Time running out: courts refuse late applications

The High Court has condemned as “utterly inappropriate” a bid by one of the big banks to amend its defence and serve a new witness statement on a litigant in person on the eve of trial.

HHJ Simon Baker QC, sitting as a High Court judge in Birmingham, was particularly unhappy that there had been “not even one word to explain why the evidence… [was] prepared late, could not have been prepared earlier, and ought now, at this very late stage, to be permitted to be adduced at trial”.

He added: “Nor is there even one word to explain why the defence, which has stood for almost two years, and has been the subject of a detailed reply, should be amended only three working days before the trial begins.”

Proceedings in Monks v National Westminster Bank Plc [2015] EWHC 1172 (Ch) began in March 2013. Having reviewed the procedural chronology, the scope of the proposed order and the submissions, the judge said he was led “unhesitatingly to the conclusion that this very late application simply should not have been made”.

He explained: “It is utterly inappropriate to come to a court a matter of days before the trial and seek to adduce substantial further primary evidence-in-chief and to amend a pleaded case without even one word of explanation as to why that amendment and why that further evidence is sought to be introduced at such a late stage and why – if such be the case – it could not have been put before the court much earlier.

“It is inconceivable that a litigant in person should be expected to deal with a 27-page witness statement, over 220 pages of additional documentation (even if much or even all of it is common to the parties from their historic dealings over the course of years ago), and a revised case without there being an inevitable adjournment in order that there can be a fair response to this material and equality of opportunity to prepare for trial.

“Further, I do not accept that necessitating an adjournment is the only measure of prejudice to the administration of justice or other litigants. The prejudice to both the opposing party, Mr Monks, and to the administration of justice and litigants generally is so overwhelming that for those reasons alone this application must fail and be dismissed.”

In another case published today, Wani LLP v The Royal Bank of Scotland Plc [2015] EWHC 1181 (Ch), Mr Justice Henderson was similarly strict on the claimant’s application to make extensive changes to its particulars of claim ahead of the trial in early June.

He found that the application should have been made last autumn, when it would have had reasonable prospects of success.

The judge ruled: “Litigants who leave a substantial application to amend until a late stage cannot reasonably complain, in my judgment, if the undoubted prejudice to them caused by refusal of the application is found to be outweighed by the other factors which the court has to take into account. The present case, in my view, is one of that kind.”

Stockwell: astronomical spending by insurers

Lawyers have called for a cap on insurance companies’ marketing spend as a way to ensure that savings made from the Jackson reforms are properly reflected in lower car insurance premiums.

The demand was made during an evidence session on whiplash claims before the House of Commons’ transport committee, which is investigating the cost of motor insurance. MPs took evidence from representatives of the insurance industry, lawyers, and claims management companies (CMCs).

Last month the government announced it would delay its proposals on whiplash reform until after the committee reported.

Lawyers’ representatives included Des Hudson, chief executive of the Law Society, Matthew Stockwell, chairman of the Association of Personal Injury Lawyers (APIL), Andrew Ritchie QC, head of chambers at 9 Gough Square and vice-chairman of the Personal Injury Bar Association, and Craig Budsworth, chairman of the Motor Accident Solicitors Society.

Mr Stockwell said insurers’ advertising spend was “absolutely astronomical” and highlighted prime time TV advertisements as evidence that cash that could be used to reduce motor premiums was being diverted to raise the insurers’ market share. Mr Ritchie said the 1 April reforms had effectively capped legal costs. “Why not cap [the insurers’] advertising costs by reference to their pay out?” he queried.

Meanwhile, Mr Hudson raised referral fees as an unacceptable cost to consumers. The Law Society supported the banning of all referral fees and CMCs, he said, adding: “I supect insurance companies are receving referral fees from car insurers, from the sellers of parts to car repairers, from the sellers of paint to car repairers, and I think what we need is a very transparent understanding of… just where all these flows of money are coming from”

In their questioning, MPs revealed hopes that raising the small claims limit to £5,000 might actually improve access to justice. The committee chair, Labour MP Louise Ellman, asked whether raising the limit might help stimulate a “new market” to develop in which solicitors offered services to those with small claims. But the lawyers were adamant damages within the track would be insufficient.

Andy Wigmore, policy director of the Claims Standards Council, went further and warned the committee that raising the limit would mean “everyone becoming a claims management company” and stimulate an entire industry like that which emerged around referral fees: “The whole cycle will start again; you’ll have the reinvention of new marketing companies.”

On the question of why whiplash claims had risen sharply, the MPs were unimpressed with the idea that traffic congestion and lower average speeds were responsible. Mr Budsworth cited figures that deaths on UK roads were far lower than in other major European countries but said minor collisions were more frequent. Labour MP Graham Stringer dismissed the notion as no more than “hypothesis” unsupported by evidence. Other committee members appeared to share his scepticism.

Mr Hudson said the existence of CMCs and the practice of insurers selling referrals had contributed to a growth in whiplash claims. Mr Ritchie argued that data on road traffic accidents used in the government’s whiplash consultation – which closed on 8 March – were “fundamentally defective” because they compared accurate government figures to those gathered by the police, which were inaccurate “by a factor of at least 200%, if not 300%”.

Asked by the committee whether the UK was “the whiplash capital of the world”, Mr Hudson presented figures published earlier this year that showed total motor claims spending by UK insurance companies in 2011 was comparable with other major EU countries. Germany’s share was 20%, France’s 13% and the UK’s 14% – a “normal market share”, he said.

The insurance industry representatives, which included James Dalton, head of motor and liability at the Association of British Insurers (ABI), Dominic Clayden, director of claims at Aviva UK, and David Fisher, Axa Insurance’s catastrophic and injury claims technical manager, insisted they were committed to lowering motor premiums. Mr Dalton said the ABI had made a public commitment they would be reduced after the Jackson reforms and they would “reduce further” if future reforms also resulted in savings.

Insurers rejected the idea that third party capture – dealing directly with claimants – resulted in under-settlement. Mr Fisher said: “I do not think there is evidence that the insurance industry is under-compensating direct claimants.” Mr Clayden agreed, adding: “It’s something that the lawyers peddle… that I don’t think is justified.”

Asked by the committee what behaviours insurers hoped to see from judges in litigation, Mr Fisher raised what he said was the problem of claimants walking away with reduced compensation after an exaggerated claim had failed: “I would like [the judiciary] to take a more robust approach and to move away from the common law approach that we have at the moment [so] that if part of the claim is tainted… then the whole claim should fall.”

Nash: recognition

The number of students applying for the new training course run by the Association of Costs Lawyers (ACL) has nearly doubled, with leading firms such as Irwin Mitchell, Kain Knight and Masters all supporting staff through it.

The ACL said it has 185 students registered to undertake the three-year qualification, starting this month. In previous years, the ACL has attracted around 100 students a year.

The 2014 intake is a mixture of law graduates and non-law graduates, which the ACL said “is an endorsement that the new course provides a credible first choice for those interested in pursuing a legal career in costs with associated rights to conduct reserved legal activities”.

Irwin Mitchell, which already employs 24 fully-qualified costs lawyers, is enrolling 12 staff members on the course this year. Among the specialist costs firms, Kain Knight is supporting at least 17 of its staff through the course, while Masters Legal Costs Services and Law Lords Cost Consultants have enrolled eight and seven students respectively. Some 95% of all students are sponsored by their employer.

Costs lawyer Steven Green, who heads the costs team at Irwin Mitchell, said: “We encourage all of our costs law fee-earners to undertake the ACL qualification. The qualification is very well recognised by the judiciary and the courts and I believe it has the added benefit of enabling qualified costs lawyers to achieve higher rights of audience in costs related matters and higher hourly rates than their non-qualified counterparts.”

The Master of the Rolls recently agreed that costs lawyers should be recognised in the guideline hourly rates and able to recover up to grade B rates.

Sue Nash, chairman of ACL, says: “I’m thrilled that so many students – and their employers – recognise the value of a recognised costs qualification. It shows that that the legal profession understands the value of good-quality costs advice and how central this has become.”

The new course recognises that many trainees will be in full-time employment, meaning it will be delivered through a bespoke online learning platform, accessible on mobile phones and tablets, to enable easier access to learning materials, tutor interaction and administrative support.

Another major change over the previous qualification format is that students will be examined at the end of each year.

Students take three units, one each year, broken down into various modules. The first two years of the course cover all the fundamental building blocks to become a costs lawyer – from knowledge of procedure to ethics and advocacy – while in the third year there are options to allow for specialisation in the costs of different areas of practice, such as personal injury and clinical negligence, land law, criminal law, company law, and family law.

New litigation funding solution from UK market entrant Kain Knight Limited, together with SpectraLegal Limited, is delighted to announce the launch of a new specialist funding solution for UK law firms.

SpectraLegal is part of BridgePoint Finance Group, the leading provider of specialised forms of working capital finance to Canadian law firms.

Changes following the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act of 2012 have resulted in increasing pressure on law firms’ cash-flow with significant amounts of work in progress locked in and firms are having to fund disbursements. In addition to that, banks are limiting the amount available to fund the day-to-day business of law firms.

LASPO mirrors the reforms enacted in Canada in 2003, so SpectraLegal is uniquely placed to understand the new landscape in the UK and the funding challenges that exist now and in the future.The new funding solution from SpectraLegal enables firms to build a relationship with a flexible litigation financier providing law firms with a powerful tool to grow their practice and satisfy clients.

The benefits of using Kain Knight and Spectra Legal funding solution are:
• Improved cash flow allows law firms to pay suppliers up front to obtain better terms
• Partnership approach to funding with competitive interest rates
• Removes the need to accept early (lower) cost settlement offers
• Ensures more stable and consistent operating cash flow
• Helps firms protect the legal interests of their clients
• Cash is freed up for investment in the business

For more information contact Kain Knight on 01279 755552, or email enquiries@kainknight.co.uk

Commenting on the launch of the new facility Matthew Kain, Kain Knight’s managing director said:

“Our research shows increasing demand amongst our law firm partners for more innovative and flexible forms of funding. Kain Knight has for some time been looking for a business that can deliver what our clients need. We are delighted to be one of the first UK firms to work together with SpectraLegal Limited. We believe this new facility will deliver significant improvements to our partner law firms’ cash-flows and enable them to grow their businesses.”

Matthew Gwynne, SpectraLegal’s business development and client relations director, said:

“The UK has been on our radar for some time. As a new entrant, we were able to take a fresh look at the funding challenges faced by UK law firms; and by working with our friends in Kain Knight, we will deliver a solution that meets the needs of a modern-day legal practice. We look forward to working with Kain Knight and building long-term relationships with their partner law firms”.

Green: inconsistent approaches to budgeting

Budgeting has extended to detailed assessments, it emerged last week as a costs judge explained how budgets can help both sides take a view on whether a case is worth fighting.

Master Haworth also predicted that litigation was moving towards an era of fixed costs for lawyers and experts.

Speaking at last week’s Expert Witness Institute annual conference in London, Peter Haworth, a judge at the Senior Court Costs Office, pointed out that he tended to come in at the end of cases rather than be involved in costs budgeting at the start of the case.

But he gave an example of a recent case, where millions were in dispute, in which he had required budgets from the parties – both hedge funds – before a detailed assessment took place.

“Both sides came in with budgets of half a million each just for the assessment, let alone the costs of several million pounds,” he said. But each was horrified when they saw the other’s budget, and within two weeks the costs judge received notice that they were going to settle.

“One of the features of having to budget is you can see where the other side are going to spend their money, so the lawyers can take a view ‘is this case worth fighting?’,” he observed.

District judges and costs judges were “getting to grips” with the Jackson reforms, Master Haworth said, predicting that the committee set up under Mr Justice Foskett to review the guideline hourly rates – due to report by March 2014 – would result in fixed costs.

“Hourly rates are likely to be fixed for solicitors within another 12 or 18 months… We are moving to an era, like it or not, of fixed costs for solicitors, probably for barristers in some respects and probably for experts.”

The one-time solicitor said this was a cyclical phenomenon. “I can remember fixed costs from 20 or 30 years ago… and now we’re moving back to fixed costs.”

Master Haworth advised experts to present their instructing solicitor with a variety of costs scenarios, because if the cost was greater than the initial estimate, the solicitor might find it impossible to vary the amount later. “It seems to me that you need to be factoring into your estimates… if the defendants pursue this line [or] that line it’s going to require me to do X,Y and Z and that is going to cost you an extra this or that…

“The reality is there is no point saying to the solicitor it’s going to cost a good deal less when in fact the solicitor will never ever recover the true cost at the end of the day… Anything other than a worst case scenario, I’m afraid, will come and bite you in the backside, or has the possibility to do that”

Master Haworth suggested that the experts assembled read the judgment by Mr Justice Coulson in Elvanite in the Technology and Construction Court, in which the High Court rejected a bid by a successful defendant to nearly double its approved £270,000 costs budget after the case had concluded.

Master Haworth said: “I think that that’s going to be followed by other judges with other budgets”. He continued: “We are in a new era and if the Jackson reforms are going to work there is going to be quite a lot of pain for a lot of lawyers, and of course they might want to transfer that pain, or some of it, on to their experts.”

Also speaking at the conference, Steven Green, head of costs at Irwin Mitchell, said the firm’s experience so far had been that judges had adopted inconsistent approaches to costs budgeting.

Of the seven cases that had been assessed since April, the judges had spent between half an hour and three and a half hours giving figures that would be allowed for each phase, he said.

“I think it’s fair to say it’s been a fairly bumpy ride for the first five months, with some inconsistent approaches… Over the next 12 to 18 months hopefully things will settle down and we’ll get a more consistent approach as to how these budgets should be applied.”

Ryder: fixed fee support

The government and senior judiciary “are keen to extend the fixed recoverable costs regime to as many civil cases as possible”, they said today.

It follows repeated calls from top judges to impose fixed costs across the fast-track and ‘lower reaches’ of the multi-track.

Some will see it as a recognition that costs management has not delivered what was expected, and also that the judges are fed up with the number of costs disputes before them.

The announcement came in the Transforming our justice system ‘vision statement’ issued today jointly by Lord Chancellor Liz Truss, Lord Chief Justice Lord Thomas and the Senior President of Tribunals. This set out a £1bn plan to digitise all courts and tribunals. (For a full report, see our sister site Legal Futures.)

Included in it is the intention to build an online court as recommended by Lord Justice Briggs.

For the civil courts, the statement said: “We will automate and digitise the entire process of civil money claims by 2020. These account for more than four fifths of the 1.6 million claims issued in the county courts and the High Court each year – with the vast majority (83%) of which are uncontested.

“We will speed up resolution as we replace paper and post with digital working: currently, a ‘fast track’ claim with a value between £10,000 and £25,000 takes 11 months to be resolved. Under our new digital model, cases will be handled faster and in a more convenient way, improving the experience for everyone making and defending claims in the civil courts.

“More needs to be done to control the costs of civil cases so they are proportionate to the case, and legal costs are more certain from the start. Building on earlier reforms, we will look at options to extend fixed recoverable costs much more widely, so the costs of going to court will be clearer and more appropriate. Our aim is that losing parties should not be hit with disproportionately high legal costs, and people will be able to make more informed decisions on whether to take or defend legal action.”

In an accompanying consultation paper, the Ministry of Justice added: “We are keen to extend the fixed recoverable costs regime to as many civil cases as possible. The senior judiciary will be developing proposals on which we will then consult.”

The statement also urged lawyers to embrace innovation so that they can “find new ways of delivering services, of simplifying working practices, of focusing more on meeting the needs of all their clients, from defendants to families and civil claimants”.

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.

Kenvyn: fill the funding gap for lawyers

VFS Legal Funding – which provides costs advance and disbursement funding to law firms – has secured a new £20m funding facility from OneSavings Bank.

The company has also “significantly increased” its capital base from both existing and new investors, as well as introducing a “strong level” of new mezzanine funding.

VFS founder and CEO Norman Kenvyn said: “This initial facility from OneSavings Bank, in conjunction with our strengthened capital base, will enable VFS to move forward at a more rapid rate and to help fill the funding gap for our clients in the legal profession.”

When it started life in 2011, VFS was funded by a mixture of equity, loan notes and peer-to-peer funds via ArchOver, but Mr Kenvyn said the company took the view that the time was right to work with a bank “that shares its vision and recognises the opportunity that exists”.

There is a growing number of options for law firms looking to borrow against bills that have been served, or on work in progress, with VFS, Novitas and newcomer SpectraLegal, which is backed by a major Canadian legal financier. Mr Kenvyn said VFS has provided funding against £50m worth of bills to date.

ArchOver CEO Angus Dent described VFS’s expansion as a “brilliant outcome” and proof of the value of peer-to-peer lending. “We were there for VFS in 2014 and our innovative funding provided the appropriate solution for VFS to expand,” he said.

“We are pleased because it supports our original assessment that VFS was a solid company worth backing. It is also a perfect illustration of how P2P crowdlending should work. We have fulfilled our role for both borrower and lenders. This is a case where everyone wins.”

Legal expenses provider ARAG is offering an innovative Family Prosecution Defence policy to protect individuals accused of criminal offences. The new policy guarantees the right and freedom to have a defence in court.

David Haynes, head of underwriting & marketing noted that “the cost of obtaining justice can be extremely high, even for those who are completely innocent. Family Prosecution Defence provides first class lawyers, protecting innocent family members of someone who is accused of committing a crime against serious financial consequences– such as the need to re-mortgage or sell the family car to fund a proper defence”.

Plugging the defence funding gap caused by a combination of savage cuts to Legal Aid, changes to the rules on recovering costs at crown court trial and cover limitations that generally apply to existing Family legal protection products; the new policy extends to areas such as allegations of dishonesty, violence, uninsured driving and alcohol or drug-related offences. All family members including those studying for further education away from home are covered.

“Mr Haynes continued, “The burden of proof in a criminal trial lies with the prosecutor who is required beyond all reasonable doubt to prove that the accused is guilty of the charge. We’re here to ensure a quality defence is available so there is no miscarriage of justice.

“Where an error of judgement has been made and an individual has been drawn into committing a crime, just as for those who are wrongly accused, individuals still have a legal right to a defence. They have the opportunity to apologise to the court and those affected by their actions. Under these circumstances, when a guilty plea is entered, the court can be lenient when passing sentence, if the judge is convinced of the defendant’s remorse.

Family Prosecution Defence will typically be available to boost Family Legal Protection policies for High Net Worth individuals or for company directors and partners as an extension to commercial products, but the new policy is also suited to affinity groups.

What is covered?

The new policy covers the majority of criminal acts but Class A and Class J offences (see note 4 below) or repeat offences are excluded. Most importantly, assistance can be sought before an arrest or notice of prosecution is received.

In addition to criminal matters cover is available to provide representation for individuals facing a regulatory investigation or disciplinary action by a professional body. Confidential telephone counselling and legal advice is also provided as well as access to an online consumer legal service website, for legal advice and documentation.

Policyholders are urged to add the 24/7 helpline number to their mobile contact list to ensure immediate representation is available for police interviews.

“The number of lawyers prepared to take on legal aid cases has reduced as the rate they are paid makes it unattractive to work in that area”, adds Mr Haynes “and the courts have realised a huge surge in the number of litigants representing themselves. “Our FPD policyholders don’t have to worry about that because they have access to the best people to help them and ARAG will be footing the bill”.

Raab: ambulance-chasing lawyers

Justice minister Dominic Raab and armed forces minister Penny Mordaunt are to chair a working party looking at how to prevent “any malicious or parasitic litigation from being taken against our brave armed forces”, Mr Raab revealed yesterday.

The move follows the controversial announcement last week by Prime Minister David Cameron that he wanted to end the “industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq”.

During justice questions in the House of Commons, Conservative MP Craig Tracey asked what action the government intended to take.

Mr Raab said: “The professionalism of our armed forces is second to none, but we cannot have returning troops hounded by ambulance-chasing lawyers pursuing spurious claims. The justice secretary [Michael Gove] has asked me to chair a working group with the minister for the armed forces to look at all aspects of this – no win, no fee; legal aid rules; time limits for claims; and disciplinary sanctions against law firms found to be abusing the system – so that we prevent any malicious or parasitic litigation from being taken against our brave armed forces.”

Ratcheting up the rhetoric further, fellow Conservative Michael Fabricant said “people in this House will find it despicable that two firms and possibly more are actively seeking – soliciting, in fact – people in Iraq to make spurious and bogus claims against our servicemen overseas”. He asked about newspaper report that the government still intended to give legal aid “to these appalling claims”.

Mr Raab replied: “I am concerned about the way in which the system operates. It is important to say that there is accountability for any wrongdoing, but that does not mean giving lawyers a licence to harass our armed forces. We will look at every angle, including the point about legal aid that he made.”

In his statement last week, Mr Cameron said: “It is clear that there is now an industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq. This is unacceptable and no way to treat the people who risk their lives to keep our country safe – it has got to end.

“The National Security Council will produce a comprehensive plan to stamp out this industry, including proposals to clamp down on no win, no fee schemes used by law firms, speeding up the planned legal aid residence test, and strengthening investigative powers and penalties against firms found to be abusing the system. We will also take firm action against any firms found to have abused the system in the past to pursue fabricated claims.

“Our armed forces are rightly held to the highest standards, but our troops must know that when they get home from action overseas this government will protect them from being hounded by lawyers over claims that are totally without foundation.”

A briefing paper on legal aid for such claims, published by the House of Commons library on the same day as Mr Cameron’s announcement, said: “It is not yet clear which cases the Prime Minister has in mind when he describes them as ‘spurious’.

“Such cases (if they exist) may not be funded by legal aid; as the Prime Minister’s comments recognise, they may be funded by ‘no win, no fee’ agreements…

“The eligibility criteria for civil legal aid in England and Wales are intended, through the merits test, to weed out those cases with poor prospects of success. The MoJ intends to introduce a residence test which would further restrict the availability of civil legal aid, requiring (with certain exceptions) that people applying for legal aid must have been in the UK for at least 12 months.”

Responding to Mr Cameron, a Law Society statement said: “Solicitors represent both those bringing claims against the state, and those serving in the armed forces, both regular and reserve, as trusted legal advisers. Everyone’s actions are subject to the rule of law – international human rights treaties and the law of armed conflict – and everyone’s fundamental rights must be protected…

“An independent regulatory system already exists to identify and penalise wrongdoing, including any involvement in the fabrication of claims. If lawyers contravene the rules of professional conduct, or act unlawfully, they must be subject to professional discipline. Legal aid contracts already allow the Legal Aid Agency to apply sanctions where there is an official investigation.”

Acland-Hood: Results were “largely what we expected at this stage

An independent evaluation of an online video hearing pilot run by HM Courts and Tribunal Service (HMCTS) has found it was beset by technical failures, ended up much smaller than envisaged, and warned that the participants could be “self-selecting”.

The evaluation, by academics at the London School of Economics led by associate law professor Dr Meredith Rossner, tested user experiences in a small number of party-to-state hearings in the First-tier Tribunal (Tax Chamber).

However, as far as it went, the evaluation reported high levels of user satisfaction with the trial, mainly due to the convenience of not having to travel to a physical hearing..

The academics found that only a small proportion of the initial 108 questionnaires issued by HMCTS resulted in respondents who were suitable for video hearings.

Several were discounted by judges because, for example, the case included lengthy submissions. In a further eight, “the appellant needed an interpreter, was hard of hearing or deaf, blind or partially sighted, or did not have access to a private space”.

Of 20 hearings booked initially, just 11 went ahead and three of them could not proceed at all due to technology ‘fails’.

Of the eight video hearings that were eventually completed, seven suffered brief technical hold-ups, such as wifi network connection problems.

The academics reported the concerns of one tribunal judge that the high level of administrative support provided during the pilot would not be maintained when video hearings proper were rolled out.

Generally the judges handled the hearings well, but one judge was recorded as saying: “I think that video hearings should only be used where they are better than the alternative… they are not as good as ‘in person’ hearings and should not be used just because they might be cheaper.”

The evaluators were concerned that the participants were self-selecting, concluding: “It is likely that there was a self-selection bias in that appellants who returned the initial questionnaire were more amenable to video hearings.”

They recommended “further investigation into barriers to access”.

In a blog announcing publication of the evaluation, HMCTS chief executive Susan Acland-Hood acknowledged the pilot had been “small”.

But the results were “largely what we expected at this stage”, she said.

She highlighted that user satisfaction was high, adding: “Participants reported that the hearing itself was clear, easy to navigate, user-friendly and formal enough not to diminish the majesty of the court…

“So, we can take from this that when it works well and it’s suitable, video hearings have the potential to be a more convenient option for some people.”

Further testing and piloting of video hearings would be carried out “later this year as the technology continues to develop”.

She also said: “The prospect of video hearings gives rise to concerns for some – mainly about making sure they are used in the right way and for the right things, and that’s why we are piloting their use and evaluating the impact carefully.

“We also acknowledge that they are not suitable for every hearing and expect their use to be initially relatively limited.”

Supreme Court: hearing next year

The Supreme Court has consolidated three cases on whether the continuing recoverability of additional liabilities in publication and privacy cases are incompatible with publishers’ rights to freedom of expression.

It announced today that Mr Justice Mann’s ruling in Frost and others v MGN Limited has been leapfrogged to the highest court given that a previous ruling of the House of Lords is at issue.

A spokeswoman confirmed that it would be heard together with appeals against Mr Justice Milling’s ruling in Miller v Associated Newspapers Limited and the Court of Appeal’s decision in Times Newspaper Ltd v Flood. The hearing is likely to be early next year.

In Frost, a phone-hacking matter brought by eight claimants, the success fees claim exceeded £1.4m and the ATE premiums £632,000. Many more cases are in the pipeline and so the point has considerable significance.

Mann J said that, like Mr Justice Mitting in Miller, he was bound to follow the House of Lords costs ruling in Campbell v MGN in 2005, which determined that the existing conditional fee agreement (CFA) regime, which allowed for the recovery of uplifts, was not a breach of article 10 of the European Convention on Human Rights.

But in MGN v UK, the European Court of Human Rights (ECtHR) had taken a “contrary view”, he continued. The effect of that decision on the previous House of Lords decision “has yet to be tested”.

Mann J went on: “As a matter of the law of precedent, therefore, I am left with an apparently clear decision of the House of Lords, at least in relation to the uplift, and an apparently contrary decision of the ECtHR.

“When faced with that same situation, Mitting J in Miller considered that the laws of precedent required him to follow the English decision and I consider that I should do the same.”

Mann J said the position of ATE premiums was “technically different” to success fees as they had not been at issue in the Campbell case and so neither court made a ruling on their recovery.

“However, for my part, I find it very hard to see how ATE premiums fall to be treated differently in the circumstances.”

Mann J said he agreed with Mitting J that the recovery of ATE premiums did not contravene article 10 either.

Djanogly: much easier for insurers to defend claims

The government today executed a major U-turn on raising the small claims limit for personal injury claims, having announced three months ago that it was not going to do so.

Following a Whitehall ‘whiplash’ summit with the motor insurance industry, the government said raising the limit from £1,000 to £5,000 would make it “easier for insurers to defend spurious or exaggerated claims by ending the situation whereby it is easier and cheaper to settle claims than it is to fight them”.

It was only on 8 February, in its response to the Solving disputes in county courts consultation, that the Ministry of Justice said the personal injury small-claims limit would remain at £1,000.

In the summer it will consult on the details of this and on the feasibility of introducing independent medical panels to replace the current assessment of whiplash injuries either by GPs or by doctors employed by medical reporting organisations.

The Ministry of Justice said: “Independent (eg, court appointed) medical panel doctors without direct client links to either the claimant or defendants could help to provide a transparent and consistent approach to assessment and easier identification of exaggerated or fraudulent injuries.”

Justice minister Jonathan Djanogly said: “It’s totally unacceptable that we a seeing a disproportionate rise in whiplash claims when road traffic accidents are falling every year.

“Our proposed reforms will make it much easier for insurers to defend claims through the court system and will reduce fraudulent claims by tackling questionable medical evidence. The proposals will also mean genuine victims of whiplash with valid claims get fair compensation quickly, cheaply and easily.

“This is a part of a package of reforms including reforms to ‘no-win, no-fee’ and referral fees. This will reduce costs for insurers – savings which we strongly encourage them to pass onto consumers through cheaper premiums.”

The Legal Aid, Sentencing and Punishment of Offenders Bill – which introduces the Jackson reforms and referral fee ban – was given Royal Assent yesterday.

Law Society President John Wotton observed that despite the introduction of the RTA claims portal in 2010 – which is estimated to have saved insurers over £500m in legal costs – insurance premiums have steadily risen, way ahead of inflation.

“Fraud is entirely indefensible and the Law Society has made it clear time and time again that it is happy to work with ministers and the insurance industry on tackling fraud head on – but we must ensure that proper recourse to justice remains available for those who have been injured by the negligence of others. We doubt that simply giving insurers what they are asking for will reduce premiums.”

“All of us need to work together to ensure not only that dishonest or exaggerated  whiplash claims are addressed but also that insurers tackle other factors such as excessive car hire charges, which are inflating consumers’ premiums.”

The government cited Association of British Insurers figures showing that the number of whiplash claims surged by 70% between 2005 and 2009, a rise it said was largely attributed to the increasing use of conditional fee agreements. Insurers say that around 50% of the costs of insurance premium increases are related to personal injury claims, with whiplash claims adding £90 to the average premium.

It added that research published in January by LV= car insurance found that 60% of GPs have seen an increase in the number of patients they believe feigning whiplash in the last two years.

London bus: alleged accident

A claimant found to have brought a bogus personal injury claim – but then cleared of fraud in the Crown Court – can only face civil contempt proceedings if there is new evidence, the High Court has ruled.

HHJ Peter Hughes QC, sitting as a High Court judge, instead urged the Civil Procedure Rule Committee to consider creating a fast-track procedure to ensure that “those who make and rely on false statements to make bogus or inflated claims are punished speedily and effectively” by the contempt regime.

While it is well established that being punished for contempt of court is no bar to a subsequent prosecution based on the same facts, Judge Hughes said there appeared to be no authority on whether the reverse could happen.

He was ruling in First Capital East Ltd v Plana & Anor [2015] EWHC 2982 (QB), where a London bus driver claimed he had suffered an accident that had caused a minor brain injury.

The defendant’s insurer admitted liability for 90% of the claim. In support of the claim dealing with quantum, which the claimant put at £637,000, the driver and his son each filed witness statements, signed and verified by statements of truth, which the judge said “sought to present the picture of a claimant who had been left seriously incapacitated and in need of constant care”.

By the time £125,000 of interim payments had been made, the defendant presented surveillance evidence that contradicted these symptoms. HHJ Collender QC in the Central London County Court declared the claim fraudulent, struck it out and ordered the repayment of the £125,000 plus costs on an indemnity basis. In addition, he directed that the case be transferred to the High Court to enable an application to be made for permission to bring contempt proceedings.

This was delayed while the claimant left the country, and when he returned he was arrested; the contempt application was issued two months later and in response the claimant maintained that his claim was genuine.

HHJ Hughes recounted: “After a three-day trial, he was acquitted by the jury… The verdict may seem surprising in the light of Judge Collender’s observations, but these, of course, would not be before the jury, and the surveillance evidence, which I am told was. I have not seen a transcript of the proceedings, and it would not be right for me to comment further on the verdict.”

The judge said he had “no hesitation” in finding that the case against both the claimant and his son were strong. In relation to the claimant, he concluded, two “important and competing considerations” had to be weighed in the balance.

“The first consideration, relied on by the applicant, is that the court should itself punish those who seek to rely on false statements in civil proceedings before it with a view to financial gain. The second, based on the principle of finality in litigation, is that the same allegations should not be litigated twice over.

“Each case must be considered on its merits. I do not believe that the acquittal by the jury is an absolute bar to permission being granted for committal proceedings, but, in my view, permission is unlikely to be granted except, for example, where there is material evidence that was not before the jury, or where important new evidence has since come to light. This is not such a case.

“Were permission to be granted, the judge hearing the committal application would be invited to reach a different conclusion to the jury on the same evidence and applying the same standard of proof. That is not an attractive proposition.”

If it was inappropriate to grant permission to bring committal proceedings against the claimant, he added, then it was the same for the son. He said he came to these conclusions “with reluctance”.

HHJ Hughes said that the lesson of the case was that applications for permission to bring contempt proceedings “need to be made without any delay”, particularly for cases before district and circuit judges, who do not have the power to grant permission.

He concluded: “This difference of approach may be something that the Civil Procedure Rule Committee might wish to consider in view of the importance of ensuring that those who make and rely on false statements to make bogus or inflated claims are punished speedily and effectively…

“It ought… to be possible to streamline the practice and procedure to ensure that applications arising out of county court proceedings are referred to the High Court immediately and fast-tracked to ensure that a decision is made with the minimum of delay.”

Kendall: more time to get to grips with new bill

The Civil Procedure Rule Committee has decided to delay compulsory introduction of the new electronic bill of costs, it has emerged.

It was due to start in the Senior Courts Costs Office (SCCO) in October 2017, but a spokeswoman for the committee told Litigation Futures that it has been deferred “to ensure that all courts are ready to accept electronic bills of costs”.

She said the aim was to implement it in April 2018 but this was subject to the parliamentary timetable.

A paper before this month’s meeting of the rule committee, authored by Mr Justice Birss, said that while the Courts Service and Ministry of Justice were “very supportive of the project”, there remained a concern “that implementing the new bill on a mandatory basis from 1 October 2017 in all the county courts across the country represents practical risks.

“Our view is that the best option is bring in the amendments to the rules and PDs as planned, but with the date on which the new bill is mandatory pushed back to 6 April 2018.

“The April date would apply everywhere, i.e. in both the SCCO and the county courts. Note that the SCCO handles detailed assessments for Central London County Court.”

Birss J said bringing in the bill on a mandatory basis on different dates in different courts “creates complexity and a real risk of confusion for court users. So that option is undesirable”.

Further, various IT improvements are being rolled out in the county courts in the next year in any case “and therefore delaying mandatory implementation by a few months means that by the time the bill must be used, the availability of dual screens, wifi and laptops in the county courts will have improved substantially.”

The extra time would allow for testing/training of court staff and judges using the example electronic bills in the interim period.

“The proposal would make the new bill available as an option from the date the changes come into force (presumably 1 October) and so it may be that in the interim period the SCCO will have some new bills in the meantime.

“There may even be a few bills in the county court too, although our expectation based on the experience of the voluntary pilot is that users do not use this new bill unless it is mandatory.”

Francis Kendall, vice-chairman of the Association of Costs Lawyers, said: “The profession will welcome more time to get to grips with the electronic bill. This delay provides an opportunity both to iron out any remaining glitches and to make the bill more advanced and user friendly.

“Also, rolling it out in all courts – rather than having a twin-track approach – would be eminently sensible. It is good to see that pragmatic and sensible decisions are being made regardless of any pressure for change.

“My concern, however, is that some solicitors will just use the delay to avoid addressing this new approach to billing at all. The fact is that an electronic bill of costs is coming sooner or later and lawyers need to be ready.”

There was virtually no take-up of the original electronic bill, Precedent AA, after a voluntary pilot began in the SCCO in October 2015 following work done by the Hutton committee. In October 2016, the rule committee made amendments to the bill being used in the pilot, issuing Precedent AB, and allowing users to create their own versions so long as they include certain levels of information.

But since last year the SCCO has not dealt with a single electronic bill (although three have been filed).

Costs budget: users can prepare it in precedent H

Litigation Futures sponsor CostsMaster has launched a preview of the update which will bring the costs software in line with the new budgeting requirements coming into force next month.

CostsMaster version 4 is now available to download, at no extra charge to existing CostsMaster users, from here.

CostsMaster 4 allows users to prepare a costs budget in precedent H, either by entering work or by importing it from a time recording system. It also contains features to manage budgets once set by the court or agreed with the other parties.

A spokesman for CostsMaster said: “We believe it is the most comprehensive costs budgeting tool available. Despite all the new features available, version 4 is available to existing CostsMaster users at no extra charge.”

Version 4 is still undergoing the final stages of testing but is available now to give users the chance to familiarise themselves with the new features. There are several further additions planned, some that have been requested as a result of the initial testing. CostsMaster would welcome the feedback of users who download the preview version.

It will install alongside version 3 so users can keep both versions on their machines until they choose to switch to version 4.

CostsMaster is also reflecting next month’s legal aid changes, adding support not only for the new CLAIM1 & CLAIM1A forms but also new bill templates to reflect the change of wording from the Legal Services Commission to the Legal Aid Agency. This work is still in an early stage of testing and will be made available shortly.

Budgeting: Precedent R disregarded

A defendant who offered very low sums in their budget discussion report in the hope that the court may compromise in the middle of the polarised figures put forward by the two sides is guilty of “an abuse of the cost budgeting process”, a High Court judge has ruled.

Warning that budgeting is not “a game”, Mr Justice Coulson said he wanted his ruling published on Bailii “because of the critical need to ensure that the Precedent R process is carefully and properly adhered to”.

In Findcharm Ltd v Churchill Group Ltd [2017] EWHC 1108 (TCC), he said the introduction of Precedent R, which requires each party to comment on the cost budget of the other, has led to a “great saving” of judicial time, “because it has obliged the parties to adopt a realistic attitude to the budget of the other side, and has assisted in the identification of the real disputes between the parties on costs”.

But he continued: “However, even now, some parties seem to treat cost budgeting as a form of game, in which they can seek to exploit the cost budgeting rules in the hope of obtaining a tactical advantage over the other side.

“In extreme cases, this can lead one side to offer very low figures in their Precedent R, in the hope that the court may be tempted to calculate its own amount, somewhere between the wildly different sets of figures put forward by the parties. Unhappily, this case is, in my view, an example of that approach.”

The case involves an £820,000 claim by Findcharm, which operates a restaurant within the Churchill Hotel in London, over a four-month closure that followed a gas explosion.

Coulson J recorded: “In contrast to Findcharm’s detailed pleaded claim, Churchill’s defence could not be more basic. It is a combination of bare denials and non-admissions of the kind that the Civil Procedure Rules was designed to sweep away.

“It is, bluntly, an insurer’s defence straight out of the 1970s. For example, despite the fact that the explosion happened in its hotel, Churchill does not even formally admit the cause of that explosion.”

Findcharm’s budget was £245,000; through its Precedent R, Churchill offered less than £90,000.

The judge said: “In my view, Churchill’s Precedent R is of no utility. It is completely unrealistic. It is designed to put as low a figure as possible on every stage of the process, without justification, in the hope that the court’s subsequent assessment will also be low. In my view, therefore, it is an abuse of the cost budgeting process.”

Among the examples of “the lack of reality” in Churchill’s Precedent R were its offer of £5,300 for Findcharm to prepare three witness statements and consider Churchill’s two; Findcharm’s estimate was £40,235.

“[Churchill’s figure] is simply incredible in a case where, not only does the background and circumstances of the explosion need to be explained, but also where a large claim for loss of profits will need to be underpinned by detailed factual evidence.”

As a result, the judge said he was “obliged” to disregard Churchill’s Precedent R, and considered Findcharm’s budget to be both proportionate and reasonable.

Churchill’s own budget was just under £80,000. “Even on Churchill’s own case, it seems erroneous on its face,” Coulson J said.

“For example, it allows nothing at all for fire experts, even though at the CMC Churchill were arguing that causation was in issue and an expert was necessary. It also purports to estimate a sum of less than £7,000 for the preparation of a High Court trial. It is, therefore, on any view, an unrealistically low budget.”

However, Findcharm had, “not unreasonably”, agreed the Churchill’s budget and so Coulson J approved it.

Williams: “exciting opportunity to lead on a case”

A paralegal has played a key role in securing a significant costs ruling at the High Court.

Alistair Williams, senior paralegal at Bates Wells Braithwaite, challenged a costs order imposed by Norfolk Magistrates’ Court against a walker who complained about a blocked right of way.

Mr Justice Collins said Mr Wheeler applied to Norfolk County Council, under section 130 of the Highways Act 1980, to get an obstruction blocking a footpath removed.

Collins J said the local authority took the view that there was “no unlawful obstruction”, so the walker exercised his right to apply to the magistrates’ court.

The court rejected the application and made a costs order against Mr Wheeler in favour not of the defendants in the case, Norfolk County Council, but in favour of the person originally accused of obstructing the path, a Mr Dixon.

“The justices took the view that they had a wide power to award costs to the interested party, that is to say the person allegedly responsible for the unlawful obstruction,” Collins J said.

However, the judge said it was “clear beyond any doubt” from section 64 of the Magistrates’ Court Act 1980 that the only power the court had was to “make orders for costs between the parties to the case who are either complainant or defendant”.

Collins J went on: “It is not such as enables the court to make any order in favour of the person who I have described as the interested party – that is to say, the person who has a right to be heard if he wishes as the alleged obstructor of the highway in question.

“In those circumstances, the decision of the justices was clearly wrong. They were not entitled to make an order against the appellant, Mr Wheeler, in favour of Mr Dixon.  In those circumstances, this appeal must be allowed and that order quashed.”

Lord Justice Beatson agreed.

Mr Wheeler is a member of the Ramblers. Mr Williams acted for him and helped advise the charity, which backed the appeal to the High Court. He was supervised by partner Melanie Carter and associate Matthew Orme.

A spokesperson for Bates Wells Braithwaite said Mr Williams, who completed the bar vocational course in 2012, had identified the limit on the powers of magistrates’ courts to award costs.

The paralegal commented: “It was an exciting opportunity to lead on a case for well-known client and I am really pleased with the outcome. I have a personal commitment to the Ramblers, being a walker myself.

“It is an important charity that represents the rights of walkers, and this legal clarification should encourage others to use their rights with less fear as to the cost implications.”

Stuart Waters appointed in first stage of expansion of Johnson & Johnson Exeter office

Kain Knight, one of the UK’s largest professional firms of costs lawyers, has appointed Stuart Waters from its London Wall office as manager in charge of the Exeter office.

The Exeter office was acquired as a result of Kain Knight’s acquisition of Johnson & Johnson, also based in St Austell, in November 2014. The acquisition is the latest phase of Kain Knight’s well-publicised business expansion strategy which commenced in April 2013.

Stuart has worked in the legal profession for his entire career, starting as a barristers’ clerk in London and subsequently joining a law firm as a fee earner and eventual head of the Criminal Department. He has worked in the legal costs industry for the past 16 years, joining Kain Knight in July 2014.

Commenting on the appointment, Peter Petyt, CEO of Kain Knight, said:

“We are delighted to appoint Stuart to this position as the first stage in our expansion of the Johnson & Johnson Exeter Office. He and his family are relocating to Exeter, which shows great commitment to the cause, and we are very confident that his enthusiasm and expertise are ideal for growing the office further.

Since our acquisition of Johnson & Johnson we have received a great deal of interest in our services from clients in Exeter and from the surrounding region and we already arranging in-house and external seminars on current issues in the legal costs market.

Kain Knight continues to innovate and will be launching new value-added services early in 2015 which leverage our considerable expertise and experience. These new services complement our traditional offerings and will be well received by clients in the South West and farther afield.”

Law Society Endorsed legal software provider, Eclipse Legal Systems, is implementing its Proclaim Case Management Software at Total Legal Solutions, a nationwide costs and claims service.

The firm operates from its office in Sheffield, providing clients with cost services from bill drafting and negotiations to points of dispute and advocacy for a range of sectors including personal injury, litigation, property and negligence. Total Legal Solutions prides itself on its reputation to offer an entirely bespoke service to each client depending on their specific requirements.

A ready-to-go Proclaim Costs Drafting Case Management solution is being rolled out across the new firm, providing a high level of automation in all aspects of case handling, eliminating a number of administration-heavy duties in bill preparation, whilst maintaining the highest quality of standards.

To meet with Total Legal Solutions’ aim of providing an entirely paperless offering to clients, Eclipse’s Proclaim Case Management Software will enable the firm to operate completely electronically, allowing schedules, negotiations, bills of costs and points of dispute to be forwarded to clients for instant review. Furthermore, as Total Legal Solutions has a number of clients utilising Proclaim, the system’s capability to provide seamless Proclaim-to-Proclaim file transfers will enhance the firm’s service offering, ensuring fee earners can commence work immediately, greatly reducing settlement times.

Simon Wadlow, business development manager at Total Legal Solutions, comments:

“As a new start-up business we are incredibly busy. The level of automation within Proclaim means we can eradicate a number of time-consuming tasks that are inherent within bill preparation, enabling us to process larger volumes of cases at a much quicker rate.

Furthermore, by offering our clients a fully electronic service, it ensures work is commenced as soon as we receive instruction, eliminating lead times and significantly reducing expenditure for our clients – something that is now crucial a result of the fixed costs introduced within the PI sector.”

High Court: conditions imposed

A High Court judge has granted relief from sanctions despite finding that the non-compliance was non-trivial and deliberate, and that there was some delay in lodging the application for relief – using instead powers to impose conditions on the order.

The parties in Newland Shipping and Forwarding Ltd v Toba Trading & Ors [2014] EWHC 1986 (Comm) agreed to press ahead to the ruling even though the Court of Appeal is currently considering whether to issue fresh guidance on Mitchell, which has led to other cases being stayed in anticipation.

The application from one of the defendants was to set aside a default judgment, which followed his deliberate failure to acknowledge service. Mr Justice Males said it had been established at first instance, and was common ground between the parties, that this was an application for relief from sanctions.

He noted that CPR 13.3 on setting aside a judgment cross-refers to CPR 3.1(3), “thereby drawing attention to the court’s powers to attach conditions on any order which it may make to set aside a judgment”.

He continued: “This indicates, to my mind, that when considering the exercise of discretion under CPR 13.3, the court should bear in mind that the entry of a default judgment may operate as an extreme sanction and that justice may be done by making the setting aside of such a judgment subject to conditions… That may represent a more proportionate sanction.”

As well as the other failings, Males J said the prospect of the defendant being able to defend the claim was “borderline” so far as liability was concerned.

However, he said the claim involved serious allegations of dishonesty, meaning that “to maintain the judgment in default deprives him of any prospect of vindicating his defence and clearing his name, and importantly the judgment may well be for an excessive sum to which the claimant is not fully entitled”.

The judge noted that setting the judgment aside would have no real adverse impact on the overall progress of the action.

Males J ruled that in all the circumstances, it was a case where the “usual expectation” that the sanction would apply – as stated by the Court of Appeal in Mitchell – was not appropriate.

Instead he made a conditional order requiring a $4.75m payment into court within 28 days, and the payment of an outstanding costs order as well as the costs of the application within 21 days, failing which the default judgment would stand.

Mastercard: Awarded 80% of costs

The costs incurred by Mastercard in defending an attempt to bring one of the largest class actions ever appear “wholly unreasonable and disproportionate”, the Competition Appeal Tribunal (CAT) has found.

The credit card company is seeking to recover more than £1.2m in fees charged by City giant Freshfields Bruckhaus Deringer, but the tribunal said its provisional view was that a reasonable and proportionate figure would be around £250,000.

It made the comments in deciding that Walter Merricks should pay interim costs of £290,000 after the CAT ruled last summer that it could not grant a collective proceedings order (CPO).

The CPO would have allowed him to act on behalf of 46m people in bring a £14bn claim against Mastercard over charges imposed on the use of credit and debit cards. Mr Merricks is appealing.

The CAT ordered that Mr Merricks should pay 80% of Mastercard’s costs after dismissing a raft of his objections to it making any order at all.

“We do not think that the novelty of the regime for collective proceedings… is a reason for giving the applicant immunity from a costs award in this case,” said the tribunal.

“This was, on any view, a very ambitious application for what would have been one of the largest class actions seen in any jurisdiction in the world. It was hardly typical of the kind of case that may be expected to be brought by way of collective proceedings.”

The reduction reflected Mr Merricks’ success over the question of whether he was a suitable class representative, and the fact that both sides used specialist costs counsel to argue over the funding agreement Mr Merricks has with Burford Capital. Their fees were disallowed.

Mastercard’s costs were just shy of £2m, with Freshfields’ fees topping £1.25m, fees for counsel Mark Hoskins QC, Matthew Cook and Tony Singla coming in at £630,000 and foreign lawyers’ fees of £96,000, plus disbursements.

After deducting costs counsel fees and 20%, that left the maximum recoverable up to 30 June 2017 at just over £1.5m.

Mastercard sought an interim payment on account of costs of £629,247.

The CAT said: “We recognise that this was a claim estimated at around £14bn and that it is reasonable for any company, however large, facing the prospect of a claim of that size to leave no stone unturned in mounting its opposition.

“Nonetheless, it should be borne in mind that on this application: (a) the respondents put in no evidence, whether factual or expert; (b) no disclosure of any kind was ordered; and (c) the oral argument took 2½ days (of which a little over half a day concerned the funding agreement).

“We do not question the expenditure by the respondents on foreign lawyers, given that both sides put in copious reference to US and Canadian jurisprudence which was helpful.

“But apart from that, we have to say that we regard costs of this magnitude as wholly unreasonable and disproportionate. We say that as regards both counsel’s and solicitors’ fees.”

The size of the costs relative to the value of the claim was not the only test, it added, while the £1.75m spent by Mr Merricks in making the CPO application was not relevant, as he had to do substantially more work.

The CAT said that, so as to make the interim order, it had to reach a provisional view as to what level of costs was likely to be awarded “and then err on the side of caution”.

“Taking a very broad brush approach and having regard to the very full skeleton argument that was prepared by the respondents’ counsel for the hearing, we consider that a reasonable and proportionate figure for counsel’s fees (excluding specialist costs counsel) would be no more than £250,000.

“Considering what was involved on the respondents’ side, we find it difficult to see that the reasonable and proportionate figure for solicitors’ fees could be any higher than that for counsel.

“However, we are conscious that we have not been provided with a breakdown of the slightly over £1.2m charged by the respondents’ solicitors.

“In these circumstances, we are simply unable to come to even a very provisional estimate of the global figure for the reasonable and proportionate costs which the respondents may be likely to recover on detailed assessment.”

As a result, the tribunal excluded the solicitors’ fees from the question of payment on account and award 80% of what remained, leading to an order for £289,280.

Mastercard also sought interest on its costs, but the CAT said its rules did not enable such an award. “We recognise that this is a lacuna in the rules which requires urgent attention.”

Wife’s difficult pregnancy was not a good excuse for default

The High Court has fired a warning that the Denton ruling does not give parties a free run at relief from sanctions applications after overturning an “overly generous interpretation of the judgment in Mitchell”.

The initial ruling granting relief by HHJ Charles Harris QC at Oxford County Court came after Mitchell but before Denton.

But on appeal Mrs Justice McGowan ruled: “Denton restated and gave greater definition to the views of the court expressed in Mitchell. There were adjustments to facilitate greater understanding and perhaps a greater explanation but Denton does not alter the statement of principle as set out in Mitchell.”

British Gas Trading Ltd v Oak Cash & Carry Ltd [2014] EWHC 4058 (QB) related to a claim for an unpaid debt for the provision of electricity. Proceedings were initiated in February 2013, and in November 2013 the defendant was given three months to file the listing questionnaire. It failed to do this, and then failed to comply with an unless order. Default judgment for £211,388 was entered until HHJ Harris granted relief and reinstated the defendant’s defence.

McGowan J applied the three-stage Denton test and said that, firstly, it could not be said that the failures were neither serious or significant.

In relation to the second stage, it was recognised that the defendant’s solicitor had suffered personal problems, with his wife undergoing a difficult pregnancy.

“That being said, this was a significantly sized firm, over 40 qualified solicitors practised within the firm. There must be provision for those who have the responsibility of conducting litigation who know that they may not be available because of an ongoing medical problem to delegate the work to others who have sufficient experience and skill to ensure that tasks are properly completed,” the judge said, ruling that there was no good excuse for the failure.

Moving to the third stage, she said: “In considering all the circumstances of this case, I take into account the effect of the failure to comply. It is accepted that a questionnaire of this sort might not be the most important document provided by either side in the conduct of litigation.

“That being said, the persistent failure to provide such a questionnaire meant that in this particular case the trial date of two days was lost. That must be a matter of grave concern when one looks as the court did in Mitchell to the overall effect of such a breach, to the impact that it would have not only on the conduct of this piece of litigation but all those other cases awaiting dates for hearings and the waste of valuable court time, which is already massively under strain.

“I also bear in mind the effect on the defendant of their not being granted relief from sanction in this case. The finding against them is one in a substantial sum. It is unfortunate, to say the least, that the consequence of a refusal to grant relief from sanction in a case such as this, will in certain circumstances mean satellite litigation. It may well mean that the defendant now has to bring an action against its own solicitors…

“In my view the learned judge fell into error in applying an overly generous interpretation of the judgment in Mitchell… Looking at the circumstances of the case as a whole, there is no reason why relief from sanction should be granted.”

Like the solicitors at our partner firms, everyone at ARAG recognises the importance of staying up-to-date with the latest legal developments in those practice areas in which our after-the-event policies are used. But such expertise often extends beyond the realms of purely legal knowledge.

Just one example is the progress over recent years in using immunotherapy treatments for mesothelioma, which offer unprecedented and realistic hope for asbestos victims, but at a considerable price.

Trying to include the cost of such treatments in a settlement requires knowledge, not just of the current legal position, but also the latest clinical trials and decisions with regard to NHS funding of such drugs.

Even today, when medical miracles abound, the prognosis for mesothelioma patients is bleak and the standard treatments brutal. A combination of surgery, chemotherapy and radiotherapy may extend life for some terminally ill patients, but the reprieve is likely to be measured in months, not years.

Relatively new “immunotherapy” drugs, such as nivolumab and pembrolizumab, have been approved for NHS use in treating some cancers under certain circumstances, but trials are still ongoing for mesothelioma patients, so many would have to pay for them personally, to benefit.

The cost, even for a short course of such drugs, currently runs to tens of thousands of pounds which, if they do their job, could turn into an annual bill well into six figures.

Such sums, especially given the uncertainty surrounding both the treatment’s success and for how long it might be needed, inevitably make things very difficult when trying to reach a settlement in this sort of claim.

Nonetheless, I’m very pleased to say that we have had some recent successes with partner firms working on this sort of industrial disease case. Through their diligence and expertise, clients who have been dealt a cruel hand now have the hope afforded by the latest in medical advances.

Such successes demonstrate the importance of all the homework that we and our solicitor firms do to stay in touch with the latest developments in relevant practice areas. They also reflect ARAG’s mission, for more than 80 years, to provide equal access to justice for all citizens, regardless of their means.

In these cases, access to justice might also be the difference between life and death.

Anstee: moving towards critical mass

There is “strong interest” from investors in third-party litigation funding, according to Therium Capital Management’s parent company.

An interim management statement from investment company City of London Group plc (COLG), covering the period from 1 April 2012, said Therium has raised £14.9m in all to cover around 20 investments.

The statement said that following the award In April of Therium’s first institutional mandate – for £5m, with a stated intention to increase the fund to £15m – “there has been strong interest in this non-correlated asset category from a range of potential investors and consequently the outlook for further third-party funding looks very promising.

“The pipeline of legal cases coming to Therium for funding remains strong with over 325 cases reviewed to date, of which approximately 6% have been funded. There have been no significant developments on legal cases in this period and accordingly there have been no performance fees during this period but the outlook for the portfolio of cases is encouraging.”

COLG also reported that its subsidiary Novitas Futures Ltd, which lends to law firm clients in litigation, “has developed a good track record but continues to search for third-party funding to enable its growth”.

COLG chief executive Eric Anstee said: “The activity in this period clearly demonstrates increased momentum on third-party funding for our platforms despite the challenging economic conditions. Each of our platforms is moving towards critical mass and this has laid the foundation for future growth…

“We are continuing to look to reduce our holdings in our other investments to redeploy the capital in line with our strategy.”

COLG’s strategy is to build a financial services group centred on specialist financing and alternative fund management. It says there are particular opportunities in the SME and professional services sectors as major national and foreign banks limit new lending to these borrowers.

It also owns Professions Funding Limited, which provides asset backed finance and working capital loans to professional practice firms.

Mobile apps – the current “big thing” for consumers

For several months now there has been predictions about when, not if, search on mobile will overtake desktop.

As long ago as March 2014, Matt Cutts of Google predicted this would happen in 2014. Whilst it didn’t quite happen, there is little doubt that mobile search will now surpass desktop in Q1 2015.

No one should be that surprised given the strength of mobile phone adoption. Apple just announced that in the last 3 months of 2014, it achieved record sales with a profit of $18bn…that’s £11.8bn. The reason behind these mammoth numbers….record sales of iPhones.

Apple sold 74.5 million iPhones in the 3 months to the end of December 2014. In contrast, iPad sales fell 18% in 2014 from a year earlier supporting my view the tablet market is shrinking as smartphones move up in size.

So what does this mean for the legal industry. Well quite simply that you have to have a mobile strategy that covers the four main bases:

Responsive/adaptive website – most law firms have adapted their sites so that they appear user friendly on the small smartphone screens.

Online search – this links into the point above and the point below. A well-presented mobile version of the website along with a strategy around content management will make it easier for clients to find you online.

Content Management Strategy – the powers at Google say that the way to increase SEO rankings is not to have loads of paid links but rather to produce valuable content and information for consumers.

Mobile apps – the current “big thing” for consumers. Everyone wants to know if there is an app to solve a problem. If there is, it is easy to find on their smartphone, focuses typically on one or two objectives and enhances experience. Working out how an app fits into a law firm effectively to deliver a ROI is important to avoid the pitfall of having an app which delivers no results.

By Litigation Futures sponsor: InCase

Pickering: task was a difficult one

Costs protection in defamation and privacy cases could be achieved by a form of qualified one-way costs shifting for which both claimants and defendants could apply, a Civil Justice Council (CJC) working group has recommended.

However, this so-called ‘variable costs protection’ (VCP) could be removed by the judge if a party was deemed to have sufficient means to litigate without it.

The CJC was asked to investigate costs protection by justice minister Lord McNally during passage of the Defamation Bill during Parliament, and the working group – chaired by Irwin Mitchell chief executive John Pickering – did not have time to consider the impact of the recommendations by Lord Justice Leveson.

Its report did not come down firmly either way on whether VCP should apply by default. If so, it should only be to claimants, the group said, subject to an application by the defendant for it to be disapplied.

That application would be made on the basis that the claimant was ‘of sufficient means’ to be able to litigate without protection against the defendant’s costs being enforced in full against them.

Defendants seeking VCP would have to prove they have insufficient means to be able to litigate based on the potential costs consequences that could follow.

The report said the mechanism should be sufficiently flexible so that it does not require an ‘all or nothing’ type application. “Whilst parties should be encouraged to apply as early as possible for costs protection (if appropriate to do so), provision should still be made for such protection to be applied for at any stage in the proceedings.

“Provision should also be made within the drafting of any costs protection mechanism for the assigned judges to have the power to order costs protection only in respect of a certain stage of the proceedings and/or for it to apply only above a certain level of costs.” The continuing need for costs protection should also be regularly reviewed throughout the proceedings, the working group said.

However, a minority of members of the working group were completely opposed to the introduction of any type of costs protection system at all, “because they believed the risk of facing a costs liability to be an extremely important part of civil litigation”, the report said.

Other key recommendations included:

• Greater judicial case management, with specialist judges allocated to ensure proceedings are dealt with swiftly and at minimal cost, with early intervention, approval of costs budgets and overseeing progress;
• Agreeing in which circumstances parties might lose their cost protection – for example if a claim is found to have been fundamentally dishonest, or has been struck out (eg, as being an abuse of the court process);
• Applying costs budgeting measures, as adopted in other areas of law, so that parties draw up realistic budgets for cases and adhere to them under judicial supervision; and
• Allowing the courts to continue to use their cost-capping powers to supplement VCP.

Mr Pickering said: “Our task was a difficult one. Defamation and privacy law is fast-changing and complex, not least because of the advent of social media and online publication. Ideally we would have had much more time (for example not all members were able to sign off the report), than the ministerial timetable permitted, to both consider the issues and consult widely.

“Our deliberations were also hampered by examining the issues without knowing what model of arbitration would develop in response to the Leveson inquiry.

“Nonetheless, we have done our best to weigh up the pros and cons of various methods for protecting parties from major adverse costs in bringing or defending a defamation or privacy claim, as without such protection there is a real risk of people not receiving access to justice.”

Members of the working group included media law specialists such as Desmond Browne QC (5 Raymond Buildings), Keith Mathieson (partner, Reynolds Porter Chamberlain), Lucy Moorman (partner, Simons Muirhead & Burton), Zoe Norden (in-house lawyer, The Guardian), Marcus Partington (group legal director, Trinity Mirror), and Alasdair Pepper (partner, Carter-Ruck).

Posted by Richard Whale, Sales Manager at Litigation Futures sponsor DAS LawAssist

Whale: have your say

Recently I spoke at a conference on the proposed consultation and introduction of fixed recoverable costs in clinical negligence claims. The purpose was to address the ‘elephant in the room’, being the potential impact of a planned secondary consultation relating to the further reform of arrangements for ATE insurance premiums.

At present, part of a client’s ATE insurance premium is still recoverable from the losing party in clinical negligence claims where it relates to the risk associated with the cost of the liability and causation reports necessary during the investigation into the merits of a claim.

So what exactly is the Ministry of Justice (MoJ) planning and what impact could its proposed changes to the ATE recovery rules have on solicitors and clinical negligence claimants alike?

The ATE issues

Back in August 2015 I met with Robert Wright (head of civil litigation and costs) and members of his team at the MoJ to discuss their proposals for premium recovery. At that time there were four options tabled:

Introduce a notice period, i.e. no insurance can be obtained until both parties have had a chance to settle.

Given the primary risk in clinical negligence claims is during the investigation period, not being able to seek ATE insurance cover until after the reports necessary to determine the merits of a case have been obtained, puts the solicitor and the claimant at a considerable disbursement costs risk.

Restrict recoverability of the ATE premium to claims valued above the Department of Health (DoH) fixed costs limit.

This is hardly a fair scenario. If the claimant recovers damages of a significant value and arguably can thus afford to pay for the ATE insurance premium, they can get the premium paid by the losing party, but should they recover limited damages and arguably not be able to afford to pay the premium, they must.

ATE insurance premiums not recoverable if no expert evidence has been obtained.

In fairness to the MoJ, we would actually be quite happy with this outcome given it is the basis of our premium model currently, i.e. if no reports are required or obtained then no premium is charged to the defendant.

And the one I believe they are seriously contemplating and the most likely to be introduced:

Abolishing recovery completely.

At this juncture I was going to state that nothing further has been forthcoming from Robert or the MoJ. However, recently I have had a response to a follow-up e-mail and they have confirmed:

• The four scenarios on the table and up for proposed consideration are still those I described above;
• The consultation on ATE insurance premium recovery will be run separately to but concurrently with the DoH’s primary consultation on fixed recoverable costs; and
• The only indication the MoJ is prepared to give as to when these consultations will take place is “by the summer”.

So why do I believe ATE insurance premium recovery will be removed completely?

Firstly we have experience of the MoJ ignoring advice from stakeholders and pressing on regardless, as was seen during the run-up to and implementation of the original Jackson reforms and LASPO in 2013. It is also no secret Lord Justice Jackson is a big fan of damages-based agreements, which are still viewed as the means to soften the blow of success fees and ATE premiums no longer being recoverable from the losing party.

Further, Richard Miller (head of legal aid) of the Law Society is reported to be investigating the viability of setting up a contingency legal aid fund (CLAF) which again is a firm favourite of our friend Jackson LJ. Mr Miller has been quoted as saying: “The CLAF is an idea that has been knocking around for 20 years, but we need to look at whether the issues that stopped it getting off the ground initially can now be overcome.”

What is one of the primary issues Mr Miller is referring to? Well, the following is a direct quote from a discussion paper on the merits of a CLAF produced by the Bar Council back in 2009:

A [CLAF] is unlikely to be able to compete, i.e co-exist, in a world where CFAs operate which entitle a successful claimant to recover in full the success fee and any ATE insurance premium. So if [it is] to be feasible, the right to recover the success fee and ATE premium must be abolished.

The impact

So let’s work on the assumption I am right and the MoJ does do away with ATE insurance premium recovery. What actual impact will this have?

Take away premium recovery and you kill off a large chunk of access to justice. We have already seen many commercial claims being abandoned since premium recovery was removed in that area of litigation due to the value of the claim being disproportionate to the cost of the ATE insurance and the client not wishing to pursue a claim without protection.

When the Jackson reforms were implemented in April 2013, ATE premiums did come down, but this was as a direct result of the introduction of qualified one-way costs shifting, which naturally lessened some of the costs risks associated with clinical negligence claims.

This was almost a sideshow given the largest risk faced by ATE providers remained, that being the costs risks associated with claims for expert reports. Taking away premium recovery now will not bring premiums down. Why? Because the costs risks remain exactly as they are and all the MoJ will achieve is to transfer the full premium liability to the claimant.

“The premiums are too high already, so surely you can bring them down given the profit you must be making?” This is a line heard often but the truth is it is too early to say if ATE providers are making a profit. Being only three years into the post-LASPO world is not enough time to have the full picture. Not enough cases have worked their way through the system in this short period of time and as such our claims history currently shows a high proportion of abandoned/failed claims versus a relatively low volume of cases where the case has settled and the ATE insurance premium received.

This is only to be expected, given that the majority of cases are insured prior to expert reports being obtained and high volume of cases being abandoned during the investigation period. Only time and a considerable increase in the number of successfully concluded cases will enable us to identify if we have priced the book of business correctly, but if you were to look at the loss ratios now, you could be forgiven for assuming we are making a loss.

If we have no idea of the true impact of the 2013 reforms, given all the data available to us, how can the DoH and MoJ be in any position to state there has been no decrease in costs to the NHS and that further reforms are required? Maybe I am being naïve in thinking the best course of action would be for all parties to reassess once sufficient claims have passed through the system.

The true savings impact from the LASPO reforms will not be realised until we are into 2017, given the average settlement time for clinical negligence cases is three years plus. Simply put, it’s too early to say to what extent the NHSLA has enjoyed costs savings.

We are also seeing more demand, post LAPSO, for elements of cover which were never factored into the original pricing model. No account was ever made for instances where claims are presented for pagination costs far exceeding the actual spend on the expert reports they relate to.

In addition, more and more requests are coming in for the fees associated with external costs draftsmen to be covered as a disbursement in a failed case. Now is not the time to argue the findings in Crane v Canons Leisure [2007] EWCA Civ 1352 as to whether they are a solicitor’s profit cost, but more to reiterate the fact they were never deemed part of the cover required.

These additional requests for cover all increase claims costs, increase loss ratios and have a detrimental effect on both an individual solicitor firm’s and our overall clinical negligence book of business.

Taken as a whole, this all leads to one overarching reality: if firms want ATE insurance premiums to come down if recovery is removed, then there needs to be a decrease in the number of claims on the policy and/or fewer costs associated with those policy claims. I’m afraid it is a stark reality and a view all ATE providers would admit to if they were being honest.

So where does this leave us?

Simply put, we can’t afford to wait for the consultations to take place before we try and work out where we go from here, especially if the latest rumours – that the consultations won’t start until the EU referendum is concluded – are to be believed.

Despite not knowing the detail relating to the introduction of fixed costs, we need to be taking action now to re-model cover and premiums ensuring we are ready to deliver new ATE insurance product options should my assumptions be correct and implemented by 1 October 2016.

In order for us to do this, we have been and will continue to ask clinical negligence specialists for their assistance in formulating our plans to shape the future of ATE insurance and maintain access to justice for all claimants, regardless of the quantum value in question.

Over the past few weeks, we have been running a survey to help us understand how the proposed DoH/MoJ reforms will affect how solicitors will run clinical negligence cases, their attitude towards risk and ATE insurance, together with what cover is seen as crucial, regardless of premium price, in the fixed costs world.

We have been tempting solicitors with three product options which we have asked them to consider and provide feedback on in terms of suitability, looking at both the cover provided and indicative client premium costs.

The results of this survey are now in and I would like to take this opportunity to thank those who took the time to complete it and provide us with their valuable feedback.

The results of this survey are now being used to fine-tune the product options and we will be looking to re-engage stakeholders and gain further feedback on the ‘tweaked’ versions to ensure they meet the requirements.

During this whole period, we will be seeking to meet with individual firms to gain an understanding of their ATE requirements and determine if specific pricing can be considered and modelled based on their post-LASPO experience with clinical negligence cases.

Do have your say

The potential implementation of fixed recoverable costs is now at the forefront of everyone’s mind and until we know the quantum value affected and the new rules, the market is going to be full of uncertainty.

I would urge you not to lose sight of the fact ATE insurance plays a major part in whether clinical negligence claims are viable. Is it fair a fatal claim can’t proceed because removing ATE premium recovery makes the overall costs disproportionate to the claim value? Perversely if your plane or train is delayed, the government is quite happy for you to claim compensation but seemingly not for the death of a family member due to NHS negligence.

The MoJ is not talking or listening to the ATE providers but they might just listen to you. I would urge you to put pressure on them by completing the consultation and getting your thoughts across on what impact removing ATE premium recovery could have on victims of clinical negligence. It will have a huge impact on us all if they take it away.

We are actively engaging with solicitors to develop market-leading products whatever the outcome of the above. If you have any thoughts or concerns over the future of ATE insurance, we would love for you to get in touch. Please visit our website or call 0370 241 1345.

Thomas: huge differences in rates

The impact of the new rule on proportionality means that there should be a greater emphasis on only instructing London lawyers for non-London work when genuinely necessary, with the issue addressed during costs budgeting, the new Lord Chief Justice has said.

Giving his first speech in the role – the Birkenhead lecture – Sir John Thomas focused on improving the provision of justice outside of the capital, particularly because it “provides access to justice without the cost of parties coming to London”.

Sir John said the “serious impediment” to reducing the costs of litigation is the “trend towards the use of London lawyers and the courts in London to do work that can properly be carried out by lawyers based outside London in courts based outside London”.

The impetus for this, he suggested, may well be the higher rates that can be charged and recovered.

Noting the 1998 Court of Appeal ruling in Wraith v Sheffield Forgemasters – which said judges had to ask themselves whether it was objectively reasonable for London solicitors to be instructed – Sir John said only a few types of case “truly require” London firms, with all the overheads their location adds to the hourly rate charged.

“Of course a party is entitled to employ any firm it wishes in any city, but if the party does instruct a London firm for out of London work, it should do so in the knowledge that in the event of success, it will be necessary to explain to the court at the costs budgeting stage or on any assessment why it was reasonable to use a London firm for such a dispute. The differences in costs are now huge.”

He highlighted a Divisional Court case relating to Wales on which he sat last year in Cardiff, where the two interested parties instructed the Sheffield and London offices of the same national law firm respectively, at partner rates of £198 in Sheffield and £510 in London. It was held unreasonable for the Welsh party to have instructed the London office.

He continued: “But the advent of the national firm, the huge differences in rates and the increased emphasis on proportionality the Jackson reforms have introduced into the conduct of litigation are all matters that have arisen since the judgment of Kennedy LJ in [Wraith].

“It may be that this will necessitate a reconsideration of the factors that go into an assessment of whether it was reasonable to instruct London solicitors in cases where the dispute arises out of London.

“Kennedy LJ may have noted the duty to avoid higher costs. It will be interesting to see the view that the courts take of that duty now. Will it be seen as one that carries with it the requirement that instructing parties have to consider how best to ensure that costs are proportionate to the claim? Will this go beyond simply avoiding higher costs than would otherwise be incurred?

“If proportionality does have this effect, in addition to its wider effects on costs through budgeting and costs assessment, it may well serve to increase the impetus for clients in cases arising out of London to use expert local firms or, if a national firm is instructed, to ask the question of their solicitors why the work, or the bulk of it, was not done in an office out of London and charged accordingly.”

Sir John acknowledged that there has always been work that requires lawyers from a certain part of the country. “London remains one of the world’s financial and commercial centres. It is inevitable that those law firms specialising in such work will locate there. Nothing should disturb that or question the reasonableness of using them for such work.

“However there is a vast amount of litigation, including what has traditionally been seen as specialist, such as much traditional chancery work and administrative court work, that can and should properly be litigated outside London by local firms where that work arises out of London. The courts will do all they can to encourage that.”

While highlighting the need for a better court infrastructure, particularly IT, and the need to stamp out local directions, Sir John said the key to the “proper provision of justice” outside of London is structuring and motivating the legal profession to support it, including preserving local specialist advocacy.

Sir John continued: “London has no monopoly on skill or experience, as any of our law firms and chambers based out of London will tell you with both pride and justification. In the age of the internet, of tele-conferences, Skype and Facetime, there is no reason why a litigant should not or could not properly instruct a lawyer from outside London to work for them at a cost significantly less than in London but with equal quality experience in most fields… And of course such increased competition from a truly national market will affect London prices.”

This in turn means that “there is a real opportunity to reverse the recent historic trend that has seen London gain the largest concentration of the legal profession”, he added.

To read the full speech, click here.

Dean: ruling provides sufficient authority to challenge fees

A reasonable and proportionate fee to pay a medical agency not signed up to the Medical Reporting Organisation Agreement (MROA) is £200, a regional costs judge in Liverpool has decided.

Ruling in three conjoined cases, District Judge Woodburn at Liverpool County Court said he was aware that “a number of other cases” involving the same issue were awaiting his judgment.

The lead case was Charman v John Reilly (Civil Engineering) Ltd, but each involved a claimant represented by Liverpool law firm Duncan Gibbins, which instructed Tri Star Medicals – the firm’s partners are also directors and shareholders of Tri Star. Each medical report was charged at £350 plus VAT.

The fee payable under the MROA is £200 for a GP report where there is no need for medical records, and the defendant – represented by Nick Bacon QC – argued that this was evidence of a reasonable and proportionate fee.

Both the defendant and judge cited HHJ Cook’s 2002 ruling in Stringer v Copley, in which he allowed the charges of the medical agency incurred in obtaining the report, but only so far as they did not exceed the reasonable and proportionate work if it were carried out by a solicitor. He also said the agency’s invoice should distinguish between the medical fee and their own charges.

DJ Woodburn noted that Stringer “has remain undisturbed for a period in excess of 10 years”, and also expressed frustration that such an invoice had not been provided.

He said the defendant was “entitled to ask reasonable questions as to how the costs they are asked to pay, are arrived at”. But he continued: “I do not believe that the fixed-price agreement reached by the signatories to the [MROA] is the appropriate measure of a reasonable and proportionate charge. The parties chose to be signatories of the agreement; there is no good reason for those terms to be imposed on non-parties.”

He said: “Doing the best I can in relation to fairly straightforward low-value claims where medical records are not required, where there is a ready panel of willing medical specialists available, where standard letters may be used to notify the claimant and the solicitor of the medical appointment and having regard to the use of a standard process for high-volume work, I would assess the cost of a reasonably experienced and competent medical agency to carry out the work to obtain the medical report at £50 plus VAT, where applicable.

“In the absence of any information to assist me, I would further assess the cost payable by the agency to the medical expert [in such circumstances] at £150.”

Howard Dean, director of costs at Keoghs – which represented the defendant in Charman – commended the decision and said it should provide “sufficient authority to successfully oppose claims in excess of MROA rates on fairly straightforward low-value claims”.

He was also pleased by the emphasis on the claimant and their solicitor providing a breakdown of the invoice. “We shall continue to challenge claims where the medical agency fees are in excess of MROA fees,” Mr Dean said.