The free guide to costs, funding and the Jackson reforms
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DAS Team
An 11-strong team of senior managers from leading legal expenses insurer DAS, has successfully completed the National Three Peaks Challenge to raise £9,000 in aid of charity, Wallace and Gromit’s Grand Appeal.
The Appeal helps sick children and babies at Bristol Children’s Hospital and St Michael’s Neonatal Intensive Care Unit, part of the Bristol University’s Hospital NHS Foundation.
The total height scaled was 3,407 metres in just twenty-four hours, and included shinning up Ben Nevis in Scotland (1,344m); Scafell Pike in England (978m); and Snowdon in Wales (1,085m).
The climbers were made up of eleven members of the DAS senior management team: Matt Frost, Lyndon Willshire, Paul Timmins, Paul Gibson, Richard Harris, Kathryn Mortimer, Bob Screen, Carol Cluness, Lelita Kaur, Karen Asplin and Rachel Gibson.
DAS head of marketing, Bob Screen, said of the ascents: “It was a lot tougher than I thought it would be. We have been in training for several months for this and it has brought about a great team spirit. It’s been an incredible journey and worth every bit of legwork – the Wallace and Gromit Grand Appeal is a fantastic charity, and we do genuinely believe in giving back to the community where we can. Thank you to everyone, especially friends, family and our co-workers at DAS, for helping us raise £9,000.”
For more information, or to donate, go to: www.justgiving.com/dasthreepeaks
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Just Costs Solicitors and Novitas Loans have launched a new funding scheme for industrial disease, personal injury and clinical negligence law firms to realise work in progress (WIP) and improve cash flow.
The scheme offers unlimited funding and is available to law firms throughout the country.
Said Mark Hartigan, client services director at Just Costs Solicitors:
“Law firms can have considerable sums of money tied up in WIP, significantly constraining the money available for growth. Our solution is to advance the law firm a fixed sum, per case, that has reached a certain stage in its development. The size of the loan facility and the amount per case that can be drawn down is agreed per firm and interest is only charged on money drawn-down.”
While the money itself is advanced by Novitas, Just Costs Solicitors conducts a WIP audit on the firms’ files which acts as an approval process. When the case settles, the money advanced on the case is repaid via the cost consultant, Just Costs.
Jason Reeve, managing director at Novitas Loans said:
“This is a very flexible source of funding with no personal guarantees required. We believe it will be of widespread appeal.”
Last year, Just Costs Solicitors and Novitas launched a costs advance scheme, equivalent to invoice discounting, which is now lending over £1 million every month to law firms.
The costs advance scheme helps firms’ bridge the gap between applying for and receiving their case fees.
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Documents: Argument over disclosure
Authoritative guidance on whether clients can demand their full files from previous solicitors would help the Senior Courts Costs Office deal with the large number of applications it is facing, a costs judge has said.
Master Brown’s comment came in a decision in which he granted such an application, brought again by Leeds firm JG Solicitors, in the wake of recent rulings by two of his fellow judges that went the other way.
He said: “A large number of similar applications have been made in the SCCO. As I understand it, whilst many are substantially resolved by the parties, there are significant differences in approach to the issue of the court’s jurisdiction to make the orders sought.
“Although I have set out my views on this issue (at greater length than I had intended), it does seem to me that authoritative guidance on the point may assist.”
In Swain v JC & A Ltd [2018] EWHC B3 (Costs), the claimant’s personal injury action settled for £2,807, from which the solicitors deducted £891. It is the deduction that the claimant is considering whether to challenge.
The defendant firm initially sought to deal directly with their former client instead of his new solicitors, and on the day he issued proceedings, it sent him what it said was a statute bill for £2,634. This gave credit for sums already paid but asserted that a further £927 was due.
It was “substantially redacted”, with the fee-earner’s details removed, and claimed an hourly rate of £250. The after-the-event premium was £198.75.
The claim before Master Brown ultimately focused on the disclosure of four schedules referred to in the disclosed part of the conditional fee agreement, and any other documents in the firm’s client-care pack that had not been disclosed.
Master Brown said section 68 of the Solicitors Act 1974 gave the court the discretion to order the provision of copies of the documents sought, “whether or not a proprietary right in the relevant documents has been established”.
Further, “it would be appropriate in this case for that discretion to be exercised in the claimant’s favour”.
The claimant said he had never received a signed copy of the CFA, and in any case the judge said he doubted whether many clients, particularly those bringing relatively low-value personal injury claims, “would appreciate the need to retain documents they had been provided with in the course of a claim for any length of time.
“Indeed, I would expect many clients to assume that if they were to lose or mislay the papers for any reason, their solicitor would provide them copies on request.”
It was reasonable for the claimant to seek the documents “as he is at a substantial disadvantage without them”.
He added: “Section 6.4 of Practice Direction 46 provides that if any application for an assessment concerns a conditional fee agreement, a copy of that conditional fee agreement must accompany the claim form.
“Whether or not the court might issue proceedings notwithstanding a failure to append such an agreement to the claim form, the practice direction clearly acknowledges the importance of considering such an agreement in advance of an application for an assessment.
“Further, quite apart from any concern as to the reasonableness of the fees generally and the necessity of expenses claimed in the bills in this case, it seems to me that there is a particular need to consider the status of the fee-earner and the rates that were agreed for the fee-earners.”
The claimant had been told a legal executive would be handling his claim, and the judge said “the rate of £250 per hour is perhaps a rate one would normally associate with a substantially higher-grade fee-earner in a matter of significantly greater complexity and value.
“I would expect details as to the charging arrangements to be set out in the schedules to the CFA and I think it would be necessary to consider these prior to an application for an assessment in the context of a general consideration of the reasonableness of the funding arrangements and the charges.”
There was also confusion about whether a success fee was provided for, which the schedules would clear up.
Master Brown acknowledged the “substantial and legitimate concerns about the proportionality of costs incurred in applications of this sort, and as to the prospect that allowing the production of copies of documents might encourage ‘satellite’ litigation”.
But he said: “In this case the costs that would be at stake on an application for assessment are potentially significant in proportion to the damages received such that the matter is likely to be of importance to the claimant, particularly given the recent demand for payment by the defendant.
“Indeed I do not think that these two concerns should weigh against making an order which I otherwise consider to be correct; if the sums involved are modest in proportion to the costs that would be incurred in pursuing a section 70 assessment, that might be said to be a factor which weighs in favour of giving the disclosure sought now, not against.
“Further, if the exercise of providing copies or inspection of documents is at the claimant’s expense this should deter frivolous requests; the costs involved in this application will reflect the issues arising, including issues as to proprietary interests, and thus may be higher than might otherwise be the case.
“In addition, the ‘one fifth rule’ is statutory protection against frivolous or unsubstantiated applications for assessment. Moreover, in the spirit of CPR 31.16, there is, it seems to me, at least a reasonable basis for thinking that transparency will improve the prospect that any dispute as to the defendant’s costs can be resolved without the need for the court’s further intervention.”
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Judges had received “no training in costs as such”
Master Gordon-Saker, who replaced Peter Hurst as Senior Costs Judge yesterday, has used his first public speech in the role to launch a strongly-worded attack on the lack of training for judges in costs budgeting.
He said judges had received “no training in costs as such” but only help in understanding how to use the relevant forms, particularly Precedent H.
“If judges don’t have a feel for what the costs are likely to be, you give them the figures and they won’t have the faintest idea if they are realistic,” he said.
Master Gordon-Saker spoke of “horror stories” in which judges spent days examining costs budgets, and commented that this was not what they were designed for.
“Costs budgeting is intended to be cheap, speedy, efficient and avoid arguments at the end,” he told a Commercial Litigation Association conference last night.
“For a lot of judges it is a difficult task, and we need to give them the education and training to do it.”
Master Gordon-Saker said that when he went on his Jackson training session, the group of judges he was with were asked to estimate the costs of a five day professional negligence case at the High Court.
The result, he said, was estimates varying from £30,000 to £150,000. The master added that some “experienced judges thought £30,000 was appropriate”, provoking laughter from conference delegates.
The master set the lack of judicial training in the context of a Courts Service which was “under strain”.
A self-confessed Jackson enthusiast, he said the reasons for costs budgeting were “obvious”, and it was needed to provide “fairness for litigants”. While the theory behind it was good, the problem was “the timing”.
He said there was “no money” to give judges a proper training in costs budgeting, leaving “judges with limited expertise in costs with no better idea of what reasonable costs will be”.
Lowering expectations, he warned: “Costs budgeting is a huge change and it will be some time before we get it right”.
He said judges needed confidence, which would “only come with training and experience”. However, he said that he had been told that, so far, people were “generally happy” with the overall results.
Looking to the future, the master said he believed the Court of Appeal should be careful to limit the circumstances in which appeals based on having a “good reason” to depart from costs budgets should be allowed. Otherwise, he questioned whether there was any point in having them.
Elsewhere in his speech, Master Gordon-Saker strongly defended the status quo. He blamed solicitors for failing to take part in the Civil Justice Council survey on guideline hourly rates, leading the Master of the Rolls, Lord Dyson, to put the issue of an increase or decrease on hold.
He said Master of the Rolls would be meeting with the Law Society and the Ministry of Justice to discuss a way forward, but information from solicitors was essential.
The master condemned the old system of recoverable conditional fee success fees and insurance premiums, but added that requests for adjournments based on the Supreme Court ruling in Coventry, which suggested the old regime may have breached the Human Rights Act, had rightly been given “short shrift”.
He repeated his view, that was no need for further guidance from the Court of Appeal on the issue of proportionality in costs, as it was “already there”.
Master Gordon-Saker predicted that the Court of Appeal might only restate the approach taken by Lord Justice Jackson in his final report.
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From Legal Futures’ Associate ARAG.
In our new video, ATE Account Manager, Paul Morgan, talks about our Recourse Complete product, the certainty it provides and the benefits of insuring all types of personal injury cases with ARAG.
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Parliament: battle of wills
The House of Lords yesterday reinstated three of its amendments to the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill to intensify the battle of wills with the Commons.
Peers voted again to exempt mesothelioma sufferers from the impact of the Jackson reforms, to require the Lord Chancellor to ensure that people have access to legal services “that effectively meet their needs”, and to widen the categories of evidence that can be used in legal aid applications for domestic violence and lengthen the time for which the evidence is admissible from two years to six.
They were brought respectively by crossbenchers Lord Alton and Lord Pannick, and former Labour Attorney General Baroness Scotland.
However, LASPO opponents lost five further votes on other amendments, including making the legal aid telephone gateway non-mandatory, restoring legal aid for claims by children and exempting all disease claims from the end of recoverability.
The amendments will continue to go between the Lords and the Commons during this ‘ping pong’ stage until agreement can be reached. A conclusion is needed by next Monday, when the Houses will have to sit all night if necessary.
Lord Alton countered the government’s argument that the Jackson reforms rightly give clients an interest in their lawyers’ fees. He said: “It is not the job of someone dying of mesothelioma to become the government’s regulator or watchdog, watching the clock or challenging exorbitant legal fees. That is the job of regulators, not victims of a lethal industrial injury.”
He continued: “The minister argued that it would be unjust to single out one class of claimants for exemption. Of course it is never possible to do what we would like for everyone – I fully accept that – but does that mean that we can never see the difference between one category of victims and another?
“Is there not a difference between someone lodging a claim for whiplash and someone who has contracted a terminal illness? Are we really incapable of prioritising or seeing grounds for exceptions, as we have now, for instance, in medical negligence cases – and rightly so?” The amendment was passed by 214 votes to 205.
Lord Pannick rejected the government’s assertion that his amendment – which says the Lord Chancellor’s duty would be subject to available resources – would have adverse financial consequences or lead to litigation.
He said: “The purpose of the amendment is to ensure that the Bill recognises that we are cutting back on legal aid, most regrettably, because of current financial stringency, but that the principle of securing that individuals have access to legal services that effectivelymeet their needs, which has been part of our law since 1949, has not been forgotten.” Peers voted 248-233 in favour.
Baroness Scotland said she welcomed the concessions the government has already made on domestic violence cases – while regretting the time it took to do so – but said her amendments would take them a bit further.
She said: “It is clear… that the government do not entirely understand the issues in relation to domestic violence as I had hoped that they would… I wish that I could simply say to the House that we have moved far enough, but it is now a matter of whether the House and the government will choose to assist those who are in dire need.” The vote was won by 236 votes to 233.
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The latest recruit to our sales team is ATE Account Manager Jonathan Bassey. Experienced in the financial services and legal sectors, he will be developing ARAG’s relationships with solicitors and ATE intermediaries in the East Midlands and North East of England.
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Wilson: Who is covering the risk?
Posted by Rory Wilson, business development manager at Litigation Futures sponsor Amberis
The recent administration of insurance agent AU Insurance Services gave a real-life example of the difficult trading conditions in the post-LASPO era. We have seen law firms cease trading, but until now there have been fewer service providers casualties.
Whatever the reason for AU’s failure, it is clear that the effect of the reduction in income post-LASPO is having an impact on a range of services.
So what is the impact on a solicitor and their customers when their insurance provider goes in to administration/run off?
The first and most crucial question is, who is covering the risk? Remember, the insurance policy is the claimant’s and as such the solicitor must quickly establish who has ultimate responsibility for the policy.
The solicitor should be aware as to the status of their insurance provider, whether it be a direct insurer, an insurance agent or an insurance broker. There is a direct correlation between the providers status and the impact on policy holders.
A direct insurer’s failure has the most significant impact on policyholders and means that they are potentially left uninsured. If the insurer contributes to the Financial Services Compensation Scheme, then the policyholder is protected. If not, all transactions will be managed by the administrator and any claims paid if there are sufficient funds available once all other liabilities have been discharged.
Whilst similar, there is one distinct difference between an insurance agent and an insurance broker. An agent conducts business on behalf of the insurer and represents them in the insurance process, including claims. A broker works for the policyholder (and/or solicitor) and acts independently of insurers in obtaining quotes and guiding clients in determining the most suitable from a range of products.
If the provider is an agent, then the terms of the administration/failure need to be understood as they may impact on the cover provided and any potential claims. As the agent will generally be tied to an insurer, guidance should be sought from them to ensure ongoing cover is provided to the claimant. The policyholder should be advised as soon as possible of the situation and the potential impact on the policy coverage.
In the case of a broker, then the solicitor will have received regular updates as to the selection of the insurer and the performance of the scheme. He or she will then be able to make direct contact with the insurer to clarify the process in terms of the ongoing management of their account and cover for the policyholder. In the event of a failure of the insurer, then the broker will be responsible for the situation and will manage the run-off for the solicitor and/or seek an alternative as quickly as possible.
In light of the AU situation, it is important that solicitors consider the information above and how such an event would impact on them and what, if any, contingency plans they have in place.
If you have been affected by the administration of AU, please contact us.
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Mortimer: surprisingly commercial decision
Legal expenses insurers have welcomed this week’s Court of Appeal ruling about the rates they have to pay non-panel firms.
On Wednesday the Court of Appeal said before-the-event (BTE) providers have to pay an “appropriate” rate to ensure policyholders have a meaningful freedom of choice of solicitor.
The case involved ULR Additions, but it has emerged that three other leading BTE providers – ARAG, Arc Legal Assistance and DAS – intervened in the case.
Robert Kay, chief executive of ULR Additions, said: “We are, naturally, delighted with the outcome, which has totally justified our decision to appeal the first-instance judgment of Burton J.
“It must be right than an insured has the freedom of choice in appointing his or her own lawyer, but equally that the insurers are entitled to rely on the terms of their contract of insurance to provide the best access to justice by utilising pre-determined economic rates. Otherwise, how can insurers accurately price their premiums?
“We were always convinced that common sense would prevail, and thanks to our excellent legal team we believe we have secured an important legal precedent on behalf of not just ourselves but the whole insurance industry.” ULR was represented by Nick Bacon QC of 4 New Square and Dr Mark Friston of Kings Chambers, instructed by Horwich Cohen Coghlan.
Kathryn Mortimer, head of legal at DAS, told Legal Futures that the court had reached a “surprisingly commercial” decision. She explained: “These judges actually understand insurance. When you are trying to underwrite and reserve for the losses you are indemnifying, you have to have some sort of control over what you spend.”
Tony Buss, managing director of ARAG, also welcomed the ruling, saying that insurers dealt with non-panel firm requests by negotiation, recognising that different circumstances demand different types of lawyer. He said ARAG has a panel of firms at different grades depending on the demands of the case.
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Leading legal expenses insurer DAS is predicting an increase in demand for motor legal expenses insurance (MLEI) as a result of the Ministry of Justice’s response to the proposed personal injury reforms announced last week.
The reforms, which are primarily designed to reduce the number of fraudulent whiplash claims being pursued, have been criticised in some quarters for making it harder for genuine claimants to seek compensation by raising the small claims court track limit for motor injury claims to £5,000.
James Henderson, Managing Director Insurance UK & Ireland, DAS UK Group said: “Whilst we welcome any steps taken to help remove fraudulent activity, I am concerned the Government’s response to the proposed reforms may pass too great a burden onto legitimately injured claimants. Almost no detail has been given as to whether there will be reforms to how victims access compensation”
“Without legal representation, claimants could be responsible for obtaining and reviewing medical reports to support their injury, calculating financial losses and expenses, and obtaining evidence to prove fault such as a police report, witness statements or engineering evidence. In disputed cases claimants may need to issue court proceedings and put forward legal arguments concerning the accident circumstances, the injury and any financial losses incurred.
“I have no doubt that legal expenses insurance will play a crucial role in mitigating any negative effects of these reforms. Legal fees are likely to deter many legitimate claimants; knowing that they have access to expert help and that their legal fees are covered by their MLEI policy will be of considerable comfort.”
James Henderson also pointed out that “For insurers to offer the current level of service to customers, they may have to increase premiums of the legal expenses cover as the cost of legal action for lower value claims will no longer be recoverable from the at fault party.”
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VW: private hearing over lead solicitor role
Two law firms are in the High Court this week, battling it out to be named the lead solicitors in the group action being taken over the Volkswagen emissions scandal, Litigation Futures can reveal.
The face-off comes ahead of a hearing next month on whether to grant a group litigation order (GLO) in the case.
London firm Harcus Sinclair brought the claim against Chesterfield-based Your Lawyers, and the pair were scheduled to be facing off in a private hearing before a deputy High Court judge for the last of three days today.
Neither firm commented on the dispute when contacted by Litigation Futures, but we have seen an order emanating from another private hearing held last month, in which Mr E Johnson QC, himself a deputy High Court judge, ordered an expedited trial.
While the firms may have hoped that their disagreement would have stayed between them, the judge said his order should be copied to all the other firms of solicitors representing both the claimants and defendants in the case.
A hearing in January first considered Harcus’s application whether to grant a GLO. The dedicated Your Lawyers website for VW claims records that at the hearing, “[we] informed the court that we were very well placed to take on the role of lead solicitors, and to take a leading role in the conduct of this litigation.
“We expected a little encounter with Harcus Sinclair, the firm that made the application and another couple of law firms but on the day of the hearing, there was a consensus that the application should not proceed. The High Court agreed and the application was adjourned until October 2017.”
Harcus Sinclair has enjoyed a high profile over its pursuit of the case, working with national giant Slater & Gordon to represent tens of thousands of car owners in the group. Some 1.2m cars built by VW, Audi, SEAT and Skoda – all part of the VW Group – are affected.
We reported at the start of the year that Harcus Sinclair was operating under a damages-based agreement and has secured third-party funding from Therium Capital Management.
The key allegation is that the affected cars should not have been certified as fit for sale because they produced higher levels of harmful emissions than the rules allowed. It is also alleged that the affected vehicles only passed official emissions tests because their engines were fitted with a ‘defeat device’ which reduces the emissions under test conditions.
Harcus Sinclair said it would make a claim for exemplary damages if it could show that VW deliberately fitted the defeat device to increase its profits.
Your Lawyers specialises in consumer action claims and group litigation, and says on its website that it too has thousands of clients under ‘no win, no fee’ agreements.
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Richards: much less tolerant approach towards non-compliance
The Court of Appeal has rigorously applied the Mitchell guidance for the first time, overturning a decision to grant relief from sanctions for non-compliance with an order requiring service of witness statements by a specified date.
Though the lower court had granted relief because of the potential impact on the reputation of several individuals, the appeal court said such considerations should not carry much weight once the sanction has been imposed.
Durrant v Avon & Somerset Constabulary [2013] EWCA Civ 1624 involved a litigant in person bringing multiple claims over her arrest by the police, and a final order that the defendant file and serve witness statements by 12 March 2013, with the sanction that it would not be able to rely on any evidence served after then.
The defendant served two witness statements on 13 March, a further four in mid-May, shortly after applying for relief from sanctions. Shortly before trial in June it made a further application for relief from sanction so as to allow two more officers to be called.
Having used the nine factors in the old rule 3.9 as a starting point, HHJ Birtles went on to consider the new 3.9 before deciding that he should grant relief given the potential effect on the careers and reputations of individuals and the police force if the officers concerned were unable to give evidence, and on the public interest in scrutinising the actions of police officers in the light of all of the evidence from both sides.
The Court of Appeal, led by the deputy head of civil justice Lord Richards, sitting with Lewison LJ and Mr Justice Coleridge, said the decision was “plainly wrong” in the light of Mitchell – which, it noted, came after the judge’s ruling.
The court said HHJ Birtles should have started by bearing in mind that the sanction was “a proportionate sanction which complied with the overriding objective” and found that he did not approach the new rule 3.9 in a sufficiently tough way.
It said he did not give greater weight to the two considerations specifically mentioned in the new rule – the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and court orders.
“Nor did he appreciate how much less tolerant an approach towards non-compliance with rules, practice directions and orders is required by the new rule,” said Richards LJ.
The court noted how late most of the statements had been served and the applications for relief had been made, ultimately meaning that the applications were heard on the first day of trial and led to an adjournment.
“Even if on this occasion… it was possible to fill the vacated trial slot with other business, the adjournment of a lengthy trial and the need to relist it for another date is detrimental to the efficient conduct of litigation.”
Richard LJ said the considerations that led to HHJ Birtles granting relief have only a “limited role” to play in the context of relief from sanctions.
“They may be relevant to the question of how much time should be allowed for service of witness statements in the first place, and even to the question of what sanction should be imposed for failure to meet the deadline; but once the court has determined both the deadline and the sanction applicable for failure to comply, we do not think that such considerations can properly carry much weight in determining whether to grant relief from the sanction for non-compliance”.
In light of the history of the case, and of the failure to make a prompt application for relief, the court also overturned the relief granted in relation to the two statements served the day after the deadline, a failure that might otherwise have been deemed trivial.
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Confrontation: take the temperature down, says judge
There is an “urgent need for commercial practitioners to bring a sense of proportion” to hard-fought litigation, a High Court judge said yesterday as he called on lawyers to bring down, rather than raise, the temperature of disputes.
Mr Justice Walker said “it is perfectly possible to be vigorous without being insulting”.
He made the comments while ruling on an application for the claimants in Kazakhstan Kagazy Plc & Ors v Zhunus (Rev 1) [2015] EWHC 996 (Comm) to provide security for costs
At the start of a 238-paragraph judgment, he said: “This case is an example of something which the court is seeing with increasing frequency. Claims are made for large sums. Emergency orders are obtained, without notice to the other side, which freeze assets worldwide up to the value of the sums claimed.
“From then on there is a series of interlocutory applications. They are heavier than they should be. Not weeks, but months, are spent assembling material to be put in evidence. Correspondence is exhibited. In some cases it includes something which correspondence should never include, namely the trading of insults between the solicitors for the parties.
“There has been little, if any, attempt to agree facts or issues. Time estimates for pre-reading are given which underestimate the time needed to read the key evidence and gain a grasp of what the real issues may be. The time needed is far more than it ought to be, largely because no expense has been spared in taking every point. There is an urgent need for commercial practitioners to bring a sense of proportion to this type of litigation.”
The judge continued by putting forward some “universal guiding principles which practitioners should always have in mind”, including that “the court expects solicitors and counsel to take appropriate steps to conduct the debate, whether in advocacy or in correspondence, in a way which will lower the temperature rather than raise it”.
He added: “This remains the case even where – indeed particularly where – any concession is perceived as anathema by one or other or both sides. It is perfectly possible to be vigorous without being insulting.”
Walker J said imputations on others should only be made if they are both “necessary and justified”; otherwise they should be “rigorously excluded”. Even then they should be confined to the immediate matter at hand. “What is needed in order to support an application for a freezing order may differ from what may be required if an imputation is to be made and sustained in a different context.”
He urged sides to dispense with criticising each other and instead focus on working out a timetable “which will enable opposing parties to consider what facts and issues can be agreed, and what information and revised estimates for reading and hearing time can be given to the court prior to the hearing so as to ensure that the court’s time is used efficiently and productively”.
His final principle was that “if it is likely that a point which might be taken by a party, or it becomes likely that a point previously taken by a party, will not significantly advance that party’s case, or will require a disproportionate amount of time or resources if it is to be resolved, then notification should be given that the point will not be relied upon for present purposes. The notification can be accompanied by an appropriate reservation as to the position in future”.
Zaiwalla & Co acted for the claimant, and Peters & Peters for the defendant. Mr Justice Walker granted the application for security for costs, but not at the level sought by the defendant, Baglan Zhunus.
“Mr Zhunus has instructed a legal team who command a premium in the market. There is nothing wrong with this, but the premium must be for him to bear,” the judge said.
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Stark: some form of electronic bill of costs is inevitable
There is very little enthusiasm among costs professionals for the new electronic format of the bill of costs, a survey by the Association of Costs Lawyers (ACL) has found.
However, the ACL has launched its own, “more workable” version to introduce lawyers and judges alike to the possibilities of the Excel-based bill.
It said there has been virtually no take-up of the original electronic bill, Precedent AA, since a pilot began in the Senior Courts Costs Office in October 2015 following work done by the Hutton committee.
In October 2016, the Civil Procedure Rule Committee made amendments to the bill being used in the pilot, issuing Precedent AB, and said the aim was for a final version to become mandatory from October 2017.
The key change this autumn was to drop the requirement that users of the new bill had to apply the J-Codes to record time.
Nonetheless, a poll of 117 ACL members held after the changes found that half thought the new bill format was simply not needed, with 28% saying it would actually make things worse. Just 9% said they were getting used to the new bill, while a pessimistic 34% reckoned that however good it may be, solicitors were simply not interested in changing.
Some 57% of respondents said October 2017 was too soon for it to become compulsory, although 28% agreed that ‘it has to happen sometime, so why not then?’
Just one in 10 costs lawyers expected the J-Codes change to improve the situation, while nearly half (48%) thought them dead in the water. A third (32%) predicted that some will still use the J-Codes, but said other approaches would be just as effective.
The ACL said its bill of costs took into account comments made about the pilot version by members, Senior Courts Costs Office judges and solicitors alike, which in broad terms indicated that Precedent AA was overly convoluted.
ACL chairman Iain Stark said: “Having analysed what is required under the practice direction, the ACL bill is intended to be a more workable solution for a claim for costs. It is intentionally far less rigid than Precedent AB.
“For some members of the judiciary, costs lawyers and draftsmen, the ACL bill will represent their introduction to the more advanced features of Excel. It allows them to hone the essential skills they will need as the civil courts continue to embrace technology to advance the services they provide.
“With such a focus on modernising civil justice, some form of electronic bill of costs is inevitable. Done properly, it can offer significant benefits to parties, judges and lawyers alike. Nobody is better placed that the ACL to take the lead on this and we believe that the ACL bill will smooth the path for what will be a major change in the way litigators operate.”
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Jackson altered the rules on disclosure. The dramatic change to relief from sanctions means that there is likely to be more satellite litigation around contested disclosure as solicitors struggle with the post-Jackson situation.
All solicitors need to know how to make and defend applications of disclosure whether before proceedings start or during the proceedings themselves. The situation raises many questions: How do I make or oppose an application for disclosure? What disclosure am I entitled to pre-action? What disclosure can I require in various types of litigation?
After viewing our new one hour webinar you will be able to find out how to apply for disclosure if the other side is not co-operating and oppose a disclosure application made against your client.
This webinar is presented by Gary Barker, a practising solicitor with over 20 years’ practical experience. This title is one of a new range of litigation webinars presented by Gary for MBL – others include A Guide to Disclosure Following Jackson, Limitation Periods – The Essentials for Litigators and Costs Update: Recent Case Law Review.
For more information or to make a booking give us a call on 0161 793 0984. Alternatively, just email lucy@mblseminars.com quoting the course title and Litigation Futures.
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Whiplash: evidence on an industrial scale
A leading barrister has called for a study to examine whether anecdotal evidence of abuse and misconduct by expert witnesses is on the “industrial scale” alleged by some, as funding arrangements increase the risk of malpractice.
Tim Dutton QC, a professional discipline specialist at London’s Fountain Court, who took part in a Panorama documentary exposing misconduct by expert witnesses, said in his experience “charlatan forms of behaviour” by expert witnesses is rare.
But he told the Bond Solon expert witness conference in London that anecdotal evidence from circuit judges, who routinely deal with volume low-level personal injury cases, criticised the “industrial scale” on which “so-called expert evidence” was given by doctors for claimants where there was no evidence of injury, particularly in whiplash cases.
This suggested that an expert was being repeatedly used by one side as a “hired gun” in cases that were expected to settle before trial because of costs. “In other words the expert is free to report again and again in the hope that most cases will settle,” Mr Dutton said.
He added that the problems are not likely to arise in well-financed cases, but are more likely to occur in publicly funded cases or where lawyers are working under a conditional fee agreement (CFA) or damages-based agreement. “Under-resourcing” creates risks, he said.
“Where the lawyer is working under a CFA or DBA the risks that lawyer will not discharge his duties – viz a viz the expert – are greater as the lawyer needs to win the case to be paid and may therefore be under greater pressure than in a traditionally paid case not to comply with the rules,’ said Mr Dutton.
In addition, from conversations with judges who do criminal work, he said there is a concern about “experts for hire” in cases including those involving handwriting, facial mapping, or forensics.
But he was cautious about the need for increased regulation. What is needed, he suggested, is a study under the aegis of the Ministry of Justice to discover how serious the problem is.
If after two years a study reveals that abuse is continuing and is widespread the next step, he suggested, might be to make it an offence to “knowingly to fail to comply” with the duties set out in either the Criminal or Civil Procedure Rules.
Mr Dutton also suggested the regulators of those professions from which the experts come be involved and reminded of their duties to uphold standards.
Most experts are already regulated by their professional bodies – doctors, accountants, nurses, surveyors and so on – and they have a duty to behave with integrity and uphold the dignity of their professions, he said.
“Lawyers have a duty to uphold the administration of justice. So a lawyer who gives expert evidence not in compliance with his duties under the CPR or under the Criminal Justice Act 1988 and the Criminal Procedure Rules may well be in breach of his professional duties under the SRA Code of Conduct 2011. Likewise a doctor or an accountant,” he said.
Mr Dutton suggested regulators are not seeing referrals about experts who have given bad evidence. The judges who complained to him about expert reports, he said, had not made complaints to the GMC.
He accepted there may be problems in relation to those experts who are not in regulated professions, but to regulate expert witnesses as a “separate cadre” was difficult.
Rather, he said, look to lawyers to maintain standards. “In every case where a lawyer is involved, the lawyer is bound to spell out the duties to the expert, and not to put an expert into the witness box if he/she believes the duty of the expert has not been complied with.”
Other remedies to address the problem could include proceeding against an expert for contempt of court, attempting to pervert the course of public justice or conspiracy to pervert the course of justice, he said.
“It may only take one or two prosecutions for a salutary effect to be brought to the system as a whole.”
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Chalk: DBA fee analogous to success fee
The application of the indemnity principle to damages-based agreements (DBAs) should not mean claimant lawyers lose out if base costs exceed the contingency fee, a leading academic has claimed.
Successful claimants under a DBA will still be entitled to recover their base costs as calculated in the normal way, and last week the Ministry of Justice said the indemnity principle meant that if the DBA fee is less than the base costs, a losing defendant will only be liable to pay the former.
However, well-known legal costs expert David Chalk, of Winchester University, argued that if, under the DBA, the client is liable for costs and additionally for a contingency payment, “then the contingency payment is entirely irrelevant to the opponent and its costs liability”.
He explained: “The opponent will always be liable as usual for the costs of the work done to the extent recoverable. The client is in addition liable for a contingency fee based on damages.”
He said the DBA fee was analogous to the success fee under a conditional fee agreement.
Mr Chalk said that if this was not the case, it would produce an odd result: “The purpose of the DBA regulations is to support access to justice whilst protecting client damages, rather than provide a windfall for the opponent.”
He suggested that the confusion has arisen for two reasons: the draft regulations have been lifted from the regulations governing DBAs in employment tribunals, where there are no recovered costs; and the regime is modelled in part on the one operating in Ontario. “It is always dangerous to borrow just a part of some other system and graft it on to your own system – I fear in this case it simply confuses matters,” he said.
Mr Chalk continued: “Some will say I am wrong because, at least in personal injury, the regulations as drafted make reference to the payment being net of recovered costs and anyway the MoJ thinks there is no liability beyond the contingency fee.
“So what? That does not mean the funding agreement as a whole cannot and does not create a liability for base costs – and that is the only sensible way to use a DBA in litigation.”
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LCJ: higher remuneration in private practice
Research has shown widespread disaffection among the judiciary with working conditions, including findings that almost half of High Court judges would quit the bench early if possible.
Nearly twice as many judges in 2016 felt like going than did two years earlier.
Meanwhile, the government has dropped a key proposal aimed at increasing diversity in the judiciary – introducing single, non-renewable fixed terms for fee-paid judges – after a consultation revealed broad opposition to the plan.
The 2016 UK judicial attitude survey for England and Wales courts and UK tribunals carried out an online poll of salaried judges anonymously last summer. All but 22 of the 1,602 judges in courts and tribunals combined completed the survey.
Results included that while the overwhelming majority believed they provided an important service to society and found the work satisfying, just 2% of judges felt valued by the government and 3% by the media, compared to 43% by the public at large.
Three-quarters said their conditions had deteriorated since the last attitudes survey in 2014, with a similar proportion claiming their pay and pension entitlement combined did not reflect the work done. Almost two-thirds said both pay and pension changes had negatively affected the morale of colleagues.
More than a third of the salaried judiciary (36%) said they might consider leaving early in the next five years, with almost half (47%) of High Court judges agreeing. Overall, 42% of judges would leave if they had a viable alternative, almost double the 23% finding in 2014.
Calculated by gender, 31% (144) of female judges said they were currently considering leaving.
Eight out of 10 judges said higher remuneration would keep them in the job until retirement age, while 57% said a settled position on pensions and 56% better administrative support would be reasons to stay.
In other findings, just over half of judges had concerns for their personal safety in court and 37% outside of court. More than half rated the standard of IT used in court as poor and some four in 10 felt IT support, internet access and personal IT equipment was also poor.
While three-quarters of judges were satisfied with the quality of judicial training, large numbers were unhappy with the short amount of time they had to discuss work with colleagues, insufficient support for stressful work conditions, and inadequate opportunities for career progression.
In a joint statement, the Lord Chief Justice, Lord Thomas, and the Senior President of Tribunals, Sir Ernest Ryder, said the finding would help in making “evidence-based recommendations” to government on judicial pay.
“In the light of the substantially greater remuneration available to the most able practitioners in private practice, these matters are vital to our ability to attract candidates and retain judges of the highest calibre.”
On the government’s plans for revised terms and conditions for judges, the Ministry of Justice abandoned the proposal to introduce single, non-renewable terms for fee-paid judges after the measure was roundly condemned by a majority of the more than 400 responses to consultation.
The policy aimed to improve the diversity of the fee-paid judiciary and create clearer career progression by explicitly designating fee-paid office as a stepping stone to salaried judge.
Objections included that it would mean experienced judges left the service at the end of their term, particularly tribunal judges.
Law Society president Robert Bourns said: “Setting non-renewable fixed terms would have been a backwards step, making these roles less attractive to new judicial candidates, and we’re pleased the government has listened to the responses to their consultation and thought better of this idea.”
But the government said it would press ahead with plans to replace guaranteed sitting days with an “expectation” of the number of days. Mr Bourns said he was concerned: “Removing clear minimum expectations of income and time does not add flexibility, but instead makes it harder for solicitors and their firms to understand the commitment they are entering into.”
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Established in 1889, Merseyside-based Lees Solicitors is a full-service practice committed to delivering excellent customer service. The firm employs over 100 staff across its three offices in Birkenhead, Heswall and West Kirby.
In preparation for competitive and legislative changes to the legal markets, Lees Solicitors embarked upon a new business strategy focusing on direct client acquisition – reducing a reliance on third party introducers. To achieve this new goal, investment in technology was required to ensure operational processes were optimised and service delivery became the prime focus of the practice’s activities.
A Proclaim Practice Management Solution was implemented firm-wide to provide an efficient and consistent approach to multiple practice areas. Proclaim’s integrated financial platform enabled a complete reporting base and a seamless approach to billing and practice management.
Proclaim impressed with its ability to be accessed from anywhere at any time – a vital requirement for Lees as it would enhance the firm’s flexibility and service proactiveness.
Lees set out its stall to be the go-to law firm in the region for a broad range of legal services. Critical to this was fast, transparent service delivery.
Using Proclaim’s process management capabilities, Lees has been able to build a complete client journey – from initial inception right through to cross-selling and upselling opportunities at file conclusion. The management board at Lees has access to real-time information courtesy of Proclaim’s integrated reporting suite – providing both broad and granular data analysis.
In terms of marketing and business development, Proclaim provides a core platform from which to service clients and ensure that loyalty and recommendation levels are at an all-time high.
“Proclaim enables us to optimise our processes and gives us the agility to implement a superb client experience – driving customer loyalty and improving margins”, says Joanna Kingston-Davies, CEO, Lees Solicitors.
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Hurley: liability insurers will take heart from the findings
Posted by Paul Hurley, director and head of ATE at ARAG, a Litigation Futures sponsor
A recent survey by Liverpool law firm O’Connors concluded that firms are taking on an unknown credit when agreeing to take on a personal injury claim risk-free.
According to the poll, 23% of respondent law firms are providing client indemnity for the adverse costs risk, stepping into the shoes of a regulated insurance product. Insurance companies, which are regulated by the Financial Conduct Authority (FCA), are required to abide by stringent solvency requirements that are closely monitored by the FCA.
Such a process is in place to protect clients, making sure that insurers have the required capital in reserves to pay for claims that can occur many years in the future. Providing unregulated insurance cannot guarantee the payment of claims that are lost or abandoned, potentially leaving clients with a liability should a firm cease to trade.
This poll will not have passed unnoticed by liability insurers and no doubt they will take heart from the findings. Firms who provide client indemnity for the adverse costs risk will encounter opponents who are financially strong and ready for a fight. There will be cases where the chances of winning are evenly balanced leaving firms in a precarious position. Although firms have a duty of care to the client, they will also have an eye on costs, making it difficult to provide a totally impartial view on the merits of the case. Potentially this could lead to undersettling cases.
Claim reserving is a technical process, requiring years of data and information together with knowledge and experience to accurately calculate reserves by case type. This is no easy task and if not approached in a methodical manner, it can lead to disastrous consequences.
Solicitors cannot safeguard themselves and their clients by simply looking back at a few years’ experience in the hope that this will provide an accurate assessment for future reserving. Claims can take years to settle, and the sting in the tail can prove fatal to a loss or profit. Accounting for reserving can also weigh heavily on the balance sheet and so firms need to consider the lost opportunity cost – that is, of course, assuming that firms are accounting for claim costs!
Also revealing is that just over 10% recommended a policy only when the client’s case had reached a point when the risk to adverse costs materially increased, meaning insurers are picking up only the riskier cases. Insurers rely on a spread of risk and so should this trend be correct, insurance premiums will substantially increase or firms will find they are unable to obtain insurance.
Couple this with 41% already believing that after-the-event insurance premiums do not fairly reflect the client’s risk exposures, and premiums will increase rather than reduce, meaning claimants awarded medium to low compensation could find their damages completely eroded.
The legal expenses insurance industry will provide solutions but firms need to understand that a process needs to be followed to ensure a long-term future, and that a spread of risk is the only way of providing insurance at a reasonable cost, whilst providing peace of mind that claims will be met.
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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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We are pleased to announce that version 4.2.40 of CostsMaster is now available to download from our web site. This version has several important bug fixes plus a couple of minor improvements.
Version 4.2.40 is a free upgrade for current subscribers and we would recommend that you update your copies to this version.
CCMS Update
The Bulk Upload pilot has been progressing well with very few problems being experienced. The LAA have now implemented the facility to view the pricing of the claim automatically after uploading the file and thus no longer have to implement the manual workaround.
They are now looking to make the bulk upload facility available to more CCMS users on a slow but steady basis. If you work for a firm of solicitors who are on CCMS and would like to bill using CostsMaster, or if you are a draftsman who has solicitor clients on CCMS, please get in touch with us and we will put your names forward to the LAA for possible inclusion.
The bulk upload facility is made available to specific users so as well as details for your solicitor client (if necessary) we will also need to pass on the names of the CCMS users who will perform the uploads. Once accepted we will add you to our CCMS email list where you will receive notice of any updates and you will have the facility to raise any problems you are experiencing.
If you have any questions about using CostsMaster with CCMS please email Frankie Little at frankie@costsmaster.co.uk
New and improved CostsMaster website launched
We are pleased to launch the new and improved CostsMaster website fresh for 2015 – you can find it here. The new website has been designed to provide a much more intuitive and user-friendly experience with improved navigation and functionality throughout. It allows visitors to easily access detailed product information and the latest downloadable versions of the CostsMaster software.
The new home page features a menu tool bar with quick links to all areas of the site including downloads, training and support. A welcome new addition to the site is the live CostsMaster Twitter feed which appears along the bottom of all web pages along with the CostsMaster live news feed meaning there is always current relevant industry information close to hand.
Also new to the site is the Testimonials page featuring the latest CostsMaster product reviews given by current users of the product.
We are confident the new website will improve the online experience for all visitors and are keen to gather feedback to keep in mind for future site updates so do feel free to let us know what you think.
Contact us
Follow us on Twitter @CostsMaster for the very latest news on our software updates and releases as well as relevant industry comment and news.
Please don’t just follow us, talk to us too! If you have a question or a genius idea that would make a difference to how you use CostsMaster then we want to hear about it so feel free to tweet us. Your feedback is really important and helps guide our work on future updates and versions.
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The Kain Knight team
Kain Knight, a leading firm of Costs Lawyers, held their own warm-up to the forthcoming World Cup 2014 by inviting several leading law firms and barrister’s chambers to participate in a friendly, though not always, knock-out football tournament in “trendy” Shoreditch, London.
On an exceptionally cold evening last Friday, eight teams took to the astro turf for the glory of winning the Kain Knight trophy and, after a very hard fought final between Slater & Gordon and Collyer Bristow, Slater & Gordon were victorious at 4-3.
Matthew Kain, Director of Kain Knight, said “following the success of this event, it is intended to make this an annual event and we look forward to welcoming teams again in 2015”.
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Expert reports: solicitors more anxious about meeting deadlines
Solicitors requesting dates be left off documents, fewer instructions, downward pressure on fees, and tighter deadlines for reports are among the issues bothering expert witnesses from the first year of the Jackson reforms, a survey of their views has revealed.
Expert witness training specialists Bond Solon asked its list of experts for their experiences of the Jackson reforms one year on, whether courts had been tougher under the new regime, and whether they had been invited to ‘hot tub’ (when experts give concurrent evidence).
The most serious accusation made against solicitors came from Jan Harrison, managing director of occupational therapy experts Harrison Associates, who charged that solicitors had been “expecting us to omit or be vague regarding the dates of reports and documents we have relied on”.
She explained: “This is because other experts’ reports are being finalised very close to the court-imposed deadlines.”
Ms Harrison pointed to a letter to members from the College of Occupational Therapists that said that at a recent meeting “it was noted that solicitors are increasingly sending [occupational therapy] experts source material including draft reports and witness statements but asking them either not to list or refer to this material in their report, or to remove all dates of reports and witness statements”.
The letter, produced by the college’s medico-legal forum committee, acknowledged that “solicitors themselves are under increasing time pressures due to increasingly tight case management by the courts, following Jackson and the recent Mitchell judgment by the Court of Appeal”.
But it said occupational therapists should be aware that such requests are “likely to be incompatible” with part 35 of the CPR, as well as most forms of declaration and the Protocol for the Instruction of Experts in Civil Litigation Claims, which require the expert to give details of any literature or other material which they have relied on in making the report. Only earlier versions of the report, where it has been updated because of new evidence, are privileged and can be removed from the documents list.
By removing dates from documents, “there is a huge potential for confusion further down the line, with readers being unclear which documents have been relied upon, eg at experts’ meetings and in court”, it said. The letter also pointed out that “once you have read a document, the content of that document is within your background of knowledge and thus consciously or subconsciously may influence your thinking”.
The letter added: “There is a clear danger that experts who agree to such requests could be liable to censure by the court and are putting at risk their own professional independence and integrity.”
More broadly, the range of views received by Bond Solon suggested the effects of Jackson on expert witnesses had not had time to bed in. Of some 50 responses, about a third reported they had noticed no effects at all.
Just one expert said they had experienced hot tubbing and was very positive about it. But they “felt sorry for the counsel” because the judge became so involved as to exclude them. The only downside to the experience was that the witness box was too crowded with two people and their bundles.
Others expert witnesses reported that their instructions had slowed down or dried up, particularly in family related work, forensic accountancy, and personal injury.
Several said the instructing solicitor had become more anxious about meeting deadlines. Solicitors were emphasising that they had no leeway with court timetables. One medical expert said they wrote themselves to the court asking for extra time to write a report and was granted it. The instructing solicitors had been reluctant to ask.
One expert accused solicitors of “bullying” them by saying that if the case collapsed due to missed deadlines, it would be the expert’s fault.
Other effects of Jackson observed by the expert witnesses included solicitors “bartering for lower fees” and demanding more detailed costs estimates. An expert said that in one case their fees had been cut by 40% without explanation.
Mark Solon, managing director of Bond Solon, said: “Many experts are unhappy about the Jackson landscape. The complaint is that courts expect quicker monkeys for less peanuts. Experts have a day job and for many years have generated a substantial secondary source of income from report writing and appearing in court.
“If the expert work is not properly remunerated or becomes too burdensome, the experts can always turn it down. This contrasts with the oversupplied lawyers market where only the day job exists.”
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Evans: Additional costs likely
Professional negligence claims will become harder to handle under the new approach to disclosure which will be piloted later this year in the Business & Property Courts, particularly for defendants, a barrister has warned.
Helen Evans of 4 New Square said front-loading of costs, imbalance between the parties, and disclosure of adverse documents were all potential problems.
The plan for a complete overhaul of the disclosure regime was set out last November by a working group led by Lady Justice Gloster.
Under this, the duties of the parties, and of their lawyers, in relation to disclosure will be expressly set out, including a duty to cooperate with each other and assist the court over disclosure, and to disclose known adverse documents, irrespective of whether an order to do so is made.
There will be ‘basic disclosure’ of key/limited documents relied on by the disclosing party and necessary for other parties to understand the case they have to meet, to be given with statements of case. A search should not be required for basic disclosure, although one may be undertaken.
The working party said that, for some cases, basic disclosure may obviate the need for any further disclosure.
Where ‘extended disclosure’ is required, there will be five models for the court to order, ranging from an order for no disclosure in relation to a particular issue, through to the widest form of disclosure, requiring the production of documents which may lead to a train of enquiry.
Writing on her chambers’ website, Ms Evans said the new regime would require parties to focus much more closely on what disclosure they were seeking from the pleadings stage onwards.
“The way the system is designed now requires each party to think in detail about what it wants from the other side (rather than to focus on its own disclosure). A party seeking anything other than basic disclosure will have to incur the substantial costs of completing a list of disclosure issues and documents.
“Given the requirement that the disclosure model adopted be reasonable and proportionate, the seeking party is likely to have to pull together detailed information about what disclosure may cost.
“A party resisting extended disclosure will have to do similar work in order to argue against the model. “Although there is some suggestion that costs budgeting may be delayed until after the relevant disclosure model is imposed, the court will want to know what the disclosure stage will cost before it reaches a decision about what is appropriate.
“Of course, having additional costs budgeting hearings after disclosure has been dealt with will also increase parties’ expenditure.”
On the imbalance between the parties, Ms Evans said defendants usually had a file of all the documents required for a court to determine breach of duty at least.
“By contrast, the bulk of the documents relating to issues such as causation and loss tend to be held by claimants. They are rarely in one file. They can come from a disparate number of sources, such as emails, letters, bank statements, information about investments and so on.
“Claimants are likely to depict disclosure as a substantially more onerous task for them, and argue for the slimmer disclosure models, whilst seeking the defendant’s complete hard-copy file.
“When deciding what is reasonable and proportionate, the court has to take into account a party’s financial means as well as the ease and expense of locating and retrieving documents. Again, this may work in some claimants’ favour.”
Ms Evans continued that where a party was only under a duty to disclose ‘known’ adverse documents, “this is likely to prove troublesome”.
As many professional negligence claims were only started years after the event giving rise to the action, “how realistic is it to expect a party to know about the existence of 10-year-old adverse documents if there is no search requirement?”
Further, many claims were brought by corporate claimants. “Whose knowledge is relevant for the purposes of adverse documents? The current directors? The former directors? Which ones? What enquiries have to be made?”
The barrister concluded: “The disclosure pilot that is expected to start in October 2018 is likely to pose significant challenges for lawyers handling professional negligence claims, particularly on the defendant side.
“It will require significant changes of practice in terms of grappling with disclosure early on and being prepared to persuade the court to go beyond what would currently be regarded as very basic disclosure.
“If standard disclosure is shortly to be a thing of the past, it is important to get thinking about which parts of it are most necessary to professional negligence claims. It will be for the seeking party to identify and explain why documents of a particular type have to be disclosed in order for there to be a fair trial.”
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Whiplash reform: no financial links between claimant lawyer and expert
All medical reports for whiplash claims must now be brought under the MedCo system after it formally went live yesterday.
Users of the service – both those providing reports and those commissioning them – have been warned that it can take between five and 10 days for their applications to become authorised users to be processed if they have not done so by now.
Claimants will be given the choice of one “high-volume national” medical reporting organisation (MRO) and six smaller ones, or seven medical experts.
Among the features of a high-volume national MRO are the capacity to process at least 40,000 independent medical reports each year, that it has contractual arrangements with at least 250 individual medical experts, and at registration it has a minimum of five distinct clients, which are not associated organisations with the MRO, with none of them representing more than 40% of its total instructions.
The high-volume MROs will be charged £75,000 a year to be a member of MedCo, with other MROs charged £15,000, and individual experts £150.
Lorraine Rogerson, the independent chair of the MedCo board, said: “We would encourage users to sign up at their earliest opportunity to minimise any internal disruption to their service whilst we process their registration. We are also encouraging users to familiarise themselves with the entry criteria in advance to ensure registrations are approved first time round.”
One of the purposes of the system is to ensure claimant representatives do not have any direct financial links with MROs and medical experts. MedCo has cautioned them to check that their declarations of direct financial links are up-to-date “on a regular basis”.
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Malla: two-stage process
The government has outlined two approaches to setting the discount rate in its long-awaited consultation on whether it needs changing
This is the first of two Ministry of Justice (MoJ) consultations on the issue, it has emerged
The discount rate is the rate of return to be expected from the investment of a lump sum award of personal injury damages for future loss, and applied to the lump sum to ensure a claimant is not over-compensated
The rate has been 2.5% since 2001, largely by reference to yields from index-linked government gilts (ILGS). This is on the basis that claimants would seek low-risk investments
The MoJ has been under pressure to act on this, with the Association of Personal Injury Lawyers last year launching a judicial review over the failure to reconsider the rate.
The consultation paper said: “Yields on ILGS have been declining for some time and there is a risk that the present rate may now be too high.
“This would mean too much being taken off claimants’ damages; on the flip side, a lower discount rate would mean defendants and their insurers having to pay more.”
The MoJ is seeking views on the methodology to be used in setting the rate, putting forward two broad options: to use an ILGS-based methodology applied to current data; and to move from an ILGS-based calculation to “one based on a mixed portfolio of appropriate investments applied to current data”.
“Identifying the appropriate methodology will not of itself have any direct effect on awards of damages, but, depending on its size, a change in the discount rate may significantly increase or decrease the sums payable in awards of damages for personal injuries.
“This follows inevitably from the application of the principle of full compensation. However, the consequences for defendants of paying awards are not a matter to be taken into account in setting the discount rate.”
The consultation gave the real-life example of a claimant who was awarded a lump sum of £5.5m following the application of a discount rate of 2.5%. Had the discount rate been 1.5%, the award would have been £6.4m and £7.5m had it been 0.5%.
“Whether a change in the discount rate leads to an increase or decrease in the size of awards will depend on how rates have changed since the rate was last set. Any methodology will therefore be capable of producing increases or decreases on different occasions.”
The consultation also raised the possibility of having more than one discount rate to apply to different types of case, and asked for specific rates that respondents would recommend.
Christopher Malla, a partner at leading defendant law firm Kennedys, welcomed the consultation, adding: “I understand from the MoJ that this consultation is a two-part process.
“The methodology is under review in this consultation, with a separate consultation to follow in the autumn to review the present legal basis for the setting of the rate and to seek views on whether the restrictions imposed by the present law on the factors that can be taken into account in the setting of the rate are still appropriate.
“We look forward to working with all parties with a stake in this important issue with a view to achieving a fair and balanced outcome.”
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Paul Keelan, senior proclaim developer at Smooth Law
Established in July 2015, Smooth Law is a modern progressive law firm providing claimant legal services to a wide range of clients. The firm prides itself on operating as an entirely paperless office, communicating with clients via email, telephone and SMS text messaging for speed and efficiency.
Paul Keelan, Senior Proclaim Developer at Smooth Law, has worked with Eclipse’s Proclaim legal software since 2003 at a variety of firms, and as a result, possesses extensive knowledge of the system.
Most recently, Paul has worked with Eclipse to efficiently implement the Proclaim Practice Management software at Smooth Law and now works as the practice’s primary Proclaim developer.
Why was Eclipse the chosen supplier for Smooth Law?
The partners here had previously worked at a large Liverpool firm which utilised Proclaim heavily so from first-hand experience, it was the solution of choice. As a smaller firm, but with ambitious plans, it’s great that Proclaim is not just exclusive to large firms – whether it’s a 100+ fee earner practice, or a sole practitioner, Proclaim remains the same and is always just as simple-to-use.
Additionally, the Law Society Endorsement was a factor in our decision. Although Eclipse and its Proclaim solution were already known to us – and we were certain it was the software suited to us – the endorsement announcement just cemented our confidence in the decision.
It meant that, to us, Eclipse was continuing to move forward and although it had already conquered the legal sector market, it wasn’t resting on its laurels.
Furthermore, the complete flexibility of Proclaim means we can develop the solution entirely in-house, without the need to bring in external IT consultants – I personally have yet to be in a position to say “we can’t do that”.
Smooth Law originally implemented Eclipse’s out-of-the-box Personal Injury system – how has this been configured to fit in with business requirements?
We did initially take an off-the-shelf Personal Injury solution as that’s the area of law we predominantly practice. However, we’ve also recently created our own case type for Holiday Sickness claims, which is an entirely bespoke solution to Smooth Law, and designed completely in-house using the Personal Injury workflow as a platform.
The sheer flexibility of Proclaim means we have the ability to do this. It gives us the boldness to expand and the confidence to know it’s a possibility – we now have over 1000 live claims in the system.
How was the transition to the latest iteration of Proclaim (v3.3.1)?
It was very easy. Although we have a small database, there are still a wide range of issues that can occur when upgrading software but this wasn’t a problem with Eclipse, it was extremely simple.
I’ve done a number of migrations throughout my time working with Proclaim and have never had a problem. In my experience, this is down to two things:
- Good internal planning
- Excellent communication
As part of this second point, Eclipse’s Transition Support team is brilliant, as are all the staff and I’ve found everyone is always happy to help and go that extra mile if needed.
How are you benefiting from Proclaim’s new ‘Options Images’ feature?
This is an absolutely fantastic feature!
One of the main benefits is the ability we now have to develop our client journey. We have two stages of a claim – portal and non-portal – and using Option Images we’ve been able to create an entirely bespoke yet simple case status feature within FileView (Eclipse’s online case tracking tool).
Depending on the stage of the claim, the client’s view will differ and due to Proclaim’s inherent flexibility, we’ve been able to build in high-level automation so the stages are instantly updated to correspond with actions taken by our fee earners.
This is an excellent feature for our clients that like instant access to updated information and an at-a-glance view to their case. It’s also proven vital for those instances we experience a language barrier – the stages are now displayed in simple images and enables clients to see case changes as and when they need to.
Perhaps best of all, and as with a variety of aspects to our Proclaim solution, this was developed entirely in-house. No additional training was required, nor was support from Eclipse – it was all designed purely using the latest release notes, which supplied a user-friendly, step-by-step guide.
How have Eclipse’s additional tools, SecureDocs, FileView and TouchPoint enhanced your service offering?
We’ve used SecureDocs from day one. The online delivery and acceptance tool has proven vital in enhancing our client on-boarding process as it’s now all done with the click of a button.
We often receive an initial enquiry in the morning, and by lunch time, they’re a client. There is no doubt this is a result of the automation and quick turnaround times supplied by SecureDocs.
Furthermore, we pride ourselves on our ability to operate as an entirely paperless office and offer a wholly transparent service – this simply couldn’t be achieved without SecureDocs.
It provides peace of mind for our clients by providing a completely secure service to access and action important documents, whilst also resulting in speedier case progression and an enhanced service offering.
With regards to FileView, and as previously mentioned, using this tool we’ve been able to provide clients with an easy snapshot of their cases. Taking this further, we’re using the online case tracking feature to send details of, for example, medical appointments to clients, as well as allow them to upload images of receipts and expenses such as taxi fares.
Before FileView this would have involved photocopies or originals being sent to us via post, and in turn, would delay the claims process. With FileView, everything is effortlessly uploaded via smartphone or tablet, ensuring an innovative, instantaneous and device-operated option.
Similarly, we’ve taken advantage of Eclipse’s TouchPoint tool and are going live with it this week (at the time of writing) to further enhance our service and provide clients with a complete self-service experience. As part of this, we’ve linked it with FileView and SecureDocs for a centralised solution so clients can access everything associated with their case, from correspondence to file status.
To use my previous example, once a client has received details of their medical appointment, they can log in to their customised TouchPoint portal and find directions to the appointment through the Google Maps tile.
Essentially, the additional toolsets provide modernised and future-proof approaches to keeping in contact with clients and ensuring we are supplying them with the most relevant and up-to-date information – all with minimal input from our staff. In turn, this means we can concentrate on increasing our case volumes but with the added reassurance our current clients remain informed.
Overall, how well does Proclaim suit your on-going requirements?
Without a doubt Proclaim suits us down to the ground.
We have ambitious plans for our firm and as part of this we will be looking to develop other avenues of work. With Proclaim, we no longer need to delay these plans due to software limitations – we can simply design our own case type as and when we need to, to suit our way of working and our future service offering.
With Proclaim the possibilities are endless and in my opinion, its sheer flexibility means the only restriction is imagination!
“The sheer flexibility of Proclaim gives us the boldness to expand and the confidence to know its’s a possibility. I personally have yet to be in a position to say “we can’t do that.”” Paul Keelan, primary proclaim developer at Smooth Law
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RBS: interview notes not protected by working papers privilege
The High Court has applied a narrow interpretation of who is a client in denying RBS legal advice privilege in relation to interviews its solicitors carried out with staff – but said it was an issue the Supreme Court needed to look it.
Mr Justice Hildyard ruled that, for these purposes, the client “consists only of those employees authorised to seek and receive legal advice from the lawyer”.
Further, legal advice privilege does not extend to information provided by employees and ex-employees to or for the purpose of being placed before a lawyer, he decided.
In The RBS Rights Issue Litigation [2016] EWHC 3161 (Ch), an interlocutory hearing as part of the group litigation over the bank’s 2008 rights issue, the judge was asked to decide on RBS’s claim to privilege in relation to transcripts, notes and other records of interviews conducted with employees and ex-employees.
Hildyard J said he was bound by the Court of Appeal’s ruling in Three Rivers District Council and others v Governor and Company of the Bank of England (No 5) [2003] QB 1556, a decision that has been the subject of much criticism since for not clarifying who is a lawyer’s ‘client’ for the purposes of legal advice privilege.
Quoting a critique by the Singapore Court of Appeal, Hildyard J said: “There is, to my mind, force in these criticisms and attempts to confine the application of the decision in Three Rivers (No 5).
“It may be that in a suitable case the Supreme Court will have to revisit the decision, and perhaps the fundamental question as to whether and to what extent the distinction between legal advice and litigation privilege on which Three Rivers (No 5) ultimately rests is really justified and appropriate…
“But… there can be no real doubt as to the present state of the law in this context in England: Three Rivers (No 5) confines legal advice privilege to communications between lawyer and client, and the fact that an employee may be authorised to communicate with the corporation’s lawyer does not constitute that employee the client or a recognised emanation of the client…
“The individuals interviewed were providers of information as employees and not clients: and the interview notes were not communications between client and legal adviser.”
In the alternative, RBS argued that the lawyers’ notes of the interviews were privileged as part of their working papers.
It was common ground that such papers are generally covered by legal professional privilege, but Hildyard J said RBS had to prove that the notes in question had “some attribute or addition such as to betray or at least give a clue as to the trend of advice being given to the client by its lawyer”. This meant a pure transcript was not privileged.
He said RBS’s argument was that the interview notes carried “the annotation as to ‘mental impressions’” because they revealed the lawyers’ “train of inquiry” and by being a note, not a transcript, they reflected “some greater or lesser degree of selection”.
The judge ruled: “This, in my judgment, is not sufficient: the evidence is not such as to substantiate the claim to privilege on the basis of ‘lawyers’ working papers’. My conclusion is reinforced by the consideration that there is a real difference between reflecting ‘a train of inquiry’ and reflecting or giving a clue as to the trend of legal advice.”
RBS has indicated that it will seek permission to appeal.
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Workers: denial of justice, says TUC
The government is being dishonest about the UK's ‘compensation culture’ in order to justify cutting basic health and safety protections at work, a report backed by the TUC claimed yesterday.
On the day that the new extended portal for employers’ and public liability claims worth up to £25,000 went live, the report argued that thousands of workers suffering from deadly occupational diseases are being denied payouts.
The report, by the workers’ health journal Hazards, found that the number of people receiving awards for work-related injuries or diseases has fallen by 60% over the last decade – down from 219,183 in 2000/01 to 87,655 in 2011/12.
It said that for most occupational cancers, the chances of getting any compensation payout is below 1 in 50. While more than 4,000 workers a year die of work-related chronic bronchitis and emphysema, just 59 received compensation in 2011/12.
For those suffering from work-related stress, anxiety and depression, the chances of getting compensation are even smaller. Of the 221,000 cases in 2011/12, just 293 resulted in a payout.
As well as the Jackson reforms – meaning “victims now give an unhealthy slice… of any payout to the lawyers” – the TUC cited changes to the Criminal Injuries Compensation Scheme, and the outlawing of strict liability claims where there has been a criminal breach of safety law by the employer but negligence has not been proven.
TUC general secretary Frances O'Grady said: “The government is trying to brainwash people into thinking the UK has a rife compensation culture.
“However, the facts tell a very different story. Even those dying from work-related diseases have precious little chance of getting a payout. The true government motive here is to weaken health and safety laws and make it harder to for victims to pursue claims.”
Hazards editor Rory O'Neill, professor of occupational health at Stirling University and the author of the report, said: “The government's cynical promotion of a compensation culture myth means many workers who are dying in pain are also dying in poverty.
“We are seeing a denial of justice because the government is putting the health of the insurance industry and the safety of the most dangerous rogues in the business community over the health, safety and survival of people at work.”
Welcoming the extended portal, justice minister Helen Grant emphasised that it would only reduce what insurers have to pay in legal fees and thus charge in insurance premiums, rather than the amount of compensation itself.
Blog
A golden opportunity for the ATE market to innovate
With the key judgement in the BNM v MGN case not expected until the end of the year, and decisions in the fixed recoverable costs arena not due until 2019, the after-the-event (ATE) insurance sector – already burdened by ever-changing regulation – is playing something of a waiting game. But this could be a golden opportunity for the ATE sector – the chance to take advantage of what might otherwise be a relative lull in activity period to set in motion a time of self-analysis and transformation, to develop plans for what the future of ATE insurance will look like.
July 16th, 2018