This case is especially significant because it is the first of its kind – where solicitors were held liable for the full consequences of their failure to properly advise their clients of the risks involved in a ‘disastrous’ holiday home venture in Southern Italy, and failure to conduct the matter in a manner so as to protect the purchasers from those risks.

Penningtons Manches acted for a group of over 100 UK and Ireland based claimant purchasers to successfully defend an appeal brought by law firm Giambrone & Law (Giambrone) and others against the High Court’s prior finding that Giambrone’s advice and conduct was negligent, in breach of contract and in breach of trust.

The judgment handed down by the Court of Appeal ruled in favour of Penningtons Manches’ clients, dismissing all five grounds of appeal brought by the defendants.

Commenting on this judgment, Temple Legal Protection – Senior Underwriter David Chase said: “Group actions such as this are complex, difficult to pursue and highlight how important commercial ATE insurance can be for claimants. It is critical that access to justice is available for litigation of this nature; it may not have proceeded had claimants not received insurance backing.

“With indemnity from Temple Legal Protection, claimants were able to pursue the action with confidence and see justice prevail, unintimidated by the costs risk that they would inevitably face under UK law.”

David Niven, Partner with Penningtons Manches’ commercial dispute resolution team, and an expert at recovering substantial sums in CFA-backed litigation said: “For many of these claimants, the risk of pursuing their claims, which were hard fought by the defendants and their insurer every step of the way, would not have been feasible without the protection of after the event insurance.”

UK market-leader Temple Legal Protection has in-depth experience and a long-term commitment to supporting professional negligence proceedings. We provide ATE insurance and disbursement funding for these types of claims, many of which have resulted in landmark judgments and have shaped the development of this increasingly high profile area of law.

Click here to read the details of the judgment as reported by Penningtons Manches.

Thailand: Dispute over status of law firm’s office

The High Court has expressed dismay that Watson Farley & Williams (WFW) did not receive an apology from the solicitors on the other side of a dispute for their “implied criticism” of the City law firm’s conduct which they then abruptly dropped.

Triple Point Technology, Inc v PTT Public Company Ltd [2018] EWHC 45 (TCC) involved a dispute over the performance and termination of a contract for a commodity trading and risk management system where the defendant was based in Thailand.

Mr Justice Jefford gave judgment for the defendant, awarding it over $4m for its counterclaim.

PTT sought an interim payment on account of costs of £2.1m, the amount of its approved costs budget, although it said it had actually incurred nearly £500,000 more.

Ahead of a hearing, the claimant (TPT) argued through its solicitors, Kobre & Kim, that the judge could not be satisfied as to what amount would be recoverable by PTT.

This was because it suggested that WFW’s Thailand business, which was responsible for some of the costs, may not be a regulated law practice; thus it could not conduct litigation in England and Wales and its costs could not be recovered.

On the other hand, it argued, if WFW Thailand was acting as agent for the English regulated entity, its costs could not be recovered as disbursements because the work it was doing could have been, and would normally have been, carried out by English solicitors.

The defendant responded by confirming that WFW Thailand was registered with the Solicitors Regulation Authority and complied with the SRA Overseas Rules 2013; WFW was not a regulated entity but was authorised, in accordance with the 2013 rules, to conduct reserved legal activities and employed regulated individuals (ie English solicitors).

Jefford J said: “That did not satisfy TPT who continued to pursue the issue at the hearing and, to my mind, derailed the hearing to a considerable extent in doing so.

“TPT maintained at the hearing that there was no insinuation of improper conduct on the part of Watson, Farley & Williams and that they, TPT, were entitled to ask questions about the costs bill.

“It seems to me that once [the defendant’s counsel] had explained the position and his explanation was not accepted, there was inevitably such an insinuation, despite TPT’s assertion to the contrary.”

He had not expressed a view on the merits of TPT’s argument when, a week after the hearing, Kobre & Kim sent a “brief” e-mail dropping the issue.

Jefford J said: “It seems to me unfortunate that there was no recognition of the disruption that this issue had caused and no apology to Watson Farley & Williams for the implicit criticism of them.”

He ordered that TPT pay £2.1m on account of costs

Lord Sumption: costs ‘could exceed entire assets of estate’

A trustee in bankruptcy considering an appeal to the Supreme Court can go ahead without taking on the risk of having to pay the costs of previous proceedings in the lower courts, five justices have unanimously ruled.

Giving the leading judgment, with which the four other justices agreed, Lord Sumption said that if the trustee lost, and his liability extended to the costs of the proceedings below, it would exceed the entire assets of the estate.

The court heard that the issue arose from a professional negligence action against BPE Solicitors, which resulted in the Court of Appeal awarding a former commercial client a nominal amount of £2 in damages, but making him liable for the firm’s costs of almost £470,000.

A few months after the Court of Appeal’s ruling in 2013, the claimant, Richard Gabriel, was made bankrupt on his own petition and a trustee in bankruptcy was appointed.

Delivering judgment in BPE Solicitors and another v Gabriel [2015] UKSC 39, Lord Sumption said the trustee accepted that if he lost at the Supreme Court, he would be personally liable for BPE’s costs, but not the costs of the proceedings below.

If he decided not to appeal, Lord Sumption said Mr Gabriel’s creditors would recover only between 3p and 5p in the pound, but if he won that figure was expected to rise to between 23p and 25p.

If he lost at the Supreme Court and his liability extended to the costs of the proceedings below, Lord Sumption said Mr Gabriel would be “personally exposed for the balance subject to any indemnity which he is able to obtain from the creditors”, and it was “far from clear” whether any indemnity would be forthcoming.

Lord Sumption said the only authority that dealt directly with the question was the 1882 case of Borneman v Wilson, in which the Court of Appeal extended the personal liability of the trustee to cover costs incurred by the other side before his adoption of the proceedings.

However, Lord Sumption said the Victorian ruling was “no longer good law”, because, at the time when it was decided, costs could only be awarded against a party in the proceedings.

He said the modern jurisdiction to make an order for costs against a non-party was conferred by Section 51(3) of the Senior Courts Act 1981.

Lord Sumption said there could no longer be an “absolute rule” that trustees should be required to pay the other side’s costs, including those relating to a time when the issue was conducted by the bankrupt. Instead courts had a discretion.

“The mere fact that the trustee has adopted the appeal could not possibly justify this court in ordering the trustee to pay the costs which the Court of Appeal has ordered to be paid by Mr Gabriel.

“The trustee is entitled to adopt the appeal to this court without adopting the distinct proceedings below. Indeed, the adoption of proceedings below would be contrary to principle.”

The Supreme Court declared that if the trustee appealed to it, he would not be held personally liable for any costs up to and including the Court of Appeal’s order.

Injur, the experts in helping firms generate more cash and profit from medical instructions, are proud to be sponsoring the Solicitors Group Conference.

We have negotiated a special 10% discount for all those delegates we signpost to the conference in Manchester on October 30th.

If you would like to take advantage of this – please email us at team@injur.co.uk or call us on 0161 870 6124.

Sharon Lister, MD and Founder of Injur, will be giving a presentation called:

“Shhh – The Industry's Best Kept Secret!!“

Her presentation covers how instructing medical experts in the usual way could put firms in breach of LASPO and the SRA Handbook. inJur have recently linked up with former SRA compliance experts, Legal Compliance Services, to offer clients a bespoke personal injury compliance health check which will enable them to operate with confidence.

Sharon’s presentation will show that the way you instruct medical experts can earn you those all-important profits whilst at the same time enabling you to actively demonstrate compliance with LASPO and the SRA Handbook.

Don't miss this informative event and feel free to catch up with Sharon if you rub shoulders with her at any point during the day.

Clarke: not dismayed by non-lawyer Lord Chancellor

The government has around three months to sort the detail on personal injury reform if it wants to hit the April 2013 target, the president of the Forum of Insurance Lawyers (FOIL) has warned.

The prediction by Don Clarke came as family law solicitor Helen Grant – newly appointed as a junior minister at the Ministry of Justice (MoJ) – was given the brief of seeing the Jackson reforms through to implementation.

Writing on his firm Keoghs’ website, Mr Clarke said the Court of Appeal’s decision to reopen its ruling in Simmons v Castle – on the 10% increase in damages – “cannot bode well for the broader roll out of the Jackson reforms where Sir Vivian [Mr Justice] Ramsey has already been talking of various ‘anomalies’ which will doubtless impact on a smooth transition to a reformed claims process.

“FOIL believes that claimants and compensators alike need and deserve clarity on the reforms in order to prepare for change. Compensators in particular need this clarity in good time so as to be able to ready themselves operationally and to inform them on key and sensitive issues such as pricing.”

He said that with seven months to go to implementation, “we still await some considerable detail from the MoJ on various aspects of the Jackson reforms”, such as part 36, qualified one-way costs shifting and the scope and level of fixed costs.

Mr Clarke argued that the level of legal costs “drives all the behaviours within the current dysfunctional system” and urged the government to start work on re-populating the “Jackson Table B” matrix of fixed costs for fast-track personal injury cases pre- and post-issue.

He concluded: “We have probably three months to sort the detail on personal injury reform. Let us hope that a new MoJ team will revitalise and re-energise the debate and drive the work on to a successful conclusion.”

The portfolios for the new MoJ team were announced on Friday, and Ms Grant’s include civil law and justice, courts and tribunals, and legal services and claims management regulation. She largely inherits the areas previously covered by Jonathan Djanogly, except for legal aid, which has moved to Liberal Democrat Lord McNally, who piloted the Legal Aid, Sentencing and Punishment of Offenders Act 2012 through the House of Lords.

Mr Clarke said he does not share the dismay of others that the new Lord Chancellor, Chris Grayling, is not a lawyers – “I hope that he brings a common sense approach to the issues that face him and without the ‘baggage’ of a former practising solicitor or barrister”.

Nicholas Clark, director, Kain Knight

Kain Knight, a leading national costs law firm has signed an exclusive deal to use the LHQ software platform to provide a consistent and virtual integration between costs lawyers and litigators in time to cater for further reform and costs scrutiny.

Konnect™, the new online, ‘plug and play’ platform, is the result of the partnership between Kain Knight and Newlands and is specifically targeted to remove the ever-growing burden of technical costs management from solicitors, leaving them to focus on their primary function: effective, client-focused litigation.

Primarily focused on producing and monitoring budgets to drive costs efficiencies at every level, Konnect™ is designed to accommodate J-Codes and adhere to requirements of the new Bill format currently scheduled for Autumn 2016.

It also removes the potential requirement for litigators to dramatically change their time recording and practice management systems.

Scheduled for formal release this month, through a series of symposiums, the unique combination of Kain Knight’s expertise and LHQ’s cloud-based technology is set to be a significant benchmark in the modernisation of the oft-antiquated costs industry.

Nicholas Clark, a director of Kain Knight, said: “We are delighted to be working together with LHQ to provide an effective solution to an ever-growing problem.

We look forward to further developments aimed at completely embracing all current proposals revolving around the new Bill format, driving further efficiencies whilst embracing the regime itself.

“The unyielding budgeting regime initially left many of our clients irritated but it is now beginning to have a real financial impact which we, as their costs experts, are now able to address in real time. We have gone further to manage and advise on profitability and fixed costs pricing even in the non-contentious arena.

“We look forward to further developments aimed at completely embracing all current proposals revolving around the new Bill format driving further efficiencies whilst embracing the regime itself.”

Jeffrey Coorsh, Newlands MD, added: “Kain Knight’s experience combined with LHQ’s unique solution will provide significant cost control, budgetary confidence and risk mitigation.”

Konnect™ launched on the eve of Kain Knight’s 40th anniversary, will provide its costs lawyers with a versatile and agile platform to interact with the firm’s solicitor clients, further developing Kain Knight’s reputation as a sustainable market leader and LHQ’s reputation as a software innovator.

For further background, please see the attached brochure (page 2)

House of Lords: strong criticism

Justice minister Lord Faulks yesterday defended the imminent court fee increases by stressing to peers that litigation is “very much an optional activity”, and suggesting that solicitors should help their clients by advancing them the money.

Meanwhile, leading administrative law QC Lord Pannick expressed confidence that the judicial review of the increases would be successful.

In a debate on the statutory instrument to introduce the increases – to which Lord Pannick sought to attach a ‘motion of regret’ – criticism rained in from other peers, with a focus on the difficulties they will cause in bringing mid-size claims, such as those brought by SMEs and people suing over personal injuries or clinical negligence.

The new fees are set to come into force on Monday.

Lord Faulks suggested that the current fees are “very modest”, adding: “It is also worth bearing in mind that litigation is very much an optional activity. Anybody who is deciding whether or not to sue will have all sorts of factors that they bear in mind.

“There are plenty of reasons for not bringing proceedings, one of which is uncertainty of outcome. Anyone advising a claimant will probably need to satisfy that claimant that there is at the very least a better than even – probably a 75% – chance of success before they commence proceedings. Another relevant factor is the solvency of the defendant or the likelihood of recovery.

“All those are matters that will inhibit somebody in deciding whether or not to sue. Of course, there is also the factor of the cost and extent of their lawyers’ fees. What is important is that the court fees generated here would be recoverable from any defendant in the event of a successful claim.”

He said this was relevant both to the question of access to justice “and also as to whether a solicitor will feel able, as is often the case in personal injury or clinical negligence cases, to provide assistance with the upfront costs on the basis that they will be recovered in the fullness of time”.

Similarly he thought after-the-event insurers could help in personal injury claims. “In appropriate cases where an insurer thinks that a claim has merit, it enables court fees to be incurred, which are, as I said earlier, recoverable from the other side.”

The minister also highlighted the fee remission provisions and that the government did listen to consultees by amending some of its proposals. He insisted that it bore in mind the wider choice of jurisdictions that international claimants have. “[We] are satisfied, having consulted widely, that this is a reasonable and proportionate increase for these large claims.”

Asked about the 80% fall in employment tribunal claims since fees were introduced, Lord Faulks agreed with the comments of crossbencher Lord Brown of Eaton-under-Heywood, who in a speech otherwise hostile to the rises, said that while the tribunal fees had “no doubt” discouraged a number of meritorious claims, “I suspect that it has discouraged at least as many unmeritorious claims – speculative claims, which used regularly to be brought and then bought off or settled because, frankly, that was a cheaper option for the defendant employers than successfully resisting them and then being left to bear their own costs, which were quite likely to be very substantially more”.

Lord Pannick poured scorn on the notion of litigation as an optional activity. “As the minister well knows from his experience as a very successful barrister, for many people – those suing for debts or to recover compensation for personal injury – litigation is often a necessity to keep your business alive or to maintain any quality of life…

“The fee remission provisions to which the minister, perhaps somewhat desperately, referred are not going to assist other than in exceptional cases.”

The power to charge court fees at above cost price is contained in section 180 of the Anti-social Behaviour, Crime and Policing Act 2014. Lord Pannick asked: “But is it a fair, reasonable or proportionate exercise of that power? Plainly not. For litigants to have to pay such substantial sums in advance of bringing a legal claim will inevitably, in practice, deny access to the court for many traders, small businesses and people suing for personal injuries.

“The government have suggested that court fees will be a small fraction of the legal expenses which a claimant will incur, but many claimants will not have to pay their legal expenses at the outset of proceedings. They will not have such a substantial sum of money available at the outset of the case, or they may be able to pay these court fees only by doing without competent legal representation.”

He said section 180 does not alter the Lord Chancellor’s legal duty under section 92 of the Courts Act 2003 to “have regard to the principle that access to the courts must not be denied”.

Lord Pannick argued: “The courts will interpret the powers conferred by section 180 as not intended to authorise regulations which impose an unreasonable or disproportionate barrier to access to the courts…

“If you wrap yourself in Magna Carta, as Mr Grayling sought to do last week at the Global Law Summit, you are inevitably and rightly going to invite scorn and ridicule if you then throw cold water over an important part of our legal heritage.”

He decided not to push his amendment to a vote given his “optimism that the courts will inevitably add this order to the long list of Mr Grayling’s regulations which have been declared unlawful in the past three years”.

Just over 12 months ago inCase hit the legal sector with its revolutionary mobile app, specifically tailored for law firms specialising in personal injury. Offering an effective communication tool for firms, early adopters began to see the advantage of their own mobile app as speed of securing instructions; enhanced client satisfaction and reducing overheads began to take hold.

Today, inCase has already been radically enhanced to offer a signature feature. Allowing firms to send documents and forms securely to a client’s mobile phone or tablet within seconds using PUSH technology and notifications, clients are alerted to take immediate action.

Continuing to reinvest knowledge and experience built up over the last year and previous 2 years from its original conception by founder and PI solicitor, Sucheet Amin, inCase has already released a model specific for the conveyancing market and it has plans to open into other sectors in the coming 12 months.

Founder and managing director, Sucheet Amin said “it is such an achievement to be shortlisted in this category of Associated Industries. Whilst being among some long established and well respected businesses, inCase has demonstrated again that it is worthy of this recognition.”

Richards: troubling features of ruling

The Court of Appeal has waded back into relief from sanctions by comprehensively overturning a post-Jackson but pre-Mitchell decision to grant relief.

Though the primary failure of the judge had been to overturn another judge’s decision to refuse the same relief without good reason, the court was also critical of how he approached rule 3.9.

The breach in Thevarajah v Riordan & Ors [2014] EWCA Civ 15 was a failure to comply with an ‘unless’ order over disclosure in a business dispute. The sanction was that three of the defendants were debarred from defending the claim.

In August 2013, Mr Justice Hildyard refused an application relief, given the serious failures to comply and the provisions of the revised rule 3.9.

There was no appeal against this, but a second application for relief was filed shortly before the October trial and hearing it then took up more than four of the five days allocated to the trial, which was before Andrew Sutcliffe QC, sitting as a deputy High Court judge.

He decided that the order had been complied with, if belatedly, and noted that the defendants’ former solicitors had advised them that ahead of the August hearing that they had complied at that point. He granted relief under rule 3.9, and varied and revoked Hildyard J’s order under rule 3.1(7) to the extend he needed to.

The Court of Appeal found that the judge had been wrong to consider that a second application could be made under 3.9 – rather than 3.1(7) – “on the threshold ground that no proper basis had been put forward for revisiting Hildyard J's order”, such as there having been a material change of circumstances.

This was the reason the ruling was overturned, but the appeal court – led by the deputy head of civil justice, Lord Justice Richards – said there were several other “troubling features about the deputy judge's approach to the application before him”.

His approach to rule 3.9 “lacked the robustness called for by the guidance subsequently given by this court in Mitchell and gave insufficient consideration to the need (a) for litigation to be conducted efficiently and at proportionate cost, and (b) to enforce compliance with rules, practice directions and orders”.

He also failed to take as his starting point that the sanction in the unless order, which had not been challenged, had been properly imposed and complied with the overriding objective.

The court said Mr Sutcliffe seemed to place weight on principles derived from Rayyan al Iraq Co and Wyche, both of which were criticised by a differently constituted Court of Appeal in Mitchell.

Richards J said the deputy judge also paid “insufficient attention” to the fact that the second application had not been made promptly and that he allowed the hearing of the application for relief to take up a disproportionate amount of court time.

Following its ruling in Mitchell, the Court of Appeal emphasised its hardline approach in Durrant.

“Mediation may settle any dispute any dispute more quickly and cheaply”

The Civil Procedure Rule Committee (CPRC) has launched a consultation on a new pre-action protocol for debt claims, following complaints from creditors.

In a letter to consultee organisations yesterday, the committee said it was not “made aware” that there had been no consultation on the proposed protocol until June this year.

The CPRC said it did not, as a rule, carry out consultations but only “on a selective basis with key stakeholders” and on details of the drafting.

“Having seen letters from a number of organisations representing creditors, CPRC decided at their July meeting to consult on the debt protocol, but only on the content not the principle, and with organisations that represent both creditors and debtors.”

The committee said that creditors particularly objected to a requirement that details of the contract and full statements of account should be included in every letter of claim in every case, even though many were not defended.

Creditors also objected to allowing defendants at least 28 days to seek advice. The committee argued in the letter that “reductions in public funding mean waiting times for appointments for advice can be significant, and advice should help settle the case or to narrow the issues”.

The CPRC said a further complaint related to the requirement to consider ADR. “This is standard in all the protocols, and complaining to an ombudsman or attempting mediation may settle any dispute more quickly and cheaply than issuing proceedings.”

The committee said a core principle of the debt protocol was that debtors, or alleged debtors, should be provided with sufficient information to enable them to obtain advice on their position prior to the issue of claims.

“Many debt cases settle without proceedings. But a significant number do not, particularly where there are disputes about the identity of the parties, whether the claim is within the relevant limitation period, the terms of the contract, interest or charges imposed, and where the debt has been assigned by the creditor, often a number of times.”

The committee is consulting a wide range of organisations from the Advice Services Alliance and Age UK to the Law Centres Federation and the Law Society. However, it said responses were welcome from “anyone with an interest” in the subject. The deadline is 30 September 2014.

Nash: proactive approach will allow firms to benefit from Jackson reforms

Omnia, the brainchild of well-known costs lawyer Sue Nash, is a web-based software solution for the production of costs budgets which also enables solicitors to produce their own bills of costs and costs schedules. It is specifically designed to integrate with solicitors’ existing practice and case management systems.

Omnia Legal Software is a Litigation Futures sponsor. Ms Nash said the program assists solicitors in their budget preparation and monitoring by enabling them to:

• Prepare costs budgets in Precedent H;
• Set alerts for each phase of each budget and for each element of a budget phase to help ensure that budgets are closely monitored and not exceeded;
• Compare forecast, budgeted and actual costs by each category and sub-category of case to produce median figures for each category/sub-category and then populate draft budgets;
• Allow internal or external costs specialists to check and monitor budgets on an ongoing basis to ensure work is being accurately assigned; and
• Enable the easy preparation of accurate schedules and breakdowns of costs at any point during the life of a case as well as bills of costs for detailed assessment.

Omnia can be used by firms of solicitors as a replacement time and invoicing system, as a separate program running alongside firms’ case management and practice management systems or as a standalone costing program.

Firms can enter their work in ‘real time’, or import it on a regular basis to produce bills of costs, schedules for summary assessment, costs schedules and breakdowns and all court costs forms/applications – as well as the all-important costs budgets.

The net result is a better view of a law firm’s business, particularly its cost-to-revenue ratio, as the software enables an at-a-glance overview of the time spent on various stages of litigation and how much the firm is charging for each stage.

Ms Nash said: “Omnia was born from my own experience of the way the organisation and funding of litigation has evolved over the past 25 years, coupled with Jackson LJ’s reforms which have provided the impetus for change now.

“Some solicitors’ firms are taking steps to respond to the current changes, analysing historic cases to establish the median costs of each phase and starting to record and monitor all current work done by phase. If firms aren’t doing this, then they will need to start doing so and should consider engaging costs specialists to assist them.

“It is this proactive approach that will allow firms to not only comply with the new costs budgeting rules come April, but also to actually benefit from them.”

Ms Nash added that the Jackson reforms also represent opportunities for costs lawyers to evolve their offering – and that Omnia can play an important role within that:

“While some areas of costs work will inevitably tail off, it isn’t all doom and gloom. Costs budgeting in particular will need costs lawyers’ expertise since the arguments that they are used to dealing with retrospectively will now be dealt with prospectively at the initial costs management hearing – meaning that costs lawyers’ advice will be required on the initial budgets and throughout the case.

“Omnia will enable both solicitors and costs lawyers to work together in monitoring actual costs against budgets.”

Omnia is formally launched at the Legal IT Show running today and tomorrow at the Business Design Centre in Islington, London.

Jeff Winn of Winn Solicitors talks about how the flexibility of Proclaim enables fast, responsive customer service in personal injury claims.

About Winn Solicitors:

• 300 Proclaim users
• UK’s leading Road Traffic Accident claims specialist
• An ABS (Alternative Business Structure) providing the full accident management service including vehicle hire and medicals

Burcher Jennings, a leading national legal cost and pricing consultancy is pleased to report that law firms using its services have reported significant progress with many indicating the workshops have transformed their approach to pricing and billing – whilst lawyers participating express they are well equipped to work more efficiently and in a more structured way. Notable outcomes as expressed by law firms include:

• Workshops have helped provide greater value for clients and increased profitability for law firms
• Progress cited by law firms in their discussions with clients on all aspects of pricing be it discussing charging options, pitching fixed fees, scoping work, sharing risk whilst always ensuring the client is in control of legal spend
• Claims of immediate return on investment with delegates attending the course providing examples of where they had successfully used the tools provided

Martyn Jennings, chief executive noted: “Pricing is just one of the many components of providing exceptional client service and providing choice to the client is key. Amidst an evolving legal market, a growing number of law firms recognise the importance of providing pricing and payment options, which entail greater client involvement in determining the pricing / costs aspect of the relationship, with more transparency, certainty and predictability. We are extremely delighted that law firms recognise this, and ultimately that they are now benefiting from having happier clients. A transformation is without a doubt taking place in the industry, and it is certainly great to see both law firms and their clients reaping the rewards”.

Burcher Jennings has to date received extensive feedback, which has also been reflected in further recent client comments.

Chris Murratt, finance director at Actons Solicitors said: “Having recently organised for Burcher Jenning’s pricing skill workshops to be delivered to senior colleagues, the team and I were delighted with the results and the insight gained. Our main purpose was to achieve expert guidance on our pricing strategy to remain in line with our clients’ objectives and needs. The event provided that and more.

Nigel Haddon, who led the workshop was an excellent and enthusiastic presenter who clearly talked from broad practical experience, and kept everyone engaged throughout. The personalised approach offered by Burcher Jennings was invaluable as the workshop was tailored according to what would work best for our firm’s offering to all our valued clients. Putting what we discussed into practice has resulted in happy clients and happy lawyers and we are consistently offering bespoke solutions to clients which has strengthened our relationships with our clients.”

Richard Lane, managing partner, Wright Hassall Solicitors added: “The workshop was very good on many levels and was certainly very worthwhile – so much so that we have already booked another 2 days for a further 15 people. Tim Aspinall delivered the session extremely well and kept everyone engaged and attentive throughout. Having experienced this workshop at first hand, it is certainly critical to get senior people right behind it and experience the workshop’s true value. They have to be seen to be doing it and changing what they do to embrace all the benefits. Having booked further days, I am sure that this in itself says it all!”

Burcher Jennings’ interactive pricing workshops provide guidance and direction to law firms on strategies in line with their clients’ needs, and ultimately help to transform their approach to pricing and billing. During the workshops, firms are offered 20 alternative pricing strategies / tactics. Training takes place at the client’s offices and can be spread over one, two or three days.

Injury: growth in proactive rehabilitation

There are suggestions that some accident victims are being “forced into rehab” by lawyers and claims management companies determined to “boost their own incomes”, an independent report has found.

Researchers said the spread of “proactive rehabilitation”, where law firms routinely added rehab to all their cases, raised concerns that the process was increasingly being driven by “commercial rather than medical considerations”.

In the first edition of its annual UK Medico-Legal and Insurance Market Briefing, IRN Research estimated the total value of the market for medical experts, report writing, rehabilitation and allied services at over £600m.

IRN said the use of rehabilitation in the personal injury claims process had increased in the past five years, with claimant lawyers now as likely to provide the main impetus for rehabilitation as insurers.

“Recently, proactive rehabilitation has developed, where some claimant legal firms routinely add rehabilitation on to all their cases.”

IRN said the Ministry of Justice had suggested this was because introduction of the Jackson reforms had reduced fixed recoverable costs for processing cases.

“Some have argued that this has resulted in some injured/sick individuals being forced to take rehab treatment they did not really need, with rehab being ordered by a claims company or legal firms as a way of boosting the claims payout – the legal firm will take a cut, say 25%, of the rehab costs.

“While proactive rehabilitation is not something done by all legal firms, there is a concern that rehab is increasingly being driven by commercial rather than medical considerations and this is extending into the choice of rehab provider.

“There is a temptation for lawyers and claims management companies to select the most expensive provider of rehabilitation services as a way of boosting their own incomes.”

IRN said there had been an increase in recent years in the amount of rehabilitation being used on lower-value claims, and development of the RTA portal had led claims companies to focus “more on the quality and value of claims”, meaning the low-value claims pursued were less likely to be dropped and more likely to involve rehab.

Meanwhile, IRN estimated that the fees paid by claimants for experts’ reports obtained through MedCo, the portal for medical evidence in whiplash cases, hit around £100m last year.

IRN said a report by Capital Economics, commissioned by Access to Justice, estimated that 1,735 people worked in medical reporting organisations (MROs).

Researchers said that studying the accounts of these companies suggested an average annual turnover per employee of around £150,000 to £200,000, “which would imply a total turnover of MRO companies of around £260m to £347m, with a mid-point estimate of £304m”.

IRN said the total market for medical experts, report-writing, and rehabilitation was probably worth over £600m in 2016, “having grown from over £500m in 2013”, though growth in the market had “slowed recently”.

The report found that demand for expert witnesses grew last year but said that “over a longer-term perspective”, the amount of expert witness work conducted by each expert witness, especially court appearances, may have gone down.

“It is now rare for experts to have to appear in court in low-value civil cases and it is becoming less and less likely in higher value cases, hence the drop in court appearances.”

IRN said surveys showed how court appearance fees had declined from 2013 to 2015 and the hourly rate for reports had risen only slightly over the years 2011 to 2015.

County court: small claims push

The government is to take an unexpectedly cautious approach to extending the road traffic accident (RTA) portal regime and has ditched the idea of mandatory pre-action directions, it announced today.

In its long-awaited response to the Solving disputes in the county courts consultation, the Ministry of Justice (MoJ) said that while it will increase the upper limit of the portal to cases worth up to £25,000, “consideration will be given to the timing of the extension, following a full evaluation of the existing RTA PI scheme”.

This has been a key demand of claimant groups given that the portal only went live two years ago.

Similarly, while it confirmed the plan to create a similar scheme to cover employers’ and public liability claims, “further consultation with key stakeholders will be required to agree the detail”. The MoJ said it is aware of specific concerns raised in relation to issues of causation and contributory negligence.

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It will also work closely with the NHS Litigation Authority and the Department of Health to evaluate their pilot scheme for clinical negligence claims before considering the introduction of a similar scheme for low-value clinical negligence claims.

More generally the MoJ said it intends to extend the system of fixed recoverable costs, “subject to further discussions with stakeholders about details of how best to extend, to include claims up to a higher value and across a broader range of personal injury”.

The MoJ said that many of the 319 respondents felt that the existing pre-action protocols were sufficient without having to develop mandatory fixed-fee pre-action directions for money claims under £100,000, as had been proposed.

“On balance therefore, the government does not recommend the development of mandatory pre-action directions until we have considered the effectiveness of the current pre-action protocols and whether and how these could be simplified to ensure a more streamlined and cost-effective process.”

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As first revealed by Legal Futures yesterday, the small claims limit will double to £10,000, with a view to moving it to £15,000 after full evaluation of the increase. There will be no change to the current limit for personal injury and housing disrepair claims.

Judges will also be allowed to refer business-to-business disputes and other suitable cases with a value over £10,000 to the small claims track without requiring the consent of the parties, while more complex cases worth less than £10,000 could be pushed up to the fast-track if appropriate.

All small claims will be automatically referred to mediation – although initially it will only be for cases worth up to £5,000 – but the MoJ stressed that this is a requirement to engage with a mediator, rather than compulsory mediation. Parties will also be able to agree that a judge can decide their case on the papers.

There will not be a mandatory mediation information session for higher-value claims, but the MoJ is to investigate how to improve awareness. It added: “The Ministry of Justice also plans to work with the Law Society to better reinforce the role of the legal profession, when discussing options with their clients, to explain whether mediation or some other ADR procedure may be more appropriate than litigation, since this is already stated in the ‘client care guidance’ of the Solicitors Code of Conduct.”

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There are also to be various structural reforms, including establishing a single county court across England and Wales.

The fast-track limit will remain at £25,000, but the government will increase the financial limit below which equity claims may be commenced in the county courts from £30,000 to £350,000, while the financial limit below which non-personal injury claims may not be commenced in the High Court will be increased from £25,000 to £100,000.

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Specialist claims – for variation of trusts, certain claims under the Companies Act and other specialist legislation, such as schemes of arrangement, reductions of capital, insurance transfer schemes and cross-border mergers – will be removed from the jurisdiction of the county courts and placed under the exclusive jurisdiction of the High Court.

High Court judges will be able to sit as a judge of the county court as the requirement of business demands.

There are also plans for a range of measures to improve debt recovery and enforcement, including allowing charging orders in applications where instalment orders are in place and introducing a minimum threshold of £1,000 in applications for orders for sale, but limited to Consumer Credit Act debts.

Justice Secretary Kenneth Clarke said: “Without effective civil justice, businesses couldn’t trade, individuals couldn’t enforce their rights, and government couldn’t fulfil its duties.

“But individuals and businesses tell me that the civil justice system at the moment can sometimes be intimidating and that they don’t know if using the system will be worth the time, expense and hassle of going to court.

“These changes will produce a service that helps people to resolve their disputes effectively and in the simplest and quickest way possible so they can get on with their lives and businesses.”

Harmans Costs have launched ‘Costs Expert’ – a bespoke mobile application which features the first ever interest calculator for the costs industry.  The app, available on both iPhone and android, is free and available to download now and will act not only as a valuable industry resource but also as a tool to help solicitors with their everyday workload.

The key feature of the Harmans app is the unique interest calculator which allows users to input various data such as date of order, amount of offer, costs to date and any payments on account to calculate totals inclusive and exclusive of interest. Previously this calculation could only be done using a complex formula (and some well educated guess work!) so Harmans are very confident that this will prove to be an invaluable tool for users.

Senior partner Matthew Harman said: “We are delighted to launch our app Costs Expert and I’m confident that the interest calculator will prove to be a very useful tool for all costs lawyers and solicitors.  I think it fills a void in the market, in fact I have been using the calculator myself on a daily basis while the app has been in development and it’s a real time saver.”

Other features of Costs Expert include a court directory allowing users to find the nearest county court or civil justice centre to their location along with its contact details and a useful map and directions.  The directory also has a link to the latest court fees.

There is also an interactive book a collection section on the app which interfaces with the Harmans office diary and allows the user to quickly and easily book a file collection using their free courier service.

The Ask a Question section means that wherever you are you can ask one of our costs experts a question via the app, invaluable if you are out and about and unable to lay your hands on your usual references.  Previously answered questions will also be visible in this section meaning it will provide a bank of information on costs queries.

There are also sections providing contact details and more general information on Harmans.

Download Costs Expert now –

iPhone version:  https://itunes.apple.com/gb/app/costs-expert/id875061911?mt=8

Android version: https://play.google.com/store/apps/details?id=com.andr.harmans

Brennan: looking to the future with optimism

Third-party funder Juridica has generated £52m from five cases that concluded in the first half of 2014, a 44% rise on the same period last year, its interim results have shown.

All the cases were in its antitrust portfolio, but a further antitrust case was lost, while two of the cases in Juridica’s commercial portfolio “continue to show indications of enhanced risk”, meaning their value has been written down.

At 30 June 2014, the company has invested or committed approximately £91m across 16 live investments, mainly commercial and patent infringement matters as all but one of its antitrust cases have now reached some sort of conclusion.

One notable new investment is £2.1m in ProSports IP, a new joint venture with the National Football League Players Association in the US which has been established to develop and monetise a large portfolio of patents in the technology and sports market.

The company said it expects several investments to be completed over the next 12 to 18 months. To date Jurdicia has received net proceeds from all its cases of £109m.

Lord Brennan QC, Juridica’s chairman, said: “During the first half of the year the company has continued to manage its maturing portfolio of antitrust and commercial claim investments, whilst developing its patent activities through its partnership with ipCreate.

“Taken together with the recently announced returns on investments, we look to the future with optimism and expect the portfolio to continue maturing, delivering attractive dividend income and net asset value growth.”

Meanwhile, plans by City of London Group plc to sell its stake in third-party funder Therium are progressing, it emerged this week.

John Kent, the group’s acting chief executive, told its annual general meeting earlier this week that “it is now in advanced discussions around the sale of Therium”.

Assignment: deal between law firms effective

The assignment of conditional fee agreements (CFAs) is under the spotlight yet again after a costs judge ruled that one had been validly made.

Master Leonard agreed with HHJ Wood’s recent ruling in Jones v Spire Healthcare that the leading authority in the area did not require there to be a relationship of personal trust and confidence between a particular solicitor and client to allow an assignment.

Azim v Tradewise Insurance Services Ltd [2016] EWHC B20 (Costs) concerned the detailed assessment following the claimant’s acceptance of a £3,500 part 36 offer for a road traffic claim.

The transfer of the case from TLW Solicitors to Russell Worth Ltd on 23 July 2014 was under scrutiny. The two firms reached an agreement to transfer various claims over on that date, and TLW wrote to the claimant the same day, saying: “We have recently received an influx of new work as a resulting (sic) of securing a new contract, however unfortunately have been unable to replace a couple of key staff who are currently on maternity leave. This means that existing staff have more cases to deal with than we would normally wish.

“Rather than have this impact on the quality of service which you receive or cause any delays to the settlement of your claim, we have put in place arrangements to pass over the handling of your case to another firm which specialises in cases such as yours.” The letter emphasised that the claimant was free to go elsewhere.

The court had to decided whether the retainer with TLW had been terminated, whether the CFA could be assigned in this way, and whether, if so, it was effective.

Master Leonard distinguished this case from other recent cases, such as Budana and Webb, because here the assignment occurred before the claimant was informed about it. There was “no real basis for concluding that the TLW CFA had been, or was, terminated at the point that TLW entered into its 23 July 2014 transfer arrangement with Russell Worth Limited”.

As to the legality of the assignment, the only binding authority is Mrs Justice Rafferty (as she then was) ruling in Jenkins v Young Brothers Transport Ltd [2006] EWHC 151, which established a narrow exception to the rule that a personal contract could not be assigned, saying it could be where a client was following his solicitor to another firm.

In his much-discussed Jones ruling in May, HHJ Wood ruled that Rafferty J was not seeking to qualify the exception to the general rule against the assignment of the burden of a contract to specific situations where personal trust and confidence could be established, so much as to set a context in which it applied to the facts of the case.

Master Leonard said: “That is reasoning with which I respectfully agree. It seems to me that Rafferty J found limited assistance in the authorities to which she had been referred in applying a principle, which may be said to exist for the benefit of the non-assigning party, to circumstances in which the non-assigning party had every reason to (and did) accept an assignment.

“Nonetheless she applied established principles in coming to the conclusion that a CFA could be the subject of a valid assignment, and she expressly stopped short of any finding to the effect that a relationship of personal trust and confidence between a particular solicitor and a particular client was a prerequisite to that.

“For the reasons given by both District Judge Besford [in Budana] and HHJ Graham Wood QC the imposition of any such prerequisite would in my view be inappropriate.

“In summary I can identify no obstacle, in the principles governing assignment of the benefit and burden of contracts, to the validity of a bona fide, arms-length CFA assignment in the circumstances of this case.”

He went on to find the assignment effective and that, as a result, a novation had not taken place.

Master Leonard concluded: “It follows that the indemnity principle does not operate to prevent the recovery of the costs incurred by the claimant and payable both to TLW and Russell Worth Limited under the terms of the TLW CFA.”

Kirby: did client make a properly informed decision?

Solicitors need to be careful to ward against professional negligence claims for mis-selling damages-based agreements (DBAs) or under-settling cases run under them, a QC has warned.

PJ Kirby QC of Hardwicke Chambers said solicitors need to put in procedures that ensure that a full explanation – both oral and written – is given as to the various funding arrangements discussed and why the DBAs was considered suitable.

If a solicitor is not, either generally or in relation to a specific case, willing to undertake a case under a particular type of funding arrangement, then that should be explained and the reasons recorded, he added.

Several commentators have highlighted the difficulty that DBAs work very well for the solicitor, and far less well for the client, if a substantial case settles quickly.

However, Lord Justice Jackson’s recommendation that the client seek independent legal advice before entering in a DBA did not make it into the final regulations – but then the risk of mis-selling was raised again in February by the Legal Services Board.

Writing on his chambers’ website, Mr Kirby said the central issue is whether the client has made a properly informed decision about the funding of its case and whether the method of funding recommended to the client was in the client’s best interests.

“The fact that the DBA turns out to be profitable or indeed unprofitable for the solicitor is not the test as to whether the same was in the client’s best interests at the time that it was entered into,” he said. “It would only ever be the gift of hindsight that would enable the solicitor or client to know which fee arrangement in fact would end up being the best one (and it is most unlikely with the benefit of hindsight that the fee arrangement that turns out to be the best for the solicitor will have also been the best arrangement for the client).”

Mr Kirby said the clients who are most likely to be aggrieved are those who feel that their claims were settled for less than their true worth on the one hand and on the other those clients who consider that the lawyers have received a disproportionate amount of the sum recovered bearing in mind the amount of work actually done by the lawyers.

“There is concern that solicitors may be inclined to advise that claims be settled for less than their true or at least their potential worth in order to ensure that they exclude the risk of loss and no payment, and get paid whilst incurring the minimum level of costs necessary.

“Whilst under CFAs there could also have been the temptation to settle for less than the true worth of the claim in order to avoid the possibility of a loss and no payment, at least with a CFA the more work that was done the more the solicitors would be paid and the greater the amount recovered by way of uplift. Furthermore so long as the uplift was recoverable from the other party the client had no real interest in questioning the amount of the uplift.

“Under a DBA the longer the case goes on the lower the reward for work or effort ratio becomes. Indeed under many DBAs the prospect of the matter going to trial will be of real concern to solicitors who may see any possible recovery under the DBA as being less than the costs incurred on a traditional time-cost basis and much less than the amount due to the solicitor under a CFA with an uplift, yet continuing with the case to trial may be in the client’s best interests.”

Shaw: no clear and identifiable injustice

Uncertainty regarding a claimant’s prognosis is part of the usual risk of personal injury litigation and not enough to justify disapplying the usual consequences of accepting a part 36 offer out of time, the Court of Appeal has ruled.

The court said in Briggs v CEF Holdings that it was not enough to show that it was difficult to form a view on how the litigation would go.

According to a report on the case by Plexus Law, which acted for the defendant, the claimant injured his foot in the defendant’s workplace in January 2010. Proceedings were issued in January 2012 with an unfavourable prognosis for the injury provided by the claimant’s orthopaedic surgeon.

The defendant made a part 36 offer of £50,000 in September 2012. The claimant neither accepted nor rejected it.

The claimant was granted a stay of proceedings and had foot surgery in May 2013. In April 2014, the stay was lifted, at which point he increased his claim to £248,000. The claimant also produced a new report from a new orthopaedic surgeon and although the prognosis was “slightly better”, overall it remained unfavourable.

In October 2014, following disclosure of the defendant’s surveillance evidence, the claimant’s expert altered his opinion in the parties’ orthopaedic experts’ joint statement.

This brought it more in line with the opinion of the defendant’s expert, concluding that the claimant would be able to work until retirement age.

A trial was fixed for early 2015, but in advance of this the claimant applied to vacate the trial and in June 2015 accepted the part 36 offer.

He then successfully applied under CPR rule 36.13(5) to alter the usual consequences of part 36, and at first instance the defendant was ordered to pay his costs up until 30 October 2014. The judge accepted that, as the prognosis had been uncertain until the joint statement, it would be unjust to apply the usual 21-day acceptance period.

On appeal, the Court of Appeal said it was important not to undermine the salutary purpose of part 36 but at the same time the court should not conduct a microscopic examination of the case.

It was for the claimant to demonstrate that it would be unjust to order the usual consequences,

A Lawtel report of the case said the court considered the decision in SG (A Child) v Hewitt (Costs) [2012] EWCA Civ 1053, where there had been difficulties in forming a prognosis following brain damage to a child.

There the court had applied the same principles and it was a clear case “on the other side of the line from the instant case where, as a contingency of the litigation, it had simply been hard to work out how it might go”.

Plexus said the court found that, whilst it was not suggesting the claimant’s injuries had been exaggerated, the overall process and timescales of the litigation provided some cause for concern – in effect, there was no discernible reason to distinguish this case from any other involving the usual risks of litigation.

Questions were also raised as to the point at which the claimant opted to accept the offer.

The stay may have been relevant had it promptly followed the part 36 offer but in reality there had been a significant time lapse. Even without a finding of exaggeration by the claimant, the amount of the claim had been greatly increased following the stay.

The court concluded that the district judge had erred in that he did not give proper effect to part 36 by properly identifying injustice.

Plexus partner Louise Shaw said: “One of the main purposes of part 36 offers is to transfer the risk from the defendant to the claimant, in the event that an offer is not accepted.

“Uncertainty regarding the claimant’s prognosis is part of the usual risk of litigation; it is not enough to show that it was difficult to form a view on how the litigation would go.

“The district judge had been wrong to not make the usual costs order following late acceptance where there was no clear and identifiable injustice.”

Lloyd: plan puts consumers in the driving seat

The government is to introduce opt-out collective actions for competition law claims, but lawyers will not be able to handle them on a contingency fee basis, it announced today.

Law firms and third-party litigation funders will also not be allowed to initiate such cases.

There will be a raft of other safeguards to avoid the accusation that it is allowing US-style class actions, including strict judicial certification of cases, no treble or exemplary damages and maintaining the ‘loser pays’ rule. However, the CBI has still made exactly that claim.

Other changes announced by the Department for Business, Innovation and Skills (BIS) following last year’s consultation on private actions in competition law include making the Competition Appeal Tribunal the main court for competition actions in the UK, including a fast track regime, and promoting alternative dispute resolution.

The government said “there could be a risk of abuse if legal firms, funders or special purpose vehicles established solely for the purpose of litigation were allowed to bring cases”, with conflicts of interest a particular concern of respondents to the consultation.

Instead, only those who have a “genuine interest” in the case, such as genuinely representative bodies (such as trade associations or consumer associations) or those who have themselves suffered loss should be allowed to start litigation.

Groups of consumers or businesses will automatically be included in the action unless they opt out (although non-UK domiciled claimants will have to opt in). It will also allow for a collective settlement to reduce costs for the offending party.

Any unclaimed damages will be allocated to the Access to Justice Foundation, in line with the recommendations in the Jackson report and the Civil Justice Council.

BIS quoted consumer group Which? saying that in systemic cases of mis-selling, a collective action can offer a better resolution.

Competition minister Jo Swinson said: “Competition is one of the great drivers of growth; it keeps our prices low and our businesses innovating. This is why it’s important that where there are businesses who abuse their position in the market, those who have been affected can take appropriate action.”

Which? executive director Richard Lloyd said: “This will give consumers more power against unscrupulous businesses. In the small number of cases where this will apply, collective legal action and settlements will automatically include everyone who has been affected so more people should get redress and sooner.

“The proposals will help to put consumers in the driving seat and will also act as a meaningful deterrent to dodgy or dishonest firms. This is good for consumers, responsible businesses and the wider economy.”

However, the CBI immediately criticised the proposals. Katja Hall, its chief policy director, said: “The government has let the litigation genie out of the bottle by adopting US-style collective actions. By grouping potential claimants together indiscriminately, these ‘opt-out’ actions fail the growth test and will fuel a litigation culture in the UK.

“It is absolutely right that victims of competition law breaches are properly and swiftly compensated but there are better ways to do this than resorting to litigation, like using alternative dispute resolution.”

Manchester Civil Justice Centre: solicitor must have acted beyond his role to justify order

The High Court has refused to grant a non-party costs order against a solicitor who took on a case for an impecunious claimant under a conditional fee agreement (CFA) without after-the-event (ATE) insurance and also agreed to pay the disbursements.

HHJ Stephen Davies, sitting as a judge of the Technology and Construction Court in Manchester, said that to make an order the solicitor must have acted beyond his role in conducting the litigation.

In Tinseltime Ltd v Roberts & Others [2012] EWHC 2628 (TCC), the order was sought against sole principal Gavin Edmondson after his client disappeared with a costs order against him unpaid.

The judge said the authorities on non-party costs orders established that the starting point must be whether in all the circumstances it is just to make the order; this is a fact-specific enquiry. When a solicitor is involved, “it must be shown that he has in some way acted beyond or outside his role as a solicitor conducting litigation for his client”.

Where there is a CFA, “the fact that [the solicitor] stands to benefit financially from the success of the litigation, in that otherwise he will not be able to recover his profit costs or his success fee, does not of itself mean that he has acted in some way beyond or outside his role as a solicitor conducting litigation for his client”. The judge said the fact Mr Edmondson had funded the disbursements made no difference as this was “perfectly proper”.

He suggested that to justify an order there would usually need to be “either some financial benefit to the solicitor over and above the benefit which he can expect to receive from the CFA, or some exercise of control of the litigation over and above that which would be expected from a solicitor acting on behalf of a client, or some combination of both”.

HHJ Davies found no evidence of either. If anything, rather than viewing the case as a business proposition from which he could receive substantial fees, the evidence was that the solicitor failed to appreciate how complex and costly the case might be, he said. Further, had the case settled before trial, he would have recovered £20,000 in profit costs, a £2,500 success fee and £10,000 in disbursements. “That does not seem to me to indicate someone who is taking on a case as a business proposition.”

Similarly there was no clear evidence that Mr Edmondson was aware the case could not proceed if he did not fund the disbursements, nor did he advise his client not to take out an ATE policy. Further there was no reason to believe he controlled the litigation.

“Finally, but extremely significantly in my judgment, when I come to consider the overall justice of the matter, there is a case where there is contemporaneous evidence that Mr Edmondson was not motivated solely by financial self-interest in taking on this case, but with the laudable aim of providing access to justice to Tinseltime.”

Rejecting the application for an order, HHJ Davies added that had he found differently, he would have limited Mr Edmondson’s exposure to the £10,000 he had estimated incurring on disbursements at the beginning of the case (it ended up being more than double that). He also dismissed an application for a wasted costs order.

During the ruling, the judge said he was not aware of any reported cases in which a solicitor acting under a CFA has had a non-party costs order made against him on the basis of control. “But I can see how there might be circumstances where the court was able to conclude that the solicitor’s desire to achieve a successful outcome had caused him to in effect take over the running of the litigation for his own ends, and that this would justify the making of a non-party costs order against him.

“One example might be where the damages claimed were, or had become, modest in comparison to the costs already incurred, so that the client had for all practical purposes lost any real interest in the pursuit of the proceedings but the solicitor was wedded to pursuing them to recover his costs.”

CFA clients welcome greater transparency

Posted by Malcolm Roberts, managing director of Litigation Futures sponsor Beechwood Solutions Ltd

It’s now two months since ‘J Day’ and life as a CFA sign up agency has in fact changed much less than we expected. Accidents are still happening, solicitors and claims management companies are still marketing and we are still receiving instructions.

So what can we report from the sofas and firesides of the claimants we have been visiting since the new regime came in? By and large clients’ reaction to seeing part of their compensation being retained by their solicitors has been a collective shrug of the shoulders, whiplash permitting.

The thing is that, in our experience, clients always thought that they would pay in the end; they just didn’t know how much and where the bill would come from, despite everything they had been told. Now the deal, as they see it, is much more transparent and more palatable because of that. A case of better the devil you can see than the devil you can’t. We, of course, understand that the client’s position is now vastly inferior to before; however, as in most aspects of life, perception overrules reality.

The subject that may still be regarded as far from settled is that of after-the-event (ATE) insurance. Initially there were different schools of thought regarding whether clients should pay for this, or the cost should be absorbed within the 25% of damages to be retained. Both sides of the debate vigorously argued their stance, but the prevailing wisdom now is that this is a disbursement for which the client is responsible.

The question that remains is whether the benefit provided justifies the cost. I’m very glad that it’s not within my remit to advise clients on this, or to decide how much it should be. My feeling, though, is that if it were cheap enough, then the vast majority of clients would simply tick the ‘yes’ box to enjoy the security of complete protection. If that were the case, then the many would be contributing to assist the few who needed to rely on the cover, as is the normal basis on which insurance works.

On the other hand, if the cost of ATE is comparable to the sort of purchase that most clients would have a good long think about, then only those with very weak claims may take it up, resulting in an ever decreasing spiral of decline for ATE providers.

Prior to J Day there were many voicing doom and gloom predictions, but one thing is abundantly clear: the demand from the public for accident compensation is a juggernaut that is gaining speed. Some 600,000 people a year are successfully claiming and if each one of those tells just five others of their experience, the gap between those who could claim and those who do will inevitably narrow.

That provides an enviable platform for this business sector. The future challenge lies in being able to satisfy that demand profitably.

High Court: judge failed to direct himself properly

A High Court judges has sent a strong message to county courts about dealing with applications for relief from sanctions in a case where “a wholesale and flagrant disregard” of directions occurred.

Mrs Justice Swift overturned HHJ Milton’s ruling where he granted relief and ordered the defaulting claimant to pay the costs arising from an adjourned trial on the indemnity basis.

Biffa Waste Services v Dinler & Ors [2013] EWHC 3582 (QB) – handed down last month but the full judgment in which has only just been released – saw multiple failures to comply with directions by the claimants, who were injured when the defendant’s refuse lorry hit them. The defendant admitted the collision but denied negligence, and also hinted at elements of fraud in the claims.

Among the failures were significant delays in serving witness statements and the pre-trial checklist, not applying for permission to adduce oral evidence, and making no effort to agree with contents of the trial bundle, serving it the day before trial. Further, the listing and hearing fees were only received the day after stated in an ‘unless’ order.

Swift J said: “The picture that emerges is one of a complete lack of recognition on the part of the claimants’ solicitors of the need to comply with court rules and orders.”

While acknowledging that the judge had faced various difficulties in dealing with the case, she still found that his judgment contained “a number of serious defects”, including that he failed to direct himself on the principles which he should apply when determining an application for relief from sanctions, neither party having drawn his attention to rule 3.9.

“In particular, there is no indication at all that he had in mind the need to enforce compliance with rules, directions and court orders, or the need for proportionality. Those needs are clearly referred to in the amended overriding objective.”

The judgment also revealed “no exercise of balancing the relevant factors”, she continued. The only explanation for his eventual decision was that he considered that an adverse costs order would do “sufficient justice”.

Swift J referred to a host of post-April cases showing a hardening attitude to breaches. She said that in all the circumstances and taking into account the post-Jackson emphasis on conducting cases at a proportionate cost and in a way that does not expend more than a proportionate amount of the court’s time and resources, “I am satisfied that this was a case in which relief from sanctions should have been refused”.

“The judge himself observed in his judgment that his decision was ‘a very close call’. It seems to me that if he had had regard to the principles to which I have referred, his decision would inevitably been different.”

Supreme Court: House of Lords decisions result in “unfair outcomes”

The Supreme Court has overturned two House of Lords judgments in ruling that the multiplier in assessing damages for fatal accident claims should be calculated from the date of the trial, not the date of death.

The court, made up of seven justices, described the reasoning in the House of Lords decisions as “illogical” in the current legal climate and said it “results in unfair outcomes”.

Delivering the judgment of the court, Lord Neuberger and Lady Hale said the current system, based on the date of death, led to “under-compensation in most cases”.

They said that, in the case before them, the claimant would receive over £58,000 less if the date of death was used.

The justices said the Law Commission had recommended in its report Claims for Wrongful Death that, as in personal injury cases, multipliers should be used in calculating future losses in fatal accident cases from the date of trial.

The court heard in Knauer v Ministry of Justice [2016] UKSC 9 that Mrs Knauer died from mesothelioma at the age of 46, while working as an administrative assistant at a prison. Her husband made a claim for future loss of dependency under the Fatal Accidents Act 1976.

The ministry admitted liability in December 2013, and a damages hearing took place before Mr Justice Bean in July 2014.

Bean J held that he was “bound to follow” the approach of the House of Lords in Cookson v Knowles [1979] AC 556 and Graham v Dodds [1983] 1 WLR 808 and to calculate the multiplier from the date of death.

However, Bean J said that if he had been “freed from that authority” he would have preferred to take the approach taken by the Law Commission. The judge granted a certificate enabling an appeal against his decision to go directly to the Supreme Court.

Lord Neuberger and Lady Hale said the House of Lords cases were decided in a “different era” when the calculation of damages for personal injury and death was “nothing like as sophisticated as it now is” and courts discouraged the use of actuarial tables.

The justices said the old approach relied on the “intuition of barristers and judges” and was “wholly unscientific”. In particular they said the Ogden Tables, which first appeared in 1984, did not exist when the House of Lords rulings were delivered.

The Supreme Court said it “should be very circumspect” in invoking the 1966 Practice Statement (Judicial Precedent) to overrule previous House of Lords decisions, but in this case it had “no hesitation” in doing so.

The court accepted that there were “examples of over-compensation” in the operation of the Fatal Accidents Act, where for instance the claimant remarried, but the “solutions must lie with parliament”.

The Supreme Court allowed Mr Knauer’s appeal and ruled that “the correct date as at which to assess the multiplier when fixing damages for future loss in claims under the Fatal Accidents Act 1976 should be the date of trial and not the date of death”.

Lords Mance, Clarke, Reed, Toulson and Hodge contributed to the judgment.

2015 was a busy year for litigators, with changes affecting all areas of the profession. Wouldn’t it be great if there was a summary of all the main changes to make sure you are up to speed on all the big topics from last year? Well you’re in luck!

Our 2015 review looks back at all of the main talking points from 2015 and includes some insightful commentary from our team. We’ve also teamed up with Professor David Chalk of the Department of Law and the Centre for Information Rights at the University of Winchester who discusses the big topics on the horizon in 2016.

https://www.daslawassist.co.uk/news/read/181/?ref=general

DBAs: take detailed notes when signing up clients

Solicitors advising on damages-based agreements (DBAs) should make detailed notes at the time agreement is made in case they are later accused of exploiting the client, one of the leading barristers in solicitors’ regulation has advised.

Speaking at a seminar on costs held this week by 39 Essex Street, one of its silks, Greg Treverton-Jones QC, predicted that the Solicitors Disciplinary Tribunal would be sent cases in which “allegedly avaricious solicitors have entered into agreements which are punitive to the client”. The tribunal would have to “wrestle” with the problem, he said.

Complying with conduct rules on treating clients fairly and acting in the best interest of clients would be hard to judge when discussing funding options, he said. “At the outset of a case nobody knows how long it’s going to take… whether it’s going to settle… whether you’re going to go off and have extensive barristers and experts… so how are you, at the coalface, going to be able to advise your clients?,” he asked.

He gave the example of a commercial claim for £2m undertaken with a DBA at 50%, where costs after trial of £200,000 are recovered from the other side. The client recovers £1.2m and the solicitor receives £1m. However, under a conditional fee agreement (CFA), the same case would have yielded £400,000 for the solicitor even with a 100% success fee, whereas the client would have received £1.8m.

“I think it’s really difficult in those circumstances to be able to justify a solicitor charging £1m,” Mr Treverton-Jones said.

The difficulty in deciding whether an agreement was compliant with professional rules was structural, he added. “The problem with all of this is that there is an in-built conflict of interest between the solicitor and client because the more the solicitor gets, the less the client may get and vice versa.”

The Solicitors Regulation Authority (SRA) was likely to prosecute at some point, he expected, and when it did, the factors influencing a client’s decision to choose a funding agreement would be critical. “Just to give you a steer, I think that [whatever] fee arrangement you enter into with your clients, you are going to have to be able to justify it. So I would strongly advise that if that justification has to be made, a… detailed attendance note is made at the time you enter into the agreement.”

He said his understanding was that DBAs in lower-value personal inury cases were “dead in the water”. He explained: “Nobody is doing them because the maths tends to work in favour of the solicitor doing a CFA with 100% uplift rather than a DBA – because 25% of not very much is not very much.”

The way he has been advising solicitors to “square” this in terms of their ethical obligations has been for them to “simply say to the client ‘well, there are other solicitors out there who will be operating other funding models and there are these things called DBAs – [and] we don’t do them’.”

Victoria Morrison-Hughes will lead the Manchester office

Martyn Jennings and Richard Burcher are delighted to announce that the firm has joined forces with Victoria Morrison-Hughes of Kings Legal Costings, to launch a new Burcher Jennings Manchester office.

With an increasing demand for specialist services in relation to costs, pricing and funding, this now represents the firm’s fourth UK office to support locally based law firms.

The new office opens on 4 January and is based in Wilmslow. It is led by Costs Lawyer, Victoria Morrison-Hughes who has been operating as Kings Legal Costings for the past 11 years.

A qualified Costs Lawyer with a degree in accountancy and finance, coupled with her experience working as a lawyer in high street practice provides Victoria with unique insight into both the operational and technical demands of a legal business.

Her main areas of expertise include commercial litigation, clinical negligence, catastrophic injury, Court of Protection and solicitor & own client disputes together with Costs management and negotiations.

Victoria commented: “To ensure all law firms in the region have access to our services and without compromising quality control, our aim has been to identify a reputable and forward thinking partner which shares similar values. Burcher Jennings was the perfect fit especially in relation to client care and service where the priority rests on quality and ensuring clients receive a bespoke service.

“Providing a personalised service is key and I believe this partnership is a win-win for clients as they benefit from the combined strength of an award winning legal services provider and my client care strengths.”

Martyn Jennings said: “We are delighted to have joined forces with Victoria. Our structure has always consisted of creating centres of excellence which are staffed by experienced costs draftsmen and costs lawyers, pricing and funding specialists, to offer proactive, flexible and responsive constructive support.

“Victoria clearly has an exceptional talent with her attention to detail and level of service commended by clients as excellent. The attention she gives to the needs of clients together with her experience and expertise give her an unrivalled position in the legal industry. Clients have access to specialist knowledge, service and care that is not readily available elsewhere.”

The opening of the Manchester office follows a year of significant growth for Burcher Jennings, during which time the company also launched the ‘Burcher Jennings Funding for Growth’ scheme – the first of its kind in the industry whilst adding further offices in Exeter and London.

In late November 2015, Burcher Jennings received the ‘Supporting the Industry Award’ at the Modern Law Awards 2015, an Award which recognises businesses that have demonstrated significant support to the legal sector over the past year.

Medical reports: claim over consultation failures

A group of personal injury firms and medical reporting agencies has pushed ahead with its plan to issue an application for judicial review against the government, challenging its reforms to medical reporting in whiplash cases.

The firms – led by Manchester firm JMW – argue that ministers failed to conduct an adequate consultation before announcing the changes in December, which it alleges are irrational and unfair.

From 1 April 2015, claimants in straightforward whiplash cases will have to choose their experts from a randomly allocated list through the MedCo portal. Solicitors’ firms which own medical reporting agencies will no longer be able to refer work to them.

A spokesman for the firms said the judicial review application was submitted to the High Court in Manchester.

Mark Jones, the partner at JMW acting for the group, said: “Even though we have been in contact with government since our concerns were first raised, we feel that those exchanges have resulted in insufficient progress.

“Given the considerable impact which these changes will have on how clients pursue whiplash claims and the prospect of further consequences for those making other types of personal injury and civil claims, we view a judicial review as a very necessary step to take.”

Mr Jones said the law firms agreed with ministers and the insurance industry about the need to clamp down on fraudulent claims. However, he argued that the changes would impose severe restrictions more than 900,000 people who make legitimate whiplash claims each year.

Mr Jones added that if the High Court agreed that there were grounds for a review, a hearing could take place before the summer.

It emerged in December that the group were preparing a judicial review application. It was made up of JMW, Express Solicitors, Quindell Legal Services, Jefferies Solicitors, Winn Solicitors, Savas and Savage Solicitors, and Thorneycroft Solicitors, as well as the QualitySolicitors network. Five medical reporting agencies are also backing the action.

A spokesman for the Ministry of Justice said: “We are bearing down on the fraud and abuses of the system that have left honest drivers facing unfairly increased premiums for years.

“Our reforms have already had a major positive impact, turning the compensation culture on its head and we are now seeing premiums fall at record rates.

“We are signalling our commitment to ending the era of questionable whiplash claims by making sure all medical reports are above suspicion.”

Kightley: firms need to “flex” the fixed-fee regime

“Litigate, don’t procrastinate” was the message yesterday to claimant solicitors as one way to ameliorate the financial loss they will suffer from the new portal and fast-track fixed fees.

Speaking at the Association of Personal Injury Lawyers (APIL) annual conference at Celtic Manor, Stuart Kightley of north London firm Osbornes, said that taking the maximum success fee from all claimants’ damages would not be enough to make up for the impact of the new fees.

Instead firms need to “flex” the fixed-fee regime by being more ready to issue proceedings in cases that fall out of the road traffic accident, employer’s liability and public liability (RTA/EL/PL) portal schemes. “Don’t mess around – just issue,” he said.

He modelled how this would work, and more generally the impact of the new fees, by taking a basket of 300 successful cases at average damages levels – 100 in each category – where the current fee levels (using the figures produced by Professor Paul Fenn) were put up against the new fixed fees with a success fee charged to the client to the maximum level.

Mr Kightley – APIL’s new secretary – then assumed that half of the RTA cases would settle inside the portal, 35% would settle outside the portal and 15% would conclude after proceedings have been issued.

On this basis RTA cases currently generate average costs of £1,750 per case. Under the new fees, it falls by 16% to £1,470 per case. However, by issuing more readily – with 25% of cases concluding after issue – average costs would be £1,720, a fall of just 2% on the present level.

In EL – assuming 80% settling pre-issue – he put averge current revenue at £3,550 per case. Modelling 24% of cases settling within the new portal, and 56% pre-issue, fees would fall 16% to £2,960 per case. But issuing in 30% of cases, rather than 20%, would take it to £3,230, a more modest fall of 9%.

The figures were worst in PL. Average current fees – based on 75% settling pre-issue – are £4,330 per case. Under the new regime, with 19% settling in the portal and 56% pre-issue, it sinks to £3,140. Issuing in 35% of cases, rather than 25%, improves things a bit to £3,410, still a 22% fall.

Put all together, the 300 cases in the basket currently generate £963,000. Even with the maximum success fee, the effect of fixed fees will reduce that revenue by 21% to £757,000, Mr Kightley said.