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Meet Jonathan Bassey

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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See how Eclipse’s Proclaim Case and Practice Management Software system removes uncertainty and provides a future-proof and scalable platform for new firms.

Featured in this video:

  • Phil Hodgkinson, Pure Legal Costs
  • David Edwards, Edwards Hoyle
  • Sally Clark and Laura Clapton, Consilia Legal
  • Idris Mir, Mir Solicitors
  • Chris Byron, Aspire Law
  • Ross Carr, Bakers Solicitors

Proclaim is the only Case and Practice Management Software solution endorsed by the Law Society.


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Head: aim must always be to deal with meritorious claims within the portal

Insurers should still run contributory negligence arguments rather than seek to settle under the new extended protocols for employers’ and public liability (EL/PL) claims – which come into force tomorrow – a leading defendant insurance law firm has advised.

Kennedys also highlighted continuing “ambiguities” in the rules that “compound the challenges” faced by defendants.

Partner Tracy Head there had been considerable discussion over whether, on a commercial basis, it is cost effective to argue contributory negligence up to a certain level and have a claim exit the protocol.

Acknowledging the need for insurers to identify the “tipping point” between contributory negligence arguments the and cost savings available within the portal, she said: “We anticipate that most organisations will take the view that claims with real contributory negligence should be still be run. To not do so risks sending the wrong message to their workforce and/or members of the public about taking responsibility for one's own health and safety.”

Ms Head also speculated that there could be an increase in claimants making pre-action disclosure applications. “Such a step will allow a claimant to take a view on whether to proceed through the protocol as they can then assess if it has merit without committing resources to completion of a CNF [claim notification form] and any associated steps.”

She said it was “unfortunate” that the ambiguities around some of the sanctions have not been ironed out before extension. In particular she said it was unclear what the sanction would be for:

  • Failure by the claimant to re-submit the CNF within 30 days of first issue to insurer (in EL and PL claims);
  • Failure to provide next-day acknowledgment of the CNF or a defendant CNF. What does the word “must” acknowledge mean without clear guidance on whether a sanction applies?;
  • Failure to provide details of loss of earnings after 20 days of making an admission of liability (in an EL claim); and
  • Failure to pay settlement monies within 10 days of agreed settlement, including stage 2 fixed costs.

“Whether clarity will be offered by the Ministry of Justice via the Civil Procedure Rule Committee in due course waits to be seen,” she said. “In the meantime, such grey areas represent potential risk points for insurers, insureds and those with self-insured retentions.”

More generally, Ms Head said: “Whilst the protocols take effect and organisations learn to understand the impact of the response times, we might see certain procedural ‘behaviours’ develop.

“For example, there may be an increase in the number of repudiations as organisations get to grips with the timelines for making decisions on liability, although we suspect this will level off in due course. The aim must always be to deal with meritorious claims within the portal and compensate genuinely injured individuals as quickly as possible and at a reasonable value…

“As with other aspects of the civil justice reforms, we anticipate that the next 12-18 months are likely to bring a number of challenges which organisations will need to be alive to. Ongoing review of their claims-handling procedures will be vital, to ensure efficiencies are identified and maximised in order to take full advantage of the costs savings that are available.”

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Royal Courts of Justice

Defendant could not conceal the way things had changed

Judges who give permission for the withdrawal of part 36 offers must disclose the arguments and evidence behind their decisions, the High Court has ruled.

Mr Justice Leggatt said that, in a “remarkable” personal injury case, a judge granted an order permitting the defendant NHS trust to withdraw a part 36 offer without the claimant being served with any evidence or any record of what was said at the hearing.

“Even now, the claimant and her representatives do not know the basis on which the ex parte order was made,” Leggatt J said.

“The only information provided to them has been a redacted version of the defendant’s skeleton argument for the hearing on 7 August 2014. This contains a submission that there was a change of circumstances which justified permitting the defendant to withdraw its offer.

“However, in the copy disclosed to the claimant, the parts of the skeleton argument which presumably explained the nature of this alleged change of circumstances have been blanked out.”

The court heard in Evans v Royal Wolverhampton Hospitals NHS Foundation Trust [2014] EWHC 3185 (QB) that the claimant responded by issuing an application to have the ex parte order set aside and for evidence in support to be served on the claimant.

Jayne Evans fell in the street while intoxicated and was discharged from hospital later in the day. The following day she was readmitted, but despite treatment, suffered a brain injury.

On July 3 this year, the defendant made an offer of £325,000 under part 36. Before the 21-day period for acceptance had expired, it served a notice of withdrawal. On the same day, the claimants served a notice accepting the offer.

Unknown to the claimant, on July 24 the defendant issued an application for permission to withdraw the offer, which was granted by Judge McKenna, sitting at the Birmingham District Registry of the High Court, at a hearing the following month.

The claimant complained that the procedure followed was contrary to natural justice and unlawful.

Setting aside Judge McKenna’s ex parte order, Leggatt J said: “It cannot be open to a party who did not have good reason to withdraw its offer at the time when it gave notice of withdrawal during the 21-day period and who would have been refused permission by the court on that date to justify the withdrawal by reference to matters discovered subsequently.

“This being so, I find it difficult to envisage what legitimate reason there possibly be for seeking to conceal from the offeree the way in which circumstances are said to have changed after the offer was made and before the notice of withdrawal was given.”

Mr Justice Leggatt ruled that unless the defendant served the evidence and disclosed the arguments on which it wished to rely, the claimant was entitled to judgment under part 36.


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Djanogly: current system not fair on the taxpayer

The introduction of employment tribunal fees aims to encourage businesses and workers to mediate or settle dispute rather than go to a full hearing, the government claimed today.

Following a consultation, the Ministry of Justice (MoJ) said some of the proposed fees will be slightly lower than initially proposed “in order to strike a fair balance between the needs of business and tribunal users”.

Justice minister Jonathan Djanogly said: “It’s not fair on the taxpayer to foot the entire £84m bill for people to escalate workplace disputes to a tribunal. We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives.

“It is in everyone’s interest to avoid drawn-out disputes which emotionally damage workers and financially damage businesses. That’s why we are encouraging quicker, simpler and cheaper alternatives like mediation.”

From summer 2013, mediation by a judge will cost £600 rather than the £750 proposed in the consultation, compared to the £1,200 it would cost to take a ‘level 2’ claim – the more complex employment matters – to a full hearing. The lower fee to take the administratively simpler ‘level 1’ claims to a full hearing will be £390 – which drops to £160 if settled before the hearing fee is payable.

Many people on low incomes may not be required to pay the full fees under the same remission system which already exists for civil court fees. The MoJ said it will review the remission system and publish a consultation later this year as part of a wider review required by the introduction of universal credit in late 2013.

Fees to use the employment tribunal will be payable in advance, and most types of fee will only apply to the person bringing the claim. However, the tribunal will have the power to order the unsuccessful party to reimburse the fee to the successful party.

The introduction of fees is part of the government’s employment law review, which has a heavy emphasis on settlement, including routing all claims to ACAS to offer early conciliation before going to a tribunal, and encouraging more use of mediation through a best practice project in the retail sector and also regional mediation pilots currently being developed in Manchester and Cambridge.

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Knight: agreement of budgets in advance now even more unlikely

The fall-out is continuing from the recent High Court decision that budgets bind the parties at detailed assessment unless there is good reason not to, although it seems clear that parties are waiting for a definitive ruling from the Court of Appeal.

In her ruling in Merrix last month, Mrs Justice Carr concluded: “I am told that many stays of detailed assessments are already in place, pending the outcome of this appeal. The parties may accept my judgment as binding for their purposes.

“Alternatively, it may be that further stays need to be imposed, to prevenient unnecessary court and judicial time and expense being devoted to a debate which the Court of Appeal is very shortly going to consider.”

There is already a case on the issue going to the Court of Appeal in May – Harrison v The University Hospitals of Coventry and Warwickshire NHS Foundation Trust, on appeal from Master Whalan – and it is possible that this will be conjoined with an appeal in Merrix.

Gary Knight, a partner at costs firm Harmans, told Litigation Futures that the defendant in a case he is handling sought an adjournment of a three-day detailed assessment listed for early next month, arguing that “with all due respect, Mrs Justice Carr’s decision in Merrix is incorrect”

He said: “The dilemma is the claimant applied for detailed assessment hearing back in October 2016 and whilst six months from application to hearing is a fair turnaround time by today’s standards, any adjournment is likely to add a further delay of six months for the assessment hearing (and subsequent payment) of costs… It is clear that Merrix was not the final word on this issue.”

He said live issues included the need for further case law to define “good reason” to depart.

“One thing that can almost certainly be guaranteed is that the agreement of claimant budgets in advance of any case management hearing just became even more unlikely and given this latest guidance, can the courts continue to adopt the approach that hourly rates are not to be debated at the case management hearings?

“Should parties now insist on a mini-detailed assessment at case management hearings whereat the location of solicitors, grade of fee earner and rates applied are debated, as rates are clearly a key element in the decision to allow profit costs for each phase.”

Lee Coulthard, Leeds-based assistant regional manager at costs firm John M Hayes, said that while “a clearer, more common sense judgment would be hard to envisage”, the issue would have to be settled by the Court of Appeal. “However, it would be no great surprise if the decision on appeal in Merrix were upheld.”

He said the ruling did not mean the end of detailed assessment, as – in addition to cases where there was a good reason to depart from the budget – other issues would still need determining, such as incurred costs, costs of unforeseen interim applications, costs excluded from the budget, all costs awarded on the indemnity basis.

Mr Coulthard also challenged the “perceived wisdom” that front-loading cases would be beneficial because it would take those costs outside of the scope of costs budgeting.

He said: “Given that costs judges are no longer bound to allow reasonable or necessary costs on assessment, and can reduce costs on the grounds of proportionality, any costs not included within the scope of costs budgeting are surely at much greater risk on assessment.

“Even if a particularly harsh budget is set in the costs management phase, at least the parties have the benefit of foresight in respect of the limit on recoverable costs.”

Writing on the blog of specialist costs law firm MRN Solicitors, solicitor Adam Fenton said the definition of a ‘good reason’ to depart would be “key in determining whether Mrs Justice Carr’s interpretation of the cost management rules has any real chance of achieving the desired savings with regard to assessment”.

He said: If ‘good reason’ emerges as a high barrier to overcome, detailed assessments could well be streamlined considerably; with non-exceeded phases likely to be agreed before the assessment. On the other hand, if ‘good reason’ is a low barrier, then the new interpretation may become little more than a synonym for detailed assessment, with no significant reduction in the arguments being heard.”

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Widely perceived as being a defendant-friendly piece of legislation, the Defamation Act 2013 nevertheless does not go as far as some libel reformers had hoped. The tension between competing interests during the passing of the Act, in particular the impact of the Leveson Report and its recommendations, have resulted in amendments to the existing regime which are the essence of compromise. This presents the prospects of a number of hard questions for the Courts to explore once cases start to be decided under the new Act.

In MBL’s full day course, the implications of the Act will be considered in detail, together with an in-depth update on cases under the existing regime, which will continue to be applicable for a little while yet, even once the new Act is in force.

Attempting to anticipate and explore some of these issues in a mixed format of talks and workshop-based seminars, Will Richmond-Coggan will guide attendees through the highs and lows of the new legislation in the context of the existing legal landscape.

We currently have a number of dates and locations for this seminar – for more details and costs please give us a call on 0161 793 0984. Alternatively please email quoting Litigation Futures.


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Earnings: Firstassist up 35% year on year

Burford Capital now has full ownership of Firstassist, with no future earn-out payments, after the success of the acquisition led it to make all outstanding payments early.

A trading update for 2012 issued yesterday described last year’s acquisition as “an unqualified financial success in addition to the substantial strategic benefits it has brought to Burford”.

Firstassist, which is best known for its after-the-event insurance but as a result of the acquisition is now also offering third-party funding, generated more than $14m (£9m) in EBITDA (earnings before interest, tax, depreciation and amortisation) during its last financial year, a 35% increase in the previous 12 months.

The statement said: “In addition to growing its leading litigation expenses insurance business, Firstassist launched a UK litigation funding business in 2012 and embarked on a series of initiatives to prepare itself and its clients for the implementation of the Jackson reforms in April 2013.

“The strength of Firstassist’s performance to date and the size of its pool of pending cases made it likely that the earn-out provided for at the time of Burford’s acquisition of Firstassist would be payable. Thus, Burford negotiated an early payment of the earn-out in exchange for a substantial discount – more than $2m – and therefore now owns Firstassist outright with no contingent future payments and no minority shareholders.

Burford, the world’s largest funder, is soon to receive a dividend from the cash generated by Firstassist’s operations to date in an amount in excess of $11m.

More generally 2012 saw Burford generate $18m net of invested capital from 12 investments (the gross recovery was $47m), maintaining its average of recovering a 61% net return. It also made a further $9m in net income from its portfolio financing and cash management activities.

It said: “The acceleration in portfolio activity in 2012 is noteworthy: 2012 alone produced as much in investment recoveries as the two preceding years combined.”

In addition, Burford has seven investments where trial or some initial adjudication has been completed but further proceedings remain, such as an appeal. Pending these, the cases will generate $53m in gross investment recoveries and $19m net of invested capital – a 55% net return on invested capital.

Further, the AIM-listed company sunk $72m into nine new investments during the year, meaning it has 30 live cases with investment of $289m. Since inception, Burford has committed $373m of capital to 46 investments.

The statement said: “Neither Burford nor litigation finance is nascent any longer: Burford has evolved into a full-fledged, internally managed finance and investment business with multiple lines of business, multi-jurisdictional operations and compelling returns.”

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Dalton: inconceivable that every whiplash claim is genuine


There is growing recognition “that the claimant’s interest and the interests of the claimant’s lawyer are not the same thing”, the Association of British Insurers (ABI) has said.

Writing on the ABI website in the wake of giving evidence to the transport select committee investigation into whiplash reform, head of motor and liability James Dalton said that “naturally there has been a howl of protest from the personal injury lawyers who can see that the gravy train of excessive fees may soon hit the buffers”.

He dismissed the argument that raising the small claims limit for personal injury to £5,000 would undermine access to justice and that lawyers are needed to represent the interests of the claimant.

He said: “Yes, work will be need to be done to make sure claimants understand their rights in a new system and how they can file a claim. And yes, consumers will need to be able to put a value on the injury they have suffered, which is why we have argued in favour of a transparent, independently controlled and regulated, software-based system to assess general damages awards. But, given time and willing, that shouldn’t be too difficult to deliver.”

“People are starting to recognise that the claimant’s interest and the interests of the claimant’s lawyer are not the same thing. And more fundamentally, there are questions being asked about the role of personal injury lawyers and when legal advice is most useful to a claimant, in an environment where the policy settings and legal framework strike the right balance, there are no disputes about liability and claimants understand their rights.”

Mr Dalton said it was “easy” to make the case for reform of the compensation system – it is “simply inconceivable” that the 500,000-plus whiplash claims made every year are genuine.

“Insurers cannot prove someone does not have whiplash any more than a claimant can prove that they do. So whiplash has become the UK’s fraud of choice for the opportunistic few ready to exploit our compensation culture.”

He said the select committee understood that “high compensation awards added to the high cost of getting that compensation to claimants equals high car insurance premiums. Insurers don’t create the society in which we live. They price the risks that society presents.

“So it is time we had an open and honest public debate about whether a minor, low-speed shunt in a supermarket car park resulting in a sore neck for a couple of days justifies thousands of pounds in compensation. But it needs to be a grown-up debate: with analysis rather than anecdotes and evidence rather than emotion. Whatever the outcome, insurers will provide the agreed level of compensation to claimants and build that into car insurance premiums.”

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The April 2014 reforms drastically extended the scope of budgeting. This seminar will look at common problems and will suggest practical solutions as well as best tactical advice.

With budgeting being so fundamental to the new litigation landscape this is one not to miss – whether you are a litigator, costs lawyer or draftsman.

Who should prepare the budget? Is the hourly rate relevant? How can you recover more in costs than the budgeted amount? These questions and much more will be discussed by expert speaker Dominic in this half day seminar.

For more details on seminar dates and costs, or to book your place, please email quoting LF14.

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Abdu Hafeez Darr, director at Blakewater Solicitors

Established in January 2007, Blackburn-based Blakewater Solicitors has rapidly evolved over the years from a leading specialist conveyancing practice into a broader firm, now offering sharia finance, immigration, personal injury and probate services.

Blakewater Solicitors has been recognised nationally for its efficient and professional service and has become one of the leading market providers for property transactions in the North of England. The flexible, expert and tailored service has allowed the firm to thrive in today’s global marketplace, boasting an expansive client base in 55 cities across 33 countries.

Having won several national and international accolades, and a Lexel and CQS Law Society accredited practice with Investor in People Gold; the firm has most recently been shortlisted for the Modern Law Conveyancing Awards 2016.

Blakewater Solicitors has taken the bold move to open a second office in Bradford, West Yorkshire, despite the current legal landscape and stiff competition. The firm is confident that the quality of its legal work and client care will set it apart.

Abdul Hafeez Darr, director at Blakewater Solicitors, speaks to Eclipse about his choice in legal software and why he’s been an Eclipse client for nearly a decade.

What was your initial reason behind implementing a practice management system?

Before I founded Blakewater Solicitors, I worked for one of the ‘Magic Circle’ law firms in London so therefore knew of the benefits to legal software, including the huge savings it could bring if used correctly.

When I established Blakewater Solicitors with my business partner, I knew a full practice management system was a necessary requirement, and we were actually one of the first firms in the North West to implement a legal software solution, and broke the mould with regards to investing in IT so heavily for a new start-up.

Why did you choose Eclipse over other providers?

Our initial selection process was extremely extensive. We looked at 5 different legal software providers and saw a range of in-depth demonstrations, as well as a number of meetings with each provider, and agreed Proclaim was the best solution on the market. Unfortunately, my business partner selected another provider – based purely on costs – and quickly realised, after 2 weeks, the system was not fit for purpose – especially in comparison to Proclaim.

Essentially, I see Eclipse and its Proclaim solution as the ‘Apple’ of the legal software sector. It provides a huge return on investment, and a quality, centralised case management system, providing us with the confidence to know it’s entirely futureproof. Additionally, third parties have Eclipse at the top of their lists for integrations, so I can feel safe in the knowledge that our legal software is always going to be top of the range.

 Blakewater Solicitors has expanded substantially since 2007 – how has Proclaim helped with this?

To put it simply, it provides us with massive efficiency gains.

For a firm of our size, we’re taking on double the work that we could without Proclaim, and even better, we’re achieving this seamlessly without the need for a full team of support staff.

Proclaim’s workflow is so easy to tweak as and when we need to, and the process of uploading letters and editing linked actions means our junior staff can open cases, input details, send out documentation and file all correspondence. Ultimately this is saving us huge amounts in both time and money. Taking this further, we don’t have the worry of needing everyone in the office at all times – our solicitors are able to work remotely, or from home, as everything is accessible and centralised.

As an Eclipse client for nearly 10 years, what are some of the benefits you’ve seen?

Firstly, the support that’s on offer. It’s excellent and there’s no other way to describe it! Anytime I’ve needed to call, no matter who I speak to, they’re always extremely friendly and approachable. I find a lot of support teams in other businesses can make you feel stupid, or like you’re wasting their time when asking questions. With Eclipse, even if it’s a simple problem, they’re willing to log on remotely and show me, rather than just explain. The whole team are always happy to help and have a fantastic attitude.

Secondly, the integrations that are available. We’re currently using the MoJ portal and LRBG integrations and have found these in particular have reduced our time in half, not to mention streamline our processes across the personal injury and conveyancing departments.

How are you using FileView to enhance your service?

FileView is a fantastic selling point for us. Not only is it a great tool for estate agents and referrers, it’s also extremely useful for our clients, enabling them to securely log in as and when they want to for case updates.

As an example, we have clients in 55 cities across 33 countries worldwide so time zones often don’t allow for us to speak with them at a convenient time. A high number of our overseas clients, particularly in Hong Kong and Singapore, are conveyancing clients looking to buy and sell property in London – they’re often very tech-savvy and extremely demanding. One of the first questions we get asked is how we can ensure they’re kept updated on their case when they are the other side of the world. FileView provides the perfect solution, and has enabled us to reach clients that we otherwise would’ve had to turn away.

How well does proclaim suit your on-going needs as a business?

As a Proclaim user and Eclipse client of nearly a decade, I can say it suits Blakewater Solicitors perfectly!

We’re always looking at new methods to improve our systems and procedures, which of course proclaim plays a huge part in. Thankfully, its usability means we can easily tweak the system whenever we need to for business and/or client requirements. As part of this, we’re currently looking to implement Eclipse’s SecureDocs tool for our personal injury department as it would significantly improve our turnaround times and complement our existing system very well.

Furthermore, Eclipse is the market-leading provider so we’re quietly confident that any of our future technology will always be supported – whether that’s a new third party integration, or entirely new case type.

To put it simply, proclaim has been – and will continue to be – fundamental to our success.

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files and computer

HMRC returned the computers and most of the documents

HM Revenue and Customs (HMRC) did not act unlawfully when it searched and removed files from a claims management company it was investigating, the High Court has ruled.

Accident Claim Helpline Limited (ACHL), based in south-west London, argued that the searches and seizures went beyond the purposes for which the warrants were issued, and included “large quantities” of material protected by legal professional privilege.

Lord Justice Fulford said ACHL had been the subject of “investigations spanning some years”, leading HMRC to suspect “large-scale fraud” relating to VAT, PAYE and National Insurance contributions.

He said that Bristol Crown Court issued search warrants in 2011, allowing HMRC to search nine addresses and seize “many thousands of files”, along with the computers on which the files were stored.

Delivering judgment in R (on the application of Mohammad Mumtaz Chaudhary) v Bristol Crown Court and HMRC [2014] EWHC 4096 (Admin), Lord Justice Fulford said ACHL “sought and secured” the return of a number of documents and laptop computers.

He said that ACHL suggested that HMRC was aware, when the files were seized, that “the contents included large quantities of privileged material”.

Mr Chaudhary, director and sole shareholder of ACHL, issued an application in 2013 for the return of all the seized material, at least the return of all the legally privileged material. Judge Bromilow ruled early this year that he had no jurisdiction to grant the application, and in any event would have refused it on its merits.

In its application for judicial review, ACHL argued that the judge erred when he concluded that he had no jurisdiction, the warrants breached the Police and Criminal Evidence Act 1984 (PACE) and the searches and seizures went beyond the purpose for which the warrants were issued, in breach of section 16(8) of PACE.

Lord Justice Fulford said the computers were returned and only 260 paper files were seized.

“These have been returned save for two documents from each file. The first document in each case related to the signed mandate provided to the company by the client of ACHL for the solicitor to pay ACHL a fee of £350 out of any compensation payment.

“This fee was in addition to the referral fee paid by the solicitor to ACHL, and it potentially constituted a second stream of income which HMRC believes has not been declared by ACHL. The second document is the ACHL claim form, which contains factual details of the client’s name, address and accident.”

Fulford LJ concluded: “On the facts of this case, I do not consider that the claimant has made out his case.”

He ruled that the trial judge was entitled to accept the evidence called by HMRC, and by implication he found there had not been any material breach of section 16(8) of PACE.

Lord Justice Fulford ruled: “On the evidence before the judge, there was no outstanding material that fell to be returned. Judicial review is a discretionary remedy and there is no sustainable basis for granting relief in these circumstances.”

Mr Justice Nicol agreed.


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Grayling: Planning Court is crucial step forwards

The first stage of the government’s reforms to judicial review – the creation of a Planning Court for England and Wales – has come into operation with the aim of speeding up the court process and reducing delays to hundreds of infrastructure projects.

More than 30 cases are already scheduled to be heard in the next three months, with an estimated 400 planning cases a year expected to be resolved by using the Planning Court rather than the main Administrative Court.

The court is based at the Royal Courts of Justice but will be able to sit at other regional venues across England and Wales when necessary. It will hear judicial reviews and other appeals on planning issues.

Justice secretary Chris Grayling said: “We are making sure that big building projects, which create thousands of jobs in our communities, don’t get held up by unnecessary delays in the legal process.

“The new Planning Court will make sure cases are heard quicker and by judges with specialist expertise of planning issues. It is crucial step forwards.”

Last year the time limit for applying for a judicial review of a planning decision was halved from three months to six weeks.

Most of the changes to JR are being introduced through the Criminal Justice and Courts Bill, which is currently before Parliament. They include significant changes to the costs rules, as well as widening the criteria to allow certain high-profile cases to leapfrog from the High Court to the Supreme Court.

Challenges over procedural defects will also be changed. At the moment the court can refuse to grant permission or award a final remedy on the basis that it is “inevitable” that the complained-of failure would not have made a difference to the original outcome; the threshold will be brought down to “highly unlikely”.

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Carr: judgment within 10 days

A contractual dispute between an oil trader and a biofuels manufacturer has shown the “possibilities for swift and litigation” under the High Court’s shorter trials scheme (STS), according to the barrister acting for the defendant.

Richard Sarll, based at 7 KBW, said the ruling by Mrs Justice Carr followed “one of only a handful of trials” heard under the scheme.

Under the STS, the case is managed by a docketed judge with a trial date fixed for not more than eight months after the case management conference and judgment within six weeks.

The ordinary disclosure order in STS cases is for the production of documents upon which the parties rely. The maximum length of a trial is four days and costs budgeting does not apply.

In her ruling in Vitol SA v Beta Renowable Group SA [2017] EWHC 1734 (Comm), Carr J noted that proceedings were issued in the normal way in September last year, but on 20 January, after an application for summary judgment was withdrawn by the claimant, Mr Justice Blair directed that the claim should proceed under the STS.

Carr J said a two-day hearing was held at the High Court at the end of last month, “with limited disclosure and witness evidence”, and her judgment was handed down within 10 days of the end of the hearing.

Having awarded the claimant, Vittol SA, damages of $352,000 (£273,000), Carr J said total costs of the action for the claimant were estimated to be around £125,000 and for the defendant £63,000 (both excluding VAT).

The High Court heard that Vitol claimed over $651,000, or alternatively almost $352,000, from Beta for loss of profit following non-delivery of a consignment of bio fuels.

Writing on the 7 KBW website, Mr Sarll said the decision “serves as an example of the possibilities for swift and efficient litigation” under the STS.

The High Court approved the first application to transfer a case started in the normal way into the STS in February 2016.

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Medical reports: MedCo steps up enforcement activity

MedCo has identified and suspended a further 21 ‘shell’ companies from the MedCo system, taking the total purged since the revised qualifying criteria were put in place last October to 155.

The Ministry of Justice regulations changed the definition of a medical reporting organisation (MROs) so that it precluded companies set up purely as a shell “to gather instructions and forward them on to a related organisation”.

Many of the high-volume national MROs (ie, tier 1) set up tier 2 shell companies to increase their chances of appearing in the random selection of MROs put to claimants and their solicitors.

They argued that this was to allow solicitors to choose MROs with which they have existing relationships, rather than being forced to work with companies they did not know.

The 21 shell companies will no longer appear in the MedCo search offer, although they will be permitted to complete existing instructions.

The first wave of 134 shell companies were removed shortly after the criteria came into force.

The revised search offer that was also introduced last October marginally increased the chances of a tier 1 MRO being selected. The results produce a choice of two tier 1 and 10 tier 2 MROs, replacing the previous choice of one tier 1 and six tier 2 companies.

MedCo has been active in its enforcement activity, announcing last week that it had suspended 23 MROs and 14 direct medical experts for failing to upload medical case data to its system.

It emerged last month that in the year to 31 March 2017, MedCo sent 337 warning letters, suspended 235 users – MROs, DMEs and ‘authorised users’, mainly claimant lawyers – over their conduct, although 84 of them were reinstated after modifying their behaviour.

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Spencer: no limit on the number of medical reports that can be obtained

By John Spencer of Litigation Futures sponsor Spencers Solicitors

From today the RTA protocol cover claims worth up to £25,000. It is imperative that every legal practitioner handling road traffic accidents fully understands these changes so that they can run cases in the most efficient manner.

Whereas the following overview will give you a guide on the implications of each adjustment to the RTA extended protocol, it goes without saying that lawyers should refer to the full text of the protocol when handling their client’s case.

Fees and payments

As a reminder, for claims worth £1,000-£10,000, the stage 1 fee is £200 and stage 2 is £300. For claims valued at £10,000-£25,000, the stage 1 payment is £200, and £600 for stage 2. Stage 3 payments remain unchanged

Prior to the protocol extension, the payment for stage 1 was required within 10 days of the compensator response. Now such payment needs to be made within 10 days of the settlement pack being sent at stage 2.

A new provision has been introduced for late settlement payment where £250 is now charged to the defendant when they settle after the court proceedings pack is sent out, but before stage 3 proceedings begin.

A specialist solicitor or counsel fee of £150 may be justified to place a value on the claim when its value is expected to be over £10,000.

There is a more significant change in regards to interim payments. Before the new protocols came into place, both parties were expected to remain in the process when medical reports were involved.

As we know, cases can drag out for a very long time and so claimants were entitled to call for an interim payment. Upon receiving the interim payment settlement pack, the defending party was required to pay within 10 days.

Now the claimant representative is entitled to request multiple interim payments, if the value of the claim exceeds £10,000.


The statement of truth must be signed by the claimant or their lawyer (if the claimant has authorised the lawyer to do so). This written evidence of the authorisation now needs to be produced which was not required in the original scheme.

There is no limit on the amount of witness statements that can be obtained but they all need to be reasonably required to value the claim. Again this wasn’t the case under the old protocol.

Medical expert reports

Similarly there is no limit on the number of medical reports that can be obtained. Legal representatives ought to keep in mind that there needs to be a robust justification obtaining each report.

If the report is obtained without justification, the court has the power to prevent recovery of the disbursement fee.

Following the protocol extension, the medical specialist must state in their report if any medical records have been assessed and highlight those with relevance to the case. Relevant records must be disclosed with the report. It is assumed that there will be no need for the medical expert to assess medical records in most cases valued at less than £10,000.

Aside from all of this, the stipulations of the non-extended protocol remain the same. Again, this breakdown is to be taken as a snapshot into the changes and any legal practitioner handling a claim should refer to the protocol and Civil Procedure Rules in full.

If you want to learn more about my opinion on these changes, you’re welcome to read my weekly blog on the personal injury sector.

John Spencer is director of Spencers Solicitors and a senior personal injury solicitor whose practice deals with all types of personal injury cases including road traffic accident claims. He is a former chairman of the Motor Accident Solicitors Society (MASS) and a member of the CPRC sub-committee which drafted both the original and the current protocol extensions.

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Cancelled flights

Thomson’s application “did not raise arguable point of law”

The Supreme Court has kept the door open to what claimants’ lawyers have predicted will be “millions” of delayed flight compensation claims by rejecting permission to appeal applications from airlines and Thomson.

Cheshire firm Bott & Co, which has pioneered a compensation service for passengers hit by delayed flights, said after the first of its two Court of Appeal victories this summer that it had put more than 2,000 similar cases on hold.

In the Thomson Airways case, appeal judges ruled that the normal limitation period of six years applies to passengers wanting to bring compensation claims for delayed flights. The airline argued that the Montreal Convention should apply, which has a limitation period of only two years.

Giving reasons for rejecting Thomson’s application for permission to appeal this morning, the Supreme Court said the application “does not raise an arguable point of law”.

In the case, the Court of Appeal ruled that Ronald Huzar had suffered “no little inconvenience” when his flight from Malaga to Manchester was delayed by 27 hours.

Mr Huzar sought compensation under regulation (EC) No.261/2004. However, low-cost airline argued that the delay was the result of “extraordinary circumstances”, an exception under the regulation to the rule that compensation was payable.

The Supreme Court decided that permission to appeal should be refused “because the application does not raise a point of law of general public importance and, in relation to the point of European Union law said to be raised by or in response to the application, it is not necessary to request the Court of Justice to give any ruling, because the Court’s existing jurisprudence already provides sufficient answer.”

The Supreme Court decisions were made by a panel of three justices following a review of written submissions.


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Insurance: complex picture behind fall in rates

Motor insurers “appear to be taking a gamble” on the claims cost savings that may arise from the personal injury reforms as premiums continue to fall, it was claimed yesterday.

According to the car insurance pricing index, in association with Towers Watson, average comprehensive premiums fell by 3.9%, the equivalent of £26 per policy, in the third quarter of 2013.

This means that the average cost of a comprehensive policy has fallen by 13.9%, or £105, in the last 12 months, to £652. It said premium levels have not been this low since March 2010. Over the same period, the average third party, fire and theft premium has fallen 6.5% to £1,057.

The index is compiled using anonymous data from all enquiries submitted on The prices used for analysis are based on an average of the best five quotes received.

Claimant lawyers have long expressed scepticism that premiums would fall post-LASPO, while the government said it would be monitoring the situation closely.

Comprehensive cover prices have now fallen in eight of the last nine quarters, and Towers Watson said that most of the recent decreases are attributable to implementation of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) and the cut in RTA portal fees.

However, Stephen Jones, UK general insurance pricing leader at Towers Watson, said the picture was more complex: “Already we’ve seen a number of senior figures within the industry suggesting that some may have placed too big a bet on LASPO and the other reforms.

“But there are other factors at play here. For younger drivers, an increasing number of telematics offerings are driving down average premiums, whilst for mass-market risks, data enrichment is providing a basis for more confident, targeted price reductions. On the basis of these trends, we’d expect to see the cheapest premium measures to keep on falling, but with increasing price dispersion.”

Further evidence of the ‘LASPO effect’ was said to be apparent within regional price movements. In Manchester and Merseyside, areas which had the highest concentration of claims management companies prior to LASPO, average comprehensive premiums fell by nearly 7% in the third quarter.

Gemma Stanbury, head of motor at, said the results were “great news for most motorists as their average premium is now more than £191 cheaper than it was two years ago… We would recommend that motorists take advantage of falling prices, rather than simply accepting their renewal price.”

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Mulheron: DBAs most novel aspect of civil justice reforms

Mulheron: DBAs most novel aspect of civil justice reforms

The Civil Justice Council (CJC) working party on damages-based agreements (DBAs) has fallen short of calling for hybrid agreements to be allowed, but told the government that if it wants to ban their use, “then it owes it to the legal marketplace to make that entirely plain”.

But in a report published today, it did recommend that recoverable costs should be excluded from DBA caps, making them potentially much more attractive for lawyers to use.

The working party, chaired by Professor Rachael Mulheron, was set up to advise the Ministry of Justice on both technical drafting issues to improve the 2013 DBA regulations and wider policy questions.

It made 45 recommendations in all, but most focus will be on the question of hybrid DBAs.

While ‘sequential’ hybrids are already allowed – meaning a solicitor could, for example, investigate a case under a normal retainer and then move onto a DBA – it is felt that the rules do not permit concurrent agreements.

This has meant virtually no take-up of this form of funding in civil litigation.

The report said: “The working group noted that this issue has assumed huge importance in the legal marketplace, in that without concurrent hybrid DBAs, lawyers may not see DBAs as being attractive enough to encourage them to take on claimant’s cases. This reluctance is heightened by the innate conservatism of the legal profession.

“In particular, the uncertainty as to whether or not concurrent hybrid DBAs are permissible has had an incredibly chilling effect on the take-up of DBAs. If the government wishes to ban their use, then it owes it to the legal marketplace to make that entirely plain, via its revised drafting of the 2015 DBA Regulations…. The present state of uncertainty cannot be allowed to continue.

“The working group also noted that concurrent hybrid DBAs may be better suited to some areas of legal practice than others, such as personal injury claims. Also, they may be quite suited to commercial cases which are litigated (at the considerable expense of both sides) over several years.”

The report acknowledged that there was insufficient evidence as to whether concurrent hybrid DBAs “would have a positive or a negative effect on access to justice/efficiency of litigation”.

But it was “certainly conceivable that there will be cases that are meritorious, but which are highly complex or costly to conduct, and which the claimant’s legal representative would be prepared to take on under a hybrid DBA, but not on a full ‘no win, no fee’ DBA (because of the level of risk), nor on a CFA (because the rewards are not sufficiently favourable).

“Accordingly, permitting hybrid DBAs may provide access to justice in these cases.”

But the group as a whole was divided on the question of allowing concurrent hybrid DBAs. “It concluded that it was a policy decision which was ultimately one for the government. However, the government should be encouraged to evaluate the arguments in favour of concurrent hybrid DBAs, even in the absence of any cadre of cases which have tested the arguments (given the nervousness of the legal marketplace on this issue).”

Currently, recoverable costs are included in calculating what is paid under a DBA – so that in a case where a claimant on a 25% DBA wins £100,000 in damages and £20,000 in recoverable costs, he will only have to pay £5,000 from the damages to his solicitor. But under the ‘success fee’ model advanced by the working group, he would have to pay £25,000.

At the very least, it said, the government should review its policy given the advantages to the success fee model, which the report listed as avoiding the consequences of the indemnity principle, enhancing access to justice in low-value cases, and being easier to explain to clients.

If this approach were to be adopted, however, the statutory caps may have to be reduced “to preclude an inordinately-large recovery by the legal representative”.

Among the technical recommendations were that the 25% DBA cap for defendants who successfully defend a personal injury action should be increased to 50%, and that lawyers and clients should be free to agree the ‘trigger point’ at which a DBA becomes payable, and the circumstances under which it can be terminated.

Further, the report said that counsel’s fees – when not working on a DBA themselves – should be treated as an expense outside of the cap, DBAs should be regulated when operating pre-commencement of litigation, and the indemnity principle should be abolished, at least insofar as it relates to DBAs.

“The application of the indemnity principle has the potential to wreak real injustice for claimants’ legal representative, in the context of DBAs,” it said.

The working party also saw no need to incorporate a requirement for independent legal advice before a party enters into a DBA – as Lord Justice Jackson had originally recommended – or that the fact of funding should be notified to the opposing party or the court.

The Master of the Rolls, Lord Dyson, said: “I welcome the government’s invitation to the CJC to address some of the issues relating to DBAs, and I now urge it consider further modifications to the regulations to help promote confidence in them as one of the funding arrangements available to those involved in a personal injury or commercial dispute… I hope that the changes recommended in this report will encourage the greater use of DBAs.”

Professor Mulheron said: “DBAs have been used very sparingly by the legal profession since the Jackson reforms took effect in 2013. This has been unfortunate, given that the use of DBAs in contentious litigation was, arguably, the most novel aspect of those 2013 reforms.”

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Sugarman: fixed-fee system for cases up to £25,000 could be workable

Sugarman: fixed-fee system for cases up to £25,000 could be workable

The Department of Health (DoH) is set to rein in its plans for fixed recoverable costs in clinical negligence cases and introduce them just for claims worth up to just £25,000, it emerged today.

The move, if confirmed, would represent a major rethink since the policy was first announced in August 2015, when the limit was going to be cases worth at least £100,000 and maybe as much as £250,000.

Minutes of the Civil Procedure Rule Committee’s July meeting, distributed today, recorded: “Amanda Stevens, chair of the [CPRC] sub-committee, reported that there had been a change in policy at the Department of Health and that they intended to consult in respect of claims up to £25,000, which comprised approximately 60% of clinical negligence claims.

“The material worked up by the subcommittee on a draft protocol and illustrative rules would be amended accordingly. The date of publication of the consultation was unknown.” This remains the case, although it is thought to be imminent.

The DoH had no comment ahead of publication of the consultation, which will include a question about what the threshold should be. Once the consultation is complete, it intends to implement the changes as soon as possible.

If £25,000 is the limit, the shift in government policy would represent a major lobbying victory for the Association of Personal Injury Lawyers (APIL), the Society of Clinical Injury Lawyers (SCIL), the Law Society and the charity Action against Medical Accidents, which have been working together to develop a scheme for fixed costs for claims up to that amount.

APIL president Neil Sugarman said “it would show that the government has listened to arguments that a quarter of a million pounds is not a low-value case, and that cases of such magnitude do not suit a fixed process”.

He continued: “A fixed-fee system for cases up to £25,000, however, could be workable. The fees would have to be fixed at a level which makes the work viable, and the process itself must also be fixed.

“Other conditions, such as admission of liability and requirement of just one medical report would need to be met for such a scheme to be effective. This would give the Department of Health the opportunity to reduce costs for the NHSLA, control defendant behaviour and secure representation for injured patients by specialist lawyers at a fair rate of pay.”

SCIL chairman Stephen Webber said: “We welcome the apparent change in the value of claims that will be covered by fixed recoverable costs but we need to see the scheme to ensure that it allows injured patients to obtain justice.

“It is essential any scheme excludes or has appropriate provision to deal with very serious cases that may have limited financial value, such as fatal cases involving the young and the elderly including representation at inquests.”

Nina Ali, clinical negligence partner at London firm Hodge Jones & Allen, said this would be “a welcome change of policy”.

She added: “However, unless there is a proper and effective consultation and ultimately acceptance that there are a number of case types that must be made exceptions of, this change of policy and playing with numbers is meaningless.

“In order to ensure that that some semblance of justice in the absence of legal aid for any case other than a birth injury prevails, exceptions must include, fatal cases, cases with human rights issues, cases that concern the vulnerable in society such as the elderly and people with learning disabilities.”

The news has come on the same day that the DoH announced plans to consult on a new rapid resolution and redress (RRR) scheme for maternity-related clinical negligence claims.

Forming part of a wider action plan to improve maternity safety, in cases of “avoidable” harm it would offer “timely access to financial support without the current obligation on families to launch a formal legal process”. At present, the average time families have to wait for resolution of a case is 11.5 years.

Families eligible for the RRR scheme would be given the option to join an alternative system of compensation that offers support and regular payments without the need to bring a claim through the courts, and the scheme would ensure families receive personalised support including counselling, case management and legal advice.

Health secretary Jeremy Hunt said: “Even though we have made much progress, our stillbirth rates are still amongst the highest in Western Europe and many on the frontline say there is still too much of a blame culture when things go wrong – often caused by fear of litigation or worry about damage to reputation and careers.

“These comprehensive measures will give practical support to help trusts improve their approach to safety – and help to foster an open and transparent culture so that the courts become a last resort not an automatic first step.”

Mr Sugarman said: “Compensation for these catastrophic injuries has a very clear purpose and, in these cases in particular, it is critical that the right amount of compensation is made available to injured children to ensure they receive the care they desperately need.

“We have yet to see the details of the consultation, but we will be reminding the Department of Health that children suffering cerebral palsy and brain damage at birth need round-the-clock medical care, specialist equipment and support for the rest of their lives.

“The fact that the number of claims for these injuries has barely changed in the past 10 years is a national scandal, and we welcome any attempt to improve this situation and the legal process which families have to navigate. But not at any price.”

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MoJ: issue sent to government

MoJ: issue sent to government

The Civil Procedure Rule Committee (CPRC) has deflected a call by the Forum of Insurance Lawyers (FOIL) to introduce fixed costs in costs-only proceedings, saying that the issue should form part of the wider reform agenda.

Recently released papers from the CPRC’s February meeting revealed that FOIL told the CPRC that “the costs of the procedure are eminently suitable for fixing for both parties. Fixing would operate on the usual ‘swings and roundabouts’ basis, where remuneration is fair when taken as a whole”.

However, minutes of the meeting recorded: “The [CPRC] agreed that if reform of the steps required to recover the costs of costs only proceedings is required, it should be addressed together with other initiatives on costs; rather than dealing with any issues raised as discrete areas of work.

“A response would be sent to FOIL expressing this view, and FOIL’s letter would be forwarded to the costs policy team at [the Ministry of Justice].”

Describing costs-only proceedings as the “intermediate stage” between the substantive claim and detailed assessment, FOIL disputed the CPRC’s previous characterisation of this as a “very small gap” and a “very minor issue”.

Its submission said: “It does have very significant costs consequences with the costs of this small intermediate stage often significantly exceeding the costs of the substantive proceedings and the sums in issue.”

FOIL argued that claimants were presently “incentivised” to commence costs-only proceedings so as to generate additional recoverable costs and “to recover additional costs generated by the costs negotiation process which would otherwise be unrecoverable”.

It continued that claimants were also incentivised to issue proceedings as soon as possible so as “to prevent the defendant having time to make a final offer for costs, which might put the claimant at risk on costs of the proceedings and to minimise the work that may be done in the costs negotiation process which might not be recovered”.

FOIL said: “Those claimants who abuse the process (often represented by one of the large claimant costs drafting firms, geared up for bulk work) will send their claim for costs with a covering letter saying that if costs are not agreed or a reasonable offer is not made within, say, 14 days, costs-only proceedings will be commenced.

“That threat is typically followed through, irrespective of offers or the defendant’s attempt to negotiate. It is difficult to envisage another type of claim where it might be thought reasonable to commence proceedings after so short a time.”

By discouraging the issue of proceedings, fixed costs “would relieve some administrative pressure on the courts and save some judicial time”, FOIL argued.

It added that data provided by defendant firm Taylor Rose TTKW showed that in the last year, 18% of otherwise unlitigated claims attracted costs-only proceedings. Of them, nearly half (46%) settled at that stage.

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DAS UK Group

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The DAS UK Group comprises an insurance company (DAS Legal Expenses Insurance Company Ltd), a law firm (DAS Law), and an after the event legal expenses division (DAS LawAssist).

DAS introduced legal expenses insurance (LEI) in 1975, protecting individuals and businesses against the unforeseen costs involved in a legal dispute. Today it has over nine million policyholders.

The company offers a range of insurance and assistance add-on products suitable for landlords, homeowners, motorists, groups and business owners, while its after-the-event legal expenses insurance division – DAS LawAssist – offers a civil litigation, insolvency, clinical negligence and personal injury product. In 2013, DAS also acquired its own law firm – DAS Law – enabling it to leverage the law firm’s expertise to provide its customers with access to justice, including legal advice and representation.

DAS is part of the ERGO Group, one of Europe’s largest insurance groups (the majority shareholder in ERGO is Munich Re, the world’s largest reinsurer).

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Workplace injury: Minster aims at no.1 spot

Minster Law has launched a bid to become a market leader in employers' and public liability (EL/PL) claims, in its first public declaration of intent since being taken over by insurance giant BGL Group.

The firm announced its growth plans despite the introduction in October of the Enterprise and Regulatory Reform Act 2013, which will remove claims against employers for breaches of health and safety legislation.

Senior manager and head of the employer liability/occupier liability team, Adam Nabozny, acknowledged that the Act, together with the LASPO reforms, would restrict the market but was confident the firm could grow its practice nevertheless and leverage its RTA PI experience.

He pointed out that the firm – which was acquired by BGL in May in what was claimed to be the largest outright sale of a law firm – had recently fought a case successfully in the Court of Appeal.

He said: “The technical complexity of cases in this area of law, coupled with extensive changes in the court rules and new legislation, will cause difficulties for many legal practitioners and will hinder many claimants in obtaining the access to justice that they deserve.

“From a commercial perspective there is a lot we are already doing in terms of streamlining our processes and technology… to ensure we can manage cases efficiently, whilst obtaining optimum results for our clients.

“As a business we have significant experience in managing RTA Portal claims, so we are in a much stronger position than some other firms in the industry to adapt to these changes in the EL/PL area and offer our clients a high standard of service.”

Mr Nabozny, who joined Minster earlier this summer, hit out at the Enterprise Act as being a “significant step” backwards in health and safety protection.

He continued: “[The Act] really waters down an employer’s responsibility to look after the safety of its employees in the workplace… Everyone has the right to return home from work uninjured and should be free to take employers that breach health and safety rules to task.

“It also puts the UK in conflict with European Law. The full impact of this Act remains to be seen but Minster Law is committed to fighting for the rights of individuals injured through no fault of their own.”

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Kelly Macha, Broker Account Manager, DAS UK Group

Leading legal expenses insurer, DAS, has appointed Kelly Macha as Broker Account Manager. The role will see her developing business relationships with brokers in South Wales, Gloucestershire, Wiltshire and Oxfordshire.

Kelly’s seven year career at DAS began in the Assistance Services Unit before she moved into Corporate Sales as an Account Technician.  In April 2012, Kelly secured promotion to Corporate Account Executive, being responsible for managing relationships with key corporate business partners.

Darren Weekes, Broker Sales Manager, DAS UK Group; “2013 was a significant year for DAS and the legal expenses market with the introduction of LASPO and the numerous Government reviews.  Kelly’s appointment is part of a strategic move to grow our sales team so we can further engage with brokers. As well as developing sales opportunities, we are able to offer them our extensive experience in the market and understanding of the legislative changes that affect them and their clients.”


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Dobson: considering funding should be standard step

Dobson: considering funding should be standard step

Posted by Stephen Dobson, legal reviewer at Litigation Futures sponsor Augusta Ventures

Failure in appropriate cases to advise on the suitability and availability of after-the-event (ATE) insurance and third-party funding will amount to professional misconduct and may amount to professional negligence, as this case study explains.


Mr and Mrs Smith invested their life savings in building their dream house. The project went disastrously wrong. The Smiths consulted Mr Brown, a solicitor with expertise in construction disputes. They explained that they had sunk nearly all of their capital into the project, and they estimated their losses at £1.5m.

Mr Brown advised that their case had a decent chance of success, and proposed that his firm should take it on under a partial conditional fee agreement. His firm’s client-care letter advised the Smiths of the adverse costs risk and provided a cost estimate and details of billing procedures, but he made no reference to ATE insurance or third-party funding.

The Smiths resolved to go ahead with the case on the terms proposed by Mr Brown, and to fund the litigation from their pension funds.

The case was a nightmare. Costs soared, mediation failed, it went to trial and the Smiths lost. They had spent £450,000 on (discounted) fees and disbursements, and were liable for the other side’s costs to the tune of £500,000. The total would wipe out their pension funds.

A sorry story, but not an implausible one; anyone with significant litigation experience will have been seen something along these lines. Litigation is risky.

The question is, how much of the risk should the client have to bear? In my view the Smiths were left to carry far too much. I explain below my reasons.

The regulatory position

The SRA’s Code of Conduct is expressly based on 10 principles. Principles 4, 5 and 6 are relevant. They are mandatory, and state that “you” (i.e. every solicitor) must:

  1. act in the best interests of each client
  2. provide a proper standard of service to your client
  3. behave in a way that maintains the trust the public places in you and in the provision of legal services.

The Code of Conduct itself prescribes the following relevant mandatory outcomes:

  • O (1.1) You treat your client fairly.
  • O (1.6) You only enter into fee agreements with your client that are legal and… which you consider are suitable for the client’s needs and take account of the client’s best interests.
  • O (1.12) Clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them.
  • O (1.13) Clients receive the best possible information, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter.

Those outcomes are evidenced by the following indicative behaviours (insofar as relevant):

  • IB (1.13) Discussing whether the potential outcomes of the client’s matter are likely to justify the expense or risk involved, including any risk of having to pay someone else’s legal fees.
  • IB (1.16) Discussing how the client will pay, including whether public funding may be available, whether the client has insurance that might cover the fees, and whether the fees may be paid by someone else such as a trade union (my emphasis).
  • IB (1.17) Where you are acting for a client under a fee arrangement governed by statute, such as a conditional fee agreement, giving the client all relevant information relating to that arrangement.
  • IB (1.19) Providing the information in a clear and accessible form which is appropriate to the needs and circumstances of the client.

What of Mr Brown’s approach, in the light of this regulatory framework? He was sedulous in providing regularly updated cost estimates; he helped the Smiths by agreeing to represent them under a CFA; he spelt out his firm’s terms regarding costs, disbursements and billing arrangements.

What he failed to do was explain to the Smiths how they could avoid the risk of an adverse costs award, and got most of the cost of fighting the case paid for without risking their pension funds, by arranging ATE insurance and third-party funding, both of which would have been available at a palatable cost.

With them in place, the Smiths would have suffered no loss from an adverse costs award and (depending on the funding model) would have only paid a proportion of their own costs and disbursements to run the litigation. If the claim had succeeded, they would have foregone a percentage of the damages recovered plus interest on the amount of finance provided.

In my view, in failing to advise on the possible availability of ATE cover and external funding, Mr Brown plainly breached SRA principles 4, 5 and 6, and outcomes 1.1, 1.6, 1.12 and 1.13; and failed to comply with indicative behaviours 1.13, 1.16, 1.17 and 1.19; and accordingly was guilty of serious professional misconduct.

Legal liability?

What of Mr Brown’s legal position? I am not aware of any directly applicable authorities, although in Adris v Royal Bank of Scotland [2010] EWHC 941 (QB), Judge Wakeham QC found that it was a “gross breach of duty on the part of [the solicitor] to [his] clients” to fail to tell them that they had no ATE insurance when they would have been expecting to have it.

Plainly it would be wrong automatically to equate a breach of the Code of Conduct, however serious, with professional negligence (see e.g. Sarwar v Alam [2001] EWCA Civ 1401 and Mastercigars Direct v Withers [2007] EWHC 2733 (Ch)).

But my feeling is that given particularly what the Smiths had made known to him about their financial position, a court could well conclude that Mr Brown’s failure to explain to them the possible availability of ATE cover and external funding amounted to breach of the common law contractual and tortious duties of care he owed to the Smiths, for which he should be found liable in damages.


I do not say that solicitors should advise clients about the possible availability and suitability of ATE cover and third-party funding in every case. There will be many situations in which it would be inappropriate to do so.

But in my view, the well-run law firm should include consideration of the possible relevance of ATE cover and third-party funding as a standard step in its engagement procedure in contentious matters, to ensure that it does not fall foul of the SRA, the Legal Ombudsman and the court.

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Cash: two successful settlements for Therium

Third-party litigation funder Therium has seen its investment pot cut by a sixth, it was announced today.

Henry Lafferty, chairman of parent company City of London Group plc, told its AGM that one of Therium's institutional clients has announced the closure of the fund for which Therium provided investment management services, and the fund manager has given notice to limit any new funding to existing cases.

“This reduces the funds made available to Therium for investment in litigation claims from the previously reported £30m to approximately £25m,” he said. “However, Therium is in discussion with several other parties regarding the possible launch of new funds.”

Mr Lafferty also said that Therium is trying to establish an international joint venture to fund commercial litigation, “albeit that talks with the various institutions involved are protracted”.

He added: “Significantly, there have been two successful case settlements in recent weeks and although both of these are fairly small, they add to Therium's successful track record.

“We are still awaiting judgment or settlement discussions on a number of more significant cases, and return to profitability for the group for the current year is dependent on the outcome of these cases for which the results remains uncertain.”

Therium has previously announced that it also entered a joint venture to examine new case potential in financial services, which Mr Lafferty said “could add further pipeline opportunities for cases to fund”.

Meanwhile, Novitas Asset Management Ltd, which makes advances to law firm clients to cover legal bills and is 50% owned by Therium, “is progressing well and continues to show good profitability”.

Mr Lafferty said Therium continues to explore adding  a banking licence so that retail deposits can be utilised by its various lending platforms, “all of which have now proven themselves to be scalable”.

He said: “Although this process can be time consuming and expensive, we are in no doubt that a successful outcome would offer substantial benefits to both our customers and shareholders.

“In the meantime we retain our existing focus on building third-party funds under management to grow our core platforms.”

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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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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 quoting the course title and Litigation Futures.


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Clinical negligence: fixed costs threaten access to justice say opponents

Four out of five respondents to the government’s consultation on fixed recoverable costs (FRC) in low-value clinical negligence cases have echoed Civil Justice Council (CJC) concerns about a single joint expert being used, it has emerged.

Meanwhile, the Department of Health has agreed to demands for a working group on clinical negligence claims.

A summary of responses to last year’s consultation on a FRC regime for clinical negligence claims above £1,000 and below £25,000, published today, showed that 167 people and organisations responded.

More than a third came from law firms. Of the respondents currently practising law, nearly 90% represented the claimant side or both claimants and defendants.

On the key question of whether a FRC regime should be introduced on a mandatory basis, the respondents split 42% for and 58% against. But among claimant lawyers 85% were opposed and among defendant lawyers 86% were in favour.

However, the summary noted that those in favour were a far smaller group and the results “should be treated with caution”.

Arguments against a FRC regime included that it could drive cost elsewhere in the claims process, that it risked access to justice, that the claims were complex, that it was premature while LASPO savings were still unknown, and that patient safety could be put at risk.

Arguments for included that it would change behaviours and deliver cost savings, that it would benefit any successful claimant by resolving their claims faster, and that since many defendant solicitors used a FRC scheme, it was only fair claimant solicitors should also.

In its response to the consultation, which closed in May 2017, the CJC warned that using a single joint expert in such cases could be a barrier to justice.

Overall, 79% of respondents objected to the proposal that there should be a presumption of a single joint expert, while 21% agreed.

Reasons included concerns about fairness, that claimants in particular would feel disadvantaged, and that the expert could be seen to be the judge of an individual case.

In the section outlining the next steps, the government said repeated calls from respondents for a working group to be set up to consider improvements to the clinical negligence process had been accepted. Claimant and defendant representatives would be included.

Work had begun between the Department of Health and the CJC to establish the working group, the summary said. The government expected it would publish recommendations in autumn 2018, which it pledged to consider “as quickly as possible”.

The working group’s terms of reference had already been agreed and a chair and deputy chair appointed. Members were being sought that would “ensure that the relevant expertise is engaged and all sides are represented”.

It added that the group would have to consider applying an FRC regime “to incidents of harm occurring in the private sector”.

The summary noted that Lord Justice Jackson had also called for a working group “to develop a bespoke process for clinical negligence claims initially up to £25,000 together with a grid of FRC for such cases” in the supplemental report to his review of civil litigation costs, published in July.

It also noted Jackson LJ was “broadly supportive” of FRC in clinical negligence and in the course of his work had found “a number of legal experts, both claimant and defendant, who were optimistic”.

The Lord Chancellor would announce the next steps “in due course“.

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Electronic bill: only way it could be viewed

Electronic bill: only way it could be viewed

Posted by Bradley Meads, senior associate at Litigation Futures sponsor Kain Knight, and Virginia Rylatt, partner at Rylatt Chubb

In the first case dealt with under the new pilot scheme – Practice Direction 51L – J-­Codes were retrospectively applied to the new Precedent AA bill of costs. We dealt with the issues within the Senior Courts Costs Office (SCCO) on behalf of the paying party/defendant.

The first thing which the parties appreciated, and no doubt the SCCO now appreciates as well, is the sheer complication and difficulties of dealing with the pilot scheme. It was exposed at the hearing that the SCCO (and the claimants) had previously relied upon members of the Hutton committee behind the scenes and were left short when significant technical questions arose.

Without the pilot scheme, the matter would have been dealt with on a far simpler basis. There had been a budget. As the matter had settled before trial, some phases of work envisaged under the budget had not been carried out and there were some phases within the bill where the costs exceeded the budget.

Moreover, there were certain tasks, within phases that were not exceeded, which were not completed. It should therefore have been a straight forward case of the claimants explaining why, in certain respects, costs exceeded the budget and trying to persuade the court that they should be allowed additional costs.

As became evident, the pilot scheme allowed a receiving party in effect to go back to the drawing board – ignoring all the work that was previously done when the case was budgeted.

Last month the Law Society launched a survey to ascertain “more about how members record their time and discover which members are already using J-Codes to time record”. What is clear at present is that very few firms record their costs in J-Codes.

When the time came to prepare the bill, the claimants’ solicitors certainly did not record their time in J-Codes. In this case (as in any case that will use the pilot scheme where all of the costs are not already recorded in J-Codes), a need for a retrospective application of time to J-Codes was required should one wish to engage in the pilot scheme. As the claimants discovered, without retrospectively applying J-Codes to time entries, the format of the new pilot scheme could not be populated correctly and would not work.

In order to demonstrate these difficulties for the defendant at a hearing for directions in February 2016, Kain Knight produced a number of screen shots to explain the situation to the court.

The bill of costs that was provided was immensely extensive and, in reality, could only be viewed properly in court electronically. Despite the fact that the claimants’ costs lawyer had spent some 96 hours and 30 minutes on preparing the detailed bill, totalling £375,000, in Precedent AA, there were still a number of areas where drilling down into various schedules electronically left gaps to be filled in or explanations which were missing.

One reality that follows from this is that not only the court but also all the parties in the SCCO using a Precedent AA form would need to have an electronic version of it in the courtroom. This would be essential for any final assessment hearing, where bills of costs can be so long and so wide that they could not be printed out in any sensible or manageable format.

From the court’s point of view, the meat within the item descriptions was missing. The J-Codes do not differentiate communications between personal attendances, telephone attendances and correspondence.

In this case, as no doubt in many others, the key issue at detailed assessment was why the costs were higher than those in the approved budget. The new format gave no assistance to the court. It was necessary for the court to deal with that by way of additional directions and to make appropriate orders for further and additional schedules to be served on behalf of the claimants.

Following on from such directions the parties settled and the court must have been left considering that as soon as it got to grips with the issue as to why the costs claimed exceeded the approved budget, the parties were able to resolves matters.

The question must be why one needs to have such a complicated system for achieving this and whether Precedent AA is in fact going to be a useful tool for the SCCO and other courts in assessing costs.

Technically there are less rigid and humane ways for costs to be presented which resolve some of the issues dealt with here. The Association of Costs Lawyers has produced a more manageable version which deals with some of the issues which arose during this case and a subsequent meeting with the Senior Costs Judge.

From the courts’ point of view, if the pilot scheme was meant to be a system which allowed the court to quickly come to a determination as to the costs to award a party, it failed. Had the cost issues not settled, then the matter was due to occupy the court’s time for a three-day hearing, despite the fact that this was a case in which cost issues had been dealt with at a full case and costs management conference and a budget imposed by the court on the parties.

The experience showed that the new J-Codes are too complicated, that dealing with such costs is too labour-intensive and that the time spent dealing with costs under the new scheme is at least 100% increased on what they would have been otherwise.

The claimants’ costs of the detailed assessment without an assessment hearing, (and which excluded the hearings for directions and the costs of preparing the bill itself) were assessed at £22,224!


The increasing appetite for third-party funding in Europe

Ross Nicholls

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

April 10th, 2018