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Houses of Parliament

The only amendment passed was from the government

The government’s Social Action, Responsibility and Heroism (SARAH) Bill, described as “very much maligned” by justice minister Lord Faulks, has survived its report stage in the Lords, with only a minor government amendment.

Cross-bencher Lord Pannick led the attack on the bill, saying he could not remember “a legislative proposal that has been the subject of more sustained ridicule and derision”.

Lord Pannick said that if the point of the legislation was to encourage people to volunteer “and encourage heroism without people being concerned about possible litigation”, then the justice secretary should buy a half-page advert in The Daily Mail or The Sun, or, to reach younger citizens, “open a Facebook page or set up a Twitter account, and simply tell people the obvious truth – that the law is already on their side”.

Lord Pannick went on: “I object to legislation being used by the government to send what is no more than a political message.

“The Lord Chancellor ought to understand that it is part—an important part—of the rule of law that the statute book has a role and a purpose: it is a purpose distinct from a party conference speech or a party election broadcast.”

Former Supreme Court justices, including Lord Hope and Lord Brown, lined up to criticise the bill. Their former colleague, Lord Walker, said the Law Commission had told him there had not been any informal consultations.

However, an amendment to delete Clause 2 of the Bill was overwhelmingly rejected by 222 votes to 77. Labour peers backed an amendment to remove Clause 3, but the margin was still comfortably in favour of the bill – 238 votes to 190.

An amendment to remove Clause 4 was withdrawn after Lord Faulks successfully tabled a government amendment. This deleted the final words of the clause so the person “acting heroically” to help someone would not have to be doing so “without regard to the person’s own safety or other interests”.

Lord Faulks said the government’s decision to table the amendment followed a meeting with the St John Ambulance and British Red Cross.

“This will put beyond doubt that the clause applies to anybody who intervenes in an emergency to help somebody in danger, regardless of whether they acted entirely spontaneously or weighed up the risks before intervening,” Lord Faulks said.

“What is more, St John Ambulance and the British Red Cross, as leading first aid organisations reaching hundreds of thousands of people a year, have said that if the amendment is agreed they will use the opportunity to encourage more people to come forward to act in emergencies.”

John Spencer, president of the Association of Personal Injury Lawyers (APIL) warned: “The bill aims to protect would-be heroes and volunteers from being sued for injuries which occur when they try to help other people, but the law already takes good intentions into account.

“By bowing to myths and misunderstandings, there is a real danger that the bill could lead people to believe they are impervious to the law if they injure someone through their own recklessness while being ‘heroic’.

“So while being a waste of time is bad enough, this move by the government actually encourages have-a-go heroes to play Superman while the injured victims suffer the consequences”.

A bid by Lord Lloyd, a former law lord, to deny the bill a second reading early last month failed after Labour peers abstained.

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Jackson: delivers report next month

The work on extending fixed recoverable costs (FRC) is going to start with a pilot to test capping costs at £80,000 for claims up to £250,000 in a limited number of courts, it has emerged.

The voluntary pilot – which will see caps set for stages as well as the overall cap – will run for two years in the London Mercantile Court or the Mercantile, Chancery or Technology and Construction courts in Manchester and Leeds (excluding personal injury cases).

We reported in April that Jackson LJ was to start with costs capping, rather than fixing, and the pilot was approved in principle at the May meeting of the Civil Procedure Rule Committee (CPRC), papers from which have been published this week. It was to start soon after but was delayed because of the general election.

A paper before the committee said the working group that proposed the scheme opted for capped rather than fixed costs because “it maintains some part of the indemnity principle, since one can never recover costs which were not incurred, and it is the same as the successful system in Intellectual Property Enterprise Court”.

To encourage take-up, claimants will be able to issue in the scheme but the case will exit if defendants do not agree to it.

There will be a streamlined procedural code based closely on that for the shorter trial scheme. There will be a list of issues reviewed at the case management conference (CMC), streamlined disclosure, limits on fact and expert evidence, and a trial no more than two days in length (excluding reading). The trial will be fixed within eight months of the CMC.

The cap for each stage will be: pre-action (£10,000), particulars of claim (£7,000), defence and counterclaim (£7,000), reply and defence to counterclaim (£6,000), CMC (£6,000), disclosure (£6,000), witness statements (£8,000), experts’ reports (£10,000), trial and judgment (£20,000), settlement/negotiations/mediation (£10,000), making or responding to an application (£3,000), work done post-issue which is not otherwise covered by any of the stages (£5,000).

To deal with claimant part 36 offers, the scheme will provide that costs will be assessed in the same way (i.e. indemnity basis) but subject to a higher cap – provisionally put at 25% – of what the cap(s) would have been.

“That allows the aims of part 36 to be achieved but preserves the certainty of a fixed costs system.”

The pilot will be exempt from the effect of changing the county court/High Court threshold, and will be monitored by academics.

Lord Justice Jackson is scheduled to deliver his final report at the end of next month.

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Zoe HollandZebra LC, trusted advisor and due diligence specialist within the UK legal sector, has achieved certificated approval for its quality management system under ISO 9001: 2008.

Zebra is unique, delivering client projects with a distinct market leading approach and known for advising in some of highest profile deals in the legal services market. Clients include leading law firms, banks, insurers, investors, funders and new entrants such as Fairpoint Group PLC and North Edge Capital.

The business has a specialist role, enabling a deeper understanding of law firms’ risk, value and opportunity profile by placing technical due diligence and independent review at the core of its value proposition. This includes using technical legal specialists across a multi-discipline of lawyers, costs, financial and risk and compliance experts.

Zoe Holland, managing director, “Zebra works within a highly regulated environment and as such quality and risk procedures are critical to both our business and our clients. Achieving a quality mark with ISO 9001 supports our mission to provide outstanding quality, innovation and technical brilliance in the delivery of our clients’ requirements.”

“The team within Zebra has worked hard under the helm of our head of risk, Hazel Ryan, to achieve the accreditation. We work to a bespoke Project Assurance Plan. Our clients take comfort in our risk based and measured approach to projects whether they be consultancy based, bank focused WIP profiling, diagnostic audits or M&A due diligence within the legal sector. I am delighted with this result.”


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Stark: demoralised group of people

Claimant personal injury lawyers have painted a grim picture of what life will be like after the Jackson reforms, with less work, redundancies and firms looking to move away from this type of work.
Nobis Jackets Men

A snapshot survey conducted by the Association of Costs Lawyers also found strong opposition to government plans to extend the RTA claims process to higher-value and other PI cases.

Some 78% of the 50 respondents predicted that they would have less work after part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force next April, with 84% believing it will reduce their profitability too – most (90%) expect competition to drive down success fees once they are no longer recoverable from the losing side. More than two-thirds (70%) think the reforms will make their firms less willing to take on riskier cases.

There was uncertainty about who would pay for after-the-event insurance if it is needed – 28% said the client, 24% the solicitor and 38% reckoned it would be a mixture of the two.

Some 62% of firms expect to make staff redundant as a direct consequence of the Jackson reforms, while 28% did not know at this time – only 10% said for sure that they would not. Nearly six in ten firms (58%) are now looking to move away from personal injury and diversify into other areas of law.

On the RTA claims process, the majority (72%) said that it falls short in some areas (22% said it delivers what it is supposed to). Asked what improvements or changes they would like to see, 32% wanted it easier to use, 22% higher fixed costs, and 16% for fewer cases to fall out – the majority of respondents (54%) said that between a quarter and a half of cases they deal with fall out of the process, which is consistent with other findings.

Four in five solicitors opposed both vertical and horizontal extension of the process, citing the increased complexity of such cases as the main reason and the fact that one size cannot fit all; the lack of an insurer database was also highlighted in relation to employer’s liability claims specifically.

A third of respondents said they were likely to move to contingency fees/damages-based agreements for non-portal cases once allowed under the Act.

Iain Stark, chairman of the Association of Costs Lawyers, said: “It is easy for the public and policymakers to be indifferent to the impact of the Jackson reforms on claimant lawyers, but the responses to our survey indicate a demoralised group of people who will not be able to hold open the door so that injured people can access justice.

“It is often said that, like water, lawyers will find a way to continue, but at what cost? As one respondent said: ‘Lower fees means less-qualified fee-earners representing clients and less compensation recovered. The actual cost of providing the professional Rolls Royce standard service which clients expect will be out of proportion to the Mini costs recoverable.’”

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Crash: liability was hard to dispute

The High Court has backed a costs judge’s decision to cut a success fee charged by Irwin Mitchell, acting for a pedestrian whose back was broken when a car reversed over her, from 75% to 30%.

The costs litigation followed a settlement in 2012, under which the Motor Insurers’ Bureau (MIB) agreed to pay the woman £1.6m.

Mrs Justice Slade – sitting with Master Campbell – said it was not “impermissible” for the costs judge, Master Rowley, to conclude that, in the light of the involvement of the MIB, that the prospect of the claimant winning but not being able to recover costs was “negligible”.

Further, Master Rowley’s decision that the MIB would be hard pressed to contest liability was “amply supported by what was known at the time of entering the CFA”.

Slade J agreed with Master Rowley that the main risks for Irwin Mitchell were the risk of a part 36 offer and the complications that might follow a finding of contributory negligence.

She said allegations of contributory negligence included the fact that the vehicle’s lights were flashing and that the “claimant had a lack of awareness of the approach of the vehicle because of her pre-occupation with her mobile phone”.

Slade J said the costs judge referred to a Court of Appeal judgment, C v W, in which the court substituted a success fee of 20% for the risk of failure to beat a rejected part 36 offer. He also said that not all cases should be taken as having a 50/50 chance of success when they get to court so as to justify a 100% success fee.

Dismissing the appeal, Slade J ruled that the costs judge did not err in his approach to assessing a reasonable success fee. The claimant was ordered to pay the MIB’s costs for the appeal.

The court heard in Bright v Motor Insurers’ Bureau [2014] EWHC 1557 (QB), that Carol Bright suffered a severed spinal cord in the accident, leaving her tetraplegic.

Counsel for the claimants argued that base costs, as well as success fees, were at risk if the claimant lost and that the MIB refused to admit liability, unlike the situation in C v W. He argued that the costs judge had erred in his approach to the staging of the success fee, which was set at 50% for the initial work.

However, Slade J said: “The decision on a reasonable success fee was reached independently of the decision of the master as to staging.

“Since the material issue is whether the requested success fee of 75% was reasonable whether it was staged or not, the observations made earlier in this judgment about the approach of the Master to the issue of staging do not affect the outcome of the appeal.”




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Nash: positive solutions

Nash: positive solutions

The Association of Costs Lawyers (ACL) has called for greater use of specialist costs judges in county courts and a role for costs lawyers as part of the new breed of case officers who will be supporting judges, in its response to the interim report from Lord Justice Briggs’ civil courts structure review.

The ACL also warned that the current operation of Money Claim Online and the small claims mediation service needed close examination before they were used as a “benchmark for what is to come” in the development of online dispute resolution and use of ADR.

The ACL told Lord Justice Briggs that “by and large” it supported his programme for reform, but identified areas of concern.

Considering the report’s overview of the current court structure, the response said: “Legal costs is a highly specialised area. It is a fact that most solicitors and barristers do not embrace costs as a specialism whilst in practice, therefore it follows that as deputy or district judges, they do not have the knowledge at their fingertips. Legal costs is a learned skill and needs to be recognised as such.

“Some set about the learning process with deliberation and are skilled and interested in what they do. Unfortunately, that cannot be said for a large number, who have no interest in dealing with the issue of costs and quite often allow their dislike of the topic to cloud their judgment when making decisions. Members have reported instances when assessment costs have been increased by the intransigence of the presiding judge.”

Briggs LJ went on to highlight the need for judges to specialise in civil work, and within that to specialise in specific areas, which would be aided by consolidating court centres. The ACL said ensuring this applied to costs would most likely reduce “significantly” the inconsistencies in costs rulings in those regional courts where there are no specialist costs judges.

Briggs LJ backed the transfer of some of judges’ more routine and non-contentious work to supervised case officers. The ACL said that given the challenge of some district judges’ attitude towards costs work, “we recommend that costs lawyers be considered for appointment as case officers in costs-related matters”.

The ACL urged that further scrutiny of the current online system be undertaken. “Experience tells us that using Money Claim Online, for example, is not straightforward, even to someone with a legal background. To use a system which is not operating adequately as a benchmark for what is to come is, in our opinion, flawed. A full survey of users of the process should be undertaken, before that process is used as a template for what will be an expensive and time consuming exercise, if the exercise is not to fail.

“Secondly, we suggest that the move toward a less adversarial approach to litigation has to be the way forward. This means that the emphasis on ADR is a positive step in the right direction and one to be encouraged; however, experience of using the small claims mediation process has not been positive. Once again we would suggest a full survey of users should be undertaken.”

More generally the ACL said it was concerned that not enough attention had yet been paid to whether the changes outlined by Briggs LJ were technically feasible, and whether there were sufficient resources to plan, deliver and monitor the change.

The response also called for a rewrite of the CPR “so that they are easily read and understood” and to stage the introduction of the proposed Online Court, starting with cases worth up to £10,000 (Briggs LJ suggested £25,000).

ACL chairman Sue Nash said: “Costs are an integral element of the court process and in looking at the overall structure of the civil courts, Lord Justice Briggs has identified positive solutions that should improve the resolution of costs disputes. Putting the right people in the right roles is a feature of modern legal practice, and we believe that as case officers, costs lawyers could make a significant contribution to the justice system.”

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ARAGARAG plc, the UK legal protection and assistance specialist, has announced 11 per cent growth in consolidated income for 2016, after a decade of trading.

In the company’s tenth year in year business, consolidated income grew from £11.1 million in 2015 to £12.3 million in 2016, while combined income (including reinsurance business generated back into ARAG SE in Germany) increased by 19 per cent from £26.5 million to £31.5 million, generating a £4.2 million profit.

While the company’s gross written premium under management dropped off slightly from 2015 (from £44.3 million to £41.1 million) there was strong growth in the BTE sector and moderate underlying growth in ATE business, resulting in a pre-tax profit for ARAG UK of £2.4 million.

“I’m very pleased that our 10th year in business was such a successful one”, comments Managing Director Tony Buss, “in spite of what continued to prove challenging times for the legal expenses insurance sector.”

“While we have maintained our cautious but flexible approach to the market, ARAG has generated excellent growth in our before-the-event business, particularly with our commercial, family and home assistance policies, and some growth in the after-the-event sector, once we have allowed for the release of provision for pre-LASPO cancellations that occurred in 2015.”

“The challenging market environment that we face shows no sign of abating, with the political, economic and regulatory uncertainty of Brexit and further potential legislative changes on the horizon, but we have always positioned ARAG to be both innovative and flexible which enables the company to be highly adaptable in the face of such changes.“

During the year ARAG also continued to pick up key industry awards, retaining the Legal Expenses Team of the Year and MGA Team of the Year awards at the Underwriting Services Awards.

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High Court: courts must always encourage parties to make offers

High Court: courts must always encourage parties to make offers

A party cannot use part of an open offer made during litigation as an admission by their opponent, the High Court has ruled.

Mr Justice Coulson said that to allow this would be contrary to the policy of courts encouraging parties to make offers.

He was ruling in The Dorchester Group Ltd (t/a the Dorchester Collection) v Kier Construction Ltd [2015] EWHC 3051 (TCC), in which Dorchester seeks various declarations, accounts and determinations as to the amount of undeclared discounts which Kier obtained from a sub-contractor.

Kier made an offer last month which was not accepted and has now been withdrawn. Dorchester then argued that it was entitled to judgment on the basis of ‘admissions’ made by Kier in the offer letter.

Coulson J rejected this submission. He said: “First, the letter of 21 September 2015 was an open offer. It contained a package of terms which Dorchester could either accept or reject. It would be contrary to the whole basis of an offer if Dorchester were permitted to accept what they say was a part of it (by claiming that it was an admission), whilst rejecting other elements of the same package.

“Courts must always encourage parties to make offers, in whatever form is appropriate. That is in accordance with the overriding objective. It would be contrary to that policy if the recipient of an offer like this could pick over its terms, accept parts and reject others, and thereby ensure that the litigation continues. That is not the purpose of an offer of this sort.”

He continued that in any case the ‘admissions’ did not meet the requirements of CPR 14.1, ‘Admissions made after commencement of proceedings’.

The judge was also asked to rule on the claimant’s application for specific disclosure. He said this was one of those “rare” cases where one party (Kier) held almost all of the relevant documents.

He had set a budget of £120,000 for the disclosure exercise (Kier had asked for £146,000) but at the time of the hearing Kier had spent around £500,000.

Coulson J said: “My figure reflected the fact that disclosure was to be on the standard basis, and that the relevant documents related to one sub-contract between Kier and Mitie, relating to one London building project. In my view, disclosure should not be difficult or time-consuming in a case like this… This disclosure process has been cumbersome, and inadequate.”

However, while he still considered £120,000 to be a reasonable and proportionate figure, the judge said the massive overspend did not mean, of itself, that no further order should be made on the grounds of proportionality.

“I have formed the view that the disproportionate costs of the Kier disclosure exercise are due to the way in which the exercise itself has been carried out.”

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High Court: no evidence to contradict claims of costs savings

The High Court has described the cost savings that can be achieved by using predictive coding for disclosure rather than a standard keyword search as “extremely significant”.

In the first reported decision on predictive coding following a contested application, Mr Registrar Jones said the cost of predictive coding in the case before him was “in the region of £132,000”, compared with “at least £250,000” for a keyword search or £338,000 in a “worst case scenario”.

City law firm Berwin Leighton Paisner (BLP) claimed victory on the issue in May, acting for the respondents in Brown v BCA Trading [2016] EWHC 1464 (Ch), but the full ruling has now been published.

The court heard that David Brown claimed over £20m from the respondents through an unfair prejudice petition brought under Section 994 of the Companies Act 2006.

Mr Registrar Jones said the respondents sought electronic disclosure using predictive coding, rather than the “more traditional” keyword approach.

He said the “majority of the documents” were in the hands of the respondents, which did not “determine the outcome”, but was “relevant to take into account when their lawyers identify the favourable difference in cost which they expect to incur if predictive coding is used instead of keyword searching”.

The registrar said there was no “factual or expert evidence” to contradict the respondent’s assertions about the “favourable difference” in cost.

He said this was “relevant and persuasive” only to the extent that predictive coding would be effective and achieve the disclosure required.

“When the size of potential disclosure is significant both in terms of quantity of documents and the time required to be spent on the disclosure process, it is particularly important for the lawyers to identify by reference to the true issues, the anticipated categories of documents and to enter into discussions to seek to minimise the work required and therefore the costs.”

The registrar went on: “The statements of case from both sides within this section 994 Companies Act 2006 petition present extremely broad issues of factual dispute.

“Realistically, however, experience shows that issues will narrow significantly by the time the trial is reached. This can mean that what may have appeared to be necessary disclosure based upon the statements of case at this stage, will turn out to have been unnecessary and indeed to a large degree irrelevant to the way the case will be heard at trial.”

The registrar said it may be difficult for solicitors to foresee the outcome, but they should make a “reasonable attempt” at doing so.

“A successful outcome from the use of predictive coding must, at least to some extent, depend upon the success of the parties having been able first to narrow down the issues and therefore the categories/types of documents relevant to the disclosure process.”

The registrar referred to Pyrrho Investments v MWB Property [2016] EWHC 256 (Ch), the first ruling endorsing predictive coding in England and Wales, but that was a case where the parties agreed to its use.

Mr Registrar Jones said all of the 10 factors cited in Pyrrho by Master Matthews applied to the case, apart from the one referring to agreement by the parties. He said an additional factor, that there were “no factors of any weight pointing in the opposite direction”, did apply.

The registrar concluded that it was right to make an order for predictive coding disclosure. “There is nothing, as yet, to suggest that predictive coding will not be able to identify the documents which would otherwise be identified through, for  example, keyword search and, more importantly, with the full cost of employees/agents having to carry out extensive investigations as to whether documents should be disclosed or not.”

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Kain Knight, one of the UK’s largest professional firms of costs lawyers, has acquired Johnson & Johnson Costs Lawyers and Consultants for an undisclosed sum.

Johnson & Johnson, based in St Austell and Exeter, is the latest acquisition under a business expansion strategy introduced by Kain Knight’s Chief Executive Officer, Peter Petyt, who joined the firm in April 2013.  The acquisition follows that of London-based Quantum Costs in November 2013 and Dubai-based Settle First in September 2014.

Johnson & Johnson was founded by Tony and Kathy Johnson in 1989. The Johnsons will remain with the business over the next few months to ensure a seamless handover. Kain Knight will be investing in both of the current Johnson & Johnson offices and is exploring further acquisitions and new offices in the South West region.

Kain Knight plans to continue its nationwide consolidation of the highly fragmented UK legal costs market, and is developing a range of new services to leverage its considerable experience and expertise in response to the reforms introduced by Lord Jackson in April 2013.

Commenting on the acquisition, Peter Petyt said:

“We are delighted to welcome the Johnson & Johnson teams to the Kain Knight group. We see a great deal of potential in the South West and will be making significant investment in human resources, technology, marketing and business development across the region.”

“Johnson & Johnson is the latest in a series of acquisitions Kain Knight is making up and down the country. We continue to believe, post Jackson, that only the very largest firms of costs lawyers will thrive in this new marketplace and we are firmly on course to become the largest independent legal costs business in the UK.”


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Welsh Assembly

Welsh Assembly: raising money does not create “sufficiently close connection”

The Welsh government lacks the power to pass a bill making employers who pay compensation to asbestos victims directly liable to it for the cost of their NHS care, the Supreme Court has ruled.

The Supreme Court unanimously found that the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill fell outside the legislative competence of the Welsh Assembly and was incompatible with the European Convention on Human Rights.

Giving the leading judgment, Lord Mance said the bill would impose a “novel statutory” or ‘quasi-tortious’ liability on compensators and a new contractual liability on their insurers.

Lord Mance, with whom Lord Neuberger and Lord Hodge agreed, said the bill was not sufficiently related to the organisation and funding of the NHS under the Governance of Wales Act 2006 (GOWA), to come within the Assembly’s competence.

He said the bill was “not retrospective in the fullest sense” but it did “significantly restructure” both the consequences of actual or possible negligence or breach of statutory duty committed “long ago” by compensators and the terms of and liabilities attaching under insurance policies “also underwritten years ago”.

Ruling in Recovery of Medical for Asbestos Diseases (Wales) Bill: Reference by the Counsel General for Wales (applicant) and the Association of British Insurers (intervener) [2015] UKSC 3, Lord Mance said that any liabilities would have to be “more directly connected with the service provided and its funding”.

“The mere purpose and effect of raising money which can or will be used to cover part of the costs of the Welsh NHS could not constitute a sufficiently close connection.”

Lord Mance concluded: “As a matter of legislative policy it could be thought appropriate by the relevant legislature that the Welsh NHS should be able to recover hospitalisation costs from those whose breach of tortious or statutory duty caused them to be incurred.

“But that is, as I have noted, a provision which could have been made by the United Kingdom when or at any time since the NHS was introduced. It is a provision which would no doubt have been proportionate if introduced in relation to future exposure to asbestos and future insurance contracts.

“But rewriting historically incurred obligations to impose it in relation to future Welsh NHS costs is a quite different step.”

He ruled that the bill was outside the legislative competence of the Welsh Assembly under the 2006 Act and breached the right of compensators and insurers to the peaceful enjoyment of their possessions under the European convention.

Lord Thomas and Lady Hale agreed that the bill was beyond the competence of the Welsh Assembly, but on narrower grounds centred on its retrospective effect.

He added that in his view, insurers had “no legitimate interest which prevents a state changing its charging policy for health care and replacing care free at the point of delivery with the imposition of charges.

“If insurers have, contrary to my view, a legitimate interest, then the ambit of their interest would need further analysis, as a state has, particularly in times of budgetary stringency, a real interest in amending its charging policy – as it does, for example, in relation to prescriptions.”

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Rolls Building: strong words over TCC case costs

A High Court judge has “unequivocally” condemned claimants represented by group litigation specialists Leigh Day for “deliberate disregard of a court order” in a case where the costs of both sides were estimated at well over £50m.

Ordering indemnity costs, Mr Justice Stuart-Smith said Leigh Day’s costs budget amounted to £24m by September 2014, while the defendant’s costs to date were estimated as “in the region of £34m”.

Stuart-Smith J said the tipping point was the service of a fourth report by an expert, a Dr Card. the claimants’ “deliberate disregard” of the court’s order was “a very serious error of judgment which had extensive consequences in placing unfair additional burdens upon the defendant and the trial process”.

Arroyo and others v Equion Energia, formerly known as BP Exploration (Colombia) [2016] EWHC 3348 (TCC) involved claims by over 100 Colombian farmers that the Ocensa pipeline, built by BP Exploration in the 1990s to carry oil to the coast, had damaged their farms. Stuart-Smith J rejected the claims in a 648-page judgment handed down last summer.

Mr Justice Stuart-Smith said the costs of the group litigation were “huge by any standard”.

He went on: “They run to tens of millions of pounds on each side and dwarf any sums that the claimants might have hoped to recover at trial even on the most optimistic projections.”

Ruling on costs, the judge explained that despite an order limiting the scope of additional expert evidence in the case, the claimants served Dr Card’s fourth report, including “new calculations”, shortly before trial.

“The additional burdens upon the defendant when confronted by what amounted to a new expert case five weeks before trial were substantial and unwarranted.

“The breach was further compounded by failing to provide the workings that lay behind the new calculations until 1 October 2014, the day before the trial started.”

Stuart-Smith J said that, having realised that his calculations were wrong, Dr Card “tried to improve his position” by providing a fifth report four days before he was called to give evidence.

“In doing so he gave an explanation for the new calculations which was seriously misleading. Finally, Leigh Day’s explanation in their letter serving the report was not a fair summary of what had happened and was itself seriously misleading.”

He said the history surrounding the fourth and fifth reports, “which the claimants acknowledge to be ‘most regrettable’, justifies serious and unequivocal condemnation”.

There were other features that supported an award of indemnity costs, such as “various iterations of the schedules of loss which… were beyond the norm both in the inadequacy of their preparation and construction and in their consequences for the progression of the case”.

The judge said an ATE policy for £1.8m taken out by the claimants provided the “explanation for an agreed order” that there should be an interim on payment on account of costs to the defendant of the same amount, but the claimants themselves “could not possibly begin” to discharge more than a “tiny fraction” of the total bill.

Stuart-Smith J ruled that the claimants should pay the defendant’s costs on the standard basis until 28 August 2014 – when Dr Card’s fourth report was served – and after that on the indemnity basis, excluding the costs of the costs hearing itself.

In making the order, Stuart-Smith J said he had not forgotten a submission from the claimants’ counsel that an order for indemnity costs may have a “chilling effect” on access on justice, in cases such as this.

“It should not do so,” he added. “If, however, it has a chilling effect on the sort of failures of which this and the main judgment are critical, it may possibly serve a useful purpose beyond the scope of this litigation.”

A spokesman for Leigh Day said the firm would not be appealing against the costs ruling.

“The claimants are understandably disappointed by the verdict having waited more than eight years for a resolution but consider it important that they had access to a judicial process and the opportunity to give their evidence to a UK court.

“The judge accepted that this was an enormous and exceptionally demanding case by modern standards of litigation. We will continue to bring legitimate cases of importance on behalf of individuals in this country and others against UK multinationals.”

In a separate High Court ruling on indemnity costs, Mr Justice Warby said the “central allegation”, which he found to be “false and malicious”, was that the claimant “had had sex with one of the defendant’s pigs”.

Delivering judgment in Barkhuysen v Hamilton [2016] EWHC 3371 (QB) – a neighbour dispute – Warby J described the case as “happily far outside the norm for civil litigation”, and “a case for indemnity costs par excellence”.

He said the defendant had “attempted to influence the course of justice in the action in her favour by threatening a witness with consequences if he gave evidence against her” and “told a series of serious lies” during the litigation.

“These are too numerous to list here, but they include false allegations that the claimant drove at her, threatening her personal safety, and a false denial that she had made an accusation of paedophilia against someone else with whom she was in dispute.”

Warby J said that, in his judgment in the main action in November last year, he held that the defendant was liable to the claimant for damages for false imprisonment, slander and harassment, and awarded the claimant damages of £32,080.

On costs, Mr Justice Warby said the defendant must pay 90% of the claimant’s costs, to be assessed on the indemnity basis – apart from the costs of the hearing itself.

Additionally, because the claimant had beaten at least one part 36 offer he had made, the defendant was ordered to pay a further £3,280, plus interest on damages and costs from the date of judgment at a rate of 10%.

Warby J further ordered that the defendant make an interim payment of £150,000 on account, with a stay of execution until 16 January 2017.

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Downward pressure: Jackson reforms to reduce work and income for lawyers

The Jackson reforms will be reviewed after three years of operation, the Ministry of Justice (MoJ) has confirmed.

Publishing the final version of the impact assessment that was first made public in draft form in March 2011, the MoJ said the objective of the April 2016 review will be to assess the impact on civil litigation costs of implementing the reforms.

The policy, which will be introduced in April 2013, will be deemed successful “if the costs of necessary civil litigation become more proportionate and necessary claims can still be bought”.

Apart from taking account of the delays in ending recoverability for mesothelioma and insolvency cases, the impact assessment has barely changed since its original publication. The same is true of other impact assessments which have recently been finalised, such as the one relating to referral fees.

The Jackson assessment predicts that the reforms “are expected to lead to reduced overall net levels of legal services business and income, especially for CFA lawyers”, driven largely by claimants having to pay success fees and after-the-event insurance premiums themselves, and by the cap on success fees.

“This might lead to lower success fees, to claimants pursuing fewer cases, to CFA lawyers taking on fewer higher risk cases, and to more competition in relation to success fees. The level of resource devoted to each case might also be lower. In addition, the reforms to proportionality and the increase in litigant in person rates might place downward pressure on legal services business.”

This may in turn lead to legal services providers incurring “adjustment costs” as they move to other areas of law. After-the-event insurers are likely to face a similar outcome, it said, while competition in the market will also be increased.

The assessment acknowledged that claimants funded under a CFA should be worse off overall as a result of the reforms, which it notes that “in line with the policy objective”. The 10% uplift in general damages and introduction of qualified one-way costs-shifting will offset this, “although it’s not clear to what extent”; in general the assessment is unable to quantify the impact of the reforms.

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Just Costs Solicitors and Novitas Loans have launched a new funding scheme for industrial disease, personal injury and clinical negligence law firms to realise work in progress (WIP) and improve cash flow.

The scheme offers unlimited funding and is available to law firms throughout the country.

Said Mark Hartigan, client services director at Just Costs Solicitors:

“Law firms can have considerable sums of money tied up in WIP, significantly constraining the money available for growth.  Our solution is to advance the law firm a fixed sum, per case, that has reached a certain stage in its development.  The size of the loan facility and the amount per case that can be drawn down is agreed per firm and interest is only charged on money drawn-down.”

While the money itself is advanced by Novitas, Just Costs Solicitors conducts a WIP audit on the firms’ files which acts as an approval process.  When the case settles, the money advanced on the case is repaid via the cost consultant, Just Costs.

Jason Reeve, managing director at Novitas Loans said:

“This is a very flexible source of funding with no personal guarantees required. We believe it will be of widespread appeal.”

Last year, Just Costs Solicitors and Novitas launched a costs advance scheme, equivalent to invoice discounting, which is now lending over £1 million every month to law firms.

The costs advance scheme helps firms’ bridge the gap between applying for and receiving their case fees.


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Bogart: pioneering new markets

Litigation funder Burford Capital has announced its strongest ever results, with profits for the first half of 2017 greater than the whole of 2016, driven by rising client demand.

Highlights from the financial results for the year ended 30 June 2017 included an increase in income by 130% to $175.5m (£133.5m), operating profit up by 151% to $155m, and profits after tax up by 170% over the previous year to $142.7m.

A total of 11 successful investments contributed to the results, including the sale of just 25% of one complex claim generating $100m in cash profit alone – more than five times the investment.

In the first half of 2017, investment income increased by 148% to $161.6m.

The interim report said cash generation of $173.7m from investments on balance sheet exceeded every previous half-year period.

During the first half of 2017, eight-year-old Burford has made $488m in new investment commitments, more than double its commitments in the first half of 2016.

An investor in the original Burford share offering in 2009 would have seen a return on investment of more than 1,000% by this month.

Burford’s acquisition of US rival Gerchen Keller Capital in December 2016 has created what it described as “the industry’s largest fund manager”, with $1.7bn in assets under management at 30 June 2017.

In March, the litigation funder announced a 75% increase in net profits for 2016, but warned that the Jackson reforms had made it impossible to provide after-the-event (ATE) insurance for “large and complex” commercial cases.

Sir Peter Middleton, Burford’s chairman, said: “In just under eight years, Burford has grown from an £80m start-up to become the clear industry leader.  In six months, we have committed almost half a billion dollars to new investments.”

Christopher Bogart, the funder’s chief executive, said: “Burford has had an exceedingly active first half. Our continued strong growth has been driven by rising client demand as well as our ongoing investment in broadening our product offering and pioneering new markets.

“As the industry advances, we continue to innovate legal cost and risk management techniques while delivering strong investment returns for shareholders.”

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Uplift: judge could not exercise discretion

Uplift: judge could not exercise discretion

A circuit judge was wrong to believe he had discretion not to apply the post-LASPO 10% uplift in damages, the Court of Appeal has ruled.

His Honour Judge Gargan in Sheffield declined to add the uplift on the basis that the claimant had been legally aided throughout the case.

Permission to appeal in Summers v Bundy [2016] EWCA Civ 126, a clinical negligence case, had been granted by Lord Justice Jackson.

Giving the appeal court’s ruling, Lord Justice Davis said: “There can, for reasons which do not need spelling out, be no judge with a greater knowledge and understanding of modern principles and procedures relating to costs. Jackson LJ took the view, as he stated, that the appeal was ‘bound to succeed’.

“Having taken that view, and with an evident desire to try and save costs, he dispensed with the need for the attendance of the appellant or representation of the appellant by counsel at the hearing of this appeal. Thus the matter comes before us today. Nevertheless, we do of course have to consider for ourselves whether this appeal should succeed.”

HHJ Gargan had awarded £27,500 in damages for pain, suffering and loss of amenity in favour of the claimant over a hospital’s failure to diagnose deep vein thrombosis. He said he had been asked to consider whether there should be a 10% uplift, and decided against given that the claimant was in receipt of legal aid.

“He does not have any uplift to pay to his solicitor from his general damages and it seems to me therefore that it would be wrong to penalise the defendant,” he ruled, drawing an analogy with the Court of Appeal’s second ruling in Simmons which made an exception for conditional fee agreement cases started before 1 April 2013.

Aside from being unclear why the judge thought this was a discretionary matter, Davis LJ said: “With all respect to the judge, I do not think that this reasoning was open to him. In my view, the judge had been required to include the 10% uplift in the award of general damages. Simmons v Castle bound him to do so.”

The circuit judge had come to his conclusion not to allow the uplift “on balance”, and Davis LJ said: “There can hardly be a principled basis under the guise of ‘discretion’ for permitting some legally aided claimants to receive the 10% uplift of general damages and others not. Either they should all get it or they should all not get it.

“Were it otherwise there would be potentially complete uncertainty and inconsistency in awards of the courts throughout England and Wales.”

In any case, he continued, such as step was simply precluded by the Court of Appeal’s two rulings in Simmons.

“The court’s decision had been designed, as was stated by it in terms, to produce ‘simplicity and clarity’. It was acknowledged that the principle advanced would not achieve ‘perfect justice in every case’. It was acknowledged that what were called ‘conventional’ claimants might be advantaged. But the need for clarity and consistency overrode such considerations.

“It would, in my opinion, be wholly contrary both to the reasoning of and to the intent behind this Court of Appeal decision for trial judges then to introduce, by way of purported exercise of discretion, a yet further potential (and long-term) exception or exceptions.

“Furthermore, in my view it is inconceivable that the Court of Appeal or the professional bodies appearing before it on the second occasion would have overlooked the significant class of legally aided claimants had there been any notion that there should or might be some further exception applicable to that class.”

There was also nothing in either the Jackson report or the current edition of the Judicial College guidelines for the assessment of general damages in personal injury cases, to support the judge’s approach, he added.

Sir Timothy Lloyd agreed.

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Buckland: sending a message

Buckland: sending a message

A semi-professional footballer who brought a fake whiplash claim has suffered twice over after a four-month suspended sentence for contempt was heaped on an £11,000 costs order for bringing a fundamentally dishonest claim.

The case of Gary Burnett was the first ever prosecution by the Attorney General in a case involving insurance fraud.

Mr Burnett, aged 25, made the dishonest claim in 2013 following a minor bump at a drive-through restaurant in Merseyside. No injuries were reported at the scene and damage to both vehicles was minor. However, a few days later he submitted a personal injury claim for £2,000 to Aviva that stated he was unable to play for Cheshire-based Northwich Victoria for a month.

Horwich Farrelly, the Manchester-based defendant firm that represented Aviva, said its investigations revealed that Mr Burnett had in fact played a football match the day after the incident – and had tweeted about the match. Online match reports and other social media posts revealed he had continued to play throughout the prognosis period.

After Horwich Farrelly submitted the evidence to his solicitors, Mr Burnett discontinued the claim, but Aviva pursued the case and in July 2015, Wigan County Court ruled the claim to be fundamentally dishonest, ordering him to pay Aviva’s costs of more than £11,000.

In addition, the judge referred the matter to the Attorney General to consider whether the Crown should prosecute Mr Burnett for contempt of court.

The firm said that whilst contempt findings have previously been secured against dishonest claimants – with Horwich Farrelly securing 10 to date – the defendant ordinarily has to make the application and bear the legal costs.

In sentencing Mr Burnett to four months in prison, suspended for a year, Mr Justice Jay said that “a deterrent sentence is called for even if low value. There is no alternative but for a custodial term”.

Solicitor General Robert Buckland QC MP said: “This is a serious case, highlighted by blatant dishonesty and a clear contempt by the offender. Burnett knowingly lied in order to benefit himself and the public interest demanded that proceedings be taken forward.

“Burnett is now deservedly paying the penalty for his actions and I hope this sends a message to anyone tempted to try and do the same thing.”

Jared Mallinson, partner at Horwich Farrelly, added: “For the government’s chief legal adviser to deem it to be in the public interest to prosecute Burnett for contempt highlights the claimant’s blatant demonstration of fraud and his disregard for the courts.

“He saw an opportunity for a quick-win, despite the claim being without merit, and was prepared to take money that he simply did not deserve, at the expense of honest policy-holders and the insurer.”

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Neuberger: admits to “skimming” documents

Appeal court judges have sought to undermine colleagues writing lead judgments and Supreme Court judges have “reverted to barrister mode” to argue their views, according to the president of the Supreme Court.

Addressing the annual conference of the Supreme Court of New South Wales in Sydney, Australia, earlier this month, Lord Neuberger argued for openness and accessibility to the courts, especially in an era when judges were under pressure to be “creative” with the law.

In a speech that contained rare insights into the process of judicial deliberations, Lord Neuberger admitted to skimming skeleton arguments before a trial, although he said the approach risked “not really being on top of things until after the hearing”.

The alternative, he argued, was to read all the case documents, at the risk of “wasting much time”, since once cases began, “most of the documentation turns out to be irrelevant, and some of the points raised in writing are often dropped”.

He said judges broadly fell into two camps: those who read everything, whom he dubbed “Pre-Raphaelites”, and those who “read very little” – including himself – whom he labelled “Judicial Impressionists”.

Even in the appeal courts, documents and issues have not been “pared down” as one might expect, he said: “Life is not quite like that. Pre-Raphaelites are still often faced with a mountain of papers, most of them irrelevant.”

In the interests of accessibility, he suggested that the practice of the Supreme Court of providing a two-page written press summary of judgments, as well as a “concise oral televised summary”, could be introduced into the lower courts. “This might be a practice worth adopting… even if it is limited to certain decisions of particular importance,” he said.

Lord Neuberger said he “emphatically” disagreed with those who argued that discussions between appellate judges conflicted with the idea of judicial independence. He had encouraged greater discussion between judges in the Supreme Court after hearings and this often helped produce “consensus or changes of mind”, he revealed.

However, sometimes more discussion was “pointless”, since “two judges may have circulated judgments coming to different conclusions, and, at a subsequent meeting, each simply reverts to barrister mode and seeks to persuade colleagues that his view is the right one”.

Still on the subject of post-trial discussion, Lord Neuberger described occasional attempts at undermining the judge tasked with writing the lead judgment for appellate courts, where, for instance, “a keen, convinced or proselytising judge” wanted “to try and persuade his colleagues to come round to his views”.

He said: “A judge other than the appointed lead judge may occasionally pre-empt the lead judge by sending round a draft which is intended to change minds. Other judges wait for the lead judgment and then try and persuade others by sending round a draft which is aimed at undermining the lead judgment in a way calculated to drum up support.”

But either tactic risked having the reverse effect, “particularly if it is obvious what the judge is doing or he expresses himself too forcefully: many judges are counter-suggestible”.

Lord Neuberger approved of the practice of circulating draft judgments confidentially to advocates, even where “counsel come back with larger complaints” about the judgment, such as “a suggestion that a particular argument had not been properly understood”. This was a “useful development”, he said, “provided that it is not misused by the losing party’s lawyers to try and re-argue the case”.

Judges were in an ever more difficult position as they tried to “ensure that the law is certain, simple and clear” and were confronted with “the need for the law to keep up with societal, moral, commercial, and technical developments”, Lord Neuberger observed. But judges should be cautious about “unintended consequences” arising from judge-made law, he warned, because “unlike the legislature we are normally not able to survey the whole landscape”.

He concluded: “Lord Reid famously observed, when referring to the view that judges declare the law rather than play any role in making it, that ‘we do not believe in fairy tales any more’. And a world in which it is acknowledged that judges do more than just reveal pre-existing law, is one in which they are rightly subject to greater scrutiny.”

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Jackson LJ’s call for a “one-off release” has been answered

Costs budgeting will not be applied to High Court clinical negligence cases listed for costs hearings between October 2015 and January 2016 in an attempt to clear the backlog, it has emerged.

A spokesman for the Judicial Office told Litigation Futures yesterday that the High Court had a “standing discretion to disapply the costs budgeting/management provisions” in individual cases.

“As a temporary measure, to clear a backlog of cases, the Queen’s Bench Masters responsible for the case management of clinical negligence cases are exercising this discretion in relation to cases listed before them between October 2015 and January 2016. This approach will be kept under review.”

In a statement on its website, Elite Law Solicitors, incorporating HM Law Costs Draftsmen, said it had been “informed that the High Court has began sending out orders stating that claims will not be subject to costs management”.

It went on: “We believe said orders are in relation to clinical negligence cases which have been issued but no order in relation to costs management has been made. It is unclear whether this will apply to cases which are issued going forward and if so for how long.”

The firm said that the new orders directed that costs estimates should be exchanged within 14 days of the order, rather than 14 days before the hearing.

“The undoubted result of these orders will be that solicitors will need to prepare costs estimates on an urgent basis for any cases where they are awaiting directions in relation to the first case management conference.”

Delivering the Harbour Litigation Funding lecture last month, Lord Justice Jackson called for a “one-off release” from costs management for all medical negligence cases in this category.

He said the issue had become particularly acute in London, where the waiting time for a first case and costs management conference had reached nine months.

Jackson LJ went on to call for the repeal of amendments to the rules that introduced an assumption in favour of costs management and their replacement with a new rule making it clear that courts should not manage costs if they lacked “the resources to do so without causing significant delay and disruption” to cases.

However, in a short address after the lecture, the Master of the Rolls, Lord Dyson, appeared to pour cold water on Jackson LJ’s proposals, saying he feared that “the ‘lack of resources’ card will be played in many cases” and there was a real danger that costs management will become the exception and not the rule in clinical negligence cases”.

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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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Judge: biggest claim was “false as regards the majority of fees charged”

The High Court has described a law firm’s claims for unpaid fees as “largely dishonest” and dismissed them as “wholly without merit”.

However, Alpha Rocks Solicitors (ARS), based in south London, hit back, saying the decision of Murray Rosen QC “grossly undermines equity and justice”. It intends to appeal.

Mr Rosen, sitting as a deputy High Court judge, said Alpha Rocks “appeared to demonstrate a high level of ineptitude”.

He went on: “Much of its argument might be described as perverse, naïve or even preposterous.

“But it is important not to conflate or confuse such characteristics with dishonesty and fraud, nor to let the deficiencies in ARS’ records and personnel, and the conduct and presentation of its case, detract or divert from, or obscure or cloud, a measured or objective legal analysis…

“However, after five days of trial… I must conclude that many of its shortcomings in dealing with and for [former client Benjamin] Alade were not the result of negligence or eccentricity, however gross”

Rather, he said, in particular in relation to the law firm’s two biggest claims against Mr Alade, an 89-year-old retired barrister, the bills were “variously false… in the most basic ways”.

These were a claim for £131,500 for fees and disbursements said to have been incurred in defending a county court action in the ‘Rufus’ matter, and a claim for fees and disbursements of over £21,500 for a Land Registry claim in the ‘Catherine’ matter.

Delivering judgment in Alpha Rocks Solicitors v Alade (HC13 D00617), Mr Rosen ruled that the Catherine claim was “false” and the Rufus claim was “false as regards a majority of the fees charged”.

Mr Rosen dismissed a further claim for £15,170 “said to have been agreed” for a freezing order in the Rufus matter since it was based on an “alleged agreement for which there is no proper factual or legal basis”.

He said a fourth claim of £3,500, referred to as the ‘landlord matter’, failed entirely on liability.

The judge concluded that many of the shortcomings of Alpha Rocks in its dealings with Mr Alade could only have resulted from a “dishonest plan to charge for sums to which it knew it was not entitled on the basis claimed, or was at least reckless as to the same”.

He ruled that the law firm’s claims were “largely dishonest” and dismissed them as “wholly without merit”. Mr Rosen gave judgment for Mr Alade’s counterclaim against Alpha Rocks for £65,370 plus interest.

The Court of Appeal ruled this time last year that the High Court had been wrong to strike out the claims made by Alpha Rocks on the grounds of exaggeration and inaccuracy, because the then judge, Kevin Prosser QC, had not sought to hear oral evidence before reaching his conclusion.

In a statement, Alpha Rocks said: “We are extremely disappointed with the judgment delivered by Mr Murray Rosen QC, which does not reflect the standard of service we give our clients or indeed the commitment and passion with which members of staff carry out their functions.

“The decision grossly undermines equity and justice as it suggests that a client can avoid paying for professional fees rendered. More so when the outcome of his instructions to us was successful and that evidence was proffered at court.

“We would point out that was a rare incident involving one out of our many clients and the work as well as the claim against the client was initiated by former partners who have since left the firm.

“An earlier decision was in fact successfully overturned by the Court of Appeal in our favour and we can confirm that we are appealing this current decision.”

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RSPB was one of the claimants in the JR

There is no immediate need for the Civil Procedure Rule Committee (CPRC) to introduce a new privacy rule for certain costs issues in environmental cases as it could conflict with its open justice review, it has decided.

The committee was responding to Mr Justice Dove’s ruling in a judicial review brought by three environmental charities this summer, which said hearings about costs protection limits should be held in private.

In that, the judge said the rules needed to change so that if a dispute in relation to the appropriate level of costs caps were to proceed to a hearing, it should be in private in the first instance.

“I am satisfied that the chilling effect which the prospect of the public disclosure of the financial information of the claimant and/or his or her financial supporters would have on the propensity to bring meritorious environmental claims would be in breach of the requirements to ensure wide access to justice set out in the [European Court of Justice] jurisprudence.”

As we reported recently, the committee is reviewing the rules to emphasise the importance of open justice, including a possible default position that all court hearings should be conducted in public.

Mr Justice Kerr, chair of the sub-committee on open justice, told a meeting of the CPRC last month that the rule changes proposed by the Ministry of Justice (MoJ) to ensure hearings were in private where the financial details of parties were being considered, would only “add to the provisions the subcommittee intends to remove”.

According to minutes of last month’s meeting, Mr Justice Coulson – who chaired the meeting and is deputy head of civil justice-designate ahead of his elevation to the Court of Appeal next March – “drew the committee’s attention” to a letter received from Leigh Day, solicitors for the claimants, asking the CPRC to implement changes set out in the Dove judgment “immediately”.

However, Coulson J said there was “no immediate requirement” to amend practice direction 39 as the judgment stood.

He said “it would be unfortunate to make an additional provision now, only to remove it again once the review of open justice is completed”.

According to the minutes, a committee member “reminded the full committee that it may be more than a year before the open justice review is completed, as there would be a full consultation”.

Government lawyer Alasdair Wallace noted that in respect of the relief sought by the judicial review, the undertaking made by the MoJ was merely to put the proposition to the rule committee, which it had done.

Coulson J “indicated that a response would be sent to Leigh Day indicating that their letter had been brought to the attention of the committee” and that their request to amend PD 39 would be “anxiously considered”.

Also in Dove J’s ruling, he said it would have been “beneficial” for CPR 45.45 to specify that any application to vary the default costs caps should be included within the acknowledgement of service, while he said the government had “properly” conceded that the claimant’s costs may be a material matter for the court to consider in determining any application for a variation of the costs caps.

A number of suggestions on the draft put before the committee were made at the meeting and it was agreed that a revised draft would be presented at its next meeting.

Under the environmental costs protection regime introduced in 2013, costs for unsuccessful environmental claimants were capped at £5,000 for individuals and £10,000 for organisations. Defendants’ liability for claimants’ costs were similarly capped, at £35,000.

New rules, introduced on 28 February this year, allowed judges to vary the cost cap during a case. The judicial review – brought by the Royal Society for the Protection of Birds, Friends of the Earth and ClientEarth – argued that this weakened financial protection for claimants in environmental cases, who faced unspecified costs, contrary to the Aarhus Convention.

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Acasta Europe & Sparkle Capital Limited

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Acasta European Insurance Company Limited is a Gibraltar insurer operating exclusively through Acasta Europe Limited in the UK and is a leading underwriter of After the Event Legal Expenses insurance and non-recourse Litigation Funding products in conjunction with Sparkle Capital Limited.

Sparkle Capital is designed for disputes over £500,000. Sparkle Capital Lite is designed for disputes with a value up to £500,000. This product enables claimants to pursue claims where the funding required is as low as £10,000.

Key Features:
Non-recourse affordable litigation funding with a straightforward application process. £10,000 minimum funding. Indicative decision within 72 hours

Cost of Funding:
Sparkle Capital – 20% of net damages plus interest.
Sparkle Capital Lite – fixed interest fee based on duration of loan.

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Stock Exchange: COLG share price has fallen

“Continued losses” at third-party funder Therium Capital as it waits for cases to conclude are set to contribute to increasing losses at its parent company, investors were warned yesterday.

But they were also told that demand is strong and there are good longer-term prospects for the funder.

In an interim management statement to the Stock Exchange, City of London Group plc (COLG) said that the outlook for Therium’s portfolio of cases is “encouraging”, but it was encountering “significant delays in case resolutions” – and therefore in receiving its “performance fees”.

COLG is a financial services group focused on providing merchant banking services to finance the SME and professional services sectors.

The lack of major case resolutions before the company’s year-end on 31 March was one of the reasons that COLG’s loss in the second half of the year was likely to exceed the £1.3m recorded in the first half, it said. The share price has fallen by nearly two-thirds over the past year, and closed yesterday at 27.5p.

But the statement emphasised that “Therium has continued to see strong demand for case funding and consequently has been easily able to allocate capital for the funds raised in 2013”.

As previously reported, Therium is in talks to establish an international joint venture to fund commercial litigation cases, and the statement said that “concluding this venture has taken longer than initially expected”. Further, Therium is in “active discussions” with two groups of investors to establish its next two litigation funds.

Therium is 50% owner of Novitas Loans, a specialist legal market lender. The statement said: “[Novitas] continues to expand profitably and has been successful in attracting new forms of finance and launching new lending products to law firms and their clients. The loan book continues to grow significantly.”

Last autumn, Novitas began working with Just Costs Solicitors on its cash advance scheme, which enables law firms to draw down on up to 70% of their likely recoverable costs once they have successfully settled personal injury, clinical negligence and industrial disease cases. It lent over £1m in the scheme’s first three months.

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Injury: RPI increase to damages

Duration of symptoms should not necessarily be the focus when assessing damages for minor personal injury (PI) claims, a High Court judge has said.

The latest (14th) edition of Judicial College Guidelines for the Assessment of Personal Injury Awards recommends increasing damages for PI victims in line with the retail price index – 4.8% over two years.

The new guidelines recommend increased damages for whiplash injuries as well as other kinds of award.

Mr Justice Langstaff, chair of the Judicial College guidelines committee, said in his introduction to the book that an emphasis purely on duration of symptoms “takes insufficient account of the other factors by which quantum of awards for minor injuries falls to be assessed, and may obscure the fact in many cases that recovery may not occur at an even pace over time, but may frequently be much more marked in the very early days of recuperation”.

Langstaff J went on: “Intelligent application of the guidelines, rather than too casual a focus on the length of time for which it is said the injury was suffered – perhaps in the light of a report saying that some minor symptoms are ongoing – is called for”.

City insurance law firm Clyde & Co commented on its website: “This could be good news for insurers in limiting payments in lower-value claims in instances where the claimant largely recovers in the initial prognosis period.

“It should be noted the guidelines are just that and therefore there is room for flexibility from both sides.”

Pete Blackmore, advocacy manager at law firm LPC, described the comment as “a warning to judges against taking an approach where the length of time for which any symptoms are suffered is treated as the critical factor”.

In a further change on minor injuries to the neck, shoulder and lower back, where a full recovery is made within three months, the bracket from a “few hundred pounds to £1,860” has been replaced by “up to £1,950”.

City insurance specialists DAC Beachcroft said: “It is worthy of note that the brackets for minor whiplash injuries, much of which may be rendered redundant if the government implements tariffs for whiplash injuries in accordance with its stated aims, indicate that a number of factors may justify awards in excess of or lower than the brackets, including the intensity of pain, impact of the injuries on work, social activities and day to day living, and the need for medication.”

Steven Snowden QC, a member of the guidelines committee, highlighted the removal of the separate, higher category of damages for female victims of facial scarring.

Mr Snowden, writing on the Crown Office Chambers website, described lower awards for men as “indefensible” and based on an “outdated stereotype”.

He went on: “The consequence has been a widening of the guideline bracket within which awards may fall, though it remains the case that the subjective reaction of the victim (whether male or female) to any scar and the extent, if any, to which scarring has affected them psychologically are of central importance. These will necessarily vary from individual to individual.”

Mr Snowden referred to Langstaff J’s reminder in his introduction that these were “guidelines not tramlines” and that many of the decisions on which the brackets for awards were set were made “many years ago” in the light of existing technology and medicine.

“The pace of technological and medical advance has, however, been quickening. On the one hand, the time during which a chronic or lifetime injury may have effect may be extended by increased life-spans; on the other, technological or medical advances may make injuries less painful, permit return of greater function, or allow for a quicker or more complete degree of recuperation than that which could have been predicted only a handful of years ago.

“There is room to argue that in an individual case such advances may call for an award which falls outside the range previously indicated by the courts.”

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Rolls Building: master grants disclosure

Rolls Building: master grants disclosure

A High Court master has rejected an application from a Leicestershire solicitor for trial of a preliminary issue in a costs claim involving another law firm, citing the “high degree of personal animosity between the parties”.

The dispute between EMW Law, a commercial firm based in Milton Keynes, and Scott Halborg over EMW’s claim for unpaid agency fees had already resulted in two appeals at the Senior Courts Costs Office (SCCO).

In EMW Law LLP v Halborg [2016] EWHC 2526 (Ch), Mr Halborg, through his firm Halborg Limited, entered into a conditional fee agreement (CFA) in 2008 with his parents for litigation against architects for negligent advice in relation to a property development scheme at their home.

Mr Halborg contacted EMW to carry out legal work on his behalf as agents. He entered into a CFA with EMW, under which the firm would be paid provided that its costs had been recovered in full from the defendants in the substantive claim.

EMW’s agreed hourly rate was £300 and the success fee was 95%; it claimed 180 hours for working on the case.

Mr Halborg and his parents accepted a part 36 offer of £350,000 from the architects, which amounted to a ‘win’ under the CFAs. He prepared a bill of costs totalling £1.36m plus interest, including a claim for costs totalling £123,590 for ‘agency charges’.

However, Berrymans, acting for the architects, argued that EMW’s work was “entirely duplicative” of Halborg Limited’s and offered nothing for it.

EMW then wrote directly to Berrymans, withdrawing Mr Halborg’s authority to negotiate costs on its behalf and offering to accept £65,000 plus VAT for its costs.

Mr Halborg claimed this was a repudiatory breach of contract that disentitled EMW from any payment for its costs from the architects.

EMW’s case was that Mr Halborg settled the claim for costs in the substantive claim – which he denies – and in breach of contract had neither provided it with details of that settlement, nor paid it.

In this hearing, EMW applied for specific disclosure of documents relevant to the costs claim, while Mr Halborg sought a preliminary trial to determine whether there were the various implied terms around payment in the CFA that EMW contended.

Mr Halborg opposed the application for disclosure, citing privilege, although the only substantive reason given was that it could potentially release the documents into the public domain.

Master Clark said there was only one way in which the claimants and defendants to the substantive action – whose joint privilege it was – could be prejudiced by the disclosure.

“This could occur if (as the defendant asserts) there has been no settlement of the costs of the substantive claim; and the privileged material was put into the public domain by being referred to in open court. It would then be available for use in any assessment of costs of the substantive claim.

“However, this could be prevented by the court making directions under CPR 31.22 preventing further use of documents referred to in open court; or, if necessary, directing that the public are excluded from the relevant part of the hearing. So far as use by the claimant himself is concerned, he would be subject to the implied undertaking provided for by CPR 31.22(1).

“For this reason, I do not consider that there is any public policy justification for withholding disclosure of these documents from the claimant provided safeguards are put in place to prevent their release into the public domain.”

On Mr Halborg’s application for a preliminary trial, Master Clark noted that the Court of Appeal had “warned on a number of occasions of the risks of delay and increased costs resulting from trial of preliminary issues, particularly in complex cases”.

He went on: “This is a case with a high degree of personal animosity between the parties which, as mentioned above, has already gone to a second appeal in the SCCO proceedings. The parties were unable to agree even case summaries for the case management conference.

“The prospects of their being able to agree a statement of facts or even what facts are relevant to the trial of the preliminary issue are effectively nil…

“This is also a case, where on the basis of past proceedings, the losing side in the issue is likely to appeal, resulting in further delay. A further factor is the relatively low value of the claim, namely £123,590.23.

“It is a claim which should be resolved as quickly and cost effectively as possible and two trials are inevitably more expensive than one. Ordering a preliminary issue in this case is in my judgment likely to cause delay and increase costs.”

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Lower profits: lawyers’ key LASPO concern

Lower profitability and the possibility of having to turn away clients pass4sure 70-298 are law firms’ main concerns ahead of implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), according to new research.

The survey of 102 firms of different sizes also revealed that fewer than half pass4sure C2040-918 appear to be actively making changes to prepare for implementation of the Act next April, with only 5% saying they are fully prepared.

The poll, conducted on behalf of LexisNexis publication Cook on Costs and featuring respondents who bought the book, found that that 36% of respondents are negative about the impact of LASPO on their businesses, with 50% unsure or believing it will have no effect – 8% were ‘fairly positive’.

Asked about their particular concerns for their business, respondents highlighted lower profitability (29%), having to turn away certain clients (24%) and having to turn away certain business types (21%).

Little more than one in five could identify any benefits for their practice from the Act. A few expect improvements in cost control and efficiency, while a handful thought they may be able to pick up business that other firms will no longer handle.

Fewer than half of the firms appear to be actively making changes to prepare for the Act – 5% considered themselves fully prepared, 43% are ‘currently preparing’, and a further 24% are ‘planning action’. One in six of respondents believed they do not need to change.

The kinds of changes being made or contemplated are new compliance processes, greater internal efficiencies and new technology. The research added: “However, the Act may have more fundamental effects on the legal market in England and Wales. Nearly one in ten say that they have already changed their practice’s business structure, and one in four that they have planned this.  There may also be staff movements, although, on the positive side, more have taken on or planned to take on new people (18%) than have made or planned redundancies (12%).”

Unsurprisingly, most thought that LASPO will have a negative impact on the justice system, although there was some acknowledgement that clients will benefit from greater control of costs.

Cook on Costs spokeswoman Clare McMahon: “For lawyers specialising in civil litigation to express concern for people who need recourse to the law but may not be able to attain it, is worrying. In the coming years, it will be important to see alternative ways for helping the most vulnerable including pro bono work.”


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Emily Thomas, Senior In House Solicitor, Acasta Europe Limited

With court fees rising and litigation becoming increasingly expensive, third party litigation funding continues to grow. There are various reasons clients may want to consider litigation funding, such as the need for a cash injection to enable them to get their case off the ground or the desire to take the litigation risk off their balance sheet and avoid having funds tied up in lengthy legal battles. Litigation funding can also be a useful tool for solicitors as it can provide payment of their fees where a client does not have the funds to continue with the litigation.

Where once third party litigation funding was banned under English Law, it is now a growing and constantly evolving industry with more and more options for clients to consider.

Unfortunately obtaining litigation funding can still be a complex and lengthy process but at Acasta Europe Limited the process has been designed to be as straightforward as possible. Whilst many clients also require After the Event insurance in conjunction with litigation funding, if this has been obtained elsewhere we can still assist with the funding element of the claim and are happy to look at providing assistance at all stages of the litigation process.

Acasta is able to offer funding for a variety of commercial disputes in conjunction with Sparkle Capital. Our in house legal team is actively involved in assessing and considering the merits of any funding proposal. We also offer a funding facility that has been specially designed to provide assistance for lower value claims as we understand that such claims cannot often be pursued due to lack of finance.

For more information click here, call 0800 668 1350 or email Emily at

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DAS LawAssist team taking part in a 10,000 feet charity skydive

Five intrepid staff members of Bristol based DAS LawAssist are taking part in a 10,000 feet charity skydive on 25 July 2014, to raise £2,500 for charity Headway (UK) – the brain injury association.

Faye Williams (24), Gino Rosolek (25), Claire Winn (26), Lucy Durbin (23) and Simon Tucker (27) have never skydived before so their tandem jumps will be a genuine challenge.

Simon Tucker, senior case handler at DAS LawAssist, who organised the jump, says: “Our line of work means we come into contact with a lot of people who’ve suffered from head injuries in accidents. Therefore, we wanted to take part in a personal challenge and raise money and awareness for a fantastic charity like Headway.

“Shockingly, head injury is the foremost cause of death and disability in young people today. Headway provides support, services and information to brain injury survivors, their families and carers, as well as to professionals in the health and legal fields. This support is vital and we know the money we raise will go towards improving the lives of people who’ve suffered a brain injury through care, support and research into treatments.”

All five are looking forward to the jump at Redlands Airfield in Swindon, but as Simon adds they are all a little nervous: “It’s an exciting challenge but our nerves are growing as jump day gets closer. We keep reminding ourselves though that this is for the benefit of a very worthy charity and that gives us the drive we need.”

The team have set up a JustGiving page, and are inviting anyone to help them reach their target of £2,500. You can reach the page at

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inCase200Full-service firm, Ascot Lawyers based in Ascot and Aldershot has invested in the personal injury version of inCase after recognising the benefits it will give to clients.

Neil Somerville, senior partner said, “having had a chance meeting with Such (managing director of inCase) I showed some promotional material to my key staff.

“They were literally demanding that the whole PI team see a full demonstration and once Such had shown inCase and explained what it was capable of doing, it took no time at all to commit to this service.”

incase your overviewNeil added, “with inCase it is easy to see how we will be able to speed up the turn of cases but also capture more clients with the signature feature especially. The fact that Such is a personal injury solicitor himself and knows the challenges in personal injury means that he has created a product that solves a number of those challenges.”

Managing director and founder of inCase, Sucheet Amin commented, “I rarely get to demonstrate inCase to a whole PI team but the opportunity meant that the workforce could see the benefits of what the app will do for them and their clients.

inCase mobile app“Ascots are a great example of where not only management but the whole firm embraces new ideas and I know that inCase will not let them down.”


Avoiding the trap of fixed costs in high-value claims

David Disney

Have you been caught out by fixed costs on a high-value RTA or EL/PL claim that settled prior to allocation to the multi-track? Over the past couple of months, we have seen this issue arise on a number of occasions. So, in what circumstances do fixed recoverable costs (FRC) under part IIIA of CPR 45 apply to high-value claims? They apply if a claim was submitted through the portal but no longer continues under the relevant protocol and the matter is not allocated to the multi-track. This is the scenario we are finding to be quite common in practice and something which practitioners should become familiar with in order to avoid the pitfalls of fixed costs.

February 23rd, 2018