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Heathcote Hobbins: easing the path to justice

Intellectual property (IP) specialists have welcomed the introduction of a small-claims track for the Patents County Court but said its limit will have to rise quickly.

Currently for cases with damages of up to £5,000, the track aims to provide copyright, trademark and unregistered design holders the option of pursuing basic disputes through an informal hearing.

The new procedure went live last month and is the product of the Jackson report – which identified the problem of high costs in IP disputes – and the subsequent Hargreaves review of IP, which recommended the small claims track. This process also led to the £50,000 costs cap in Patents County Court actions.

Business minister Michael Fallon said: “Lower legal costs will make it easier for entrepreneurs to protect their creative ideas where they had previously struggled to access justice in what could often be an expensive progress. A smarter and cheaper process is good for business and helping businesses make the most of their intellectual property is good for the economy.”

Julian Heathcote Hobbins, general counsel at the Federation Against Software Theft (FAST), welcomed the development. “It promises to ease the path to justice for smaller copyright holders that have been effectively frozen out of the traditional judicial system, which for them is unduly burdensome and complicated,” he said.

Robin Fry, a partner at DAC Beachcroft LLP and member of FLAG, added: “Intellectual property claims have, until now, been unfairly excluded from the small claims court, leaving many creatives, developers and designers adrift without a practical measure to prevent unlawful copying. The judicial system will soon realise that these kinds of disputes can, in many cases, be straightforward and that infringement can be readily identified. Once this is established, the current £5,000 cut-off figure must be raised significantly.”

Mr Heathcote Hobbins added: “Although, in the first instance, a limit of £5,000 seems sensible, keeping the threshold so low for the long-term may risk unfairly excluding many smaller software houses. It’s important that the threshold for claims adequately reflects the reality faced by software companies today, to enable them to resolve their disputes simply and cheaply and relieve the burden of these cases from the courts.

“To boot, the icing on the cake would be to be able to initiate the claim online akin the debt recovery service where claims are slam-dunk.”


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LCJ: higher remuneration in private practice

Research has shown widespread disaffection among the judiciary with working conditions, including findings that almost half of High Court judges would quit the bench early if possible.

Nearly twice as many judges in 2016 felt like going than did two years earlier.

Meanwhile, the government has dropped a key proposal aimed at increasing diversity in the judiciary – introducing single, non-renewable fixed terms for fee-paid judges – after a consultation revealed broad opposition to the plan.

The 2016 UK judicial attitude survey for England and Wales courts and UK tribunals carried out an online poll of salaried judges anonymously last summer. All but 22 of the 1,602 judges in courts and tribunals combined completed the survey.

Results included that while the overwhelming majority believed they provided an important service to society and found the work satisfying, just 2% of judges felt valued by the government and 3% by the media, compared to 43% by the public at large.

Three-quarters said their conditions had deteriorated since the last attitudes survey in 2014, with a similar proportion claiming their pay and pension entitlement combined did not reflect the work done. Almost two-thirds said both pay and pension changes had negatively affected the morale of colleagues.

More than a third of the salaried judiciary (36%) said they might consider leaving early in the next five years, with almost half (47%) of High Court judges agreeing. Overall, 42% of judges would leave if they had a viable alternative, almost double the 23% finding in 2014.

Calculated by gender, 31% (144) of female judges said they were currently considering leaving.

Eight out of 10 judges said higher remuneration would keep them in the job until retirement age, while 57% said a settled position on pensions and 56% better administrative support would be reasons to stay.

In other findings, just over half of judges had concerns for their personal safety in court and 37% outside of court. More than half rated the standard of IT used in court as poor and some four in 10 felt IT support, internet access and personal IT equipment was also poor.

While three-quarters of judges were satisfied with the quality of judicial training, large numbers were unhappy with the short amount of time they had to discuss work with colleagues, insufficient support for stressful work conditions, and inadequate opportunities for career progression.

In a joint statement, the Lord Chief Justice, Lord Thomas, and the Senior President of Tribunals, Sir Ernest Ryder, said the finding would help in making “evidence-based recommendations” to government on judicial pay.

“In the light of the substantially greater remuneration available to the most able practitioners in private practice, these matters are vital to our ability to attract candidates and retain judges of the highest calibre.”

On the government’s plans for revised terms and conditions for judges, the Ministry of Justice abandoned the proposal to introduce single, non-renewable terms for fee-paid judges after the measure was roundly condemned by a majority of the more than 400 responses to consultation.

The policy aimed to improve the diversity of the fee-paid judiciary and create clearer career progression by explicitly designating fee-paid office as a stepping stone to salaried judge.

Objections included that it would mean experienced judges left the service at the end of their term, particularly tribunal judges.

Law Society president Robert Bourns said: “Setting non-renewable fixed terms would have been a backwards step, making these roles less attractive to new judicial candidates, and we’re pleased the government has listened to the responses to their consultation and thought better of this idea.”

But the government said it would press ahead with plans to replace guaranteed sitting days with an “expectation” of the number of days. Mr Bourns said he was concerned: “Removing clear minimum expectations of income and time does not add flexibility, but instead makes it harder for solicitors and their firms to understand the commitment they are entering into.”

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Jordan: culpable failure

The High Court has ordered well-known Formula 1 personality Eddie Jordan to pay indemnity costs after he accepted a “very historic” £15,000 part 36 offer that was still open on the eve of trial – and which was £85,000 less than he had been offered a year earlier.

Mr Justice Mann said he was penalising Mr Jordan’s dilatory conduct of his claim – which related to phone hacking – and “the culpable failure to engage in negotiations which would, if conducted more properly, have been likely to have led to a settlement”.

In Jordan v MGN Ltd [2017] EWHC 1937 (Ch), the judge said: “The bottom line is that Mr Jordan did not advance any explanation, let alone a good one, why, having run his case for 2½ years, having failed to respond properly to a number of offers, one of which was close to his own proposed financial settlement, having caused himself and the other side to run up significant amounts of costs, and having exposed the defendant to the prospect of having to pay the CFA uplift and ATE premiums (which I am satisfied is a powerful threat to a defendant), should at the last minute do the equivalent of walking away from the action.

“I consider that all those factors, and the other matters referred to in this section, are good reasons for ruling that the costs be paid on the indemnity basis, and I so order.”

The action began in August 2014. During the course of its progress to trial, there were a number of both part 36 offers and ‘without prejudice save as to costs’ (WPSAC) offers, which were largely ignored.

The first was a part 36 offer in September 2014 that included an offer of £15,000 in damages. The figure kept going up and by June 2016, the defendant was offering £100,000. However, on the eve of the trial last month, Mr Jordan accepted the September 2014 offer.

Under part 36, this meant that Mr Jordan would have his costs until the expiry of the offer in October 2014 (although here an undertaking from the defendant meant the costs started from September 2016), and he would then have to pay MGN’s unless it was unjust to do so.

Mr Jordan sought to argue that it was unjust, but Mann J said his counsel “has not even begun to make a case for departing from the usual order…

“The claimant has been responsible for prolonging litigation for a considerable period and then (basically) caving in. The just result is that the normal consequences of the late acceptance of a part 36 offer should follow.”

MGN went on to seek indemnity costs, with Mann J finding it justified on Mr Jordon’s failure to engage properly in settlement negotiations.

He cited a previous, unreported, ruling he gave in the phone hacking litigation in March 2017, where he said: “It may be that inviting one’s opponent to make a series of offers without ever making on oneself after an initial stab… is a clever tactical manoeuvre to extract ever higher offers, but there comes a point at which it does not facilitate settlement.”

He also quoted the comments of the Chancellor of the High Court, Sir Geoffrey Vos, earlier this year in OMV, in which he warned that parties were obliged to make reasonable efforts to settle, and to respond properly to part 36 offers made by the other side, or face penalties.

Mann J said: “In my view the claimant has fallen short in that process. I leave out of account the early part 36 offers. Not to respond to those at an early stage of the litigation is not so culpable.

“But the failure to start to engage when the 2016 offers started coming in and increasing is culpable. One would have thought that a client who was willing to consider settlement would have started to engage more at that point.

“I find it hard to believe that a normal paying client, who was not litigating under a CFA and with the protection of ATE insurance, would have adopted the tactic of not responding and not engaging further.”

Nonetheless, the lack of engagement would probably not, of itself, have justified indemnity costs, the judge continued. “It is the addition of what happened towards the end of the process which does.”

In April 2017 the claimant made a £90,000 offer, to which the defendant responded that if that had been offered back in July 2009, the proceedings could have been brought to an end.

“On the evidence I have seen I think that that is likely… There was therefore, in my view, a culpable failure to engage in negotiations which would, if conducted more properly, have been likely to have led to a settlement. That is very significant matter.”

Also of significance was Mr Jordan’s late decision not to go to trial, having given every indication that he was ready for it.

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Linetime200Freeths LLP has contracted with Linetime to implement their Liberate litigation software. The system will support the firms growing Commercial Recoveries team.

Freeths LLP have 700 staff operating from 11 cities, offering a wide range of services for businesses and individuals.

Graeme Danby, head of creditor services at Freeths, said: “We already had a system in place handling the core of our day to day case loads. As part of our plans to grow the business unit, we undertook a review of our supporting technology. After researching the leading providers we selected Linetime’s Liberate system. It will assist in the provision of a streamlined, efficient and consistent service for our clients.”

The team will benefit from greater systems support and clients will have online access via the Liberate web portal to real time case information.

Freeths Recoveries team acts for Invoice Finance Providers, Insolvency Practitioners, Local Authorities and Finance Companies.

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Stark: it is hard to see any justification for this change

A government bid to give the key element of the Jackson reforms retrospective effect was today branded “patently unfair” by costs experts and likely to encourage defendants to start stringing out cases.

The Legal Aid, Sentencing and Punishment of Offenders Bill currently states clearly that success fees will still be recoverable on conditional fee agreements (CFAs) that are entered into before the reforms come into force.

However, this is subject to an amendment laid by justice minister Lord McNally, which will be debated in the bill’s House of Lords report stage this week. Though not entirely clear, this appears to say that where a costs order is made after the reforms go live, the success fee will not be recoverable, even if the CFA was signed before the provisions come into force.

Iain Stark, chairman of the Association of Costs Lawyers, said: “Putting aside the rights and wrongs of the Jackson reforms, it is patently unfair to retrospectively change the terms of the agreement between solicitor and client. Depending on the terms of the CFA, solicitors may suddenly find themselves unable to claim their budgeted success fee from either the other side or their own client. Barristers would be similarly affected.”

Mr Stark said the amendment, if passed, would put solicitors taking on new clients in a dilemma over whether to take the risk that the case will conclude before April 2013, the date when the reforms are currently expected to come in. They will also have to advise clients accordingly.

He added: “The amendment is a licence for paying parties that want to avoid paying success fees to start stringing cases out so that the costs order is made after the commencement date.

“Retrospective legislation is rarely a good idea and it is hard to see any justification for this change. Success fees should cease being recoverable for agreements entered into after the commencement date – that is the simple, logical and fair approach.”

Simon Gibbs, a partner at defendant costs practice Gibbs Wyatt Stone, said the amendment would cause significant practical problems, asking: “Why would any defendant settle a claim between now and April 2013?”

He said that existing clients – who as a double whammy would not be subject to the Jackson 25% success fee cap – “would have been denied any opportunity to make an informed decision to try to negotiate the level of success fee with the solicitors or find solicitors who would charge a lower success fee – a central element of Jackson’s vision”.

Solicitors who have CFA Lites would be unable to recover any success fee, he added, while practitioners will need to consider the impact on their advice: “If a solicitor gives this information to a client when entering in a CFA at any point since this amendment was proposed – apparently 7 March 2012 – and this amendment is then implemented, it would almost inevitably make any such advice negligent and almost certainly prevent the solicitor recovering the success fee from the client.”

However, others have suggested that the woolly drafting of the amendment masks that it is actually aimed more narrowly at catching collective CFAs signed before April 2013.

UPDATE 13 March: A Ministry of Justice statement has clarified the situation: “We are committed to reforming the 'no win no fee' system so that legal costs for reasonable compensation claims will be more proportionate, and avoidable claims will be deterred from going to court. This amendment brings collective conditional fee agreements in line with our planned reforms to conditional fee agreements. This means that success fees will not be recoverable in either type of case from April 2013 onwards.”

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RBS: Signature represents large number of claimants

The law firm acting for shareholders in the RBS rights issue litigation has secured a substantial correction from the Sunday Express to a story that implied it was in dispute with its clients, after making a complaint to the Independent Press Standards Organisation (IPSO).

Signature Litigation said the newspaper had breached clause 1 of the IPSO code – on accuracy – in an article in the newspaper headlined “RBS shareholders tackle own lawyers”, published last November. The online version’s headline was “RBS to lock horns with former lawyers in legal battle over £200m payout”.

The firm acts for a large number of claimants in the case and was retained in that capacity by the RBoS Shareholders Action Group, which acts as agent for the claimants. Last March, the role performed by the group was delegated to Manx Capital Partners on a sole exclusive basis.

According to a resolution statement issued by IPSO – which ultimately did not need to adjudicate on the complaint – a dispute arose between the action group and Manx as to the terms and effect of that delegation, which resulted in litigation. Signature was not a party to it.

It was settled with the action group agreeing not to appoint or instruct any other solicitors.

The Sunday Express article referred both to settlement damages paid to the claimants represented by Signature and also to the Manx dispute.

The firm said the newspaper was operating “on a fundamental misunderstanding of the matter upon which it was reporting” by conflating the two, which it argued resulted in a number of inaccuracies being published by the newspaper, including in the headlines.

The newspaper disagreed but offered Signature the opportunity to submit a letter for publication.

As a result, IPSO began an investigation, after which the newspaper offered to remove the original online article and replace it with an amended article, “the content of which had been agreed between the parties and which removed the inaccuracies that the complainant had complained of”.

The paper also removed the original online article from the other online platforms over which it had control, including its apps.

Signature said these steps resolved the matter to its satisfaction, meaning IPSO did not make a determination as to whether there had been any breach of the code.

A firm spokesman said: “The RBS rights issue litigation has in the past suffered from misreporting, which it has been important to correct in order that claimants and the public are not misinformed. We took action in this case to correct a number of inaccuracies and we were pleased to resolve the complaint having all of those removed.

“Signature Litigation has only ever acted for claimants, and not for the RBoS Shareholders Action Group Limited, which was the former agent in that case. The new agent is Manx Capital Partners Limited, by whom we are instructed on behalf of the claimants.

“The action group company recently challenged Manx’s authority to manage the litigation, but this was resolved by the court in Manx’s favour.

“We are delighted with the result we achieved for the claimants in the RBS rights issue litigation, which was more than double that achieved for any other claimant group. We are currently verifying all the shares and costs incurred in this case, in order to distribute funds to the claimants as soon as possible.”

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Bogart: market demand

Bogart: market demand

Leading third-party funder Burford Capital is set to announce strong results for 2014 after committing three times more to litigation than it did the year before, and net returns hitting 60%.

The company has also announced the acquisition of a business intelligence firm that specialises in asset tracing and judgment enforcement worldwide.

In a preview of its annual financial statement, which will not be published until March, Burford said it had made $150m (£99m) of new investment commitments in 2014, more than three times 2013’s level. It did not say whether any of these were in the UK.

Recoveries are also significantly up. Since inception five years ago, 32 investments have generated $209m in gross investment recoveries and $78m net of invested capital, producing a 60% net return on invested capital – compared to 52% in 2013. It also virtually doubled the cash generated to $63m.

Burford CEO Christopher Bogart said: “Burford’s performance continues to validate our approach to investment selection and the quality of our team. Moreover, the volume of new commitments made during the last year shows clearly the market demand for litigation finance solutions.”

The acquisition – through “indirect subsidiaries” of Focus Intelligence Ltd – increases the range of judgment enforcement options Burford offers. A London-based team of eight legal and investigative specialists are joining its ranks.

The company said it will make their services available to clients on a contingent basis so that they will only pay if assets are recovered, while other services from Focus – including enforcement intelligence, and litigation and arbitration support – will be charged on a fee basis.

Burford said it is also now prepared to purchase uncollected judgments and awards outright and then collect them at its own cost and risk.

In a statement, Focus founders Daniel Hall and Michael Redman, who are now Burford’s co-heads of global judgment enforcement, said: “We’ve successfully built Focus as a leading provider of corporate intelligence with a substantial roster of multinational clients. Now, with Burford’s capital, we’ll be able to bring the judgment enforcement business to an entirely new level.”

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CostsMasterWe are pleased to announce that CostsMaster Draftsman 5.0.44 is now available to download from our website. This version includes support for the New Format Bill, the Revised Precedent H and Precedent R, tasks, activities and expenses, the ability to import work tagged with tasks and activities and much much more.

There are two versions of the new format bill in version 5, one that sticks closely to the published template plus one alternative version that rearranges the sheets into a more familiar order and adds a few visual touches as well.

The support for Tasks and Activities has meant there are a number of changes to version 5. Whilst you can still record work solely by phase for the purpose of producing costs budgets and phase bills, and indeed do all the things you could do in version 4, version 5 installs alongside version 4 meaning you still have access to the older version should you need to access a file in a hurry before you are fully up to speed. We have also produced a guide to the major changes in version 5 to help you get up to speed with minimal fuss.

CostsMaster Draftsman 5 is a free upgrade for current subscribers.

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Walden: e-disclosure presents all sorts of challenges

Walden: e-disclosure presents all sorts of challenges

LLM students at the school of law at Queen Mary University of London will next month become the first in the UK to be part of a new academic course in e-disclosure.

Teaching will be delivered by leading lawyers and practitioners, and students will undergo hands-on training using KCura’s e-disclosure software, Relativity.

The 11-week module was conceived by Maggi Healey, a former litigator who now specialises in e-disclosure at The Review People.

Ian Walden, professor of information and communications law at the university’s Centre for Commerical Law Studies, said: “E-disclosure is now firmly at the heart of modern legal practice. It is a world-wide application of electronically stored information that will present new challenges for lawyers. For students to receive training by the leading experts in this field, and get hands-on training with Relativity, is a huge opportunity.

“The environment in which our students will work spans the full range of digital and electronic material including e-mails, presentations, voicemail, databases, audio and video files, social media posts, and web sites. It’s critical that law students are able to fully interact with this sort of content from day one in their careers.”

The students will be marked on an essay basis for 80% of the module, with 20% on a practical basis.

Professor Walden added: “This is an area for which the legal profession has had to tool up very quickly. At the broad level, e-disclosure presents all sorts of challenges in terms of using electronic data – this material must be properly understood if it is to be preserved and used as part of a legal case.

“We are also operating in a big-volume environment – the sheer amount of information that needs to be acquired, analysed, and properly accounted for is, in itself, a significant challenge.”

Ms Healey is joined as course co-ordinator by solicitor Simon Manton, regional director of Epiq Systems, and Bevan Brittan partner Marie-Claire O’Hara, and will be supported in the delivery of the course by volunteers from the profession, including top e-disclosure consultant Chris Dale, Clive Freedman QC, and Pinsent Masons senior associate Andrew Herring.

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Neuberger: legitimate expectation

The Supreme Court has ruled against three leading newspaper groups over having to pay claimants’ success fees and after-the-event insurance under the pre-LASPO regime, saying that the media’s rights under the European Convention on Human Rights were not engaged as critically as the rights of those suing them.

The court said the claimants had a legitimate expectation under the Access to Justice Act 1999 that they would be able to recover additional liabilities at the time they entered into conditional fee agreements (CFAs), and this was a bigger consideration than the newspapers’ argument that recoverability infringed their article 10 right to freedom of expression and would have a ‘chilling effect’ on their reporting.

Giving the unanimous judgment of the court, its president, Lord Neuberger, said: “It is a fundamental principle of any civilised system of government that citizens are entitled to act on the assumption that the law is as set out in legislation (especially when its lawfulness has been confirmed by the highest court in the land), secure in the further assumption that the law will not be changed retroactively – ie in such a way as to undo retrospectively the law upon which they committed themselves.”

He was ruling in three conjoined cases, Times Newspaper Ltd v Flood, Miller v Associated Newspapers Limited, and Frost and others v MGN Limited, the latter two of which were leapfrogged from the High Court. The first two concerned libel proceedings, the latter phone hacking.

Each exposed the tension between the House of Lords costs ruling in Campbell v MGN in 2005 – which determined that the then CFA regime was not a breach of article 10 – and the European Court of Human Rights’ (ECtHR) 2011 decision in MGN v UK, when it held that recoverability infringed the newspaper’s article 10 rights.

However, while indicating that it was hard to impugn the European court’s decision, the Supreme Court said it was “very difficult” to see how Mr Miller’s claim under article 1 of the first protocol to the convention (right to property) – about his legitimate expectation at the time he signed the CFA – “could be defeated”.

Lord Neuberger said: “Parliament did not see fit to render the LASPO regime retrospective: on the contrary, as explained above, the 1999 Act regime applies to all proceedings begun before 1 April 2013.

“Parliament thereby correctly recognised that, while the 1999 Act regime was unsatisfactory, it would be wrong to disapply it to proceedings which had been issued in the expectation that that regime would continue to apply to those proceedings.”

He added that given the purpose of the 1999 Act regime – as the Strasbourg court accepted – was to enable people to get access to the courts, to hold that Mr Miller could not recover the success fee and the ATE premium could infringe his right to fair trial under article 6.

Further, it may be that such a decision would infringe Mr Miller’s article 8 rights as well, given that the purpose of his bringing the proceedings was for the purpose of restoring or maintaining his personal dignity.

“However, no argument based on article 6 or article 8 was raised at all on behalf of Mr Miller (or Mr Flood). In those circumstances, I prefer to base my conclusion on Mr Miller’s A1P1 right not to be deprived of his accrued rights and his legitimate expectations…

“To refuse the costs order which Mr Miller seeks would directly infringe that fundamental principle. While freedom of expression is, of course, another fundamental principle, it is not so centrally engaged by the issue in this case: the decision in MGN v UK is essentially based on the indirect, chilling, effect on freedom of expression of a very substantial costs order.”

As a result, Lord Neuberger declined to reach a definitive conclusion on whether the ECtHr ruling was part of domestic law.

Were the Supreme Court to do this, “it would not technically bind the government [as it was not a party to this case], but it would make it difficult for the government to re-open the question in this country, and it could make it more difficult for the government to challenge the conclusion and reasoning in MGN v UK in Strasbourg.

“Although we are not being asked to make a declaration of incompatibility, a decision that the [ECtHR ruling] applies but cannot assist the appellants in the three appeals could have very similar consequences, and section 5 of the Human Rights Act 1998 requires the government to be notified if a declaration of incompatibility is sought in any proceedings.”

The claimants’ argument in Frost v MGN was weaker as the claimants – who were victims of phone hacking – all entered into CFAs and took out ATE insurance after publication of MGN v UK ruling.

Lord Neuberger said: “Despite that, I would reach the same conclusion as in Miller v ANL. Notwithstanding the judgment in MGN v UK, until LASPO came into force, the 1999 Act regime, as approved by the House of Lords in Campbell (No 2), was lawful in domestic terms, and, with all its flaws, it represented the domestic policy whereby citizens could get access to the courts to vindicate their civil legal rights.

“Parliament could have enacted that decisions of the Strasbourg court had direct effect on UK law, but, for good reasons, it did not do so.”

Further, he continued, a “more fundamental” reason to reject MGN’s appeal was the ECtHR ruling could not be properly invoked in a case involving “the persistence, pervasiveness and flagrancy of the hacking and blagging, and the lack of any public significance of the information which it would be expected to and did reveal”.

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High Court: Premium was reasonable

A regional costs judge was “quite wrong” to assume that “his underwriting skill was better than that of the underwriter” and slashing an after-the-event insurance premium by 85%, the High Court has ruled.

Mr Justice Martin Spencer also found that the claimant had little choice but to accept the quoted premium “and the necessity of so doing makes the premium proportionate”.

In Percy v Anderson-Young [2017] EWHC 2712 (QB), the claimant suffered a severe head injury as a passenger in a road traffic accident.

Her claim settled at mediation and the parties agreed all the costs except for the after-the-event (ATE) insurance premium of £533,017 payable to LAMP.

A regional costs judge, District Judge Moss, reduced the recoverable premium to £82,513.

Initially LAMP provided £50,000 of cover but as it emerged the case was likely to go to trial, the insurer – though on the evidence reluctant to take on the “very significant risk” that a part 36 offer would not be bettered – agreed to top up the cover to £500,000. The premium quoted was £319,315 up to 45 days before trial and £533,017 within 45 days of trial.

Contrary to the expectation of both parties, the claim settled shortly before trial for £1.4m. Costs of £1.1m included the ATE premium. All was agreed except the premium.

Spencer J said there was “an important distinction” between a case where a cost judge decided whether the level of cover was too high – which was not the situation here – and one where the suggestion was that the underwriting decision was flawed and the judge was essentially second-guessing the underwriter.

“District Judge Moss did indeed fall plainly and directly into the trap identified by the Court of Appeal in Rogers and set himself up as better placed than the underwriter to identify the financial risk which the insurer faced.

“Furthermore, if the district judge was to apply such a huge reduction to the premium, a reduction in excess of £400,000, I am very surprised that the district judge did not give directions for expert evidence and/or for [Alan Strange, LAMP’s chief information officer] to give oral evidence: in my judgment he should have done and his decision was flawed in the absence of having so done.

“No-one could suggest that this would have been disproportionate, given the sum at stake.”

Spencer J also criticised the district judge for concluding that the underwriting decision was flawed because it looked only at the chance of the matter going to trial and not at the chance of the claimant exceeding the part 36 offer.

He said it was fair to assume the defendant thought he had a very good chance of securing an award within the part 36 offer, while “this was archetypically the kind of case which could have seriously unravelled for the claimant at trial”.

He continued: “In my judgment, a wholly reasonable attitude for the underwriter to have taken would have been to say: ‘Once the matter gets to trial, all bets are off.’ I expect that this was in fact Mr Strange’s approach.”

Spencer J further criticised the district judge for not actually applying a broad-brush approach, but rather carrying out “a form of mathematical exercise” by wrongly starting with the premium of £319,350 and then applying “an arbitrary” deduction of 75% in assessing the premium at 25% of the starting point.

He also found “considerable force” in the claimant’s submission that the district judge’s ruling would leave claimants’ solicitors in an impossible position. The claimant her faced a binary choice of taking out the additional cover or run the risk of losing a 10-day trial and facing a costs order in excess of £500,000.

“In my judgment it is fanciful to suggest that, had [claimant solicitor Andrew Duff] said to Mr Strange ‘I think your premium is too high’, Mr Strange would have responded, ‘Oh, very well then, I will reduce it by over £400,000’.

“Mr Duff was entitled to assume that the premium he was being quoted was a bona fide and reasonable premium for the risk which the insurer was undertaking, not least because he, Mr Duff, also believed that the prospects of settlement at the mediation were small and that this was a case which was likely to go to trial.

“If he did not think that the claimant could possibly take the risk of going to trial without this insurance, why should he have thought that the underwriter ought to have a different perception of the risk?

“In my judgment, the claimant in this case had little choice but to accept the quotation from LAMP and the necessity of so doing makes the premium proportionate.”

The premium was reasonable, he concluded, and there was no evidence to suggest the underwriting risk was misjudged.

As a result, Spencer J allowed the appeal and assessed the ATE premium at £533,017.

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Jackson: greater flexibility

Jackson: greater flexibility

The new format bill of costs developed by the Hutton committee needs to be brought into use – perhaps from October 2017 – but should be decoupled from the J-Codes to make it more palatable to the profession, Lord Justice Jackson said last week in a bid to restart momentum towards one of the unfinished elements of his reforms.

It emerged in January that the Civil Procedure Rule Committee had said it was “too soon” to make the new bill compulsory, leaving the work of the Hutton committee in limbo.

But in a speech at the Law Society last week, the man whose recommendations led to the creation of the committee – originally chaired by Jeremy Morgan QC and now by Alex Hutton QC – said that while the CPRC was “right to be cautious”, there was now “a state of deadlock”.

He said: “We need practical proposals to break the deadlock and advance the discussion.”

Using the bill prepared by the committee, but without mandating use of the J-Codes, would allow “greater flexibility”, he said.

Jackson LJ said that though the J-Codes conferred “considerable advantages” on users, it was never intended to make them mandatory for the new bill of costs. “The Hutton committee took the view, correctly, that it would be beyond its remit to do so…

“Most – if not all – of the criticisms about the new format bill of costs are aimed at the J-Codes. There are strong views on both sides of the debate. As a result of the new format bill’s foundations being built on J-Codes, this has meant that the entire bill has been criticised rather than one discrete part of it.”

Instead, he said, the CPR should allow practitioners to prepare that bill in any manner of their choosing, whether with the assistance of J-Codes, automatically generated by an Excel spreadsheet or by hand.

“A digital copy of the bill should be served on the court and the paying party along with an electronic spreadsheet, which clearly and accurately details the work done in the course of litigation, following the Precedent H stages. This should be in the same format of phase/task/activity and adopt the Precedent H guidance for what work falls in a given phase.

“Time entries can either be generated automatically by time-recording software or inputted manually by those who prefer to record their work done on paper. For those using J-Codes, the Hutton Committee spreadsheet provides an excellent tool for preparing the bill.”

The judge laid out three reasons to commend this approach: “The new format bill integrates with costs budgeting and Precedent H. It can be generated automatically by time-recording software. It provides a framework for software providers to create tools for the professions.

“Secondly, it makes good use of the excellent work of the Hutton committee. Indeed, it would not be possible without it. While revising the proposals will mean that the current version of the spreadsheet and the J-Codes are not an essential part of the scheme, their value will be preserved for those who adopt J-Codes… the professions should give serious consideration to them.

“Thirdly, it sidesteps much of the criticism which gave rise to the present delays. The print version of the bill and the accompanying spreadsheet are not radical innovations. Nor do they involve significant cost. They require only a basic level of computer literacy and an understanding of how to present information clearly.”

One of the major objections to the Hutton committee’s work was the fear that retrospective application of the new format bill and of J-Codes would increase the cost of bill preparation dramatically.

Jackson LJ’s “complete solution” to this was for the CPRC to choose a future date for the implementation of the new bill, and only work done after this date would have to be done in the new format bill.

“May I suggest that the new form bill of costs should be mandatory for all work done on or after 1 October 2017? The voluntary pilot under PD 51L could be extended until that date.”

The judge also mooted fixing or capping the recoverable costs of preparing the bill.

“The receiving party should only expect to recover up to a certain amount for the preparation of the bill – possibly expressed as a percentage figure of the total value of the assessed bill.”

He also argued that the new format bill was required even if fixed costs were introduced for the multi-track.

Jackson LJ published a “possible preliminary draft of the new bill”, adding: “Regardless of whether this particular proposal is accepted or not, one thing does need to be kept in mind: the status quo is of no benefit to anyone.

“Investment decisions on time-recording software are being deferred. The work of the Hutton committee has been left to lie fallow. Most egregiously, we still have a bill of costs that was identified as being seriously deficient many years ago.”

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Rising cost

Rising costs: The “opposite” of what the reformers hoped for

Budgeting has “forced costs up and will continue to do so”, John Bramhall, president of the London Solicitors Litigation Association (LSLA), has said.

His comments came as 85% of litigators predicted that post-Jackson budgeting would increase costs, in a survey by the LSLA and New Law Journal.

Only 37% said they found costs budgeting a helpful part of the litigation process and 65% believed the Jackson reforms in general, including the new rules on disclosure, had increased costs.

Mr Bramhall said it was “hard to escape the continuing concerns that litigators have”, particularly those with larger teams who made up two-thirds of the 128 survey respondents, that budgeting had “forced costs up and will continue to do so”.

He said this was “the opposite” of what reformers hoped to achieve.

“It suggests that after a suitable bedding-in period, we should take stock to see if further adjustments can be made that bring us closer to achieving the end goal of a more efficient, cost-effective process which we all wish to work towards.”

Mr Bramhall said the Denton ruling had “helped to restore sensible collaboration among litigators which had been in danger of being irreparably undermined” by Mitchell and other rulings on relief from sanctions.

“When common sense is allowed to prevail we have a much better chance of containing costs and achieving decent outcomes for our clients.”

However, most of the litigators who took part in the survey were cautious about the impact of Denton, with 68% believing it was “too early to say” whether the ruling had achieved the “right balance” in control of litigation by the courts.

Of the remaining 32%, most (19%) thought Denton had not achieved the right balance.

Elsewhere in the survey, 59% of litigators said they had stopped offering or restricted their use of conditional fee agreements. Only a third said they used, or intended to use, damages-based agreements.

While almost half of the lawyers in the survey said there had been no change in the affordability of ATE insurance since April 2013, 34% said they were able to secure “economic” cover.

Litigators were evenly split on whether the amount of litigation would decrease (36%) or stay the same (38%) over the next five years, with only a quarter predicting it would increase.

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Deaf clients: rocky road ahead from next month

640-864 dumps

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 will have a “negative effect” on the deaf and hard of hearing, according to the only law firm in the country 700-505 with a practice dedicated to this part of the population.

Joseph Frasier Solicitors, based in Blackburn, Lancashire, launched a campaign in 2011 to make legal services more accessible to deaf people and has invested more than £200,000 in state-of-the-art technology to make its communications and services more deaf aware.

The firm has facilities such as webcams, text relay, MSN, text, Skype, Twitter and onsite interpreters to better understand clients. Fee-earners are British Sign Language trained and the cost of an interpreter is included in fixed price fees.

Chief executive Saimina Virmani said the 1 April reforms mean many deaf and hard of hearing claimants have “a rocky road ahead”.

She explained: “When deaf people need legal advice, they either go to a charity or a community group and get referred on through word of mouth to a solicitors’ firm.

“But with legal aid being cut, more and more prospective clients don’t qualify and because Jackson is putting such pressure on firms’ profits, many won’t pay for an interpreter.”

Ms Virmani cited a bleak picture in the north-west, with several firms going bust in recent months.

But she said her concern is not for her firm – turnover is up 77% in the past five years despite no external funding or major investment – but for the clients they have to turn away.

She added: “We’ve been quite successful because we’ve focused on a certain niche. My focus now is on lobbying for change. The Solicitors Regulation Authority (SRA) needs to properly regulate firms so that they only give advice to deaf clients if they have BSL-trained staff, the government needs to change the legislation on the control of noise at work and the state should consider serious provision for interpreters.

“[Last year] the SRA and Legal Services Consumer Panel published a report and came in to see what we were all about. But nothing’s been done to follow it up. There is less access than ever.”

At an event last week Joseph Frasier Solicitors was presented with its Lexcel accreditation and a Department for Work and Pensions ‘Positive About Disability’ award.

The only dedicated legal resource for deaf people is the RAD Deaf Legal Centre (part of the Royal Association for Deaf People). Last month it launched a call-centre style webcam portal to allow deaf people to get in contact in BSL online.

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Bogart: unique environment

Top litigation funder Burford Capital has put aside £10m for insolvency litigation as part of a strategic relationship with sector specialist Manolete Partners plc.

As part of the deal Burford will become a 16% shareholder in Manolete, which focuses on acquiring and funding insolvency litigation. The initial £10m is for co-funding investments.

Manolete was founded in 2009 and has seen growth of more than 100% each year since its formation. It is backed by Jon Moulton, one of the UK’s leading private equity investors, and P-Solve, the investment adviser arm of actuaries Punter Southall.

Manolete managing director Steven Cooklin said: “When I founded Manolete in 2009, after a successful corporate finance career at HSBC, I was intrigued with the unique opportunity to apply capital to the UK insolvency litigation market. Manolete has succeeded beyond my expectations, and Burford’s capital and strategic collaboration will enable us to take Manolete far beyond the next level.”

Christopher Bogart, Burford’s chief executive, said: “The UK insolvency litigation market is a unique environment. It is not yet subject to the Jackson reforms and it permits the direct purchase of claims. Manolete has done a superb job of developing this market and we look forward to working with Steven and his team to continue Manolete’s high growth strategy.”

Mr Moulton added: “Manolete has been very successful since I invested. This transaction with Burford, the litigation finance market leader, reaffirms my enthusiasm for Manolete.”

Manolete buys claims direct from insolvent companies and funds individual insolvency practitioners to pursue claims in their own name.

Manolete operates across the entire UK insolvency industry, where clients range from the large advisory groups including PwC, Deloittes, BDO, Grant Thornton, Begbies Traynor and RSM Tenon through to smaller regional firms and boutique operators such as Wilson Field, Moorfields, Leonard Curtis and Carter Clark.

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Michael Gove

Gove: due to make announcement by end of year

The Bar Council and the Association of British Insurers (ABI) have added their voices to calls from business organisations for a permanent exemption for insolvency cases from the provisions of LASPO.

The exemption from the abolition of recovery of success fees and after-the-event insurance premiums in conditional fee cases was due to end in April this year, but was indefinitely extended in February.

Lord Justice Jackson called last month for the exemption to end, describing it as “an instrument of oppression, which is liable to crush defendants who have a good defence”.

Insolvency trade body R3 hit back, saying that abolishing the exemption from LASPO for insolvency cases would create a “windfall” for third-party funders.

A spokesman for R3 said last week that the Bar Council, ABI and Insolvency Practitioners Association had joined forces with seven other business organisations, including accountancy bodies the ICAEW and ACCA, in writing a letter to the justice secretary.

In the letter, the groups called for the exemption to be made permanent, ahead of an announcement from Michael Gove expected by the end of the year.

“Without this exemption, directors who commit fraud, are negligent or wrongly take money out of business could be able to walk away with £160m a year: money that is owed to creditors, including small businesses and HMRC.

“This will undermine the good work the government has been doing on tackling tax avoidance, evasion, director misconduct, fraud and improving financial redress for creditors.”

The groups went on: “A permanent exemption for insolvency litigation would protect the public interest and public money – the two objectives the LASPO Act sought to address. It would deter white collar crime and put money back in the hands of creditors.”

The spokesman for R3 said the letter coincided with an early day motion tabled last week by MP Greg Mulholland, calling for a government review of plans to end the insolvency exemption. An early day motion in the last parliament was signed by 69 MPs.

Philip Sykes, president of R3, said a commitment by the Ministry of Justice to keep the exemption would be in the public interest.

“The exemption is used to return millions of pounds to creditors every year following business failures, including money owed to high street businesses and the taxpayer.

“If the exemption ends, it will be unaffordable in most cases to pursue ‘rogue directors’. There will be no money in insolvent estates to fund cases, and costs won’t be able to be claimed back from those who have taken the money either.”

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Thoresen: anger and disappointment

The Association of British Insurers has stepped up the pressure over the Law Society’s controversial “Don’t get mugged by an insurer” campaign targeting personal injury clients by calling for the £300,000 campaign to be pulled.

Director-general Otto Thoresen has escalated the row in a letter addressed to new Law Society president Nick Fluck which expressed his “anger and disappointment”.

In a strong-worded repost, Mr Thorensen branded the striking strategy as “a gross error of judgment” and said that it is “little more than public name-calling”.

And he has argued that the data, on which the central claims of the campaign are based, is flawed.

Last month, Legal Futures revealed the Law Society’s new advertising campaign which, for the first time, was focusing on a particular area of practice.

The society said the campaign “deliberately takes a bold, humorous and memorable approach” to gets its message across. It features posters on public transport and stations, PR coverage in regional media, radio advertising, online advertising and a video on YouTube. Firms can request A3-size posters and postcards, as well as a rotating banner advert for their websites.

The key message of the campaign is to urge personal injury consumers to not just accept the first offer of compensation from insurers.

According to Chancery Lane, research from the Financial Services Authority following a freedom of information challenge “revealed personal injury claimants who turn down an insurer’s initial offer and take legal advice from a solicitor get on average three times more compensation”.

However, after ABI director of general insurance Nick Starling hit back at the campaign, claiming it is lawyers who are “mugging” the public, and the Forum of Insurance Lawyers also complained about it, Mr Thorensen’s letter has added more heat to the debate.

Discrediting the Law Society’s data, the ABI stated that the figures are from a study of 113 cases from three insurers, undertaken four years ago.

In the letter, Mr Thoresen says that the authors of the FSA report themselves describe the data that underpins the study as “patchy”, “limited” and that it doesn’t give a “definitive conclusion”.

In his letter calling for the campaign to be withdrawn, Mr Thoresen states: “Your campaign is a gross error of judgment, represents a deeply regrettable resort to little more than public name-calling and it comes as a matter of considerable surprise that a professional and well-respected organisation such as the Law Society is prepared to lower itself to such action.

“I am more than aware that the insurance industry and some – but by no means all – of your members have taken different positions in the on-going debates over personal injury compensation reform.

“Robust debate on key policy issues is to be welcomed and, as part of those debates, the insurance industry has always been careful to ensure our contributions are based on evidence rather than the highly misleading and selective use of statistics.

“This campaign can only be damaging to relationships between the Law Society’s wider membership and insurers. I look forward to your assurance it will be withdrawn immediately.”

The Law Society had no comment yesterday.

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Court of Appeal: appeal does not create any new risk

A successful claimant cannot recover the cost of after-the-event (ATE) insurance taken out before an appeal to cover the risk of the original ruling and costs order being reserved, a divided Court of Appeal has decided.

The first time this point has been decided on, Lords Justice Rix and Etherton, with Lord Justice Patten dissenting, said the unsuccessful defendant would be unfairly prejudiced if this was allowed, especially as the claimant had not had the benefit of ATE cover in the original proceedings.

In Hawksford Trustees Jersey Ltd v Stella Global UK Ltd & Anor [2012] EWCA Civ 987, the Court of Appeal rejected the defendants’ appeal. While accepting the normal order for costs following the event, they raised a discrete point of principle over the recoverability of the £394,638 ATE premium, which was taken out on the eve of the appeal hearing – much of this was to cover adverse costs for the trial and appeal.

The respondent’s costs aside from the ATE premium were £63,650 and the appellants’ costs £68,502. The policy was brokered by TheJudge.

The case turned on the interpretation of section 29 of the Access to Justice Act 1999 and specifically whether, when it talks about a party taking out insurance “against the risk of incurring a liability in those proceedings”, those last two words referred to just the appeal or to the entire case.

Lord Justice Rix said it could be either – while it would be natural to think of an appeal as arising from and being part of the same proceedings, “it is nevertheless clear that trial and appeal have been treated as separate proceedings for the purposes of costs”.

He concluded that this should be the case here and that to allow the premium to be recoverable in relation to the trial costs would increase those costs retrospectively, “to the prejudice of the opposing party”.

Lord Justice Etherton said that the risk of paying the costs below was one that the claimant accepted at the time; “in that respect an appeal does not create any new risk” and so it was hard to see what “meritorious or logical policy” would be served by allowing recovery of the premium.

Giving the lead, but ultimately dissenting, judgment, Lord Justice Patten argued that it was “most unlikely that Parliament intended to lay down a rule ab initio that proceedings at first instance and those in the Court of Appeal should be treated as separate ‘proceedings’ within the meaning on section 29 to the end that it should be impossible to recover any part of ATE insurance against having to meet the costs below as part of the consequences of being an unsuccessful respondent to an appeal”.

He said he was sympathetic to the potential injustice of this position, “but they are, I think, inherent in many aspects of the 1999 reforms” and are in part behind the Jackson reforms.

Roger Stewart QC and Roger Mallalieu, instructed by Clifford Chance, acted for the appellants, and Nick Bacon QC, instructed by DLA Piper, for the respondent/claimant.

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Courts: differences between disciplining judges and appointing new ones

A solicitor who was denied appointment at a district judge because he had seven points on his driving licence has failed in his challenge to the decision of the Judicial Appointments Commission (JAC).

Giving the judgment of the Divisional Court, Sir Brian Leveson said JAC guidance that having more than six points on a licence will normally prevent applicants from succeeding was lawful.

The unusual judicial review was brought by Graham Jones, a partner at Swansea firm Smith Llewelyn and a sitting deputy district judge.

Assessed as an “outstanding candidate”, his application last year to be appointed a district judge would have been successful, it was agreed, but for two driving offences: a speeding offence which resulted in a conviction, £650 fine and four penalty points, and failing to obey a traffic signal, for which he received a fixed penalty and three points.

The JAC’s 2013 guidance gave its selection and character committee discretion not to enforce the six-point rule, but it did not choose to exercise it in this case.

Lord Justice Leveson rejected Mr Jones’s challenge to the JAC’s good character policy, saying: “In my judgment, the JAC is entitled to take the view that public confidence in the standards of the judiciary would not be maintained if persons who are appointed to judicial office have committed motoring offences resulting in penalty points at the level identified in the guideline within four years of their appointment.”

He further ruled that the policy was properly applied and that it was a rational decision. That Mr Jones continued to sit as a deputy district judge was not inconsistent as “there are important differences between disciplining those who hold judicial office… and appointing new judges”, Leveson LJ said.

In any event, the Guide to Judicial Conduct requires sitting to judges to report the fact that they have accumulated more than six points to the Lord Chief Justice. It is then a matter for the Lord Chief Justice and Lord Chancellor to decide what action, if any, to take. “In other words, there is a comparable level of offending which, for those who hold judicial office, triggers the requirement of reporting.”

After dismissing the judicial review, Lord Justice Leveson said: “Given the outstanding success that Mr Jones otherwise had in the district judge competition, however, I conclude by hoping that, as the first of his convictions will fall away later this year, he will consider re-applying when the next competition is launched.”

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Houses of Parliament

MPs concerned by “behind the scenes” deal

Lord Faulks, the civil justice minister, has denied that the government did a secret deal with the insurance industry on the handling of mesothelioma claims.

Labour MP John McDonnell told the justice select committee yesterday that the existence of a “heads of agreement” document between the government and the Association of British Insurers only came to light when it was sent to the committee, “probably misguidedly”, by the industry itself.

Mr McDonnell said the committee was not told about the document by the government or ministers and the industry later tried to withdraw it.

He questioned whether it could be a “pure coincidence” that after the industry’s discussion with the government, “quite a range” of its demands were implemented.

Fellow Labour MP Andy McDonald explained that under the deal the government would be rewarded for agreeing to remove the exemption for mesothelioma claims, inserted into LASPO during its passage through Parliament, allowing recoverability of success fees and insurance premiums to continue.

In return, he said the industry agreed to fund the special scheme for mesothelioma payments outlined in the Mesothelioma Act 2014 for victims cannot trace an employer or an employer’s insurance policy.

Mr McDonald said the document did not fill the committee with confidence that things had been done in “an open and transparent manner” and that no agreement had been reached “behind the scenes”.

Lord Faulks said he was not a minister at the time and had “no dealings” with the document. He said the document was “unusual” in having terms which were not implemented.

“If one looks at the government’s responses, they don’t actually agreed with all the industry required. I haven’t seen anything to suggest that any inappropriate bargaining was involved.

“This was a discussion with the industry, not a conventional contractual relationship between two commercial parties with interests which they are trying to compromise by way of an agreement.”

The minister said that the “heads of agreement” document was a list of bullet points in which “the parties came to a view on what they had agreed”. He accepted that it was “slightly unusual”.

Lord Faulks went on: “In my practice as a lawyer, I have not seen something like this quite before – not to say that it is inappropriate, but it is somewhat unusual”.

He added that the first payments under the Mesothelioma Act scheme would be made shortly, despite a judicial review hearing at the end of next month, challenging the consultation exercise carried out before the scheme was announced.


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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.”

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Nicholas Clark Kain Knight

Nicholas Clark, director, Kain Knight

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

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

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

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

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

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

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

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

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

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

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

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

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Vine: An open, no-blame culture is vital

Posted by David Vine, business development manager at Litigation Futures Associate Allianz Legal Protection

I am sure that many of us read with horror the findings of the review into the Liverpool Community Health NHS Trust by Dr Bill Kirkup.

He reported that every part of the system failed, leading to patients suffering “significant harm”, and this happened as the trust was considering what it could learn from the Mid Staffordshire scandal.

I don’t want this blog to be yet another hammering of the NHS, but rather highlight the need in whatever industry we’re in, public or private, for an open, no-blame culture to exist. It is the only way to learn and improve.

Time and time again we read of the fear of speaking out. Whether it is nurses and doctors in the NHS or actors in Hollywood, there appears to be a real fear of the repercussions that follow.

This got me thinking about the excellent book by Matthew Syed, Black Box Thinking, which amongst other things highlights the tremendous differences in two safety critical industries, aviation and health.

In one, lessons are learnt after every event and improvements put in place to avoid the same thing happening again. In the other, mistakes are seemingly brushed under the carpet and the all-pervading fear of speaking up permeates throughout.

Robert Rose, a partner at Lime Personal Injury, shares the view that “we have a duty of candour in this country”.

He explains: “It is a statutory duty to be open and honest with patients and families when something goes wrong that appears to have caused or could lead to significant harm in the future.

“Far too many of my clients, injured by medical mistakes, have had to seek legal advice because they are not told about when something has gone wrong , and are not told what if any action will be taken to prevent such a mistake being made again.

“If the NHS is truly going to become ‘an organisation with a memory’, it needs to ensure that it encourages an open and honest culture, where patient safety is always the first priority.”

So how will things ever change? Perhaps we need to stop thinking about our own immediate business challenges and start calling for an open and transparent NHS that isn’t afraid to admit mistakes, but learns from them with the goal of preventing them from happening again.

This doesn’t mean that the great work claimant lawyers in the clinical negligence arena should stop. One would hope that the work they do highlights the issues.

The NHS could learn from corporate business and its efforts to become more open, actively encouraging whistleblowing when it is right and proper to do so. It could also listen to those at the sharp end rather than dismissing their challenges out of hand.

Without a spirit of openness and inclusivity, we will likely continue to read about further scandals and sit on our hands squirming, thinking we must do something. By then I fear it might be too late.

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medical reports

Almost a third of experts said they had come under pressure to change reports

Almost four in ten expert witnesses do not believe that government plans to introduce compulsory accreditation for expert witnesses in whiplash cases will raise standards, a survey has found.

The survey of 186 experts by witness training company Bond Solon found that 39% thought the scheme would not raise standards, compared to 35% who thought it would. Around a quarter said they did not know.

The Ministry of Justice (MoJ) has said that implementation of the accreditation scheme, originally due by the end of this year, will not take place until after the arrival early next year of a compulsory portal, currently known as MedCo, through which lawyers must obtain medical reports.

The survey also found that 30% of experts had been “asked to or felt pressurised to” change their reports in a way that damaged their impartiality.

Researchers said: “Witnesses’ experiences ranged from being asked to remove sections of reports which were seen as damaging to the client’s case to being asked to rewrite in their favour.

“Other experts said some solicitors had even refused to pay them if they felt they had written an ‘unhelpful’ report.”

One expert told Bond Solon: “A leading firm of solicitors tried to pressurise me on more than one occasion as the client didn’t like my conclusions.” Another said: “Solicitors were asking for the report to be changed materially to the client’s advantage. Other solicitors were asking for quoted GP notes entries to be changed. I always refused.”

Another expert described how, in a case of “overt bullying”, a solicitor had threatened that failing to follow instructions could result in a wasted costs order. A further complaint was of a lawyer asking for a client’s medical history to be changed.

Not surprisingly, nearly half of experts, 45%, said they had encountered what they believed to be “hired guns” in the industry. Some 54% said they had never encountered this.

Almost half of the expert witnesses who took part in the survey, 44%, said there was a need for better regulation of the sector; 39% disagreed.

The survey found that the average hourly rate for report writing increased slightly this year, from £174 to £177. The highest hourly average rate rose from £480 to £500.

Exactly half of experts said the number of their instructions had increased this year, with 32% saying they had stayed the same and 17% that they had gone down.

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Lord Thomas: reconsider restrictions on judiciali appeal of arbitration

Lord Thomas: laws on arbitration “wrong turning”

The growth of arbitration as a means of resolving commercial disputes has retarded the development of the common law and the balance between the two should be re-examined, according to the Lord Chief Justice.

In the Bailii Lecture, given earlier this month in London, Lord Thomas argued that legislation in 1979, reinforced in 1996, to alter the relationship between the court and arbitration, “went too far… in favouring the perceived advantages for arbitration as a means of dispute resolution in London over the development of the common law”.

The consequence of the move to restrict the role of judges in appeals from arbitrations – made on the assumption that London’s attractiveness was being damaged as a centre for dispute resolution through arbitration – was a “wrong turning” in need of reappraisal, said the judge.

The changes, contained in the 1979 and 1996 Arbitration Acts, were made to create “greater finality and certainty in arbitral awards”. But ironically, by limiting the number of appeals from arbitral awards, London’s popularity as a centre for dispute resolution due to contracts based on the common law was in fact undermined, he argued.

Lord Thomas said he disagreed with the “philosophic point” behind the new regime – that “as the parties had freely chosen arbitration, the court should not interfere”. The result of the changes, he said, had been a big drop in the number of appeals from arbitral awards coming before the courts because of the narrow test for the grant of permission to appeal adopted in place of the previous, broader, ‘special cases’ arrangements.

Lord Thomas continued: “In my view, therefore, we must address what has happened and restore an essential part of the way in which courts are able to continue the development of the law that underpins our trade, financial system and our prosperity.”

He said there were a number of possible options. One was a revision of the criteria for appeals: “[To] go back to a more flexible test for permission to appeal… that would enable the courts more readily to develop the law whilst leaving arbitration as an important means of dispute resolution.”

This option had the merit of overturning the restriction on appeals, which he called “a serious impediment to the growth of the common law”, adding: “It would increase the potential for greater numbers of appeals which would provide the means to maintain a healthy diet of appellate decisions, capable of developing the law particularly on issues of general pubic importance.”

Another option was to encourage the use of section 45 of the 1996 Act, which would “enable the court to give decisions on points of law which arise after the commencement of an arbitration but before the decision”. But he acknowledged it carried the risk of “the spectre of reintroducing what was perceived to damage London’s attractiveness as a centre for arbitration”.

The third option was a general shift towards litigation instead of arbitration. The perceived advantages of arbitration over litigation – “such as party autonomy, confidentiality, enforcement, speed and low cost” – were often either unclear or failed to withstand scrutiny, he argued. “Whether to litigate, arbitrate, or for that matter mediate, a dispute will rest on many factors. What is good for one dispute may not be for another.”

He concluded: “There is also a need to examine whether other markets would be prepared to follow the financial markets, to waive arbitration in cases where there were significant points of general interest and to appreciate that not only would their own dispute, in the right case involving legal issues, be better determined in a court but, more importantly, the wider interests of their industry and of the common law in general would be much better served by more issues being resolved in court and the law thus developed and clarified.”

He ended by underlining: “It is the courts that develop the law. Arbitration does not. Courts articulate and explain rights, including definitive rulings on the scope and interpretation of contractual clauses, financial instruments and so on. Arbitration does not.

“As has been very rightly noted, ‘open court proceedings enable people to watch, debate, develop, contest, and materialise the exercise of both public and private power’. Arbitration does not.”

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Etherton: Master of the Rolls on the bench for Harrison

Costs judges on detailed assessment can only depart from approved or agreed budgets if there is good reason to do so, the Court of Appeal has confirmed today – although it said that proportionality remains a backstop safeguard.

The much-anticipated ruling in Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792 also upheld the recent decision by Mrs Justice Carr in Merrix, which was not appealed so as not to delay this decision.

The decision of Master Whalan, sitting as a district judge, was leapfrogged to the Court of Appeal, and Lord Justice Davis said it had been told that a number of detailed assessments “are currently on hold pending the outcome of this appeal”.

The bench was made up of the Master of the Rolls, Sir Terence Etherton, Lord Justice Davis and Lady Justice Black, with the Senior Costs Judge, Master Gordon-Saker, sitting as an assessor.

Alexander Hutton QC and Roger Mallalieu of Hailsham Chambers, instructed by Acumension, represented the defendant. Kevin Latham of Kings Chambers, instructed by Shoosmiths, was counsel for the claimant.

The case was a clinical negligence claim at all stages of which damages were expressly limited in value to £50,000. Liability was disputed. At the costs management hearing, the claimant put forward a budget of £197,000, made up of incurred costs of £108,000 – on which the judge made no comment – and future costs of £89,000. Success fees and the after-the-event (ATE) insurance premium were not included.

Shortly before trial, the case settled for £20,000 plus costs. The claimant then put forward a bill of over £467,000 (including success fee and ATE premium).

On detailed assessment, Master Whalan said CPR 3.18 precluded him from subjecting the budgeted costs to a “conventional” detailed assessment unless there was good reason to do so.

With regard to the incurred costs, it was “in practical terms” required that good reason likewise should be shown if there was to be a departure from what was set out in Precedent H.

He ultimately assessed the recoverable costs at £420,168 (including success fee and ATE premium).

The first issue before the Court of Appeal was whether a costs judge on detailed assessment was precluded from going below the budgeted amount unless satisfied there was good reason for doing so.

Davis LJ, giving the judgment of the court, said: “I am in no real doubt that Master Whalan reached the right conclusion on this issue and that the conclusion of Carr J in Merrix was also correct, for the reasons which she gave.”

He said he did not need to address the defendant’s submissions questioning the efficacy in practice of costs budgeting, “simply because, put shortly, the system is now enshrined in the Civil Procedure Rules”.

There was, the judge said, no ambiguity in rule 3.18. If the defendant were right, it would mean that a receiving party may only seek to recover more than the approved or agreed budgeted amount if good reason is shown, whereas the paying party may seek to pay less without needing to show good reason.

“It is difficult to see the sense or fairness in that. Nor does this argument show much appreciation for the position of the actual parties to the litigation – not just the prospective paying party but also the prospective receiving party – who need at an early stage in the litigation to know, as best they can, where they stand…

“As Mr Latham pointed out, had the intention really been that good reason is required only in instances where the sum claimed exceeds the approved budget, then the rule could easily and explicitly have said so.”

Davis LJ said the CMO did not effectively replace detailed assessment. “The effect, rather, is as to how the detailed assessment is conducted.”

Further, “the existence of the ‘good reason’ provision gives a valuable and important safeguard in order to prevent a real risk of injustice; and, as I see it, it goes a considerable way to meeting Mr Hutton’s doom-laden predictions of detailed assessments becoming mere rubber stamps of CMOs and of injustice for paying parties if the approach is to be that adopted in this present case.

“As to what will constitute “good reason” in any given case I think it much better not to seek to proffer any further, necessarily generalised, guidance or examples. The matter can safely be left to the individual appraisal and evaluation of costs judges by reference to the circumstances of each individual case.”

Davis LJ said the rules were similarly clear that there does not need to be a good reason to depart from the incurred costs figure.

“Paragraph 7.4 of PD 3E is quite specific: as part of the costs management process, the court may not approve costs incurred before the date of the budget costs management conference. What it can do is record in the CMO its comments (if any) on such costs: which are then be taken into account when considering reasonableness and proportionality…

“It follows, in my view, that incurred costs are not as such within the ambit of CPR 3.18 (in its unamended form) at all. Accordingly such incurred costs are to be the subject of detailed assessment in the usual way, without any added requirement of ‘good reason’ for departure from the approved budget.”

He added: “Where, as here, a costs judge on detailed assessment will be assessing incurred costs in the usual way and also will be considering budgeted costs (and not departing from such budgeted costs in the absence of ‘good reason’), the costs judge ordinarily will still, as I see it, ultimately have to look at matters in the round and consider whether the resulting aggregate figure is proportionate, having regard to CPR 44.3 (2)(a) and (5): a further potential safeguard, therefore, for the paying party.”

The court also ruled that a case was “commenced”, for the purposes of CPR 44.3 (7)(a), when the relevant proceedings were issued by the court. In this case it was important because it meant the difference between the old and new proportionality test applying.

Iain Stark, chairman of the Association of Costs Lawyers, commented: “This ruling is a victory for common sense and demonstrates once and for all the central importance of budgeting in litigation. The budget is a key document and the costs management process has real weight.

“The decision on incurred costs is similarly welcome. There is a danger of claimants incurring as much as possible before case and costs management conference, but they are only putting themselves at risk of adverse comments or the need for detailed assessment if they do so.

“However, the court’s comment that the costs judge on detailed assessment will still have to look at whether the final figure is proportionate risks introducing an element of uncertainty in the process.

“We hope that practitioners will now put renewed efforts into budgeting their case properly, which will provide their clients with a degree of certainty on costs.

“From a technical point of view, we anticipate that the assumptions parties make in their budgets will come under particular scrutiny as they are likely to feature prominently in any attempts to argue at detailed assessment that there is a good reason to depart from the approved or agreed budget.”

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Guernsey: Channel Island is hub of third-party funding activity this week

A recently listed third-party litigation funder is expecting to invest £50m in cases over the next year, Legal Futures can reveal, as separately Buford Capital, the largest funder in the world, enters the UK market by buying leading after-the-event (ATE) provider Firstassist Legal Expenses.

Argentum Capital – which has been investing in UK litigation since 2009 – recently listed on the Channel Islands Stock Exchange, making it the fourth listed funder after Burford and Juridica on AIM, and IMF in Australia.

Duane McGaw, London-based chief operating officer of Argentum Investment Management, which manages the fund, said the listing would create “scaleability” because it could continuously raise money to invest as required; other funders are restricted by closed funds that limit how much they can invest.

He said that with the opening up of the UK market to more funders – three have entered in recent weeks – “the growth potential is enormous… we want to develop this market”. Argentum hopes to have committed £50m by this time in 2012, with much more to come in following years, he said. It hopes to target big cases.

He urged solicitors to take up third-party funding, warning that “if the opportunities are not presenting themselves in the UK, we will go and find them elsewhere”.

Firstassist is being sold by Equistone Partners Europe, run by the former executives of Barclays Private Equity. Subject to Financial Services Authority approval, Guernsey-based Burford is paying £10.3m, and up to £7m in an earn-out payment in 2014 depending on performance.

Firstassist expects its 2011 EBITDA (earnings before interest, taxes, depreciation and amortisation – a measure of cash flow) to exceed £6m, and the full earn-out will be paid if its EBITDA for 2012 and 2013 combined is £19.3m. A lower earn-out will be triggered if this is not reached, and nothing will be paid if the combined EBITDA is below £14.5m.

Burford chairman Sir Peter Middleton, the former chairman of Barclays, will also become chairman of Firstassist.

Firstassist’s ATE activities are unaffected by the acquisition and it will now also be applied to Burford’s third-party funding where appropriate. Firstassist’s ATE policies will continue to be underwritten by Great Lakes Reinsurance (UK) plc, a subsidiary of Munich Re.

Firstassist employs 32 people and has a book of 3,000 active cases. Managing director Peter Smith said the aim was to “create a one-stop shop for litigation funding and insurance”. He told Legal Futures: “As part of the Burford empire, we will find, risk assess and hopefully manage cases that need funding.”

The process of risk assessing for ATE is “extremely similar” to that for third-party funding, he explained.

Though listed on AIM, Burford – which has raised around £200m in recent years – has until now focused on funding US litigation and international arbitration. Chief executive Christopher Bogart said entering the UK market was a long-held strategic goal and that buying a “cash flow-positive” and well-known business like Firstassist was a more appealing option than starting up from scratch. He said the “substantial regulatory tilt in favour of litigation funding” makes the UK “very hospitable”.

Firstassist predicts that the Jackson reforms will stimulate demand for external funding to support higher-value litigation, coupled with renewed demand for ATE protection.

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Clinical negligence: CJC support for fixed costs in principle

Government plans to impose fixed costs on clinical negligence cases worth up to £25,000 “will prevent many cases being brought”, the Civil Justice Council (CJC) has warned.

The CJC said it was particularly concerned that the new regime for experts “may indeed prove to be a barrier to access to justice”.

In its newly published response to the Department of Health (DoH) consultation on fixed costs, which closed earlier this month, the CJC described as “highly undesirable” the use of a single joint expert at the pre-action stage.

“If the claimant has to use a single joint expert before any letter of claim (who cannot be asked to provide advice in conference etc) from a centrally held list, there will be a feeling of material disadvantage/lack of (even-handed) access to justice.

“Put simply, expert opinion is often needed before a letter of claim is issued. A big difference between clinical negligence cases and many other forms of litigation (such as personal injury) is that, save in the most unusual cases, the solicitor cannot advise as to breach without an expert report.”

The CJC said if fees for experts in cases worth under £25,000 were inadequate, then experts “may refuse to take instructions in these cases” and restrict their work to higher-value cases.

“The problem becomes more acute in areas of specialisation where there are fewer experts willing to undertake medico-legal work.

“A sum of £1,200 to cover a report, a conference and a joint report with an expert instructed on behalf of the defendant will not be thought by many experts to be adequate remuneration (particularly in some specialist areas) and the position is highly unlikely to allow more than one expert to be instructed, which is necessary in some cases.”

The CJC went on: “In many cases an initial report will cost £1,500 or more (in case of a specialism such as neurology often significantly more); so capping fees at £1,200 would be unrealistic on the current market (it is to be noted that there has been no analysis of expert fees), and would prevent many cases being brought, particularly in certain clinical disciplines.

“So the paper, whilst recognising the need to ensure that claimant lawyers are not deterred from taking on low-value cases, fails to adequately recognise the need to ensure that experts, critical in this type of litigation, are not deterred.”

The CJC said it was opposed to the “imposition of a flat cap for all expert witnesses” and the insistence on a single joint expert would require a “re-think” of the current pre-action protocol.

However, there was support for the introduction of fixed recoverable costs in principle, so long as the new regime was “structured and financed properly”.

The CJC said the results of the DoH consultation and the wider review of fixed costs by Lord Justice Jackson should be “pooled and analysed in full by the government before bringing forward finalised reform proposals”.

The council added that it regarded the upper limit of £25,000 as “appropriate” and welcomed the dropping of the suggestion that they should be applied in cases valued at up to £250,000.

The Association of Personal Injury (APIL) called earlier this month for a “predictable claim process” for clinical negligence actions if the government goes ahead with its plans.

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Ambitious injury claim litigation practice, Garvins Solicitors LLP, is implementing the Proclaim Case Management Software solution from Eclipse Legal Systems.

The Manchester-based practice specialises in road traffic and injury claim litigation, providing assistance and medical rehabilitation for clients involved in non-fault accidents.  Garvins is experiencing an increase in new injury claim cases and has ambitious expansion plans to take advantage of the changing face of the personal injury marketplace.

Garvins is taking the Proclaim Personal Injury Case Management solution across the entire practice.  Users will also have instant desktop access to Proclaim’s A2A (Application-to-Application) tools for processing Portal claims for both RTA (Road Traffic Accident) and EL / PL (Employer Liability / Public Liability).

In addition, Garvins is also implementing the Proclaim Lite solution for staff members whose requirements are focused more around time recording and data storage, rather than process management and document creation.

Craig Budsworth, Partner at Garvins and also Chairman of MASS (Motor Accident Solicitors Society) comments:

“Recent legislative changes have restructured the personal injury industry, and in some cases made access to legal assistance more complex for claimants.  It has therefore never been more important for solicitors to make the process as transparent, available, and caring as possible.

“Having the right case management software means that we will be able to extend our service level, and the whole customer experience, ahead of our already very high standards.  This is imperative if firms are to thrive in the new legal landscape.”

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Neuberger: gave ABI permission to intervene

The Court of Appeal has taken the highly unusual step of reopening its decision in the case it used to announce the 10% increase in general damages from next April, it has emerged.

It follows an application to intervene in Simmons v Castle by the Association of British Insurers (ABI), which has been critical of the ruling.

It was approved by Lord Neuberger, who is still Master of the Rolls ahead of being sworn in as president of the Supreme Court and who sat in Simmons, alongside the Lord Chief Justice, Lord Judge, and Lord Justice Maurice Kay, who is vice-president of the Court of Appeal.

The Simmons decision sought to implement the increase recommended by Lord Justice Jackson and which the government repeatedly said during passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 was a matter for the courts to deal with, rather than to implement it through legislation.

Nonetheless the decision came out of the blue in late July after the court hijacked a straightforward application to approve a settlement of an appeal in a personal injury (PI) action to make its pronouncement. There was no argument on the issue before the court.

The ABI’s primary concern is that conditional fee agreement cases which are begun before 1 April 2013 but conclude after that date will benefit from both the 10% uplift and the continued recoverability of any success fee and after-the-event insurance premium. Other issues, such as whether the uplift should apply to non-PI damages, are also likely to be addressed.

James Dalton, the ABI’s head of motor and liability insurance, said: “The 10% increase in general damages was always anticipated and it formed part of a carefully balanced package of measures introduced by the Legal Aid, Sentencing and Punishment of Offenders Act. The effect of the Simmons decision is to give the 10% increase a retrospective effect.

“This represents a significant departure from government policy and, left unchallenged, is likely to lead to increases in car insurance premiums and employers’ liability premiums. The insurance industry is determined to reduce unnecessary costs and to resist this decision, which is why we are pleased that the court has agreed with the ABI’s submission to re-open the case.”

Andrew Parker, head of strategic litigation at DAC Beachcroft and one of Lord Justice Jackson’s assessors, is acting for the ABI.

The Court of Appeal ordered the ABI to notify both the Association of Personal Injury Lawyers (APIL) and Personal Injuries Bar Association (PIBA) about its application, and they have been given until 11 September to make submissions to the court. There will be a pre-trial hearing on 25 September.

An APIL spokeswoman said it was still considering the invitation, while Andrew Ritchie QC of 9 Gough Square, vice-chairman of PIBA, said the matter would be discussed at an upcoming executive committee meeting of the association.

Mr Ritchie said the court was right to reopen the case: “With any wide-ranging decision that has enormous financial implications, the Court of Appeal should listen to the interested parties.”

Well-known litigator David Greene, senior partner of London firm Edwin Coe, told Litigation Futures that it seemed the Court of Appeal had seen some sense in the ABI’s argument. Had the court given some warning and allowed submissions in the first place, it could have avoided this situation, he suggested: “It says something about the benefits of our adversarial system.”


The increasing appetite for third-party funding in Europe

Ross Nicholls

Although investors in common law jurisdictions have for sometime recognised litigation as an asset worth investing in, litigation funding remains less prominent in the civil law jurisdictions of mainland Europe. However, the European appetite is beginning to shift in favour of litigation funding, and many large dedicated funds active in common law jurisdictions such as the US, UK and Australia are starting to provide third-party capital to claimants with strong cases.

April 10th, 2018