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RTAs: MoJ aware of Portal Co's concerns
The government is determined to introduce the expanded RTA claims portal in April 2013, the Ministry of Justice (MoJ) has stressed, despite the company behind the system saying it cannot be done in that time.
As well as announcing plans earlier this week to consult on raising the small claims limit for personal injury (PI) and introduce independent medical evaluations of whiplash injuries, the MoJ highlighted the extension of the RTA portal to claims worth £25,000, and to employers’ and public liability cases, as a key part of its plans to reduce the cost of motor insurance.
However, we reported in March that Portal Co – which oversees the technical infrastructure of the RTA portal – has told the MoJ that it would take 11 months to amend the portal to encompass RTA claims worth up to £25,000, and two years and seven months to build and test a new system for EL and PL.
Further, it said this work could only begin once the Civil Procedure Rule Committee has set the rules and we believe the committee has been asked to complete this work by December.
An MoJ spokeswoman told Legal Futures: “We are aware of the Portal Co concerns and continue to work with them and other key stakeholders on both the vertical and horizontal extensions, with a view to implementation of a revised protocol by April 2013.”
She also confirmed that an independent evaluation of the RTA portal – which was promised in the Solving disputes in the county court consultation response in February as a precursor to any extension – will be published in the summer.
The spokeswoman rejected the suggestion that the proposal to increase the small claims limit for PI cases from £1,000 to £5,000 was a U-turn.
While acknowledging that the Solving disputes consultation response stated that there will be no change to the PI threshold, she pointed out that, as explained in the original consultation paper, this was because the consultation did not actually look at this question – its focus was on whether to raise the standard small claims threshold of £5,000.
She continued: “The threshold for personal injury claims hasn't been looked at since 2007, when it was decided the time wasn't right to raise the limit. There is now political and industry will to revisit this question and following discussions at the Prime Minister’s recent summit, we believe it is right to consult on an option which could help address the rising cost of personal injury claims. The insurance industry has also promised to pass on any savings to consumers.”
A third motor insurance summit is understood to be scheduled for the autumn.
To and been my pretty. Is itchy. My that after my canadian pharmacy the this fragrance, and, spray not have corners rare to.
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Now that the LASPO changes have been introduced and the market adjusts to the new regime the minds of legal expenses insurers are beginning to focus on the run-off scenario for After the Event insurance. The huge increases in the number of cases underwritten by LEI’s in the run up to 1st April have no doubt improved the look of the GWP book, but the eventual price could be a high one unless insurers take active risk control measures to prevent an increased loss ratio caused by cases lacking genuine and reasonable prospects of success. When considered alongside the issue of premium recovery accountability, the factors determining a healthy run-off become ever clearer.
Our experience at LAS paints a potentially worrying picture for insurers. A recent audit of a major personal injury law firm revealed the failure to account to the ATE insurer for a 6 figure sum of premium recoveries over a two year period. Our 2012 audit of a large practice showed a similar sum owing in respect of premiums recovered through miss-selling based claims. We are sufficiently confident of our ability to identify the failure of law firms to fully account for premiums recovered that we operate on a percentage of recovery basis. This cost-free service is proving very attractive for insurers seeking to optimise premium income, particularly where post-LASPO the relationship with the law firm is perhaps not as strong as it once was. These audits can be done remotely or via a physical visit.
The auditing of claims against technical handling criteria is normally undertaken on-site which provides the added advantage of enabling an assessment to be made regarding the efficacy of the firm’s supervisory structure, compliance regime and risk management culture. Against this background LAS are able to provide case-specific template reports containing key data, timelines and an independent assessment of Prospects of Success.
Recent live file audits have been conducted at firms specialising in Motor, Employer’s and Public Liability claims and Industrial Disease, Noise Induced Hearing Loss and Contract Law disputes. In general we recommend corrective action in c20% of the claims audited, having identified key factors that have been overlooked or steps that need to be taken. Examples include the failure to obtain available Police Reports, not acting in accordance with a supervisor’s instructions, failing to follow Counsel’s Advice, unacceptable delays in progressing matters, not communicating Part 36 Offers to insurers or clients and failing to contact independent witnesses. In an additional 13% of cases we recommend that the insurer withdraw cover due to a determinable lack of prospects which have been put to one side by a lawyer too busy to fully stay on top of matters. These concerns are more prevalent in medium/large practices where a high turnover of Fee Earners and supervisors, coupled with unmanageable caseloads, lead to a fall in standards.
As the market compresses in light of the LASPO changes, and previously strong business relationships come under increasing pressure, a greater prevalence of similar concerns is almost inevitable. Our advice is simple – manage the run-off before it runs away with you!
Dave Massey – Director, Legal Auditing Services (LAS), Bristol
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Budget: guidance needed
A second regional costs judge has ruled that an approved budget does not hinder a detailed assessment, but also called on the higher courts or the rule committee to give a definitive view.
District Judge Hale in Nottingham explicitly agreed with the ruling of his Birmingham-based colleague, District Judge Lumb, in Merrix v Heart of England NHS Foundation Trust.
In Bhojani v University Hospitals of Leicester NHS Trust, DJ Hale said: “Like Judge Lumb I think the answer… has to be more nuanced than the claimant’s contention for a fixed figure and the defendant’s contention for an entirely unfettered entitlement to attack a bill on detailed assessment.
“The budget will be a strong guide to what will be allowed on a detailed assessment and because the receiving party’s costs have already passed scrutiny once, the scope for further reduction might prove to be limited.”
Describing the budgeting stage as involving “a consideration of the landscape and assessment as a more detailed survey of the terrain” he said budgeting was not intended to replace detailed assessment.
“Had that been the intention of the rule committee, they would have made the appropriate and specific changes to CPR parts 44 and 47 and they did not.”
He added that whether or not the case management judge recorded an opinion that incurred costs were disproportionate, those costs must always be subject to a line-by-line detailed assessment.
DJ Hale said: “It seems clear to me that without an authoritative and binding ruling from the higher courts or a clear and unequivocal change to the Civil Procedure Rules, parties and judges alike will continue to operate in an atmosphere of uncertainty.
“Clarification and guidance is required urgently and whilst I have reached a conclusion, I have not done so without significant hesitation. For those reasons I have indicated to counsel that I shall readily grant permission to appeal and would hope that any appeal would be dealt with as speedily as possible.”
In December, the rule committee heard that this was a difficult issue that needed to be put out to consultation.
The judge did not accept that his decision was inconsistent with Lord Justice Jackson’s intentions. “At a detailed assessment the budget will still be an important factor in the judge’s mind. In particular he is likely to be reluctant to reduce the receiving party’s costs on grounds of proportionality when the budget has already been approved as being proportionate.
“In fact I would go as far as to say that in most cases there will be little if any scope for a further reduction on the ground of proportionality alone in the absence of a significant change of circumstances since the approval of the budget.”
But he did acknowledge that this approach would not do much to reduce the number of detailed assessments. “So far there is much anecdotal evidence that budgeting has done little if anything to reduce the number of detailed assessments taking place and the points of dispute are no shorter than they ever have been.
“However, this was not the primary objective of costs budgeting. Costs budgeting does bring with it a degree of certainty in the sense that the parties will know at the outset what the upper limit of recoverable costs will be at the end of the case unless there is a significant change of circumstances.
“It is true to say that a party cannot be certain that his recoverable costs will not be further reduced at a detailed assessment but it seems to me that certainty can never be achieved except where a fixed costs regime is put in place.”
The decision of the Court of Appeal last year in SARPD Oil has also caused confusion, and in light of that, rule 3.15 is to be amended on 6 April to make it clear that the case management hearing is not the forum to debate incurred costs, although the judge will be able to record comments on them to be taken into account at a later assessment.
Christopher Perry, instructed by Shakespeare Martineau, acted for the claimant. Robin Dunne, instructed by Acumension, the costs firm which also worked on Merrix, represented the defendant.
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Clinical negligence case: pre and post 1 April 2013 costs
It is “convenient and necessary” for lawyers’ bills to be split into two parts to distinguish between work carried out before and after 1 April 2013 in any case involving proportionality, the Senior Costs Judge has ruled.
Master Gordon-Saker said this was because the old and new, post-Jackson proportionality tests were different.
Ruling on a fatal medical negligence claim, the Master also said it was “both necessary and convenient”, where a costs management order had been made, for bills to be drawn up “in parts which reflect the phases”.
He went on: “Although multi-part bills tend to obscure the overall picture, it seems to me that (unless a sensible alternative can be devised) in a case in which a budget has been approved or agreed and the costs are to be assessed on the standard basis, it will be both necessary and convenient to draw the bill in parts which correspond with the phases of the budget.
“Within each part it will also be necessary to distinguish between the costs incurred before and after the budget was agreed or approved. This could be done without further sub-division by use of italics, bold, superscript or some other formatting device.
“The new format of bill, which is shortly to be the subject of a pilot in the Senior Courts Costs Office, should avoid these difficulties.
“Where a bill has already been drawn without being divided into phases, one possible course to avoid re-drawing the bill would be to serve schedules setting out the individual items of costs claimed in relation to each phase. I understand that a number of courts have directed this.”
Master Gordon-Saker was ruling in BP v Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs), involving a woman who died in 2010 from an infection linked to a severe brain injury which was sustained during a quadruple heart bypass operation.
The law firm Hugh James acted for her, and following her death, for her son, MP, suing as the administrator of her estate. Proceedings were issued in June 2013, seeking total damages of over £440,000.
Master Gordon-Saker said the claim was settled at a round-table meeting shortly before trial in January 2015, for £205,000. The settlement was approved by the court and the damages divided between four of the woman’s children.
The master said it was “difficult to identify” the work done before 1 April 2013, but assumed that the total base costs claimed were £45,000. He said this did not appear disproportionate, given that it was a “complex clinical negligence case in which both liability and causation were disputed throughout”.
For the period after 1 April 2013, the master allowed total base costs of £138,203. He said this bore a “reasonable relationship” to the sums in issue – a claim for £440,000, which settled at £205,000.
Master Gordon-Saker ruled that the claimant was entitled to his costs.
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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. Established for over 10 years and operating throughout the UK, Acasta has an experienced underwriting team with many years’ experience in litigation insurance and funding work. Our underwriters actively work in partnership with solicitors to develop solutions to the most complex litigation of all types through After the Event Legal Expenses insurance and Funding if required.
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Deafness claims: sharp fall during 2015
Industrial deafness claims have fallen significantly as the “pool of eligible claimants appears to be shrinking” and lawyers focus on better cases, it was claimed today.
Figures published yesterday by the Institute and Faculty of Actuaries’ UK Deafness Working Party showed that the number of claims received by insurers fell throughout 2015, from 22,079 in the first quarter to 14,274 in the last – respectively 20% higher and 7% lower than the same periods the year before.
The insurance industry has been targeting deafness cases as the “new whiplash”. The imposition of a fixed costs regime for industrial deafness cases is still on the agenda, although there has been no official word since the Civil Justice Council was asked to review the issue last July.
Gregory Overton, actuarial services director at PwC, said: “The spike in claims experienced during early 2015 was not widely foreseen by the market and many questioned whether volumes at or around the peak 2013 levels were sustainable.
“The latest figures would seem to support the view that these claims have reached the point where the pool of eligible claimants is shrinking, meaning claims volumes could continue to decrease.
“At the same time it appears that the proportion of claims resolved by insurers at nil value has also been increasing. For claims reported in 2010 and prior it looks as though around 50% of claims will be for nil values whereas for 2014 and 2015, it’s closer to 60%.
“Given the timeframe to settlement, on average now over two years, it is still going to be a while before we know if these claims are truly tailing off. However, from discussing recent experience with those in the market anecdotally, claim numbers have continued to fall in the first half of 2016.”
John Baker, senior manager within PwC’s liability restructuring team, added that many claimant firms have “reengineered their processes and notifications strategies recently”.
He said: “In particular a number appear to have scaled back on the volume of claims notified to insurers and are instead focusing on the more meritorious claims.”
The number of deafness claims settled at no cost would then decline “significantly”, he predicted, but insurers would still make operational savings.
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Foskett: Some cases are open and shut
The High Court has rejected the argument that a part 36 offer to settle a clinical negligence claim for 90% of its value was not a genuine offer because it was made shortly before trial.
Mr Justice Foskett said it would extremely difficult for the paying party to show that an offer did not reflect a realistic assessment of the risks of the case.
The case related to the brain damage sustained by a boy when he was born in 2008. The claimant won the liability-only trial, with damages to be agreed or assessed in due course.
On 6 October 2017, the claimant’s advisers put forward a part 36 offer on his behalf of 90% of the damages to be agreed or assessed in due course. It expired on Friday 27 October, effectively one working day before the trial started on 31 October.
The offer was not accepted and the claimant sought the usual consequences that came with achieving an outcome at least as advantageous as his part 36 offer
The defendant argued that the offer was not a genuine attempt to settle the case because 10% did not reflect a realistic assessment of the risks of the litigation.
Foskett J ruled: “Whilst it is unwise ever to say ‘never’, I do consider this kind of argument to be one which could hardly ever succeed.
“How one side perceives the risks in a piece of litigation (whether in the clinical negligence sphere or any other sphere) will almost invariably be different from the way the other side perceives them…
“Quite how a judge can successfully embark on the kind of exercise I am being invited to embark upon is very difficult to see.”
The judge did not like the idea of embarking on something akin to a mini-trial to determine how the case should have looked to the offeror before the offer was made, and in any case said there was no need to do so here.
He rejected the suggestion that clinical negligence cases were “notoriously hazardous” and could seldom be regarded as “open and shut”.
When an offer to accept 90% was made in a claim like this, “I would regard it as a case where the claimant’s team regard the claim as very strong, but is prepared to offer a modest discount to secure absolute certainty of obtaining substantial compensation. That is what [counsel for the claimant] says prompted the offer in this case and I have no reason to doubt that that was so.”
To decide otherwise would mean that a 90% settlement in the clinical negligence sphere would no longer be offered or accepted, Foskett J said. Further, “10% is not a token discount, particularly at a time when the level of damages in serious cases is very significant”.
Foskett J stressed that there was nothing wrong about the defendant electing to contest the case, and the decision not to accept an offer “may be perfectly understandable and reasonable even if, in due course, it turns out to have been the wrong one. It is simply a reflection of the litigation risk that each party has to evaluate”.
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Courts: push for greater use of hot-tubbing
The giving of concurrent evidence by expert witnesses or ‘hot-tubbing’ should not be “forced on unwilling parties,” a sub-committee of the Civil Procedure Rule Committee (CPRC) has advised.
The rule committee agreed with this and has asked it to draft rule changes that would nonetheless promote the practice.
The sub-committee said hot-tubbing should not be made the ‘default’ position, but it would be beneficial for it to “become, increasingly, a normal feature of expert evidence in all courts”.
In a paper to last month’s CPRC meeting, the sub-committee said it was “unanimous” in the view that it was not “feasible or desirable to identify classes of case that are suitable for hot-tubbing”.
It went on: “It is probably safe to say that hot-tubbing is unsuitable in cases where there is a serious challenge to the expertise or credibility of an expert, at least until that challenge has been determined; beyond that, adoption of criteria or guidelines for determining whether hot-tubbing is suitable, is a preferable approach.”
Earlier this year the CPRC suggested ‘hot-tubbing’ should be the default position in the Mercantile Court and Technology and Construction Court.
The hot-tubbing sub-committee, set up last summer following a Civil Justice Council (CJC) report that suggested the practice should be used more widely, said some form of question should be added to the standard form directions and listing questionnaires for cases involving expert evidence.
“There is little enthusiasm (apart from perhaps in personal injury cases) for early bespoke preliminary hearings to resolve expert evidence issues. These are already possible under existing procedural rules, but little used because the expert issues tend to develop out of the facts, rather than vice versa.”
The sub-committee described the absence of generalised early docketing of cases as “inimical” to the growth of hot-tubbing.
“There is a ‘chicken and egg’ issue, in that increased experience of hot-tubbing would diminish suspicion, hostility and resistance to it from parties; but absence of docketing limits opportunities to bring hot-tubbing into mainstream litigation culture.”
The sub-committee said the CJC study last summer showed there was “no consensus among judges” about which issues lent themselves to hot-tubbing, which was “evolving through judicial experience” that was “relatively limited and ad hoc”.
“There are no discernible patterns emerging to indicate when it is likely to be used, other than that it is more likely in complex cases involving large sums of money; nor when, if used, it is productive and successful, although judges with experience of it were mostly positive about its effectiveness.”
The sub-committee disagreed with the CJC’s enthusiastic support for ‘teach-ins’ with specially appointed experts.
“There was a marked lack of enthusiasm for ‘teach-ins’ among, in particular, the practitioners and judicial member of the sub-committee, at least in the absence of consent from all parties.
“There is a danger of violating the principle that cases should be decided on the evidence given (unless for compelling reasons) in public at a hearing.”
According to minutes of the meeting, the CPRC agreed with the sub-committee’s main conclusion that hot-tubbing “could not be imposed top down” because of the absence of docketing.
Instead the committee agreed in principle that it should, “where possible and appropriate”, be promoted.
“Offering a streamlined process similar to the shorter trial scheme or an earlier hearing date where parties use hot tubbing may be used as incentive to promote its use, particularly if it saves costs.”
The sub-committee, chaired by Mr Justice Kerr, will now consider rule amendments.
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Lord Hunt called for government to proceed “with caution”
A clause inserted at the last minute into the Criminal Justice and Courts Bill, requiring courts to dismiss personal injury claims in their entirety where claimants have been “fundamentally dishonest”, has divided peers.
Lord Beecham, the shadow justice spokesman, described clause 45 – which followed a government announcement last month on reducing insurance fraud – as an “entirely one-sided sanction”, because it failed to penalise defendants. Under the clause, claims must be dismissed unless it would result in “substantial injustice”.
During the bill’s second reading in the Lords earlier this week, Lord Beecham said the clause was inserted “no doubt once again at the behest of the Conservative Party’s friends and supporters in the insurance industry”.
The peer went on: “Again, this is presumably a moveable feast. Of course, a court can already penalise a claimant in costs if it is satisfied that a claim has been exaggerated but, more to the point, this is an entirely one-sided sanction.
“A defendant behaving in similar fashion would suffer no penalty, even though such conduct in a personal injury claim could itself add to the claimant’s suffering.”
Liberal Democrat barrister Lord Marks argued that judges should have the power to throw out an entire case for extreme dishonesty or to reduce awards of damages to reflect the court’s view of such dishonesty.
“However, there are many cases which are affected by what might reasonably be described as fundamental dishonesty where the needs of the claimant for the rest of his or her life must come first and in fairness must be met, and where completely depriving the claimant of damages would be very wrong,” he continued.
“But instead of giving a judge a discretionary power to reject an entire claim or reduce damages to an appropriate extent, this clause would provide that the court must dismiss the claim unless satisfied that the claimant would otherwise suffer substantial injustice. Once again, I sense a lack of trust in judges to act sensibly in the exercise of their discretion in accordance with the justice and requirements of the particular case that they are hearing.”
Lord Hunt of Wirral, a Conservative peer and partner in defendant law firm DAC Beachcroft, supported the principle behind clause 45, but said it might need “clarification and further amendment”.
He asked: “What does it mean to be fundamentally dishonest? What is the difference between dishonesty and fundamental dishonesty? Is it a civil standard of proof? To impose a criminal standard of proof would make it extremely difficult to bring any defence on this basis.
“We also have the situation, which I have known in my career as a practising solicitor, where quite often an overzealous claimant lawyer will include all sorts of areas of claim for which the claimant probably never had it in mind to sue and perhaps will link subsequent injuries to the original accident, when they were clearly due to something that happened afterwards and independently.
“How are we going to deal with a genuine injury that has nothing at all to do with the incident that has given rise to the claim?”
Lord Hunt added that he was not saying the government was “opening up Pandora’s box” with clause 45, but called on it to proceed “carefully and with caution”.
The Association of Personal Injury Lawyers, in its briefing for the debate, said the clause would lead to increase in satellite litigation as lawyers quarrelled over the meanings of ‘fundamental dishonesty’ and ‘substantial injustice’.
APIL predicted an increase in spurious allegations of fraud or dishonesty by “unscrupulous insurers” and an increase in the number of genuine claimants who underplayed their symptoms or failed to bring valid cases at all.
But Lord Brown of Eaton-under-Heywood, a former justice of the Supreme Court, said he was “unpersuaded” by the briefing. He said: “True, it will be necessary on occasion to argue over whether the claimant’s untruthfulness or exaggerations constitute fundamental dishonesty and perhaps it will be necessary to argue whether dismissing his claim entirely would cause him substantial injustice.
“However, given the readiness of some these days to treat an accident as a God-given opportunity to make a fortune… this seems to be a clear steer to how judges should exercise their discretion in the matter. The modest narrowing of an existing discretion is a price worth paying for the discouragement which it is hoped this new provision will provide to those who are inclined or tempted to advance dishonest claims…
“I see no possible logic in suggesting that this provision should therefore be mirrored in regard to the defendant’s conduct of their defence. Surely, on analysis, there is no sensible parallel to be drawn between the opposing cases.”
Justice minister Lord Faulks welcomed Lord Brown’s comments, saying: “Frankly, we do not think that a judge will have any difficulty recognising fundamental dishonesty. We are talking not about a schedule that contains some slight exaggerations or minor inaccuracies, but about fundamental dishonesty.
“If we ask a jury to decide a question of what is dishonest or not, surely we can entrust a judge to decide whether, in appropriate cases, there is fundamental dishonesty. The government are appalled by the explosion of litigation in claims that involve, frankly, lying and fraud.”
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Parliament: access to justice under threat, says MPs and peers
MPs and peers on the Joint Committee on Human Rights (JCHR) have attacked government plans to make sweeping changes to the costs rules for judicial reviews.
It formed part of the committee’s wider critique of the changes to judicial review, which it said lacked “supporting evidence”.
In February, the Ministry of Justice (MoJ) confirmed that it would be pushing ahead with a crackdown on what the government sees as weak or frivolous judicial reviews.
The JCHR is made up of six peers, including leading legal reformers Lord Lester and Baroness Kennedy, and six MPs, including Sir Edward Garnier, the former Conservative Solicitor General, and the chair, Dr Hywel Francis, a Labour MP.
In a report, published this morning, on the implications of the reforms for access to justice, the JCHR said the proposal to make payment of legal aid for pre-permission work in judicial review cases conditional on permission being granted, subject to the Legal Aid Agency’s discretion, was not justified by the evidence.
“Instead it constitutes a potentially serious interference with access to justice, and sufficient evidence to demonstrate its necessity is currently lacking.”
The committee said the change put “too much risk onto providers” and created “too much uncertainty about the degree of such risk”, leading to a “chilling effect” where meritorious cases would not be brought.
The JCHR recommended that the government should withdraw its proposed statutory instrument on legal aid funding, and instead table an amendment to the Criminal Justice and Courts Bill, so it could be properly debated.
The committee said that restricting protective costs orders (PCOs) to cases where permission to proceed had been granted was “too great a restriction” and would undermine access to justice.
Instead, it proposed that courts should have the power to make costs capping orders at any stage in the proceedings, including applying for permission.
The committee said that cross-capping, which limits a defendant’s liability for costs, should be a presumption rather than a duty, to preserve some element of judicial discretion.
Adopting a proposal from the Bingham Centre for the Rule of Law, MPs and peers said that the costs of oral permission hearings should be recoverable from the losing side, whether claimant or defendant.
“There is currently no real reason for judicial review defendants not to resist permission, because there is no costs incentive on the defendant to concede permission,” they said. “Yet routine resistance to permission by defendants leads to additional cost and delay.”
The JCHR defended the role of interveners in judicial review cases, describing third-party interventions as having “great value” in allowing courts to hear wider arguments.
Under the MoJ’s proposals, there would be a presumption that interveners, other than those invited to intervene by the court, would pay not only their own costs but those incurred by defendants responding to their arguments. The committee said such interventions already required judicial permission, which could be given on terms which restricted the scope of the intervention.
It recommended that the Criminal Justice and Courts Bill be amended to restore judicial discretion.
Dr Francis said: “We recognise that there has been an increase in judicial review cases in recent years, but it would have been prudent for the government to wait until recent changes to how immigration cases are dealt with made clear whether this increase was going to continue. The recent Bingham Centre report on streamlining judicial review is an important contribution to the debate about its possible reform. In our view, the government could go some way towards achieving its aims of reducing cost and delay by reforms which would not risk compromising effective access to justice – unlike those it has itself proposed.
“We also believe that the government’s proposals in this area show how the combined roles of the Lord Chancellor and Secretary of State for Justice are in conflict. This is a matter which we think relevant parliamentary committees should examine. There needs to be a complete review of the implications of combining in one person these roles, and of the current structure of departmental responsibilities between the Home Office and the MoJ.”
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Dobson: considering funding should be standard step
Posted by Stephen Dobson, legal reviewer at Litigation Futures sponsor Augusta Ventures
Failure in appropriate cases to advise on the suitability and availability of after-the-event (ATE) insurance and third-party funding will amount to professional misconduct and may amount to professional negligence, as this case study explains.
Scenario
Mr and Mrs Smith invested their life savings in building their dream house. The project went disastrously wrong. The Smiths consulted Mr Brown, a solicitor with expertise in construction disputes. They explained that they had sunk nearly all of their capital into the project, and they estimated their losses at £1.5m.
Mr Brown advised that their case had a decent chance of success, and proposed that his firm should take it on under a partial conditional fee agreement. His firm’s client-care letter advised the Smiths of the adverse costs risk and provided a cost estimate and details of billing procedures, but he made no reference to ATE insurance or third-party funding.
The Smiths resolved to go ahead with the case on the terms proposed by Mr Brown, and to fund the litigation from their pension funds.
The case was a nightmare. Costs soared, mediation failed, it went to trial and the Smiths lost. They had spent £450,000 on (discounted) fees and disbursements, and were liable for the other side’s costs to the tune of £500,000. The total would wipe out their pension funds.
A sorry story, but not an implausible one; anyone with significant litigation experience will have been seen something along these lines. Litigation is risky.
The question is, how much of the risk should the client have to bear? In my view the Smiths were left to carry far too much. I explain below my reasons.
The regulatory position
The SRA’s Code of Conduct is expressly based on 10 principles. Principles 4, 5 and 6 are relevant. They are mandatory, and state that “you” (i.e. every solicitor) must:
- act in the best interests of each client
- provide a proper standard of service to your client
- behave in a way that maintains the trust the public places in you and in the provision of legal services.
The Code of Conduct itself prescribes the following relevant mandatory outcomes:
- O (1.1) You treat your client fairly.
- O (1.6) You only enter into fee agreements with your client that are legal and… which you consider are suitable for the client’s needs and take account of the client’s best interests.
- O (1.12) Clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them.
- O (1.13) Clients receive the best possible information, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter.
Those outcomes are evidenced by the following indicative behaviours (insofar as relevant):
- IB (1.13) Discussing whether the potential outcomes of the client’s matter are likely to justify the expense or risk involved, including any risk of having to pay someone else’s legal fees.
- IB (1.16) Discussing how the client will pay, including whether public funding may be available, whether the client has insurance that might cover the fees, and whether the fees may be paid by someone else such as a trade union (my emphasis).
- IB (1.17) Where you are acting for a client under a fee arrangement governed by statute, such as a conditional fee agreement, giving the client all relevant information relating to that arrangement.
- IB (1.19) Providing the information in a clear and accessible form which is appropriate to the needs and circumstances of the client.
What of Mr Brown’s approach, in the light of this regulatory framework? He was sedulous in providing regularly updated cost estimates; he helped the Smiths by agreeing to represent them under a CFA; he spelt out his firm’s terms regarding costs, disbursements and billing arrangements.
What he failed to do was explain to the Smiths how they could avoid the risk of an adverse costs award, and got most of the cost of fighting the case paid for without risking their pension funds, by arranging ATE insurance and third-party funding, both of which would have been available at a palatable cost.
With them in place, the Smiths would have suffered no loss from an adverse costs award and (depending on the funding model) would have only paid a proportion of their own costs and disbursements to run the litigation. If the claim had succeeded, they would have foregone a percentage of the damages recovered plus interest on the amount of finance provided.
In my view, in failing to advise on the possible availability of ATE cover and external funding, Mr Brown plainly breached SRA principles 4, 5 and 6, and outcomes 1.1, 1.6, 1.12 and 1.13; and failed to comply with indicative behaviours 1.13, 1.16, 1.17 and 1.19; and accordingly was guilty of serious professional misconduct.
Legal liability?
What of Mr Brown’s legal position? I am not aware of any directly applicable authorities, although in Adris v Royal Bank of Scotland [2010] EWHC 941 (QB), Judge Wakeham QC found that it was a “gross breach of duty on the part of [the solicitor] to [his] clients” to fail to tell them that they had no ATE insurance when they would have been expecting to have it.
Plainly it would be wrong automatically to equate a breach of the Code of Conduct, however serious, with professional negligence (see e.g. Sarwar v Alam [2001] EWCA Civ 1401 and Mastercigars Direct v Withers [2007] EWHC 2733 (Ch)).
But my feeling is that given particularly what the Smiths had made known to him about their financial position, a court could well conclude that Mr Brown’s failure to explain to them the possible availability of ATE cover and external funding amounted to breach of the common law contractual and tortious duties of care he owed to the Smiths, for which he should be found liable in damages.
Conclusion
I do not say that solicitors should advise clients about the possible availability and suitability of ATE cover and third-party funding in every case. There will be many situations in which it would be inappropriate to do so.
But in my view, the well-run law firm should include consideration of the possible relevance of ATE cover and third-party funding as a standard step in its engagement procedure in contentious matters, to ensure that it does not fall foul of the SRA, the Legal Ombudsman and the court.
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LFC’s logo: UK-specific features coming later this year
A technology start-up went live this week with the aim of streamlining the litigation funding process for law firms, funders and claimants alike.
Legal Funding Central (LFC) is based in New York but as well as the US, it is targeting the UK funding market with a promise to reduce inefficiencies.
The initial service offered by the site is enabling lawyers to create a standardised case file by filling out key information and uploading documents. LFC hosts the case file on its secure cloud-based server, where it can be accessed by multiple funders once they are provided with authorisation information from the law firm, rather than requiring the lawyer to make multiple applications to funders.
LFC also provides phone and e-mail support to claimants who need extra help, facilitates requests for additional information by funding companies, and supports fax and e-mail submissions from law firms that want help uploading case information to the website.
The next stage of development for the site, according to co-founder Dylan Beynon, will be “exploring ways to eliminate inefficiencies for funding companies and claimants”.
He said: “We kept hearing the same thing from attorneys and paralegals – ‘legal funding is important to our clients, but I wish I didn’t have to deal with it’.
“There are a million ways that technology can improve legal funding, and I believe we’ve taken the first major step by removing bottlenecks that law firms and funding companies struggle with.”
He told Litigation Futures that LFC is developing new features specific to the UK market for release later this year.
LFC is currently free to use, and Mr Beynon said that while they are building additional services, “we haven’t yet nailed down a business model. However, we believe that if our technology can save the key players time and money, then that will create a clear path to monetisation”.
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National leading legal costs specialist Just Costs Solicitors is delighted to announce a number of promotions across their three offices in Manchester, London and Chesterfield.
Those promoted to Senior Associate are: Adam Oldale, Regional Manager of the firms’ Chesterfield Office; Monique Passalaris, Regional Manager in London; Simon Wadlow, National Head of Business Development and Sam Hayman, Senior Costs Draftsman also in London.
In addition, Adam Quinn, Solicitor who undertook his training contact with Just Costs in Manchester has been promoted to Associate along with Solicitor/Senior Costs Negotiator, Charlotte Knight (Chesterfield).
Paul Shenton, Managing Director of Just Costs says “It is with great pleasure that we make these promotion announcements. All reflect thoroughly justified reward for individual contribution that has played no small part in the continuing success of Just Costs Solicitors.”
Paul goes on to add “We are busier than ever and remain committed to the development of our staff to ensure our business is well-placed to respond to the demand for expert legal costs advice and assistance from litigators across the UK.”
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Gauke: Court sends a message to the world
A new flagship court is to be built in the heart of legal London to tackle cybercrime, fraud, and economic crime, and also replace the Mayor’s and City of London County Court, and City of London Magistrates’ Court.
It will be on the site of Fleetbank House, just off Fleet Street. Subject to finalising funding arrangements and securing planning permission, it is expected to be completed in 2025.
Fleetbank House is currently home to the Employment Appeal Tribunal, and it will move to the Rolls Building.
The Ministry of Justice said the court “will be a sign to the world that the UK remains the global centre for law and finance”.
The proposal for the new court was announced last October by the City of London Corporation, and work on feasibility has now concluded. Funding will be provided by the City of London Corporation and HM Courts and Tribunals Service.
The figure has not yet been settled, but the new court should be on a similar scale to the Rolls Building, which cost around £250-300m. How that cost was split between the corporation and the courts service is not known.
It will have 18 courtrooms and also house a new City of London police station.
Lord Chancellor David Gauke said: “The flag of English law is flown in countries across the globe, and London already leads the way as the best place to do business and resolve disputes.
“This state-of-the-art court is a further message to the world that Britain both prizes business and stands ready to deal with the changing nature of 21st century crime.”
Catherine McGuinness, policy chairman of the City of London Corporation, said: “This is a hugely significant step in this project that will give the Square Mile its second iconic courthouse after the Old Bailey.
“Our rule of law is one of the many reasons why London is the world’s most innovative, dynamic, and international financial centre, and this new court will add to our many existing strengths.
“I’m particularly pleased that this court will have a focus on the legal issues of the future, such as fraud, economic crime, and cyber-crime.
“Fleet Street may historically be known for hosting newspapers, but I believe with this iconic project it will be seen as a world leading centre for legal services and justice for decades to come.”
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Shenton: exciting opportunity
Specialist law firm Just Costs has secured £1.1m in bank funding to fuel its growth, with significant expansion and possible acquisitions on the horizon.
NatWest has agreed the funding package as Just Costs looks to recruit 30 staff to its enlarged Manchester headquarters, as well as its offices in Chesterfield and London.
Just Costs already employs in excess of 100 people, having added 29 in the past six months. With more than 350 clients around the country, Just Costs had an annual turnover of £5.4m in 2013, and is expecting to reach £6.4m this year.
The firm said it is also “on an acquisition hunt and is currently in talks with other specialist costs firms”.
NatWest relationship manager Aldo Palazzo said: “Just Costs has a strong presence in the legal sector and an astute management team. We are confident the wide working relationship both locally and nationally will continue to strengthen, with Just Costs taking full advantage of growth opportunities in the markets they operate, and we wish them every success for the future.”
Just Costs managing director Paul Shenton said: “We are delighted that the NatWest funding has afforded Just Costs the exciting opportunity to take our expansion and growth plans to another level.
“When we met Aldo from NatWest we liked the fact he was part of team that looked after solicitors, which for us provided added value. It’s good for our business to know someone who is well placed like Aldo and we can support him as well.”
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Grant: balance needs to be restored
Justice minister Helen Grant acknowledged yesterday that the civil justice reforms will bring “some pain initially and uncertainty for a while”. But with change comes tremendous opportunity, she argued.
She praised those exploring alternative business structures – a concept she described as “wonderful” – for seeking to make the most of that opportunity.
Ms Grant also revealed that the government’s response to the whiplash consultation will not be published until the autumn.
Speaking in London, Ms Grant emphasised her 23 years of experience as a solicitor conducting family and civil litigation work, including both serious and straightforward road traffic claims, prior to her election in 2010.
Though she enjoyed the work “immensely”, she said: “During that time I also saw a huge increase in the number of claims, I saw a huge increase in the cost of dealing with those claims, I saw the growth of risk-free litigation and I also saw the worrying growth of the compensation culture…
“Meritorious claims will always be allowed but balance needs to be restored. We need to make sure we do everything we possibly can to protect claimants’ damages and we need to tackle the compensation culture. Ultimately we also want to see the insurance industry pass on the savings to consumers through much lower insurance premiums.”
Ms Grant said that underlying both the Jackson report and the government’s reforms this year was the principle that “access to justice for all depends on costs being proportionate and unnecessary cases being kept away from the courtroom”.
On whiplash, she said the government was “committed to tackling fraudulent and exaggerated whiplash claims whilst of course ensuring that those suffering genuine neck injuries get appropriate and sufficient compensation”.
She concluded: “Ultimately it will be the consumer who wins, with greater competition in the sector, transparent customer-orientated services and, very importantly, better value for money.
“Putting the consumer first is a worthy principle… But the legal sector is a very, very worthy profession and it too needs our support. I can tell you that I will never forget that.”
Responding the speech, Craig Budsworth, chairman of the Motor Accident Solicitors Society, said: “We welcome today’s announcement that the government will be taking stock of proposals for further reform to the whiplash claims process and not make any decisions until the autumn. This will give Parliament the opportunity to give the proposal to raise the small claims limit to £5,000 the detailed scrutiny it deserves.”
The speech came on the day that the RTA portal fee fell from £1,200 to £500, in response to which justice secretary Chris Grayling said: “We are turning the tide on the compensation culture. It’s pushing up the cost of insurance, and making it more expensive to drive a car or organise an event. It’s time the whole system was rebalanced.”
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Coming inside the budget does not prevent further cuts, says judge
The budgeting regime does not fetter the powers and discretion of the judge at detailed assessment even if the receiving party comes in within the budgeted figures, a regional costs judge has ruled.
However, in a significant decision, District Judge Lumb in Birmingham urged greater co-operation between parties so that a far more accurate budget is prepared in the first place.
The judge, who is also a specialist clinical negligence district judge, said that though there was no direct authority on the relationship between the two, there were numerous examples in the CPR and case law to support the contention that cost budgeting was not intended to replace detailed assessment.
For example, there were no wholesale changes made to CPR parts 44 and 47 when budgeting came in.
DJ Lumb said: “The amendment that was made was to CPR 44 was to include an additional factor (h) in the ‘pillars of wisdom’ under CPR 44.4 (3).
“The receiving party’s last agreed or approved budget is just another factor that the court will have regard to. No special weight is attached to that budget. The rules were not amended to say that ‘first consideration’ would be given to the budget or that it would be ‘of paramount importance’ which are familiar terms in family law when weighing up the interests of children.”
In Merrix v Heart of England NHS Foundation Trust, the successful clinical negligence claimant argued that if her costs were claimed at or less than the figure approved or agreed for that phase of the budget, then they should be assessed as claimed without further consideration – unless the defendant put forward a good reason to depart from the budget.
The defendant’s position was that the costs judge’s powers and discretion were not fettered by the budgeting figure, but that the budget was just one factor to be considered in determining reasonable and proportionate costs on assessment.
While DJ Lumb ruled that the assessing judge was not fettered by the budgeting regime – save that budgeted figures should not be exceeded unless good reason could be shown – he said the full answer was “more nuanced than the defendant’s position of ‘open season’ and complete discretion to attack a bill on detailed assessment and the claimant’s opportunistic attempt to impose a straight-jacket on the costs judge and claim a fixed figure”.
He explained: “There is some merit in elements of both parties’ arguments in the present case. At the same time, their entrenched positions illustrate why some observers consider that costs budgeting has failed to be as successful in practice as it ought to have been.
“The analysis in this judgment demonstrates that the preliminary issue question itself as posed was based upon a misunderstanding of the objectives and function of costs budgeting which is a different costs management tool from costs assessment.
“If the claimants arguments were correct and that for large sections of a parties costs the only opportunity to challenge those costs, absent ‘good reason’, would be at the CCMC, those hearings would be at risk of being far lengthier than they already are. That cannot be consistent with the overriding objective of dealing with cases expeditiously at proportionate cost.
“It is the duty of the parties to help the court to further the overriding objective by narrowing the issues between them. By adopting an ADR-like philosophy in negotiation and the preparation of budget discussion reports it should then be possible, in the majority of cases, to produce a proportionate budget that is so accurate when compared to the actual, yet still proportionate costs, incurred at the conclusion of the case that the difference between the parties should be so negligible that it would not be worth the time, trouble or risk to pursue a detailed assessment.
“To get to that ideal position requires a realistic engagement by the parties and by the case managing judge who has not only the experience of effective case management but also of the proportionate sums involved in the efficient conduct of the case. The benefits to all, if this panacea can be achieved, are obvious.”
A spokesman for Irwin Mitchell, which acted for the claimant, said permission to appeal was granted by the regional costs judge and the firm was considering its position.
He added: “There is a tension in the court rules between CPR 3.18 and rule 44 which needs clarifying by the courts. Last week it was reported that Master Rowley in the Senior Court Costs Office in a costs claim against Peterbrorough and Stamford NHS Trust had allowed various phases of a claimant’s anticipated costs budget as claimed without undertaking a detailed assessment of these costs.
“It appears that there is different judicial thinking at the moment on this issue.”
A spokesman for the NHS Litigation Authority said: “We are pleased with the court’s decision in this case. If CPR 3.18 were used by costs judges to ‘rubberstamp’ payment of costs budgets at detailed assessment hearings, this would result in a massive increase in the costs of litigation. The burden of this would ultimately be paid by the taxpayer in NHS cases.
“It would also be contrary to the primary intention of the Jackson reforms, which were implemented to control costs and promote access to justice.”
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Aviva: reform could slice £60 off premiums
Pic: VisMedia
Personal injury (PI) claimants should be legally obliged to contact the ‘at fault’ insurer directly rather than going through solicitors and claims management companies (CMCs), Aviva demanded today.
In a major escalation of the rhetoric and lobbying over whiplash reform, the insurance giant said this would strip £1.5bn of “excess cost” from motor insurance premiums by halving the current cost of handling whiplash claims.
“This cost reduction could lead to premium falls of around £60 a year for the average driver,” it said, arguing that the value solicitors can offer motorists with minor PI claims is “questionable” (92% of Aviva’s PI claims settled during 2012 involved a lawyer).
Claimant lawyers hit back, saying Aviva had identified some of the problems, but come to the wrong solutions.
Aviva’s report, Road to reform: Reducing motor premiums by reforming the personal injury claims process, strongly backs the proposals in the government’s whiplash consultation, which closes next month, to raise the small claims limit for PI to £5,000 and introduce independent medical panels.
Aviva said its figures showed that there is no difference in the compensation awarded to the injured party if handled directly or via third parties, although a supporting opinion poll of 2,437 motorists found that 51% believed using a lawyer would result in more compensation than dealing directly with an insurer. Some 40% of the 383 drivers who had made a PI claim felt that third-party services would offer easier 0B0-103 access to legal advice – Aviva said legal expenses insurance in motor polices made this unnecessary.
The company outlined the “excessive cost of challenging a whiplash claim in court”, saying its average was £11,500 against £5,500 for simply paying out on the same case at once.
While Aviva largely blamed solicitors and CMCs for encouraging people to make claims, its own survey showed that of those drivers who were encouraged or advised to make their claim, this was mainly by friends and family (58%) – a CMC or PI lawyer came in at 13% and a ‘no win, no fee’ advert was cited by 9% of respondents.
Claims director Dominic Clayden said: “Our primary concerns are that injured parties receive care and compensation as quickly as possible and that all motorists benefit from a reduction in the excessive costs that have built up in claims over the past few years. We are campaigning for a more efficient system that removes the ‘interested parties’ and requires people to deal directly with the insurer of the at-fault party.”
On medical panels, Aviva said there should be a greater focus upon targeted rehabilitation rather than compensation that many of those surveyed thought was sought to spend on whatever claimants chose.
Of the 383 respondents who had actually made a claim, only 33% spent their compensation on medical treatment or physiotherapy, others said it was used to pay off household debt (29%), to buy luxury items such as TVs (12%) or to go on holiday (9%). Other uses admitted to include buying a car, putting it into savings and paying for university.
The poll identified a “strong link” between rising PI claims and rising premiums, with 95% saying unnecessary claims are behind premium increases. It found strong support for an end to cash compensation for minor motor accidents where no-one was injured – there should simply be the insurance cover for the cost of repairing the vehicle – and a preference for care above cash. Around two-thirds backed a ban on “excessive legal fees” and the unnecessary involvement of lawyers or CMCs.
There was overwhelming support for tighter regulation on how CMCs and solicitors market their services.
Craig Budsworth, chairman of the Motor Accident Solicitors Society (MASS), responded: “Aviva has identified parts of the problem but not come to the right solution. Claimants must have access to independent legal advice.”
He said MASS agreed with many of the issues and findings highlighted by Aviva: “Premiums are too high and fraudulent whiplash claims are having a negative impact on hard hit motorists. [But] we must not forget the needs and rights of the innocent accident victims. The Association of British Insurers estimates that 7% of claims are fraudulent. It is vital that whatever reforms may be made to the system, the 93% of innocent claimants are not prevented from seeking justice and compensation for their injuries.
“There is opportunity for fraud in the system and MASS agrees with Aviva that CMCs must be more heavily regulated and also that no claimant should receive any compensation without a fully independent medical – no medical, no damages.”
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Jackson: evidence “substantially the same” for the three claims
Lord Justice Jackson has shown his merciful side in overturning a “swingeing” costs order which would have wiped out the £75,000 damages won by the claimant in a housing case.
Syeda Begum succeeded in her claim for breach of statutory duty against Birmingham City Council, but failed in claims for negligence and misrepresentation.
In a swipe at the “bulging” authorities bundle provided to the court, Jackson LJ said: “The principles upon which the courts decide costs issues are well known. I will not re-state those principles lest, inadvertently, I add yet more bulk to the authorities bundles in future appeals.
“The real issue is how to apply those principles to the somewhat unusual facts of the present case.
“The claimant has succeeded in her claim and recovered damages of £74,876. Accordingly the claimant is the successful party in the action. The starting point therefore is that the court, in the exercise of its discretion, should award costs in the claimant’s favour.”
Judge David Grant, sitting at Birmingham County Court, made no order for costs for the period before issue of proceedings. Delivering the leading judgment in Begum v Birmingham City Council [2015] EWCA Civ 386, Jackson LJ said the judge divided the proceedings into three periods.
For the first period, from issue to the time that breach of statutory duty was first pleaded on 14 May 2012, he ordered the claimant to pay the council’s costs with the proviso that the council should pay her expert’s costs.
For the second period, from 14 May 2012 to the handing down of the first judgment on 4 June 2013, he ordered the council to pay 40% of the claimant’s costs.
For the third period, from 4 June 2013 to the handing down of the second judgment in December that year, Judge Grant ordered the defendant to pay 80% of the claimants’ costs.
Jackson LJ agreed with the reduction of 20% in the claimants’ costs for the third period, describing it as an “eminently fair decision” challenged by neither party because the second trial had been caused by the claimant’s “deficient pleading”.
However, Sir Rupert said the claimant’s lack of success in the negligence and misrepresentation claims “could not possibly justify” an order that she paid the defendant’s costs for the first period or forfeited 60% of her costs during the second one.
“The claimant’s pleaded claims for negligence, misrepresentation and breach of statutory duty were different labels which the pleader applied to the same underlying facts.
“The factual and expert evidence which both parties assembled was directed to those facts. Both parties would have prepared and adduced substantially the same evidence, even if the claimant had only ever pleaded her claim as one for breach of statutory duty.”
Jackson LJ went on: “The claimant continued to assert, and the defendant continued to deny, the same basic facts and the same disputed propositions of expert evidence.
“There is no suggestion that the defendant lost an opportunity to settle. The defendant at all times disputed the factual basis of the claimant’s claim.”
Lord Justice Jackson allowed the appeal, and ordered that the claimant recover 85% of her costs pre-issue, and 85% of her costs during the first two periods.
Lord Justice Bean agreed for his own reasons, and Lord Justice Sales agreed with both.
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Bogart: ATE has never really been recoverable or free in commercial litigation
The scale of the pre-Jackson panic came into sharp focus yesterday after litigation financier Burford Capital revealed that it sold more after-the-event (ATE) insurance in the first quarter of 2013 than it did in the whole of the previous two years combined.
The company has also developed a “synthetic hybrid DBA” that gets around continuing concerns over the efficacy of hybrid damages-based agreements.
Publishing its half-year results Burford said it wrote more than $150m (£96m) in new business exposure in the first three months of 2013.
“Because of the conditional and deferred nature of our litigation expenses insurance products, it is too soon to tell how much that potential exposure will convert into actual premiums, which will turn into income for the group over the next few years as cases settle, but it seems clear that the former Firstassist will exceed our expectations and that we have a valuable annuity in hand.”
Of the ATE that matured during the first half of 2013, Burford raked in $10m in income and
$6m in profit before tax. It also reported $10m in income from its third-party funding, and profits of $5.4m, with an overall profit after tax of $8.3m, up 74% on the same period last year.
Burford chief executive Chris Bogart said that unlike some other ATE insurers, Burford had not turned away any customers in the run-up to implementation of the Jackson reforms,
During that period Burford “de-emphasised” litigation funding, but its report to shareholders said it is now “proceeding nicely” in the UK, “with strong demand for capital and some early success”, with the first resolution of a UK funding matter recently achieving a return of more than 100% in less than a year.
However, Mr Bogart declined to specify how many of the 29 live investments it currently has (with a commitment of $266m) relate to UK litigation.
Burford also completed a “law firm financing transaction”, which it described as a “market innovation”. This involves providing a law firm with financing across its litigation practice or a specific pool of cases so that it can afford to take the cases on. It is looking to do this with both ATE insurance and litigation funding, although Mr Bogart said the company will still look at individual cases as well.
The report said: “It is too early to tell what the real impact of the Jackson reforms will be on UK litigation generally, let alone litigation finance and insurance. The court system is still dealing with the enormous bulge of pre-Jackson filings while the Jackson era remains uncertain.
“Our very early experience is consistent with our prior assessment – that there remains demand for insurance coverage in larger commercial matters and that the demand for various financing products has increased. However, more time is needed for the new reality to come into sharper focus.”
Burford has stopped writing lower-value ATE since April – leading to some job losses – and Mr Bogart said the end of recoverability would make little difference in commercial cases. With most settling for a global amount, rather than including a specific amount for the ATE premium, he argued that “ATE has never really been recoverable or free except in the rare cases that go to trial”.
There is longstanding concern over whether the DBA rules allow ‘hybrid’ agreements where the solicitor is paid partly by the hour and partly on a percentage of damages, leading to no take-up of the new arrangements.
Mr Bogart explained that Burford is enabling lawyers to work under full DBAs but lay off some of the risk to Burford, which he described as a “synthetic hybrid DBA”. This means, for example, that the law firm works purely on a percentage of the damages, but then agrees with Burford that it will pay the firm half of its fees, in return for half of the fee the firm receives under the DBA.
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Hopper: room for improvement in the manner in which solicitors treat experts
Experts giving evidence concurrently – known as ‘hot tubbing’ – is assisting the courts and reducing costs, according to a survey carried out by the Expert Witness Institute (EWI).
The poll of 154 experts also found that half had seen the number of instructions received go up over the past year – while a third had seen their fees rise. But late payment by solicitors was a significant problem.
Though only 15% of the experts surveyed had actually been involved in some way with hot-tubbing – a key innovation introduced by the Jackson reforms but still in its early stages – those who had gone through the process reported that it assisted the court to determine disputed issues of expert evidence, reduced the length of the trial and saved costs.
Some said hot-tubbing was also being used in mediations and early neutral evaluations, while just one respondent felt that the practice achieved nothing. The positive findings echo those of a Civil Justice Council report in August.
In July, Lord Justice Jackson predicted that the use of hot-tubbing would increase as the benefits become more widely accepted.
A fifth of respondents also reported a growing number of court orders for single joint experts, a shift that on balance found support – while 37% approved of this, 23% said such orders should only be made in very limited circumstances.
The experts were generally happy with the quality of instructions from solicitors (68% agreed that ‘Most are good – they know what they’re doing’), while the rest found them slipshod, increasingly so in some cases due to the strain the solicitors were under.
Less happily, 54% reported having been pressured to change a report, while just 10% said they were paid on time – 42% said they were paid “very late and only after a lot of chasing”. Only 19% said the solicitors always or usually let them know the outcome of the case – which is often linked to when they will eventually be paid.
Perhaps unsurprisingly, there was little love for the Legal Aid Agency among those experts who did legal aid work – some 59% considered the fee rates unsustainable, while 21% thought the agency’s rules too restrictive.
Institute chairman Sir Anthony Hooper said: “The survey, together with our recent 20th anniversary conference, paint a picture of a dedicated group of people who are open to changes in the way expert evidence is delivered for the benefit of the justice system. Hot-tubbing is a significant reform for expert, judge and lawyer alike and the early signs are encouraging.
“Experts and solicitors must work together. The survey shows that there is room for improvement in the manner in which solicitors treat their expert witnesses.”
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Caplen: scant evidence
The Law Society has pledged to challenge the government’s decision to introduce enhanced court fees from April and said it will strenuously oppose more planned hikes.
Enhanced fees are those above cost price and the Ministry of Justice announced earlier this month that it was pressing ahead with a new 5% fee for all money claims of £10,000 or more – subject to a cap of £10,000 – and was consulting on steep rises in the fees for possession claims and general civil applications.
Law Society president Andrew Caplen said: “Court fee hikes introduced by the government from April spell disaster for access to justice, pricing the public out of the courts and leaving small businesses saddled with debts they are due but unable to afford to recover. State provision for people to redress wrongs through the courts is the hallmark of a civilised society.
“It cannot be right that the government has based a decision with such wide-ranging consequences on limited small-scale research and scant evidence. The phrase ‘false economy’ does not even begin to describe this disastrous announcement from the government.”
Mr Caplen pledged that the society would “not let these changes go through without challenge”. As well as responding to the latest consultation, he said it would press the government to reverse its decision, “which will have a far-reaching impact on both our members and consumers”.
The Law Society has asked to see the raw data and evidence used by the government to formulate its decision and will be asking members for data and evidence over the coming weeks.
With the judiciary and Civil Justice Council expressing their “deep concerns” as well, the new fees have also succeeded in united claimant and defendant lawyers, with the Forum of Insurance Lawyers (FOIL) adding to the condemnation last week from the Association of Personal Injury Lawyers.
FOIL president Nick Parsons said: “The government’s contention that greatly increased court fees will not act as a disincentive to commencing litigation is unconvincing. Many individuals and SMEs will struggle to pay the new level of fee to start a claim. Ready access to the courts should be a right for every citizen, not a privilege only for those who can afford the entrance price.
“FOIL also foresees the law of unintended consequences coming into play. This decision has been taken as a revenue-raising measure by the state, yet many of the defendants who will eventually end up footing the bill are themselves public bodies; local authorities and the NHS, for instance. These are institutions that can ill afford such increased costs in these straitened times. The government may end up robbing Peter to pay Paul.”
Mr Parsons said the consultation indicated that further increases would be on the cards, and he suggested that in time, claims below £10,000 might be seen as a “fruitful area” from which to raise income. “This would be an ill-advised course to take,” he said.
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Jackson: unfinished business
Lord Justice Jackson has today put forward his vision for extending fixed recoverable costs (FRC), but said he has not gone as far as originally envisaged because of improvements made in costs management, particularly over the last 18 months.
He proposed “finishing the job” of introducing FRC for all fast-track cases, as well as a new fixed-cost ‘intermediate’ track for certain claims up to £100,000, and a voluntary pilot of a ‘capped costs’ regime for business and property cases up to £250,000, with streamlined procedures and capped recoverable costs up to £80,000.
“In my view it is now right to extend FRC above the fast track, but we must proceed with caution in order to protect access to justice,” he said.
In what he described as a “supplement” to his original 2009 report, Sir Rupert said the “holy grail” pursued by every civil justice reformer was a system in which the actual costs of each party “are a modest fraction of the sum in issue, and the winner recovers those modest costs from the loser”. Germany came closer to the ideal than England and Wales, he said, because it has a civil justice system “fundamentally different from our own”, with little disclosure and oral evidence.
“In the context of a common law jurisdiction, however, there are limits on what can be achieved. Adversarial litigation is an inherently expensive process.”
Nonetheless, the judge – who retires next year – said: “I have sought to balance the many competing interests in terms of access to justice and proportionality of costs. I have made my recommendations and set out what I believe to be reasonable costs and proposals.
“It will now fall to the government to consider this report, and no doubt subject their own proposals for reform to public consultation.”
Jackson LJ said he was “bound to accept that improvements in costs management (especially in the last one-and-a-half years) have eliminated any need to develop FRC on the scale canvassed in my lecture of January 2016” – when he talked about FRCs for all cases worth up to £250,000.
“Nevertheless, the possibility remains of substantially extending FRC in the future, if the costs management process either fails to deliver effective control over costs or becomes unduly expensive.”
Arguing that his earlier reforms have “substantially reduced litigation costs”, he described FRC as “the principal piece of unfinished business”.
He put forward a grid of FRC for all fast-track cases (see end of story), much of which was based on data from Peterborough law firm Taylor Rose TTKW, a defendant practice.
Under the proposals, all fast-track cases would be placed into four bands of complexity, band 1 being the least complex and band 4 the most:
- Band 1: RTA non-personal injury, defended debt cases;
- Band 2: RTA personal injury (within protocol), holiday sickness claims;
- Band 3: RTA personal injury (outside protocol), employers’ liability accident, public liability, tracked possession claims, housing disrepair, other money claims; and
- Band 4: Employers’ liability disease claims (other than noise-induced hearing loss, which is set to have its own dedicated FRC scheme), any particularly complex tracked possession claims or housing disrepair claims, property disputes, professional negligence claims and other claims at the top end of the fast-track.
He said FRCs should be uprated every three years by reference to the services producer price index.
For cases above the fast-track limit of £25,000, he said the case was made out for FRCs for several reasons, including that many cases which are currently in the lower reaches of the multi-track were sufficiently straightforward to be accommodated within such a regime.
Further, in lower-value cases, there was a greater risk that the budgeting process costs themselves were disproportionate, and in any case FRCs brought “a greater level of certainty than costs management can achieve”.
The criteria for the new intermediate track, again broken into four complexity bands, would be:
- The case is not suitable for the small claims track or the fast-track;
- The claim is for debt, damages or other monetary relief, no higher than £100,000;
- If the case is managed proportionately, the trial will not last longer than three days;
- There will be no more than two expert witnesses giving oral evidence for each party;
- The case can be justly and proportionately managed under a new expedited procedure;
- There are no wider factors, such as reputation or public importance, which make the case inappropriate for the intermediate track;
- The claim is not for mesothelioma or other asbestos-related lung diseases;
- Alternatively, there are particular reasons to assign the case to the intermediate track.
The FRC grid is set out at the end of the story. He also recommended FRC for applications to approve settlements for children and protected parties and costs-only proceedings, in respect of intermediate track cases.
Jackson LJ recommended that the new track be reviewed after four years and that, if it was working satisfactorily, it could be extended to cover monetary claims above £100,000 and claims for non-monetary relief.
In relation to business and property litigation, he said FRC would promote access to justice in some cases – such as where “a householder of modest means is suing their builder” – but in other instances, costs management would be preferable.
Jackson LJ said that “capped stage costs are the best variant of FRC for this class of litigation”, although recognised that if recoverable costs were capped in that way, “the work to be done must also be controlled… That requires a streamlined procedure and robust case management”.
So, as we reported in April, he has put forward a voluntary pilot to run for two years in a small number of the Business and Property Courts.
There would be no automatic disclosure, witness statements or expert evidence, the trial would take place no more than eight months after the case management conference, and last no longer than two days, while the case would be fully docketed.
If the pilot proved a success, Jackson LJ said the regime should become available for any suitable case in the Business and Property Courts or the business and property lists of the county court up to a value of £250,000.
“It may well become appropriate to extend the regime to cases up to £500,000, but that must be for future consideration.”
Specifically on clinical negligence, Sir Rupert recommended that the Department of Health and the Civil Justice Council set up a working party with both claimant and defendant representatives to develop a bespoke process for handling claims up to £25,000.
“That bespoke process should have a grid of FRC attached. This scheme will capture most clinical negligence claims. Previous experience (for example, with noise induced hearing loss claims) shows that it is possible for the ‘industry’ to come together and develop such schemes.
“There is sufficient good will on both sides to achieve that in the field of clinical negligence. I remain willing to arbitrate informally on any points of disagreement.”
Finally, he put forward measures to limit recoverable costs in judicial review claims, by extending the protective costs rules currently used in environmental cases. “Citizens must be able to challenge the executive without facing crushing costs liabilities if they lose,” he said.
FRC grid for fast-track claims
FRC grid for the intermediate track
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New appointments at MRN mark the continued expansion of the law firm
Leading Costs Solicitors MRN are delighted to announce the significant addition of experienced costs people to its team. We have witnessed exceptional growth and demand on our services, largely due to the innovative and collaborative way we have tackled the area of online costs budgeting via our Prophet Costs programme.
Solicitor James May, Daniella Phillapson, Helen Appleby, Holly Archbold, Nicola Adams, Rebecca Pickard and Seamus Kelly have all joined in the last few weeks. The appointments mark the continued expansion of the law firm, who have created a number of jobs for professionals within the costs area.
Solicitor and Managing Director Elliot Mocton commented, “We are delighted to welcome colleagues to our growing team. The appointments form part of our continued expansion policy, and will ultimately strengthen the level of service we offer ensuring we are a one stop shop for clients seeking quality, affordable legal costs services and support.”
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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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Sir Bernard: negligence claim was not an ‘unknown unknown’
A settlement agreement provides a central London law firm with a “complete defence” against a £70m professional negligence claim brought on behalf of a Russian oil company, the High Court has ruled.
Sir Bernard Eder said the main case pleaded by Forsters, based in Mayfair, was that the claim by Khanty-Mansiysk Recoveries (KMR) was caught by the earlier agreement and “therefore inevitably doomed”.
He rejected four arguments put to him by KMR. Sir Bernard said he did not consider that outcome 1.8 of the SRA Code of Conduct, which prevents solicitors excluding liability below the minimum amount of indemnity cover required by the rules, had “any relevance to the proper construction of the settlement agreement”.
He said the agreement “provided expressly” that it included potential claims and it was plain that it “had a much wider scope than the particular dispute which existed at that date”.
The judge said the £70m claim was not an ‘unknown unknown’: “Whilst fully recognising that the present claim was not ‘suspected’ at the time of the settlement agreement, the objective bystander could not and would not, in my view, have said that a claim for damages for breach of contract and/or negligence was ‘impossible’. In my view, that conclusion is reinforced by the clear express terms of the settlement agreement.”
He went on: “At the risk of repetition and even bearing in mind the ‘cautionary principle’ stated by Lord Bingham and the other observations of Lords Nicholls and Hoffmann in BCCI, it seems to me that this tripartite agreement was, and was objectively intended to be, an agreement by all three parties whereby they expressly agreed that the payment of the settlement sum would be in full and final settlement of all other ‘claims’ (as defined) and that such definition covered, and was objectively intended to cover, even a claim such as the one KMR now seeks to advance in these present proceedings.”
The court heard in Khanty-Mansiysk Recoveries v Forsters [2016] EWHC 522 (Comm) that the law firm issued proceedings against one of the directors of Irtysh Petroleum in 2012, Rupert Galliers-Pratt, after the firm’s fees of almost £130,000 “remained unpaid for some time”.
Sir Bernard said that two years before, in 2010, the oil company had switched solicitors to Fladgates.
Following negotiations, in December 2012, a settlement agreement was executed between Forsters, Mr Galliers-Pratt and Irtysh, reducing the amount claimed by the law firm to £74,800 plus VAT.
Sir Bernard said that Irtysh went into liquidation in 2015 but, by a written assignment in May, KMR asserted that it had acquired the oil company’s claims against Forsters.
The judge said KMR launched its negligence action against the law firm in October last year, setting out a number of “alleged breaches”, including failing to ensure a share purchase agreement was effective, and claiming damages “said to be in excess of £70m”.
However, he ruled that KMR’s negligence claim was ‘caught’ by the settlement agreement and the law firm was entitled to a declaration to this effect.
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Edwards: Act will make group actions easier
Litigation funders have predicted far-reaching changes following the introduction of the Consumer Rights Act 2015, which comes into force today, particularly as a consequence of the collective redress regime that it ushers in.
Among other changes, schedule 8 of the Act for the first time makes available opt-out competition law class actions in England and Wales. This means cases can be brought by a defined group of people with similar claims either as follow-on or standalone actions, once they are certified by the Competition Appeal Tribunal.
The tribunal also has powers to order them to be opt-in, will subject them to a preliminary merits test, and will have to approve any settlements. It will not be able to award exemplary damages – although it can award damages without quantifying the loss of each individual claimant – and actions cannot be brought under damages-based agreements.
Litigation funders suggested the Act would have a significant impact on litigation. Rosie Ioannou, senior counsel at Vannin Capital, predicted the advent of UK class actions could have lasting implications if such actions were deemed successful and were extended beyond the competition sphere.
She added: “There has been much academic debate about the legislative nuances of the Act and how the new class action regime will work in practice. What is clear, given experiences in other jurisdictions where class actions now operate, is that funding will be key to their success.
“Litigation funding has already seen exponential growth in recent years and since it is well suited to supporting class actions, I would expect to see this continue at an even faster pace as class actions in the UK gain traction.”
Fellow litigation funder, Jeunesse Edwards, engagement manager at Augusta Ventures, said the new Act would improve the difficult balance involved in a group action under the previous system.
“As a funder you won’t have an endless recruitment process to try and hit that critical mass in terms of number of claimants and what quantum they signed up for…
“You’ll know at the point you’re successful that the other side have to pay for all the costs of paying people out and categorising them, getting them on the system and dealing with them…
“I think it’s going to make it easier to get group actions off the ground. That makes it much more attractive for us to be able to get involved, and it also makes the process much slicker for everybody, which is what we always try to achieve.”
Leading group action lawyer Mark Harvey, a partner at Hugh James and head of its claimant division, observed that it seems the government has not pursued its original plan to bar lawyers or third party funders from acting as the representative.
He regretted the fact that contingency fee arrangements were prohibited, however. “A shame as this would have made these representative claims even more viable.”
Mr Harvey said the Act would make such actions as the PIP breast implant litigation – in which he is the court-appointed lead solicitor – “tidier and easier to follow, especially for the consumer”.
He added: “However, from my perspective the largest impact will arise from the collective redress regime it improves.”
Claimant lawyers Leigh Day suggested the Act would not bring about an increase in claims. Jill Paterson, a partner in the firm’s consumer law and product safety group, said: “The new legislation consolidates and simplifies pre-existing legislation, clarifies timescales for redress, and extends the range of remedies for consumers, such as ADR.
“A notable addition to rights brought in by the Act is the inclusion of ‘digital content’, signifying a much needed move with the times.
“Anything that makes matters simpler for consumers can only be a good thing, and we welcome the legislation.”
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Lidington: new structure a powerful further magnet for international litigation
The launch of the Business and Property Courts of England and Wales – the new name for the specialist business courts – will see a greater focus on High Court work being handled in the regions and the cross-deployment of judges, the new Lord Chancellor said today.
Speaking at the official launch at the Rolls Building, David Lidington paid tribute to the work of the senior judiciary in bringing about the change, which formally takes effect on 2 October.
The umbrella title, which incorporates the Rolls Building in London and many judges in the specialist district registries of the High Court outside of London, will cover: the Commercial Court, the Admiralty Court, the Technology and Construction Court, the Financial List, the Companies and Insolvency Court, the Patents Court, the Intellectual Property and Enterprise Court, the Competition List, the Revenue List, and the Property Trust and Probate list – the last two having been added since the move was first announced in March.
Other courts and lists will be added in future, while there will also be Business and Property Courts in Birmingham, Manchester, Leeds, Bristol and in Cardiff, with expansions to Newcastle and Liverpool likely.
Mr Lidington said: “A more integrated system of business and property courts will mean judges can be cross-deployed to maximise the benefit of their particular qualifications.
“But the reform isn’t just about bolstering our reputation among overseas claimants. It’s also about improving the service our civil courts offer to all the individuals and businesses in this country who seek legal redress.
“Senior judges have argued that no case should be deemed too big to be tried outside London. And rightly so, given the talented lawyers we have nationwide.
“Yet many cases at the moment migrate unnecessarily from the regions to the Rolls Building, leading to extra inconvenience, delays and expense for those based in our other great cities like Manchester, Leeds, Birmingham, Bristol and Cardiff.
“And having business and property courts across England and Wales that are served by a critical mass of specialist judges will mean that all classes of case should be capable of being managed and tried away from the capital.”
More generally, he said the new structure would be “a powerful further magnet for international civil litigation”.
Mr Lidington continued: “Today’s launch demonstrates beyond any doubt that our bench is responsive, forward-thinking and clear in their purpose.
“Not least in recognising that while our historic courts continue to flourish, the somewhat arcance names of some – ‘Chancery’, for instance, about which Dickens wrote with such scathing relish, or ‘Mercantile’ – are perhaps still beloved of many lawyers but rather less well understood by the 21st century business community outside the City of London.
“And, perhaps dare I say it, by those many people who have not been steeped in the law for decades. And at a stroke, this is now remedied.”
Sir Geoffrey Vos, Chancellor of the High Court, added: “When the Business & Property Courts go live, the specialist jurisdictions of our courts will all be using names that national and international business people can readily understand.
“The judges of the Business & Property Courts are high calibre forward looking people, who understand the importance of providing a state of the art service to court users.”
Sir Brian Leveson, president of the Queen’s Bench Division, said: “Cross deployment of judges across the Chancery and Queen’s Bench Divisions for the purposes of the Financial List has demonstrated the real value of flexible deployment in appropriate cases. This development will be of benefit both to the courts and the users of the courts.”
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Susan Das joins Temple Legal Protection as Senior Sales Assistant
Specialist legal expenses insurer, Temple Legal Protection is delighted to announce the appointment of Susan Das. She joins the company as Senior Sales Assistant and will be based at Temple’s office in central Bristol. Her appointment further strengthens Temple’s sales team supporting new and existing business partners.
Susan joins Temple from Allianz Insurance plc where she had a number of responsibilities within their legal expenses division and brings Temple direct experience in building relationships with After the Event (ATE) and Before the Event (BTE) business partners.
Commenting on Susan’s appointment, Calvin Smith – Sales Director said: “I am very pleased to welcome Susan to Temple’s sales team. We are an experienced team who are decision makers and ready to do business and Susan’s appointment further supports our ambitions as a major player in the BTE market.”
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ARAG 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.
Blog
The impact of technology on PI law
New technology is rapidly changing the world around us, permanently revolutionising our everyday lives. It is also changing the legal landscape, with law practitioners required to keep abreast of every new development to best help their clients. From helmet and dash cameras to improved CCTV, this is particularly evident in personal injury law.
September 14th, 2018