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Mackie: ADR entering the mainstream

The government-backed tenancy deposit protection scheme and a pioneering group championing commercial mediation were among the winners at the Centre for Effective Dispute Resolution’s (CEDR) biennial awards.

The tenancy scheme, my|deposits, won the excellence in ADR award for its “innovative” ADR process and “for working steadily to find ways of improving this service, creating better outcomes for users of the scheme”.

In the ADR and civil justice innovation category, the Commercial Mediation Group (CMG), founded by Linklaters partner and head of property litigation, Katie Bradford, was joint winner.

The 60-member group of private practice solicitors and in-house counsel advise in relation to the mediation of commercial disputes, the first group of its kind. CMG was recognised for its ‘mediation purchasers’ initiative, “which ensures that disputants receive the best process possible”.

The other winner was Croatian judge Srđan Šimac for “his energetic work in bringing and popularising mediation in Croatia”.

Ms Bradford said: “The CMG contributes a different perspective on achieving progression and development in ADR. Our survey of the mediation community in January 2012 revealed differences in opinion and approach between mediators and users of mediation. Linklaters values the impact and assistance which mediation can deliver to resolve disputes and is proud to have initiated the CMG.”

In the ADR champion category, Geoff Lloyd of Ernst & Young was recognised for his work on tax disputes as part of HM Customs & Revenue Service. Mr Lloyd headed up a government initiative which uses mediation to free up resources tied up in tax disputes.

Dr Karl Mackie, CEDR’s chief executive, said: “We are delighted by the innovative work… and the dedication shown by all of the winners and finalists to furthering the cause of alternative dispute resolution.

“The record number of finalists for this year’s awards shows clearly how these practices are entering the mainstream, and their potential for transforming the way we approach conflict. As the diverse entrants show, the field of dispute resolution is changing to reflect the diverse needs of modern society.”

Other winners included John Brand and Felicity Steadman in the ADR trainer category; recognised for their work in South Africa with the African Centre for Dispute Resolution at the University of Stellenbosch. In particular, they were the “primary instigators” of a training course which has accredited more than 160 mediators so far.

Other finalists in the ADR excellence category were the Office of the Independent Adjudicator for Higher Education UK; ABTA Ltd; the Internet Services Providers’ Association; the South African Federation of Civil Engineering Contractors; and the London Organising Committee of the Olympic & Paralympic Games (LOCOG).

The judges were Lord Justice Rix, Brian Hutchinson of University College Dublin, Dr Gillian Dada of GlaxoSmithKline plc, Guy Perring of Everything Everywhere Ltd, Professor Bryan Clark of Strathclyde University, Rhys Clift of Hill Dickinson LLP, Caroline Stroud of Freshfields Bruckhaus Deringer, and author, CEO and entrepreneur Margaret Heffernan.


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Jersey: CISE said Argentum is no longer suitable for listing

Third-party litigation funder Argentum Capital was delisted by the Channel Islands Securities Exchange (CISE) this week.

Argentum – whose non-executive chairman is former Court of Appeal judge Sir David Keene – has gained a high profile in recent months due to its backing of the Stewarts Law action brought by institutional shareholders against RBS over its 2008 rights issue.

The CISE said it had cancelled the Jersey-based company’s listing “on the basis that the Exchange considers that the company is no longer suitable for listing under chapter 7 of the Listing Rules”.

Chapter 7 deals with the listing of investment funds, but a spokeswoman for the CISX declined to give any more detailed reason for its decision.

However, a statement on the Argentum Group’s website said: “As advised by the CISE to the company, the reason for the cancellation of listing was that the company was not in compliance with those provisions of the rules requiring there to be an adequate market in the company’s securities.

“The specific rule relied upon by the CISE was rule, which requires at least 25% of an investment fund’s securities ‘be in the hands of the public in such proportions so as to satisfy the Exchange that there will be an adequate market in the securities’. The company makes this announcement to clarify the basis of the CISE’s action.”

The news came the week after a US-based website called OffshoreAlert made serious allegations about the activities of Centaur Litigation SPC, an investor in Argentum.

Argentum has released a separate statement in response to the story and any implication that the group “is in some way involved in the matters alleged”.

It said: “The Argentum Group denies any knowledge of or involvement in the matters alleged. Centaur Litigation Limited is an investor in Argentum Capital Limited and an investor in certain third-party litigation claims managed by Argentum Investment Management Limited.

“Argentum Investment Management Limited is not and was never the global investment manager for Centaur Litigation Limited or Centaur Litigation SPC. No member of the Argentum Group is or was in any way involved in the fundraising activities of Centaur or its dealings with its investors.

“Full details of the Argentum Group’s structure, activities and financial position and the terms and nature of Centaur’s investment in Argentum Capital Limited are set out on the group’s website and in the offering memorandum and audited accounts that are available there.”

Argentum is a member of the Association of Litigation Funders (ALF). In a statement, it said: “The board of the ALF has been concerned to read press reports alleging irregularities in fundraising activities at Centaur Litigation SPC. Centaur is a major investor in Argentum Capital Limited (ACL). ACL is a funder member of the ALF; Centaur is not.

“The ALF was also concerned to learn that the listing of ACL shares on the Channel Islands Securities Exchange Authority was cancelled on 24 February 2014 on the basis that the Exchange considers that ACL is no longer suitable for listing under Chapter 7 of the Listing Rules.

“The ALF has been in urgent contact with ACL since the press reports first appeared seeking to understand the implications of these developments and those contacts are continuing. No complaint has been received by the ALF from any of ACL’s funded counterparties. No further comment will be made by the ALF at this stage.”

Centaur owner Brendan Terrill told this website that he had no comment except that the matter was with his lawyers.

Clive Zietman, head of commercial litigation at Stewarts Law, said the firm was aware of the issue but had no comment.

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Linetime200South west law firm Stephens Scown have selected Liberate from Linetime.

Dean Mostert, director of ICT “We have past experience of working with Linetime and have always been impressed with the software’s flexibility and depth of functionality.

“Another important consideration in our selection process was to ensure we received first class support going forwards as selecting a system goes way beyond the initial system purchase. Our experience of the Linetime help desk has always been first class. When we undertook a review of systems the Liberate software came out as the clear winner.”

Stephens Scown is a leading law firm based in the South West with offices in Exeter, Truro and St Austell. The Liberate system will be used by the finance team to support their debt recovery and collection business.


Twitter: @LinetimeLtd

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Litigation funding brokers TheJudge have launched five new websites specifically tailored to individual areas of litigation.  remains the company’s main cornerstone website for commercial litigators but we’ve now launched what we are calling our sub-terminals websites:

Having these individual terminals will enable us to provide content rich information that is relevant to the lawyers in that practice area, including regularly updated cases studies, news articles and other useful information.  James Delaney, director at TheJudge, says “the funding issues faced by liquidators versus say a patent litigator are often vastly different.  Similarly, investment treaty arbitrators will face very different issues to say those faced by an antitrust lawyer managing a group of claimants pursuing a follow-on claim.  Our aim is to make some of the more intricate funding issues visible for these specialist areas, which collectively make up the volume of TheJudge’s business.”

As part of the launch we’ve also put together a short animation designed as an introductory guide for clients when considering their funding options.  We hope it provides a novel and light hearted introduction for what can be for some a fairly dry subject.

Following the surge of applications for funding and insurance that took place in March 2013, application volumes have again started to rise, which demonstrates that regardless of the cost regime claimants continue to have appetite to explore options to reduce their cost liability when pursuing litigation and arbitration.

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Stockwell: attack on discount rate would be grave injustice

An attack on the discount rate “would constitute one of the gravest injustices of all”, the new president of the Association of Personal Injury Lawyers (APIL) has warned as he set out his stall for the next year.

Matthew Stockwell, a barrister at St Johns Building Chambers, Liverpool, will take the reins at APIL’s annual general meeting at Celtic Manor on Thursday.

He specialises in serious injury litigation, including employers’ liability and clinical negligence claims. He takes over from Karl Tonks, partner and head of employers’ liability at Fentons.

At his inaugural speech to delegates in Newport, Mr Stockwell will call on the 4,500 APIL members to continue to meet new challenges on behalf of the injured people they represent.

Singling out the Ministry of Justice’s discount rate consultation – which is currently in its second phase – he will say: “I hope the government will consider this issue carefully and get it right because an attack on the discount rate would constitute one of the gravest injustices of all. It would not be about reducing fraud; it would not be about controlling the cost of litigation.

“An attack on the discount rate would simply amount to robbing seriously injured people of the damages they so desperately need.”

The new vice-president will be well-known campaigning solicitor John Spencer, director of Spencers Solicitors in Chesterfield and a former chairman of the Motor Accident Solicitors Society. Stuart Kightley, who runs the personal injury department at Osbornes Solicitors in north London, will become APIL’s secretary. A frequent lecturer on costs and funding, he specialises in head injury and employers’ liability claims.

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Chambers: the budget has to be prepared on a ‘worst case scenario’ basis

Posted by Louisa Chambers of Litigation Futures sponsor Spencers Solicitors

Flexing the rules is admired in some circles – it’s part of being unique, thinking out of the box and challenging the status quo.

But unfortunately this is definitely not the case when it comes to our industry. As lawyers we need to bend with the rules not away from them. We need to be agile, and adapt to any changes in the legal landscape.

Kim Tasso touched on this concept at the beginning of the year: “It’s no secret that the legal profession continues to go through a time of profound change. No matter how much we fight it, or pretend it’s not happening, it’s clear that only those firms who are flexible and agile enough to make timely changes to their infrastructure, systems, processes and behaviour will succeed.”

Still the boundaries placed upon us by legislation can sometimes frustrate – even obstruct – what we might consider ‘fair access to justice’.

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) brought with it a rigid change to costs budgeting in that solicitors are now required to complete the Precedent H form, stating how much can be claimed at the end of the case – and this must be done seven days prior to the case management hearing.

It’s a rule that, as everyone now knows, was broken by Atkins Thomson, representatives of Andrew Mitchell MP, when he launched a defamation action against The Sun newspaper over its reporting of the ‘Plebgate’ affair.

His solicitors submitted their costs budget application less than 24 hours from the hearing. Therefore, it was void, the rule was broken, and the Court of Appeal showed no compassion for the error which is likely to run into six figures of unrecoverable costs.

It’s an exacting stance from the Court of Appeal. It makes a hard job even more difficult by attaching more deadlines and procedural requirements to a hearing.

John Spencer has a similar view on this, yet he also makes the following point in a recent blog post: “Too rigorous an application of court sanctions may in some situations deny access to justice to those who need it – clients, who shouldn’t be punished for the mistakes of their legal advisers.”

It’s a new hoop we must all be agile enough to jump through with professionalism.

Below I’ve outlined how we’ve adapted to the changes and included a few tips that have helped us along the way. But please let me know how you have been approaching the new procedures by leaving a comment.

Adapt to the changes firm wide

At my firm we have updated our case management system and internal procedures to make it as easy as possible for litigators to prepare the budget when they reach the litigation stage. We’ve worked closely with staff involved in multi-track cases to produce a system which is as straightforward and user friendly as possible.

These processes are still being developed both by law firms and the courts. In our experience the stance of the judiciary in relation to human error following the implementation of costs budgeting differs from court to court; therefore we have to allow fluidity in our processes until such time that a unified approach is established by the judiciary.

The process of costs budgeting requires firms to use additional resources and time to prepare and negotiate a budget and subsequently to prepare for and attend a costs management hearing. The process also consumes valuable court time when resources are already stretched.

In theory, court time spent dealing with detailed assessment on concluded cases should be reduced but we are yet to see if this actually happens in practice. It is also apparent that courts dealing with live case management issues have little or no additional time to deal with complex budgeting arguments.

Avoid the Atkins Thomson pit falls

In order to avoid being in the same situation as Atkins Thomson, preparation will be key and not just preparation of the budget. From day one in multi-track cases it will be necessary to have in mind the issue of a costs budget; how many witnesses might there be, what expert evidence is required, what issues may arise etc.

We’ve opted for a process that before any multi-track case is issued, there will already have been at least two reviews considering issues relevant to a future budget. Litigators will also need to record the date by which their budget must be filed in our case management diary (along with all other key dates and deadlines).

Ultimately there will always be room for human error, no matter what safeguards and systems you put in place, but it is important to minimise the risk. Staff levels and capacity to undertake this additional litigation step is bound to be an issue for many firms but with good preparation disastrous situations such as that the one faced by Atkins Thomson can be avoided.

It is also necessary to keep an approved budget under review. If you go over budget and fail to obtain the agreement of the court that the additional work is proportionate and reasonable, you will be undertaking the additional work for free. This is not a position that firms will be able to sustain if they continually fail to have budgets updated, or get the budget wrong.

Calculating the budget

When preparing the budget, it is necessary for the solicitor involved to consider what further steps will need to be taken to take the case to a conclusion. The budget has to be prepared on a ‘worst case scenario’ basis which involved estimating costs right through to and including a final trial.  Each case will be different; requiring differing amounts of work and expert evidence, the task of estimating costs through to a trial can therefore be very difficult, but it must be accurate to avoid recoverability issues.

It is necessary to consider the extent of any future work and any disbursements that will be incurred; we must also consider things that ‘might happen’. The budget must include contingencies; if you fail to include a contingency that was foreseeable, you may be refused permission to amend your budget later down the line.

Both parties must prepare a budget and ideally seek to agree them in advance of the costs management hearing. If there is no agreement, the judge will go through the budget and set it as they see fit.

The whole budget process is quite adversarial; there is no particular advantage to defendants in agreeing a budget, they might as well object and let the judge set the budget because the judge might reduce it – they certainly won’t increase it. The process does not lend itself to co-operation and collaboration between the parties and may actually serve to undermine any good relations established over the early life of the case.

Learn and adapt

We are, as I acknowledged earlier, obliged to bend with the rules and adapt, which is what firms and lawyers will need to do in order to avoid the potentially disastrous consequences of a failure to comply.

Preparation and good diary habits are key, as well as ensuring that you have the right procedures and people in place to make compliance as cost effective and efficient as possible.

Louisa Chambers is a solicitor, member of the Law Society personal injury panel and a senior litigator of the Association of Personal Injury Lawyers. Louisa works within Spencers Solicitors’ complex injury team handling cases that involve serious and catastrophic injuries

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DAS CEO, Paul Asplin with BAWFC players  Natasha Harding and Corinne Yorsten

The ‘Vixens’, Bristol Academy Women’s Football Club, have announced a new sponsorship deal which sees Bristol-based legal expenses insurer, DAS UK become the club’s main sponsor for the 2014-2015 season.

DAS has a history of community involvement and sports sponsorship within Bristol and this deal represents a further commitment by the company to its home city. The announcement follows the appointment of Dave Edmondson as the club’s new head coach; the ability for the club to be able to appoint a full time manager was made possible by the DAS sponsorship. Edmondson was appointed following the departure of Mark Sampson, who took up the role as England Women’s National Team Manager in December.

The £50k one year deal, which is the largest financial shirt sponsorship for an independent club in the women’s game, will see the BAWFC players sporting the insurer’s logo on their shirts as they embark on their fourth campaign in the WSL and once again enter into the UEFA Women’s Champions League. Last year the club had the most successful season in its history, finishing runners up in the FA Cup Final against Arsenal and capping a superb league campaign by finishing second in the 2013 Women’s Super League (WSL).

Paul Asplin, CEO DAS UK Group said; “DAS has its headquarters in Bristol and whilst we employ over 700 staff nationally, the majority of our people are based in Bristol, so being involved in our local community is extremely important to us.  It is our pleasure to sponsor the Vixens and connect our brand to theirs and the rising popularity of women’s football.”

President of Bristol Academy WFC, Kevin Hamblin, said:  “We needed a sponsor befitting both the local and national appeal of the club.  DAS is a perfect fit and their sponsorship will enable us to develop the club and build on the success we have had.  We are delighted to have them on board.”

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MBL’s brand new webinarfocuses upon some key current themes and recent developments in law and regulation relating to advertising and marketing. It is particularly suitable for those advising their business colleagues on issues such as their adverts, branding, promotions and use of social media.

By the end of this webinar, you will be able to review your brands or client’s marketing copy with an understanding of the different laws and regulations that apply.

Beginning with an overview of the regulatory landscape for advertising and marketing, the webinar will also cover misleading advertising and recent Advertising Standards Authority adjudications and trends from 2013 and 2014.

For more information on webinar costs and other details, please email quoting ‘Litigation Futures’ or call 0161 793 0984.

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Consumer Rights Act has completed its parliamentary passage

Consumer Rights Act has completed its parliamentary passage

Opt-out collective actions will become a reality in England and Wales later this year after the Consumer Rights Act received Royal Assent last week.

But the government has proposed introducing a presumption that law firms and third-party litigation funders should not be able to front such cases.

Expected to come into force on 1 October 2015, the Act facilitates private enforcement of competition law by introducing a competition-specific opt-out regime in the Competition Appeal Tribunal that allows cases to be brought by a defined group of people with similar claims either as follow-on or standalone actions.

The tribunal has to certify opt-out actions and can order them to be opt-in. It will also have to subject them to a preliminary merits test, while there will be a ‘fast-track’ procedure for simpler cases. The tribunal will have to approve any settlements.

To counter fears that the regime will import the excesses of US litigation, the tribunal 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.

Where not all of the damages awarded are claimed, the extra funds will go charity, generally the Access to Justice Foundation, or the tribunal can order that they go towards the group representative’s legal costs and expenses.

Last month the Department for Business, Innovation and Skills issued a consultation on changes to the CAT’s procedures – following a review led by former Court of Appeal judge Sir John Mummery – and this includes changes to be made to implement the Act.

In line with the government’s stated policy throughout the consultation process for the Act, it asked whether there should be presumption that law firms, special purpose vehicles and third-party funders should not be able to bring cases.

The consultation explained: “Government believes that only those who have a genuine interest in the case, such as genuinely representative bodies (for example, trade associations or consumer organisations) or those who have themselves suffered loss should be allowed to bring cases.

“Government policy is therefore that claims should not be brought by law firms, third-party funders or special purpose vehicles. How to achieve this aim has been subject of debate in both Parliament and with stakeholders. In order to achieve a balance between claimants and defendants, Government is minded to introduce presumption into the rules that organisations, that offer legal services, special purpose vehicles and third-party funders should not be able to bring cases

“It is intended that such a presumption would act to bar non-genuinely representative bodies from bringing cases, but would permit the CAT to decide that a consumer organisation or a trade body that offers legal advice would be suitable to bring a case.

“The same is also true of special purpose vehicles: an organisation created with the sole purpose of bringing a case. However, there may be cases with multiple claimants who decide to create a separate entity for bringing the case to make case management easier. Again, the CAT should therefore have the ability to override the presumption.”

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Lavender: Unsatisfactory approach

A High Court judge has thrown out judicial reviews brought by two medical reporting organisations (MROs) against their suspension from the MedCo portal.

Mr Justice Lavender said there was “obviously something unsatisfactory” about the approach taken by Med Chambers and Prime Medicals, using the dispute resolution procedure set out in MedCo’s user agreement – called the ‘escalation’ procedure – and judicial review simultaneously.

He went on: “The decision in each case was that they should be suspended because they did not meet the qualifying criteria.

“The claimants have each sought to challenge two aspects of that decision by two different routes, using the escalation procedure to challenge the decision that they did not meet the qualifying criteria, and using these applications to challenge the suspension decision.

“In some cases it may be necessary and appropriate for a claimant to pursue two different proceedings simultaneously, but it is generally inconvenient and undesirable.”

Delivering judgment in R (on the application of Med Chambers and Prime Medicals) v MedCo Registration Solutions [2017] EWHC 3258 (Admin), Lavender J said MedCo carried out detailed audits of the claimants in February 2017.

Having received the claimants’ responses to the draft audits, MedCo decided the claimants “did not meet the minimum qualifying criteria” and set out in decision letters sent in June last year a series of eight breaches of the qualifying criteria by each claimant.

Lavender J said that the decisions that the MROs did not meet the qualifying criteria were challenged by them under the escalation procedure set out in clause 10 of the user agreements and were not at issue in the judicial reviews.

Clause 10 provides first for representatives of MedCo and the MRO to try and resolve their differences. If this does not work, the matter is escalated to “senior” representatives on both sides. Failing that, 30 days later a party can refer the dispute to mediation overseen by CEDR.

A party cannot take legal action until 30 days after the ADR notice has been served.

The judge noted that the applications for judicial reviews were not filed until September 2017, “at the very limit of the time period specified by CPR 54.5(1)(b)”.

The MROs argued that clause 10 was not an “adequate remedy” because MedCo did not consider submissions which the claimants made within 14 days of the decision letters, in breach of its compliance procedure.

Lavender J replied that this submission “amounted to an argument” that MedCo would not take its obligations seriously to engage in the escalation procedure, but there was no evidence to support this.

The judge rebuffed the MROs’ second argument, that the escalation procedure was “far too slow” in taking up to 90 days.

“It took the claimants 92 days to commence these proceedings. In that context, it cannot be said that a process taking 90 days is too slow.”

Lavender J said the MROs’ third argument, that the MRO procedure did not “provide the claimants with the remedies of interim relief or damages”, was to “misunderstand the nature of the procedure”.

It was a negotiation and there was no reason why the parties could not agree to lift a suspension.

He responded to an additional argument, that a review by the decision-maker was not an adequate remedy, by saying this was what happened in homelessness cases.

“All in all, I do not consider that the arguments advanced by the claimants demonstrate that the escalation procedure was not a suitable alternative remedy in the present case. On that basis, I refuse permission to apply for judicial review.”

Lavender J added that even if he was wrong on the issue of alternative remedy, he would dismissed the applications for permission to apply for judicial review on the basis that they were not brought promptly.

His ruling also said that another MRO which failed to meet the criteria had brought a claim against MedCo but it had settled.

In that case, he said, the MRO had taken a positive approach to ensuring compliance, whereas the two claimants had taken a negative approach by disputing that any issues needed to be addressed.

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Carlile: almost daily stories of rudeness

The time has arrived to create a “small” inspectorate – led by a High Court judge – that will evaluate judges’ courtroom performance, Lord Carlile QC has argued.

The Liberal Democrat peer said “important public servants, especially those with little line management and ostensibly lengthy security of tenure, should expect to be evaluated”.

Lord Carlile, who practises from 9-12 Bell Yard Chambers, is himself a deputy High Court judge, Crown Court recorder and tribunal chair. He predicted that most judges would welcome such a move, noting that the judiciary will soon be the “last redoubt” of professionals carrying out public service who are not subject to formal inspection, performance review, peer review or quality assurance on a regular basis.

Appeals are not sufficient for peer review, he said, as they rarely focus on poor judicial behaviour.

While courtrooms have become “less dramatic places” in recent years, there are still “almost daily stories of rudeness and inappropriate impatience on the bench, occasional misogyny and the placing of increased pressure on advocates who are not members of a set of barristers’ chambers”.

The Judicial Conduct Investigation Office (JCIO, formerly the Office for Judicial Complaints) deals with formal complaints against judges, but an inspectorate could both work alongside the JCIO and also deal with issues before they reach that stage, Lord Carlile wrote in Counsel magazine.

“They would be able to carry out routine and unannounced visits to courts without there necessarily having been a complaint,” he said. “The judiciary and the legal profession could refer issues to them falling short of formal complaints; for example, when a resident or presiding judge was concerned by suggestions of serious ‘judge-it is’ as occasionally happens with relatively new judges.”

The inspectors would assess such issues as case management, treatment of victims and other witnesses, and behaviour towards advocates and those instructing them, the peer continued. “The purpose would not be criticise, but rather to review and improve. Measurement of performance would be important – for what is measured is improved as a general rule.”

Lord Carlile insisted that an inspectorate – which he suggested could be made up of a High Court judge on a two-year secondment leading a team of four or five other judges – would not damage the independence of the judiciary.

“The reality is that many of the worst complaints about discourtesy and other unacceptable behaviour in court raise from the failure by a few judges to exhibit the independence which in reality they probably possess.

“I am not suggesting that there should be some uniformly bland standard of neutrally polite behaviour from the bench: all advocates expect, and should welcome, legitimate and sometimes robust judicial challenge. Nevertheless, poor practice needs to be challenged, preferably before formal disciplinary processes are needed.”

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Hearing claims: doubled in a year

There has been a “staggering” rise in the number of deafness cases, with lawyers “exploiting” the lack of certainty around the condition, a specialist insurer for the construction industry claimed yesterday.

Electrical Contractors’ Insurance Company (ECIC) said the number of deafness claims it is managing more than doubled between 2012 and 2013, and it expects a further increase by the end of 2014.

ECIC provides insurance for tradespeople in the main from within the electrical contracting, roofing, plumbing, lift maintenance and heating and ventilation sectors.

ECIC said that while control of noise levels is a particular issue in the construction sector, it believes “along with other insurers, that the rise in deafness claims can partly be attributed to an increased focus by the legal profession on pursuing these types of claims”.

The Association of British Insurers recently warned that industrial deafness had become a new “cash cow” for the legal profession.

Ian Hollingworth, claims manager at ECIC said: “The rise in deafness claims is staggering and a real concern. While there will be genuine claims we do have a concern that a good proportion will be speculative and potentially exaggerated.

“The best protection for employers is to ensure they follow the HSE’s guidelines to the letter. This will not only limit the risk of exposure but offer some protection against liability claims and the solicitors now focusing on this type of claim.”

Under guidelines set out by the Health and Safety Executive, if any work is undertaken in an environment where the noise is consistently over 80 decibels, for example from electric drills or belt sanders, action needs to be taken to limit the risk of hearing damage and litigation. Employers must provide information about the impact of noise, and protection for the employee to use.

Mr Hollingworth added: “The real challenge is in proving damage to hearing has occurred and, indeed that this has been caused by work given reports over the past few years warning of a rise in hearing loss in young people due to the use of MP3 players. This lack of certainty is something that is no doubt being exploited by the legal profession.”

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Bogart: integrated into Burford Capital

Leading third-party funder Burford Capital has announced a restructuring for tax reasons that will bring Burford Group – its investment adviser – in-house in a cashless acquisition.

In future Burford Group will no longer be free to advise the AIM-listed company’s competitors.

Meanwhile, a survey commissioned by Burford Group has found that more than half of US litigators have cases suitable for third-party funding but fewer than one in ten of top-200 US law firms have themselves used it.

In a performance update, Guernsey-based Burford Capital also reported it had received a $6.5m (£4m) settlement in one case and a further $4m, to date, of the total $20m proceeds of an investment in another case. That case gave the company an internal rate of return (IRR) of 75%. A further three cases are expected to produce an IRR or at least 50%.

The company boasted that, since becoming publicly listed on the AIM market three years ago, it has generated more than $50m in revenue, committed over $300m in investment capital and up to June 2012 had achieved net returns on litigation investments averaging 70%.

Explaining its restructuring plans, Burford Capital said the company has grown faster than expected and innovative practices – such as investing in portfolios of litigation in order to spread risk – were being constrained by US tax rules.

“As a general proposition, it is difficult to effect many of these newer innovative transactions within the company’s existing US tax structures, and indeed the company has closed certain attractive investments this year outside the US that it simply would not have been able to do in the US for tax reasons…

“Burford Capital will proceed to implement a group structure using various wholly-owned subsidiaries that will enable it to expand the investment structures it can use in the [US] and benefit from the greater flexibility achievable by structuring its operations in a way that can benefit from income tax treaties that reduce levels of taxation (and tax risk).”

As part of the restructuring, Burford Group will be acquired in a “cashless merger”. Chief executive Christopher Bogart and his colleagues will be integrated into the company, resulting in a considerable saving in performance fees. “The entire cash leakage of performance fees is extinguished,” said the statement.

Another benefit of the restructure is that Burford Group “is currently not exclusive to Burford Capital and is free to raise funds and enter into business ventures that could compete with or lessen the market force of Burford”. As a subsidiary, this freedom would end.

Burford Group’s 2012 Litigation financing survey contacted 462 AmLaw 200 litigation partners, non-AmLaw commercial litigators, and general counsel and chief financial officers (CFOs) of large and mid-sized companies. It found that among the first three groups, awareness of external litigation financing was over 90%, but for CFOs it was 62%.

Generally, views of litigation financing among litigators were favourable, with non-AmLaw 200 lawyers particularly enthusiastic. More than three-quarters said they believe it will lead to good cases being brought that otherwise will not and 85% said it usefully levels the playing field between unequal parties.

More than two-thirds of all the people surveyed expected third-party funding to increase over the next 18 months, with 51% of AmLaw 200 litigators and 69% of other litigators saying they have had a suitable case in the past. Further, around one in five said they currently had an active case that could benefit from external finance.


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Bundles: court only opened one of the 29 produced

Bundles: court only opened one of the 29 produced

The High Court has issued a costs penalty to a claimant that included material in expert evidence that it was not meant to and also flooded a preliminary hearing with unnecessary bundles.

Rejecting the argument that he should reserve the question of costs until the end of the case, as both could have become relevant by then, Mr Justice Males said it was “necessary in my judgment to mark the disapproval by the court of the course taken by C&S and, moreover, to do so now rather than waiting until the end of this litigation”.

He was ruling in C&S Associates UK Ltd v Enterprise Insurance Company Plc [2016] EWHC 67 (Comm), came after handing down a decision over preliminary matters a dispute between a claims handler and insurance company that we reported earlier this week.

He reserved the costs of the preliminary issues subject to the proviso that C&S must in any event bear the costs of preparation of the expert report and 80% of the costs of preparing the bundles for the hearing regardless of the future course of the litigation.

The expert report had included evidence which Males J said had been served without permission, and he required a version to be served with these paragraphs deleted.

“The inclusion of this material in [the expert’s] report was a deliberate decision, either by C&S itself or by those acting for it. [The expert’s] evidence was that he included this section of his report because he was instructed to do so by C&S’s solicitors, Sidley Austin. It more than doubled the length of the report and increased unnecessarily the costs of the preliminary issues.”

He continued that C&S “insisted” on producing 29 bundles for the hearing. “Only one of these bundles was even opened during the trial and when it was, the reference was extremely brief and added (with respect) nothing at all to any understanding of the case.

“It is true that disclosure of the documents contained in these bundles had been ordered, but it does not follow that it was reasonable, let alone necessary, for these to be included in the trial bundles. Inevitably this also increased the costs of the preliminary issues.”

“It is not at all obvious that the redacted passages from the report will form part of the next phase of the litigation but, in any event, it is necessary in my judgment to mark the disapproval by the court of the course taken by C&S and, moreover, to do so now rather than waiting until the end of this litigation.

“It is important that those litigating in this court are aware of the need for compliance with orders made regarding expert evidence; that so far as possible the costs of such evidence will not be allowed to spiral out of control; and that a party who deliberately chooses for tactical reasons to adduce expert evidence for which in large part no permission has been given should bear the risk that, in appropriate circumstances, the costs of preparing such a report may be entirely disallowed…

“Much the same reasoning applies to the preparation of the trial bundles, although I acknowledge that approximately 20% of the bundles would have been required in any event.”

Meanwhile, over in the Technology & Construction Court, Mr Justice Edwards-Stuart warned counsel against over-long skeleton arguments and citing too many authorities.

In Commercial Management (Investments) Ltd v Mitchell Design and Construct Ltd & Anor [2016] EWHC 76 (TCC), he said that one of the skeleton arguments submitted ran to over 70 pages, compared to 20 pages for the other parties.

“Allowing for the fact that the latter adopted a larger font and/or greater line spacing than the other two, it was still about two and a half times as long. The ability to navigate it was not assisted by the fact that it had no index.

“Paragraph 15.2.1 of the TCC Guide provides that: ‘In general terms, all opening notes should be of modest length and proportionate to the size and complexity of the case.’ In the context of this trial of these preliminary issues, I consider that a skeleton argument running to more than about 25 pages, assuming the usual spacing and font size, is not of modest length.

“The offending skeleton argument in this case exceeded this limit by a comfortable margin. There is a reason for this provision, which is not simply to save time and paper. More fundamentally, it is also the case that once a skeleton argument runs to more than about 25 pages, it is usually because it is over discursive, making it difficult for the reader to identify the real issues and to follow the argument.

“Also it makes it more difficult for the reader to find his or her way quickly to the part of the skeleton argument which is dealing with the point currently under consideration (particularly if it has no index).”

The judge added that around 40 authorities had been cited, but he had only needed to refer to a “handful” of them.

Edwards-Stuart J said: “I do not wish to be overcritical: of course counsel will wish to err on the side of caution and will be naturally averse to the risk of criticism if a relevant authority is not cited. I fully understand that.

“I would simply encourage counsel not to cite several cases where one or two will do, and not to cite authorities which simply illustrate the application of a well-known principle to particular facts (unless those facts are of particular relevance to the case under consideration) or which are examples where the conclusion contended for in the present case has been reached in different circumstances.”

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Progressive solicitorsNew start-up firm, Progressive Solicitors, is implementing the Proclaim Practice Management Software solution from Eclipse Legal Systems, the Law Society’s sole endorsed provider.

Based in Manchester, the firm was founded in late 2016 and has quickly established a clear ambition to become a leading firm across the North West. Progressive Solicitors offers services for all types of personal injury claims – from road traffic accidents (RTAs) through to slips, trips and falls – and this, combined with its dedicated team of experts is quickly cementing a reputation for excellence.

Progressive Solicitors is implementing an ‘off-the-shelf’ Proclaim Personal Injury Case Management system, providing all staff with step-by-step procedures to streamline case progression, from instruction through to conclusion. The practice will also benefit from Proclaim’s inherent flexibility, allowing staff to tailor the solution around specific areas of personal injury work taken on by the team. Furthermore, the integrated practice management and accounting toolset will form a firm-wide solution for management, enabling instant access to data and operational performance.

Additionally, Proclaim’s integration with the MoJ’s Claims Portal will significantly enhance the firm’s ability to process volume caseloads by providing 2-way access via ‘Application-to-Application’ (A2A) technology; ensuring staff can manage claims entirely through the Proclaim desktop application.

Jemma Kelleher, Director of Progressive Solicitors, comments:

“As I have previously worked with Eclipse and Proclaim, I knew when it came to starting my own firm it would be the solution of choice. As a new firm, we have extremely ambitious plans and in order for us to achieve these, we need a software provider that can scale with us as we grow and accomplish our objectives. Eclipse is more than qualified to aid in our development, and its position as the Law Society’s endorsed provider cements our confidence in the decision.”

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NHS: public back fixed fees

The Association of Personal Injury (APIL) has called for a “predictable claim process” for clinical negligence actions if the government goes ahead with its plan to impose fixed costs for cases worth up to £25,000.

Responding to the Department of Health (DoH) consultation on fixed costs, which closes today, APIL said part of the process should involve NHS Resolution, formerly the NHS Litigation Authority, admitting liability in full.

“It is pointless to impose fixed costs for clinical negligence work without fixing the process first,” Neil Sugarman, president of APIL, said.

“A fixed, predictable claims process needs to be developed, rather than imposing fixed costs on the existing, dysfunctional system.

“Taking an axe to how much the Department of Health pays does nothing to tackle the factors which drive costs, such as the ludicrously long waiting times for the recovery of medical records, or arduous expert reports.

“We propose that a claimant should submit an abbreviated expert report early on, for example, so that NHS Resolution as it is now called can decide early on whether to make an offer to settle.”

APIL argued in its response that cases involving fatalities, claimants with a short life expectancy, potential breaches of the Human Rights Act and cases with multiple claimants or defendants should be excluded from the fixed-costs regime.

Mr Sugarman added that for the DoH, as a “negligent wrong-doer”, to change the way in which injured people can succeed and the costs they can recover, was “like a criminal dictating the length of his sentence.

Meanwhile, clinical negligence specialists Hodge Jones & Allen called for fixed costs to be put on hold until an independent review of LASPO had been carried out and the findings of the National Audit Office investigation of NHS Resolution had been published.

Agata Usewicz, head of medical negligence at the law firm, said: “As a consequence of the Jackson reforms, lawyers’ fees are already tightly controlled, budgeted, capped and limited.

“Costs already have to be ‘reasonable and proportionate’ before they are paid by the insurer or NHS and the courts rightly already hold the power to reduce any bill found to be excessive.

“To seek to introduce further and somewhat draconian changes without waiting to see whether the introduction of costs budgeting will lead to the necessary improvement must, from any angle, be considered to be somewhat misguided and misconceived.”

In its response to the consultation, Hodge Jones & Allen agreed with APIL that only “straightforward cases” would be viable under fixed fees, with no more than one defendant, one expert report and two witness statements, along with an admission of liability.

The firm said that, as well as all fatalities, people with disabilities and mental health issues, the over 65s and prisoners should be exempted from fixed costs.

It called for stronger sanctions to reduce delays by NHS Resolution, including having to leave the fixed costs system and costs penalties.

Ms Usewicz added: “Aside from the impact on individuals, there will be a long-term impact on patient safety due to important cases not being brought.

“There is a great deal of evidence to suggest litigation can drive the development of better practice, hold institutions accountable and be a force for change.”

However, the Medical Protection Society (MPS), which argued strongly last month for the government to be more “bold” and include cases worth up to £250,000 in its plans, said fixed costs were backed by a large majority of the public.

The MPS said a survey of over 2,000 adults carried out by YouGov on its behalf in February showed that 81% supported fixed costs for clinical negligence lawyers.

A similar majority, 82% said they did not agree that lawyers should receive more in fees that patients did in compensation.

Emma Hallinan, director of claims at MPS, added: “At a time when the NHS is under increasing financial pressure, it is not surprising that so many members of the public want to see more done to tackle legal costs and keep more money in the NHS for frontline care.”

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Channel 5 seeks PI lawyer TV stars

Personal injury lawyers have expressed concern after it emerged that Channel 5 is considering a Dragon’s Den-style TV programme in which potential claimants try to persuade a panel of lawyers of the strength of their claim.

The channel’s in-house development team has been contacting solicitors who could be on the panel in a pilot episode, although the programme has not yet been commissioned.

According to the letter: “Members of the public (potential claimants) would attend a clinic like setting and then discuss their cases with four of the UK’s leading personal injury/negligence lawyers. These cases would range from personal injury to medical negligence to consumer complaints and small claims.

“The contributor presents their case individually to the each of the lawyers, along with any evidence – photographs, home video, medical reports etc. It is here that the lawyers have the chance to question the claimant and establish the true evidence of the case.

“The lawyers must be ruthless in their pursuit of the truth if they’re going to weed out the genuine, watertight cases of real affected claimants from those who are unreasonable, mislead or simply chancers trying their luck.”

The lawyers would then tell the claimant how much could the claim be worth and whether any of them willing to take it on.

Matthew Stockwell, president of the Association of Personal Injury Lawyers, said the body had been trying to persuade TV companies to film a fly-on-the-wall documentary about the claims process in a bid to dispel misconceptions about it.

However, on the basis of the Channel 5 letter, he said it looked like the aim was to provide light entertainment: “I just don’t see how this format lends itself to what is a serious subject,” he said.

A spokesman for the Motor Accident Solicitors Society, again commenting on the basis of the letter, said: “The format of the programme appears to be based on a fundamental misunderstanding of the relationship between lawyers and their clients, how evidence is gathered in personal injury claims, and generally what we do to investigate and build a claim.

“That being the case it seems highly unlikely that any discussion of a potential personal injury or clinical negligence claim within this format could be meaningful.”

The letter did emphasise that the format is “not set in stone and we will be refining the concept based on the realities and practicalities of the industry”. Legal Futures has been told that the aim is to educate rather than trivialise.

A Channel 5 spokeswoman said she could not comment on shows that have not been commissioned.

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Lord Brennan

Lord Brennan: “scale and diversity are the challenges”

Litigation funder Juridica has announced that it intends to diversify its approach and extend its investments to law firm portfolio finance and arbitrations.

The AIM-listed funder, registered in Guernsey, currently specialises in mainly US antitrust and competition cases, which accounted for around two-thirds of its net proceeds last year, combined with commercial and IP cases, which accounted for around a third.

Launching Juridica’s financial results for the last calendar year, chairman Lord Brennan QC said the company had “generated a record amount of cash proceeds because of five settlements in our antitrust and competition portfolio”.

According to the statement, the settlements generated proceeds of $106m (£72m). It currently has $148m invested in 22 active cases.

Lord Brennan said Juridica was “the first to enter the litigation finance market” and “well-established and performing well in this market”, as demonstrated by the results.

“Litigation finance, particularly in the United States, is now at the next stage where scale and diversity are the challenges.”

In its contribution the financial statement, investment manager Juridica Asset Management said it aimed to create a portfolio “that remains based on business-to-business claims but is diversified across not only the three existing asset classes but also law firm portfolio finance, arbitrations, judgments and special situations…

“[A] more diversified portfolio will reduce the risk of adverse judgements in a particular investment whilst reducing the average time of investments, thus providing for more regular cash proceeds to the company and its shareholders.”

It added that it had “significantly expanded” its own team to “include more risk management and a broader range of legal expertise”.

Lord Brennan said that since its launch in 2007, Juridica had developed a portfolio of investments made up exclusively of “business-to-business related claim investments” in the sectors of antitrust and competition, patents and other forms of intellectual property and general commercial litigation.

He said the company did not invest in shareholder class actions, personal injury, product liability, or mass tort claims.

Lord Brennan said: “Although our recent returns are not indicative of future returns, they are a strong endorsement of the quality of the portfolio we have invested in and developed.

“Our investments have continued to mature throughout 2014. Our successes this year enabled the payment of substantial dividends. We continue to see significant opportunities to deploy capital. We look to the future with optimism and expect the portfolio to deliver attractive returns.”

A spokesman for Juridica said the firm’s clients included Fortune 1000 and FT Global 500 companies, inventors, universities and the law firms which represented them.

One of its notable new investments last year was in ProSports IP, a new joint venture with the National Football League Players Association, established to develop and monetise a large of patents in the technology and sports market in the US.

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Buss: 18% increase in ATE policies

Buss: 18% increase in ATE policies

Legal expenses insurer AmTrust has acquired independent provider Arc Legal Assistance for an undisclosed sum.

Arc Legal is a managing general agent that provides a range of legal expenses insurance (LEI) and assistance products. It manages over 14 million legal expenses policies covering personal, motor, commercial, affinity, property owners, travel and leisure risks. Products are distributed in partnership with insurance companies, brokers, financial institutions and affinity groups.

Helen Withers, managing director of Arc Legal, said: “AmTrust provides us with a robust and supportive structure from which to continue our growth. They share our commitment to developing LEI products and services to respond to the evolving legal and regulatory structures, and support the expansion of our portfolio with new products.

“We also both see significant opportunities from investing in technology to improve the customer claims journey.”

AmTrust’s head of law, Matthew Williams, said: “Arc Legal has established a reputation for quality and integrity in the products and services it provides to a significant customer base. As an existing capacity provider to Arc Legal, we already recognised how their approach and experienced team has established them as a leading provider delivering consistent underwriting performance with outstanding customer service delivery.

“This acquisition affirms our appetite to continue to build a significant legal expenses presence.”

Meanwhile, fellow legal expenses insurer ARAG plc yesterday announced a 12% growth in premium under management for 2015.

Gross written premium under management increased from £39.6m to £44.3m, generating a pre-tax profit of £2.7m.

Managing director Tony Buss said he was particularly pleased with the results given the contraction of the after-the-event insurance market since LASPO.

“I am particularly pleased with the continued growth that our commercial legal protection and home emergency products have achieved, as well as a strong 18% increase in ATE policies, particularly for motor, employers and public liability risks.”

Mr Buss said the challenging market conditions looked set to continue, “with greater regulation, further legislation and the recent insurance premium tax increase all playing their part”, but he was confident of the company’s ability to respond.

During the year ARAG retained both the overall team of the year and legal expenses team of the year awards at the Underwriting Services Awards, as well as winning the managing general agent team of the year award for the first time. The company also secured ISO 27001 certification for information security management during 2015.

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Bott: odds stacked against the individual

The innovative and award-winning flight compensation practice set up by Cheshire firm Bott & Co has just concluded its 1,000th claim against airlines.

The firm, which only launched the practice in February, has recovered over €1m (£825,000) from 36 different airlines for 2,100 passengers on delayed and cancelled flights.

Passengers whose flights are cancelled or delayed by over three hours, or are denied boarding, are entitled to compensation of up to €600 under EU Regulation 261/2004.

Bott & Co said it has settled cases within five days and from flights dating as far back as October 2007. Of the 1,000 claims, the firm had to issue proceedings in the small claims court 318 times.

It provides a tool on its website so passengers can assess whether they have a claim and offers a free claim letter to send to airlines. But for those who do not want to deal with it personally, or are having trouble with their airlines, Bott & Co will handle it under a conditional fee agreement, taking 27% of the final award. It will take over cases part-way through.

Bott & Co said it has access to “an unrivalled wealth of historical flight data and technical expertise” provided by partner EUclaim – which runs a similar service in the Netherlands – allowing them to put together detailed weather reports and reports to combat airlines’ arguments.

Bott & Co senior partner David Bott said the idea for the practice came from a solicitor at the firm who tried to bring a claim himself and received a 12-page letter in response from the airline. “The odds are stacked quite heavily against the individual,” he explained.

The main difficulty is that the delay has to be for a reason that is “not extraordinary” – though this is narrowly defined, Mr Bott said airlines tried to make it as wide as they could.

The key to making the practice work is volume and a “really good front end” that enables the firm to sort the wheat from the chaff. “We’ve decided to make an investment in this,” Mr Bott said. “Other firms will struggle to pick the good claims from the bad very early on.”

Mr Bott – a former president of the Association of Personal Injury Lawyers – said he had also learned lessons from the way the practice operates should the small claims limit for personal injury ever go up.

Managing partner Paul Hinchliffe added: “We will continue to battle until airlines recognise their legal obligations. The regulations are clear and if the airlines pay consumers when they should, then it won’t be necessary to involve a law firm.”

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Injury claims: selling firms should seek deferred consideration rather than immediate cash

Six law firms have joined the panel of a company making deals to allow others to leave the personal injury market.

Simpson Millar – shortly to be acquired by Slater & Gordon – Colemans-ctts, Antony Hodari, Edwards Hoyle and Grindeys are all on the panel of Recovery First, which allows firms to sell to multiple purchasers and maximise the value of their work in progress if they are happy to wait until the case conclusion.

For firms which do not want to wait for their cash, Neil Hudgell Solicitors – which runs the Webuyanyfiles website – is also on the panel.

Recovery First managing director David Johnstone – who has a background in law firm practice funding at Devonshire Capital – said firms need to consider entering into sale and purchase arrangements involving a deferred consideration as opposed to an immediate cash sale, which is unlikely to generate more than 50p in the pound of WIP at the very best.

He argued that many small firms “may not understand the financial model they’re operating” and that unless they invest heavily in systems and “deskill”, they will no longer be able to make a profit out of personal injury work. They also need to be “much better at risk assessment” – while a decade ago firms could make a profit if only three cases in 10 won, that is emphatically no longer the case.

Mr Johnstone said firms are seeing that an asset they had on 31 March is “being diminished, wasted on lifestyle costs of both proprietors and staff, inefficient operational processes and at the same time not being replaced by new work of the same value”.

He said large caseloads could be split in to manageable groups across several firms, spreading the risk for the exiting firm and at the same time having in place an administration system to oversee all aspects of the process for the life of the process – in any case, Recovery First can arrange for the transfer of caseloads to at least four firms, avoiding successor practice issues and many of the other issues that do justify the heavily discounted sale prices that are the current norm.

He said the sale prices currently being achieved can rapidly be matched on a deferred sale agreement basis as the book of cases settle, with everything thereafter being a bonus.

The operations director is personal injury solicitor Nicola Klimkowski, who has previously worked at north-west firms Mace & Jones (as was) and Duncan Gibbins, and legal expenses insurer LAMP.

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Vara: legal services still offer excellent value for money

Vara: legal services still offer excellent value for money

The government has dropped plans for ‘enhanced’ court fees specifically for commercial cases, but is now targeting increased fees for the hundreds of thousands of general civil applications made each year.

Enhanced fees are those that are above cost price, and the Ministry of Justice (MoJ) said that after last year’s general court fee increases failed to raise as much as expected, it needed to find another £55m from enhanced fees.

In finally announcing the way forward on proposals first published a year ago, the MoJ first confirmed that it would press ahead with a new enhanced fee to issue money claims of 5% of the value of the proceedings for claims worth £10,000 or more.

This would be capped at £10,000, the fee payable for a claim of £200,000, with a 10% discount if lodged electronically.

The MoJ rejected concerns expressed in last winter’s consultation that its proposals could make it harder for people to access the courts, or that they would harm the competitiveness of the country’s legal services in attracting international litigation.

It said only 10% of claims would be affected by the new fee – while remissions remain available for those who qualify – and that research consistently showed that the level of court fee is a secondary or non-existent consideration in the decision to litigate, especially in big-money international cases.

But the MoJ decided against introducing a higher maximum fee (of £15,000 or £20,000) or a higher hearing fee of £1,000 a day specifically for commercial litigation, saying there were “practical difficulties” in implementing them – particularly defining ‘commercial litigation’ and ensuring that lower-value and/or non-commercial cases in the Rolls Building were not caught.

It also dropped its plan to raise the fee for an application to issue a divorce from £410 to £750 after strong opposition in the consultation.

Instead, the MoJ started a fresh consultation – ending on 27 February – which proposed increasing the fees charged for county court possession proceedings from £280 to £355 (or £325 if using the Possession Claims Online facility), from which it expects to raise £17m a year.

Secondly it proposed increasing the cost of applications without notice or by consent (which account for around two-thirds of the total) from £50 to £100, and from £155 to £255 for an application on notice which is contested. This would raise £38m a year.

There would be exemptions for applications to vary or extend an injunction for protection from harassment or violence, applications for a payment to be made from funds held in court, and applications made in proceedings brought under the Insolvency Act 1986.

The MoJ said around 700,000 general applications are made each year, the large majority of which are in civil proceedings.

In his introduction to the consultation, justice minister Shailesh Vara said: “Increasing court fees will never be popular or welcome. But I am sure that those who choose to litigate in our courts will continue to recognise the outstanding qualities our legal services offer and the excellent value for money they provide.”

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Gummer: implementation as soon as possible

Gummer: implementation as soon as possible

The government has admitted that it will not be able to introduce fixed recoverable costs for clinical negligence cases on 1 October as planned.

A letter from health minister Ben Gummer to the Association of Personal Injury Lawyers (APIL) acknowledged that the delay in publication of its consultation meant the implementation timetable was not achievable.

The consultation was first scheduled for last autumn but has been repeatedly delayed to the point where there was simply not enough time for a consultation and then amendments to the CPR to be made in time.

Mr Gummer said implementation would happen “as soon as possible following the consultation, in line with Civil Procedure Rules”. APIL would not release any more information from the letter.

An APIL spokeswoman said: “This will be a considerable relief to our members who will need time to prepare their businesses and provide clarity and certainty for clients about changes to how cases are to be costed and conducted.

“In the meantime, we will continue ongoing talks with the Department of Health about how the NHS can save money without compromising on access to justice for injured patients.”

One of the great unknowns is the upper limit of the proposed regime, with the government having mooted claims up to a value of £100,000 or even £250,000. The consultation will not be published before the EU referendum on 23 June.

Legal Futures understands that the Law Society, APIL, the Society of Clinical Injury Lawyers, and Action against Medical Accidents are in talks to resurrect a scheme first discussed with the NHS Litigation Authority four years ago for a fixed costs scheme for claims worth up to £25,000.

We reported last week that the senior judiciary has agreed with Lord Justice Jackson that fixed recoverable costs should not be introduced in clinical negligence cases in isolation, but as part of their extension across the entire fast-track and ‘lower’ end of the multi-track.

Julie Say, a partner and head of clinical negligence at Hodge Jones & Allen, said: “Ever since the October deadline was announced, it was obvious that any implementation was going to be too tight. I hope that the government will now allow a proper consideration of how clinical negligence cases are actually run before releasing any consultation.

“It would be very ill advised, if not downright irresponsible, for the government to introduce a fixed costs regime without adequate consultation, particularly given that the impact of the Jackson reforms is still to be assessed. As a consequence of the Jackson reforms, lawyers’ fees are already tightly controlled, capped and limited…

“The government should be looking at remedying underlying causes of negligence by, for example, providing proper, more regular training, if they want to reduce the negligence bill.”

The Forum of Insurance Lawyers has expressed regret at the news, however. Mike McKenna, a member of its clinical negligence sector focus team and partner at Hill Dickinson, said: “It’s a pity that other issues appear to have delayed the consultation but it’s obviously a topic still very high on the government’s agenda and we look forward to debating this important issue later this year.”

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Eclipse200Eclipse Legal Systems, the sole law society-endorsed legal software provider, has announced integration with new-to-market ReviewSolicitors.

Founded by trio Saleem Arif (co-founder of QualitySolicitors), Michael Hanney and Pete Storey, ReviewSolicitors is a review site exclusively for the legal profession. It uniquely enables law firms to capture client feedback and display it upon an unbiased online platform.

The integration between ReviewSolicitors and Eclipse’s market-leading proclaim case and practice management solution will allow law firms to automatically email clients at the end of their transaction, requesting a review be left at This automated feedback capture process will enable law firms to refine their service offerings and provide invaluable information to assist new clients seeking legal advice.

Darren Gower, marketing director at Eclipse, comments:

“This integration with ReviewSolicitors will enable Proclaim users to harness the latest review technology platform, capturing vital satisfaction data in a way that is a seamless part of their client and matter management process.”

Saleem Arif of ReviewSolicitors adds:

“In the past, review sites in the legal profession have attracted two types of review: either from those who are extremely satisfied with their service, or those that have had a bad experience. This integration will help to provide a fuller and more representative sample of overall client satisfaction, not just the extremes. This adds a new level of integrity, helping clients to make an informed decision.”

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Prince Harry with DAS employee and WellChild award winner, Chris Morter

Underwriter Chris Morter from leading legal expenses insurer, DAS, was last week awarded the Helping Hands Volunteer Award at the WellChild Awards 2013, where he also got the chance to rub shoulders with Royalty.

The celebrity-studded awards were held on 11th September, hosted by Vernon Kay and Tess Daly at the Dorchester Hotel in London, where award winners were invited to a private reception with the charity’s patron, Prince Harry.

Chris was nominated for the award by Lee Trunks, who is the project manager for WellChild’s Helping Hands project, which organises home and garden makeovers for sick children.

Chris was team leader for the project in Bristol creating a new garden for Clive, a teenager with severe epilepsy. Chris had to organise a team of 15 from six different Bristol and Bath companies, coming together over two days. The project was extremely successful. He was also instrumental in securing funding towards the project and negotiated a significant reduction in the cost of materials. Chris has supported WellChild with other fundraising initiatives and has already led another successful Helping Hands project, with more planned for the future.

The WellChild Awards celebrate the inspiring qualities of some of the country’s seriously ill young people and the dedication of the people who go that extra mile to really make a difference to their lives.   They were attended by celebrities including, Rod Stewart and Penny Lancaster-Stewart, Pixie Lott, Karen Brady, Duncan Bannatyne, Tim Vine, Konnie Huq and Chris Hollins.

Entries for the 2013 Awards were judged by an expert panel including children’s health researchers, former winners and health professionals.

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James Heath

Heath: A “simple, but quite nebulous, concept”

The new rule on fundamental dishonesty in personal injury actions, which comes into force today under section 57 of the Criminal Justice and Courts Act 2015, brings with it “a lot of potential for satellite litigation”, a leading defence lawyer has warned.

James Heath, director of counter-fraud strategy at Keoghs, described fundamental dishonesty as a “simple, but quite nebulous concept”.

The concept was first introduced two years ago in CPR 44.16, meaning that claimants found to be ‘fundamentally dishonest’ lose the protection of qualified one-way costs shifting (QOCS).

Under the new rule, which comes into force today, where a court finds that a claimant has been fundamentally dishonest in relation to “the primary claim or a related claim”, the court “must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice”.

Mr Heath said section 57 was “quite a different remedy” from CPR 44.16. “Clients will need to understand the difference between the two regimes that rely on the same concept. The challenge for the defendant is to pick the right one and fight it accordingly. The costs consequences are very different for both.”

Under section 57, courts dismissing a claim on the grounds of fundamental dishonesty must record in their order the amount of damages they would have awarded to the claimant “in respect of the primary claim”. This amount must be deducted from the costs the claimant is ordered to pay.

Mr Heath said the result was that if the defendant’s costs were less than the notional damages, the defendant recovered nothing. “The only rationale I can think of for this to prevent the claimant from having an otherwise legitimate damages claim denied and being penalised on costs.”

He said it was unclear whether defendant insurers would have to “pin their colours to the mast”, and say whether they were going for section 57 or CPR 44.16, or just mention fundamental dishonesty.

Meanwhile, he said there was still no leading authority from the High Court or above on CPR 44.16. “They’ve all been local, county court decisions so far,” Mr Heath said. “We’ve had around a dozen.

‘It’s too early to tell what the impact of the original rule will be, as the bank of cases and the publicity is only starting to build. It has not had a deterrent effect yet.”

Mr Heath added that the firm had not seen any spike in claims yet, as lawyers rushed to beat the implementation date for section 57. “The section applies to claims issued on or after 13 April, so claimants may have issued but not yet served proceedings.”

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Denyer: Jackson/Mitchell principles still in place

A change to the standard directions that would allow parties to agree a 28-day extension to time limits without the need for court approval would not signal the major policy change that some claimant lawyers think it will, a leading defendant lawyer has argued.

It emerged earlier this month that the move has already been made to the clinical negligence model direction used by the Queen’s Bench Masters, as well as to the specialist asbestos list (although the extension there is for 21 days).

The Civil Procedure Rule Committee is currently considering whether it should be a general change to model or standard directions.

Simon Denyer, strategic legal development partner within the insurance practice group at national firm DWF, said that while this decision is awaited, “these buffer orders are starting to be used by judges up and down the land” and could become the norm.

The reason for the change, he said, is the “simple fact” that judges think that they will be able to get on with their workloads better if they are not side-tracked by regular applications from litigants concerned by the Mitchell judgment who want to put back the time for witness statement exchange or expert evidence exchange, and recognise that they now need court approval to do this.

Mr Denyer continued: “What this news is not however is ‘a major policy change and a major blow to the Jackson/Mitchell courts’ as has been claimed in some claimant quarters. Those ‘Jackson/Mitchell principles’, which in turn lead to the need for careful procedural planning in all cases, remain in place.

“The challenges and opportunities which Mitchell gives rise to remain intact, and it will be a failure of planning to think that this news leads us to any other position. If claimant commentators think that there will be any indirect softening of the Jackson approach as a result of this news, then we will have to await any evidence of that.”

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Sault: Things looking much brighter for motor insurers

UK motor insurers should see “a strong uplift in profits” next year as a result of the discount rate review and whiplash reforms, Big Four accountancy firm EY has predicted.

It forecast that insurance premiums would also fall by up to £21 if the discount rate rises from -0.75% to 0-1%, as suggested by the Ministry of Justice.

EY’s analysis was that motor insurers would be close to breaking even this year at 100.8% net combined ratio (NCR) – meaning that they would have paid out marginally more than they received in premiums.

But it said the NCR for 2018 was expected to be “solidly in the black” at 98.5%.

The most recent figures from the Association of British Insurers say that, at £479, motor insurance premiums in the third quarter were 10% higher on average than a year earlier, taking them to their highest ever level.

However, EY predicted that the revision to the discount rate was likely to lead to a fall of between 2% and 4% on average premiums, saving up to £21 annually for the average motorist.

The whiplash reforms should provide further relief to motorists, with an additional 8-10% reduction in premiums starting later in 2018, totalling £45 per year saving once the reforms are fully implemented.

Tony Sault, UK general insurance leader at EY, said: “The revised [discount rate] proposals in September have provided something of a reversal in the motor insurance industry’s fortunes.

“While the changes announced earlier in the year meant the insurance industry was facing an additional cost of £3.5bn, the revised proposals could see up to £2.5bn shaved off this figure.

“The reversal is also expected to have a positive effect on premium rates for consumers and we would expect the premiums to start to fall next year in anticipation of the new legislation coming into force.”

He continued: “The proposed whiplash reforms are also expected to benefit claims costs and premiums later next year, although there is a risk that the weight of Brexit legislation will not leave Parliament enough time to pass the promised Civil Liability Bill.

“The industry though, is certainly facing a much better end to the year than it had feared back in February and its prospects are looking a great deal brighter.”

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Posted by Neil Rose, Editor, Legal Futures

Interlocking reforms: lawyers bidding to make changes through implementation

There was a time when it looked like the Jackson report was heading for the long grass. Instead, it has now been embraced almost in its totality by the Coalition government, with the referral fee ban being the piece of the famously “interlocking” reforms that few had expected to see until very recently.

Having survived the House of Commons unscathed, the reforms have still to make it through the House of Lords, where the whole Legal Aid, Sentencing and Punishment of Offenders Bill can expect a far rougher ride than it got from MPs.

It seems clear that their Lordships’ focus will be much more on legal aid than the Jackson reforms; one senior Labour figure recently explained to me that Jackson looks like an argument between lawyers – just one glance at the phrase ‘qualified one-way costs-shifting’ (QOCS) will do that – whereas it is much easier for non-lawyer peers to get their heads around issues such as legal aid for babies with cerebral palsey. The woes of claims management companies are not going to play strongly in such a context.

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There are various efforts by special interest groups – such as over defamation and international human rights cases – to win carve-outs from some of the reforms, although the government seems pretty fixed on not making any exceptions, knowing that once it opens the door, many will try to rush through.

So perhaps for the anti-Jackson campaigners, the best hope now comes from how some of the key reforms are implemented and whether subtle but significant changes can be brought about that way. That was certainly the hope of many of those who attended last week’s Civil Justice Council (CJC) expert workshop of the technical aspects of Jackson implementation.

For those close to the costs world in the last decade, this is what government cuts have done to the fabled CJC ‘big tent’. Rather than an overnight event in a country hotel as in the old days, when a good deal of useful business was done in the bar after dinner, the workshop was held in a government conference centre in London from 9.30am to 3pm on a Monday. Nonetheless, it was good to see the CJC back in the middle of costs disputes.

It is important to note that this event was not another opportunity to rehash opposition to the reforms; it was to focus mainly on how QOCS, part 36 sanctions and the new proportionality test should be implemented, and examine the options put forward in a 100-page report by the CJC’s working group.

One thing that struck me at the workshop was that the contribution of Lord Justice Jackson himself has become peripheral. He has given us his report but it is not lore. He keeps lecturing and producing papers, but we all know what he is going to say – to paraphrase, “Stick with my recommendations”. The debate, however, has moved on, and frankly he should be pleased that so much of his report is being implemented.

Now practitioners are explaining convincingly why, in some respects, that would be a dangerous path to go down when formulating the details. The rebellion at the workshop was most marked over the introduction of some kind of means test as part of QOCS (pronounced ‘kwocks’, for those who were wondering).

Sir Rupert was not at the workshop and is not a member of the CJC – although he is a member of the Civil Procedure Rule Committee – and so it was a conversation on implementation between the government officials making the final decisions and the “industry”, a somewhat useless word (which I have nonetheless used on many occasions) given the deep divisions among the different sides of it.

The question to which we will not know the answer for some time is whether this was truly a listening exercise; some claimant representatives I spoke to were worried that the workshop was a largely cosmetic affair that would allow the government to say it had consulted the market before making decisions. But let us not pre-judge them, especially as there were few clear messages coming out of the workshop. It will be interesting to see if the CJC working party manages to find enough unanimity to recommend a specific course of action on the three areas under discussion.

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I cannot imagine that there are many litigators out there who still hold out hope that the reforms can be seriously derailed (bringing clinical negligence back within scope of legal aid is the main concession that is expected), so this is a difficult time for them, especially those in personal injury (PI).

PI solicitors can expect a cushion from the substantial run-off period of cases commenced before the Jackson reforms kick in – likely to be 1 October 2012 – but they need to be thinking now about how to change their business model for the post-recoverability world. I have to say that for all the doom and gloom among solicitors, and even more so (and more justifiably so, perhaps) among after-the-event insurers, I remain confident that the “industry” will adapt. It always does, even though there will no doubt be casualties along the way.

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One few bits of good fortune, arguably, is the introduction of alternative business structures just ahead of the reforms. The chance they provide to re-engineer PI practice has come at just the right time.


Though the plan is for the Jackson reforms to come in on 1 October 2012, it was recognised at the workshop that the timetable is very tight. Tweeting in response to this blog, former APIL president David Marshall, a senior member of the CJC working group, suggested that April 2013 is more realistic.

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Supreme Court: competence decision

The Supreme Court has been asked to decide whether the Welsh Assembly can introduce legislation that allows the NHS to recover the cost of treating asbestos victims from negligent employers or their insurers.

It is estimated that the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill, a private member’s bill introduced by former Thompsons partner and now Assembly member Mick Antoniw, will raise around £1m a year.

However, the competence of the Welsh Assembly to pass the bill – which it did in November – has been repeatedly questioned by insurers, and this week Theodore Huckle QC, the Counsel General for Wales, announced his reasons for referring it to the Supreme Court to decide.

“Before the Supreme Court I will contend strongly that the bill is within the Assembly’s legislative competence,” he said.

“However, making a reference before it receives Royal Assent enables the matter of the bill’s competence to be determined without awaiting what I consider would be the inevitable challenge in potentially far more expensive court proceedings in due course, perhaps when substantial amounts of money had been recouped under the bill’s provisions and would quite likely be subject to repayment were the decision of the courts to be adverse.

“The litigation costs of a reference being made during the intimation period are likely to be less than the costs of any challenge brought once the bill is enacted under the usual judicial review procedure, as Supreme Court rules provide that orders for costs will not normally be made either in favour of or against interveners [such as the Association of British Insurers].

“It is in my view in the public interest for me to take the initiative in seeking the Supreme Court’s decision on the bill as it stands.”

The Welsh initiative has raised questions as to why the Westminster Parliament does not introduce a similar measure for England.

See blog: Justice for asbestos victims moves forward


A golden opportunity for the ATE market to innovate

Enrique Gomez Head of ATE DAS UK Group

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