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Cranston J: without costs protection, “access to justice may be denied”

Protective costs orders (PCOs) can be made in favour of people accused of terrorism and where reliance is put on ‘closed evidence’, the High Court has ruled.

Ruling on an application by Moazzam Begg, a former Guantanamo detainee, Mr Justice Cranston said that reliance on closed evidence could make it “impossible to determine the merits of any challenge”.

He said that “for understandable reasons in this type of case the state is able to withhold its case” from individuals.

“The other side of the coin, however, is that if these individuals wish to vindicate important rights, such as reputation, they may be at risk of paying substantial costs since they cannot assess the strength of the case against them, with the result that they may be dissuaded from pursuing the matter.”

The court in Begg v HM Treasury [2015] EWHC 1851 (Admin) heard that Mr Begg’s designation under the Terrorist Asset-Freezing etc. Act 2010 had been revoked, but he was seeking to clear his name by having it declared void from the outset. Mr Begg complained that having been previously designated made it difficult to access financial services.

However, there was material which it was not in the public interest to disclose, commonly referred to as ‘closed material’. Mr Begg argued that without costs protection, he could not pursue this case because on this closed material, which he would never see, his claim may prove to be ill-founded

Cranston J said that closed material procedures were recognised in law “for good reason”, but were not consistent with “ordinary principles of procedural fairness”, particularly the rules of disclosure.

Though the Treasury’s counsel had in court warned him against taking the “very bold step to establish a novel category of costs protection”, the judge ruled: “In these circumstances, the orientation of the costs rules changes, and, consistent with the overriding objective, a protective costs order may be the fair and just way to dispose of the case. Without costs protection, access to justice may be denied.”

However, Cranston J said PCOs should only be made in this type of case subject to “strict conditions”. First the case must be of “real benefit” to the individual bringing it, and second the individual must not be able to assess the prospects of success in the ordinary way.

Cranston J continued: “Thirdly, having regard to the financial resources of the individual and to the amount of costs likely to be involved, it is fair and just to make the order. Fourthly, if the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in doing so. Finally, the individual should not benefit from the order if his conduct is later judged to be unreasonable or abusive.”

Applying the conditions to the case before him, the judge said he was “yet to be persuaded” that the first condition was met, partly because there was “no evidence, least of all from Mr Begg, about how his reputation has been adversely affected” by his designation under the 2010 Act. He said both Mr Begg and his wife had banking services.

Cranston J held that his second condition, like the first, was “not yet satisfied” until HM Treasury had served all its evidence, while the position on the third and fourth conditions was “somewhat unsatisfactory”.

Cranston J said it would be up to the judge who heard the case to decide if Mr Begg’s conduct was reasonable.

The judge concluded that a PCO “may be appropriate” in the case, but “for the reasons I have given, it is premature at this point”.




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Medical reports: system not designed for direct contact with litigants

MedCo issued 337 warning letters to users – and went on to suspend two-thirds of them – over the past year for behaviours such as circumventing the random search selection process and influencing medical experts’ opinions on diagnosis/prognosis, it has emerged.

Other behaviours that prompted MedCo to take action include undertaking medical examinations in inappropriate circumstances, increasing market share of instructions in breach of government policy, and failing to upload case data, the company behind the system has revealed.

The figures came in MedCo’s submission to the justice select committee for its inquiry into the government’s personal injury reforms, both of which have now been dropped because of the election – although they could re-emerge afterwards.

MedCo said that in the year to 31 March 2017, it sent 337 warning letters sent, suspended 235 users – medical reporting organisations, direct medical experts and ‘authorised users’, mainly claimant lawyers – although 84 of them were reinstated after modifying their behaviour. In all, 134 user agreements were terminated.

Since its implementation in April 2015, there have been 882,000 searches resulting in the selection of an MRO and over 123,000 searches resulting in the selection of a direct medical expert, MedCo said.

MedCo said the proposed increase in the small claims limit – and likely increase in litigants in person – could have a “major impact” as the system was not designed for direct contact with litigants. “Significant changes to MedCo processes will be necessary.”

The proposed ban on pre-medical offers would also likely result in an increase in the use of MedCo, it said.

“The reforms will require increased monitoring of behaviours by MedCo and a review of procedures to deal with the challenges of identifying trends which attempt to circumvent legislation and government policy.

“For example, there is a high risk that there will be attempts to influence medical experts to increase prognosis periods to achieve higher damages awards. MedCo may also need to review its constitution to include representatives from claims management companies and litigants in person/McKenzie Friends.”




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Deadman: solicitors have a responsibility to wean clients off the ‘something for nothing’ culture

Posted by Christopher Deadman, sales director at Litigation Futures sponsor Augusta Ventures

Your dear old granny was full of wise sayings. ‘Look before you leap’, ‘if it looks too good to be true it usually is’ and ‘you get what you pay for’.

All of these pithy aphorisms could apply equally to the 100% conditional fee agreement (CFA) in the post-Jackson landscape. The days of receiving something for nothing have long gone. It is time for claimants to grow up and face the fact that in the brave new world, they are going to have to pay for the services of their legal team. It is also time for lawyers to wean clients off the laudanum of 100% CFAs for commercial claims.

To illustrate this point, I had a recent meeting with a very well-regarded firm which specialises in professional negligence claims. Whilst the firm acknowledged that it would benefit considerably from financing part of its fees and those of counsel for the purposes of cash flow, it was unable to agree a financing package because clients “expected them to take all the risk”.

If the firm indicated that it was not prepared to take all the risk, clients would simply seek the services of a potentially less competent firm that was prepared to conduct the work on a wholly conditional basis.

In the words of not just your granny, this is absolutely bonkers. For the long-term good of the profession, solicitors have a responsibility to wean clients off the ‘something for nothing’ culture and educate them in the ways of the post-Jackson world.

But what do you say to the client who hints darkly that they are tempted to take their stonking commercial claim down the road to a ‘no win, no fee’ firm?

In the main (and I am here to be shot down in flames), a firm acting on a 100% CFA is unlikely to allocate it 100 hours of partner time a week. In all probability, the case will be parked with a pretty junior fee-earner who will give it just enough attention to keep the matter live in the hope of securing an early offer of settlement. And that makes perfect commercial sense. Why would you throw the kitchen sink at a case when you aren’t being paid?

The key message to give the client is that if you want a senior fee-earner to run your case properly, you are going to have to pay for it. Paying a senior fee-earner by way of a financing arrangement ensures that the lawyer is properly resourced to run the case effectively. Counsel is similarly remunerated. Avenues can be explored. Evidence can be collected. Proper strategies can be devised. In short, the legal team can prepare the case in such a way as to maximise its prospects of success.

For the claimant, this can often mean a higher settlement (because the legal team can exert maximum pressure on the defendant) and, crucially, a shorter timescale. Obviously there are never any guarantees with litigation, but having a properly resourced legal team can make a significant difference to both the quantum realised and the time in which it can be achieved.

This is a far more compelling argument for the would-be claimant than simply caving in or losing the work all together. Inevitably there will be occasions when the client is simply beguiled by the promise of something for nothing and goes elsewhere. When that happens, it is best to recall one of granny’s other sayings: ‘You don’t miss what you’ve never had.’




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Walton: independent report

Creditors face losing more than £150m per year if the exemption from the Jackson reforms for insolvency litigation ends as planned next April, according to an independent report commissioned by the insolvency profession.

However, the report also acknowledged that success fees and after-the-event insurance premiums are “rarely paid in full and often not paid at all” at the moment.

The Association of Business Recovery Specialists, known as R3, has launched a press and parliamentary campaign to call for a permanent exemption for insolvency litigation.

It commissioned Professor Peter Walton of the University of Wolverhampton to research and write the report, with the support of the Association of Chartered Certified Accountants, the Insolvency Practitioners Association, the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants Scotland, claims specialists JLT Specialty, solicitors Moon Beever, and accountants Moore Stephens.

R3 said that without the ability to recover costs fully, legal action to reclaim debts from directors would be unaffordable in most cases.

Using 2010 figures from the Insolvency Service and a survey of R3 members, the research estimated that insolvency litigation conducted under conditional fee agreements (CFAs) realises £150-160m a year. A majority of claims realise £50,000 or less, and it said practitioners believe such “relatively small” claims are generally unlikely to be pursued if the exemption comes to an end.

But it also admitted that “in reality, the CFA uplift (and ATE insurance premium) are rarely paid in full and often not paid at all (even where the insolvency litigation has been successful)”. But the report continued that nonetheless, “the existence of the risk to defendants of having to satisfy such claims, does concentrate their minds. The current system does encourage a large majority of claims to settle.

“The view of practitioners is that Jackson would lead to fewer cases being brought and of those that are brought, fewer would settle. Those that would still settle would settle for a lesser amount.”

This meant that “wrongdoers are more likely to ‘get away with it’, and further culpable behaviour will be encouraged”.

Phillip Sykes, deputy vice-president of R3, says: “Insolvency litigation is absolutely in the public interest, and it is absurd that the government is considering making it all but impossible for such cases to continue. The Jackson reforms were supposed to protect exactly this type of case.”

“The government’s only justification for ending the exemption is that it would make the Jackson reforms consistent across the board, regardless of the consequences. It’s just lazy thinking.”

The report argued that insolvency litigation differs from ordinary civil litigation in a number of ways that should continue to be recognised by the law.

“Insolvency litigation is in the public interest and claims brought are not frivolous nor do they have disproportionate costs. For example, when a public body is sued successfully public funds are reduced, yet when insolvency litigation is successful, it is often public funds that benefit, through returns from the insolvent estate to HMRC. Alternative funding, whilst available has a high acceptance threshold and a high cost.”

Further, it said disproportionate costs are not a problem in insolvency litigation.




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Master Rowley: contribution to costs

Master Rowley: contribution to costs

Lawyers should tell clients in cases where costs significantly exceed damages that the new test of proportionality means they will receive “no more than a contribution” to those costs if they are successful, a costs judge has said.

“It may be that such advice proves to be a driver for the costs to be reduced or for alternative dispute resolution mechanisms to be explored,” said Master Rowley in the Senior Courts Costs Office.

He was ruling in a private nuisance case brought by Queen guitarist Brian May and his wife Anita Dobson, which settled after they accepted a £25,000 part 36 offer prior to the defendants entering their defences.

Master Rowley initially reduced their £208,000 costs bill to a shade under £100,000 on an item-by-item assessment, and then cut it to £35,000 on the basis of proportionality.

He ruled that in cases where the sums in issue were modest, “the amount that can be recovered from the paying party is not the minimum sum necessary to bring or defend the case successfully. It is a sum which it is appropriate for the paying party to pay by reference to the five factors in CPR 44.3(5). It is not the amount required to achieve justice in the eyes of the receiving party but only a contribution to that receiving party’s costs in many modest cases”.

Going through the five factors, he found that the case was worth in the region of £25,000 and for which there was a “modest prospect” of an injunction at least early in the case. There was no “noteworthy complexity” of either a legal or factual nature, no additional costs caused by the defendant’s conduct, nor any wider factors to be considered, as the claimants’ “celebrity status” was not material, he said.

“In these circumstances, the reasonable costs allowed of £99,655.74 are undoubtedly disproportionate.”

He rejected the argument that costs should never exceed the damages, but also bore in mind the stage at which the case settled. “The proportionate amount of costs must inevitably be smaller for a case which concludes early than one which reaches a final hearing.”

Earlier this month the Senior Costs Judge, Master Gordon-Saker, also showed the harsh application of the proportionality rule by halving a bill he had deemed reasonable.

Master Rowley had earlier explained that the extent of the reduction in the original bill was “undoubtedly due in part” to the fact that the claimant had instructed Simon Farrell QC on a direct access basis.

“Mr Farrell is authorised by the Bar Standards Board to conduct litigation. Consequently no firm of solicitors were instructed and Mr Farrell utilised the services of other barristers and a solicitor as required. The Bar Standards Board had only begun to authorise barristers to conduct litigation shortly before Mr Farrell was instructed by the claimants. Inevitably therefore, there was some novelty in conducting litigation for Mr Farrell and his team.

“Nevertheless, I am satisfied that the sum that I have ultimately allowed as being a reasonable sum is so whether or not it had been incurred by a firm of solicitors or by direct access counsel. As Mr Carpenter, counsel for the defendants said, and I accept, the reasonableness and proportionality of the recoverable costs cannot depend upon the method of representation. I have raised the point merely to provide some reasoning for the significant level of reduction on assessment from the original sum claimed.”

Master Rowley expressed hope that “cases such as this one, which are in the transitional phase of understanding the new proportionality test, will be relatively rare”.




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Supreme Court: overruled Court of Appeal and High Court

Supreme Court: overruled Court of Appeal and High Court

The Motor Insurers’ Bureau (MIB) has welcomed the clarity provided today by a Supreme Court ruling that damages for a UK resident badly injured by an uninsured driver in Greece should be assessed under Greek law.

The High Court had ruled that Tiffany Moreno should be compensated under English and Welsh law. The case was then leapfrogged to the Supreme Court.

Lord Mance, giving the unanimous ruling of the Supreme Court in also overturning two previous Court of Appeal decisions, noted that while here the claimant’s concern was that Greek law would yield less compensation than English law, in other contexts the reverse might be the case.

“There is, for example, evidence that Irish personal injuries’ damages can be significantly higher than English, and that Italian law can in fatal accident cases award significantly more (and, if relevant, to a broader range of persons) than English law,” he said.

The judge ruled that the underlying European law “proceeds on the basis that a victim’s entitlement to compensation will be measured on a consistent basis, by reference to the law of the state of the accident, whichever of the routes to recovery provided by the directives he or she invokes”. This was effectively transposed into English law by The Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003.

MIB chief executive Ashton West said: “The outcome of this case is that the law for damages will now be applied consistently to uninsured and insured cases.

“Nothing changes the fact that Ms Moreno has been the unfortunate victim of a serious accident with an uninsured driver abroad. There is no doubt that she is entitled to damages for her injuries, however, the principle is about using the right law to decide how much to pay Ms Moreno.

“MIB is here to help UK residents with their claims for compensation while at the same time protecting the interests of UK motorists, who ultimately provide the funds on which we rely. As this relates to events which occurred in Greece, everything surrounding the claim should be treated under Greek law.”

The MIB’s role also extends to acting on behalf of its Greek equivalent, the Greek Guarantee Fund (GGF).

Mr West said: “As a result of the Supreme Court’s decision, MIB will compensate Ms Moreno on behalf of the GGF and will do so on the same basis as any other claim in Greece. Furthermore a number of MIB cases have been waiting for the outcome of this case. As the law is now clear, these cases can now be resolved.”




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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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Parliament: final ping pong stage begins today

The government will today try and invoke a controversial parliamentary rule that will bypass efforts by peers to hold on to their amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO).

The bill begins the ‘ping pong’ stage today, during which the Commons and Lords have to agree on the exact wording of the bill. The Commons will begin by focusing on the 11 defeats that peers inflicted on the government.

The Ministry of Justice has confirmed to Legal Futures that it will invite the House of Commons to invoke ‘financial privilege’ to overrule eight of the amendments.

The rules on financial privilege, used each year in relation to the Budget, mean the House of Lords is not allowed to change or reject tax and other financial proposals agreed by the Commons. The government used this tactic recently to push through its welfare reforms, to the anger of both Labour and peers who had spent weeks debating them.

The government is to accept amendments that ensure the independence of the new director of legal aid casework, retain legal aid for welfare benefit appeals on a point of law to the upper courts, and widen the definition of domestic violence for the purposes of legal aid eligibility.

Among the changes it will seek to overturn are retaining legal aid for children claiming clinical negligence, requiring that the new telephone gateway for legal aid is not compulsory, and excluding asbestos and industrial disease cases run under conditional fee agreements from the end of recoverability.

With campaigners making their last stand against the bill, a wide range of groups have spoken out against various aspects of the legal aid and Jackson reforms, including a coalition of 20 charities and legal organisations – such as Disability Rights UK, Mind, Shelter, Scope and Mumsnet – as well as Citizens Advice, the Children’s Society, and Amnesty International.

The JustRights coalition said figures obtained from the Ministry of Justice under the Freedom of Information Act show that 6,000 (or 13%) of children who currently receive legal aid each year would no longer be eligible under the reforms.

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Gardiner: Change is urgently needed

Aviva rejects around one out of eight whiplash claims because they are suspect or fraudulent, the insurer said today.

It is currently investigating nearly 17,000 personal injury claims for suspected fraud – 1,000 more than last year.

In all, Aviva said it recorded a 5.4% increase in the value of fraud in 2017 to £90m, two-thirds of which was attributed to ‘crash for cash’ and fake whiplash claims.

The £59m worth of motor fraud detected was £9m up on the 2016 figures.

“Despite recent industry figures showing a drop in the number of motor claims paid, these figures show that the UK’s largest insurer is not seeing any let-up in the number of bogus personal injury claims it is dealing with,” Aviva claimed.

It said the figures demonstrated the importance of the Civil Liability Bill, which would “remove the financial incentive for opportunistic fraud and bring down the cost of motor insurance [and also] remove the financial incentives behind the nearly 900 million nuisance calls and texts made chasing an injury or insurance issue”.

Though Aviva said the level of organised motor fraud declined last year, it still has nearly 3,000 suspect claims under investigation with links to organised fraud or gangs.

“This decrease was offset by an increase in the numbers of low-speed accidents which have resulted in bogus injury claims.”

Tom Gardiner, head of fraud at Aviva UK Insurance, said: “Whilst it’s good news that the number of accidents is falling, we are still detecting more fraudulent claims than before.

“Whiplash fraud continues to present the biggest threat to customers – not just in terms of pushing premiums up, but by fraudsters putting innocent motorists at the risk of real harm by deliberately causing accidents to make bogus whiplash claims.

“Change is urgently needed. The proposed Civil Liability Bill will deter fraudsters from pursuing their campaign of crash for cash, simply to line their pockets. The good news in the meantime is that we are detecting, disrupting and prosecuting more fraud.”

Aviva said that last year it helped to bring 68 successful criminal prosecutions for fraud, carrying 143 years of prison sentences.

It also defended its customers against more than 800 “spurious” claims of being responsible for motor accidents, and in the last two years has had more than 250 claims against its customers struck out due to findings of fundamental dishonesty.

The insurer said it now screened all new and existing motor business to prevent fraudsters and gangs from buying policies with the express intention of submitting fraudulent claims. Last year, it avoided more than 14,000 policies where the applicant had known links to fraud.




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Milliner: Disproportionately expensive method

A leading insurance company that had to appeal to the High Court to secure a finding of fundamental dishonesty in a personal injury claim said the case showed the industry needed “more support” from judges if they are to challenge fraudulent claims.

LV= said the first instance decision showed “just how hard it is for us to win even when the facts speak for themselves”.

Manchester insurance firm Horwich Farrelly acted for LV= in the case of Robert Fithon, a mortgage advisor with a part-time career in dance music.

It said that, following a minor motor collision in September 2016 in Manchester, Mr Fithon claimed that his vehicle was hit with such a “heavy and violent impact” – which felt like “a small bomb going off” – that the muscles and tendons of his shoulder were “crushed”.

The injury was so severe he claimed, that it took 10 months to heal correctly.

However, Horwich Farrelly found that, in reality, Mr Fithon had been discharged from physiotherapy five weeks after the accident having undergone only two sessions, with a 100% recovery.

He had also claimed he was unable to attend his gym for three months due to his injuries. However, the physiotherapy discharge report showed that, five weeks after the accident, he was able to “do all gym exercises pain free when using good technique” and that he could “perform all gym activities to his pre-accident levels of ability”.

At first instance, a judge at Manchester County Court found that Mr Fithon had greatly exaggerated his claim, prompting him to disregard the evidence in its entirety. However, he found he had no option other than to award damages on the basis of the physiotherapy discharge report, awarding Mr Fithon £1,869.

Horwich Farrelly argued on appeal that the judge had not properly applied the fundamental dishonesty rule in section 57 of the Criminal Justice and Courts Act 2015, and Mr Justice Andrews agreed.

He allowed the appeal and dismissed Mr Fithon’s claim on the basis that it was fundamentally dishonest.

Martin Milliner, GI claims director at LV=, said: “Insurers are often wrongly criticised for not defending enough spurious whiplash claims. The original court decision highlights just how hard it is for us to win even when the facts speak for themselves.

“Taking whiplash claims to the High Court on appeal is a disproportionately expensive way to underline the point that, for insurers to defend more cases to trial, we need more backing, support and certainty of outcome from the judicial process, especially at first instance.”

Ronan McCann, counter fraud partner at Horwich Farrelly, added: “We hope this successful outcome will encourage the industry to tackle more fraudulent claims and will help ensure both consumers and insurers benefit from the costs saved on unmerited claims.”

Horwich Farrelly has now secured nine findings of fundamental dishonesty since securing its first in April 2016.




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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 Jet2.com 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 Jet2.com 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 Jet2.com 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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Burnett: Increase judicial retirement age

“Dispiriting and sometimes genuinely frightening” abuse on social media is discouraging people from becoming judges, the Lord Chief Justice has warned.

In a wide-ranging evidence session before the House of Lords constitution committee, Lord Burnett also called for the retirement age for senior judges to be increased from 70 to 75.

Lord Burnett said social media abuse was undermining the rule of law as it “erodes confidence” in the judiciary, adding that some judges have had to take out restraining orders.

The LCJ agreed with peers that there was a distinction to be drawn between criticism and abuse, but there was “still a good deal of abuse being hurled at judges” on social media and online generally, with some “very striking” recent examples.

“It is a particular problem for those operating in the family field and some on tribunals,” he said. “Emotions can run extremely high in these circumstances.

“It is something that affects people, because whatever we do we are human and we all have concerns about our families. It is a significant problem that stretches across society in general.

“I suspect there will not be a solution until the providers of these platforms develop appropriate algorithms to ensure abuse is instantly deleted.”

The LCJ described social media abuse as a “factor that inevitably may play into the recruitment of judges” especially in some jurisdictions. “There is no doubt that it dispiriting and sometimes genuinely frightening for our judges.

“People may ask themselves: ‘Why should I put myself through all that?’”

The LCJ said the government had taken a “good deal of trouble” to provide support and protection for judges.

Responding to a question from Lord Pannick, who asked why abusers could not be prosecuted for contempt of court, Lord Burnett said it was often impossible to identify who they were.

“On occasions the police are informed and do take action. Civil action has also been taken by judges to obtain restraining orders.”

The LCJ highlighted the need to focus on talent in the Government Legal Service and Crown Prosecution Service to help the recruitment of judges.

The LCJ said an increase in the retirement age from 70 to 75 should be considered for senior judges, as “we are losing some judges at the height of their powers”.

Although solicitors represented a “huge reserve of talent that was not coming forward”, Lord Burnett said there was “so much being done to encourage solicitors to become judges, I wonder what more can be done”.

On the court estate, Lord Burnett condemned many buildings as “terrible” and an “embarrassment”, and it was not a question of tens of millions of pounds being needed but “hundreds of millions”.

He said that an emergency fund of £7m had set up to deal with “immediate problems”, such as peeling paint, filthy carpets and broken chairs.

He described the state of accommodation for jurors, in particular, as “frankly disgusting”, though he said the problem was being dealt with.

The LCJ said that “at the heart” of recent failures in disclosure in rape and other trials, currently being reviewed by the Attorney General, was the fact that the people responsible for the system were “under enormous pressure”, including the police and Crown Prosecution Service.

“Those who do the work have too much to do, and they put things off.”

Lord Burnett said he expected the live streaming of selected cases at the Court of Appeal to begin “relatively soon”, though the televising of sentencing remarks in criminal trials was more problematic.

On criminal legal aid, while keen to avoid being drawn into a “trade dispute” or use the word “crisis”, Lord Burnett said Law Society research on the lack of young solicitors had made it clear that the situation was “desperate” in some parts of the country.

Meanwhile, the Ministry of Justice (MoJ) yesterday launched an online learning platform to enable candidates from all legal backgrounds to develop their understanding of the role and skills required of a judge, and how their legal experience has prepared them for judicial office, prior to making an application.

The Pre-Application Judicial Education (PAJE) programme is a joint initiative from the Judicial Diversity Forum, which is made up of the MoJ, Judiciary, Judicial Appointments Commission, Bar Council, Law Society and Chartered Institute of Legal Executives and coordinates action to remove barriers to candidates from underrepresented groups applying to be judges.

Additional, targeted support will be available to those applicants from groups that are underrepresented in the judiciary via discussion sessions led by judges.

These aim to give potential candidates insight into the realities of the role and offer an opportunity to address any perceptions they may have on barriers to judicial office.

The MoJ is paying half of the £300,000 cost of PAJE over the next three years, with the other forum partners making up the rest.

The online education will be available from early 2019, with the discussion groups to follow and the MoJ will work with partners to increase awareness amongst practising legal professionals.




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Jersey: questions over company's ability to pay costs

Jersey: questions over company’s ability to pay costs

A businessman involved in a £132m dispute with property tycoons Nick and Christian Candy has been ordered to provide £5.5m security for costs after the High Court rejected arguments that the application was an abuse of process because the Candys had withdrawn a previous application.

Mr Justice Nugee said Mr Holyoake brought the £132m damages claim for conspiracy to injure with Hotblack Holdings, a Jersey-based company “ultimately” owned by him.

He said the Candys, along with the CPC Group and three of its directors – Richard Williams, Steven Smith and Timothy Dean – denied all liability for damages and brought the security for costs application because there was reason to believe Hotblack would be unable to pay the defendants’ costs.

Delivering judgment in Holyoake and Hotblack Holdings v Candy and others [2016] EWHC 3065 (Ch), Nugee J said it was not an abuse of process for the defendants to bring their second security application.

The first application was withdrawn on the eve of the hearing after the defendants received information about Mr Holyoake’s financial situation that suggested he had €20m sitting in a bank account.

The judge found that this was not done as “a simple acceptance” that it was right to make no order, but as the result of a bargain between the parties that in return for the defendants withdrawing the application, the costs would be costs in the case. This was embodied in a consent order.

Also, the claimants noted by email that the defendants had reserved the right to bring a further application for security.

But Nugee J said this was not a contractual agreement that that the defendants could apply again on any grounds they liked. The consent order disposed of the matter and so the defendants could only launch a fresh application by showing a good reason for doing so.

He found that there were: “It does not seem to me that there is anything inappropriate in the defendants having withdrawn the first application at a stage when, although they had suspicions, they had no material to indicate that the impression given by [a statement by the claimants’ solicitor] was wrong, and then applying again once they had obtained evidence casting real doubt on that impression.”

Ordering Hotblack to provide security of £5.5m, Nugee J said the defendants had accepted that an after-the-event policy was sufficient to meet £4m of it.




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Hudgell: further establish our presence in the south

Leading WIP buyer Neil Hudgell Solicitors has completed two more deals for work with a total valuation of more than £1m.

It is taking the clinical negligence book from northern home counties firm Pictons, and the personal injury department of Buckinghamshire and Berkshire practice Gordons Solicitors.

All the cases will be handled by Neil Hudgell’s London office, which was opened after it bought the WIP of Harris Cartier, which closed last October after failing to find professional indemnity insurance. Gordons’ head of personal injury, Sally Fromont, is moving over.

The firm, which opened in 1997, now employs over 110 staff in Hull, London and Leeds.

Managing director Neil Hudgell said: “These latest acquisitions enable us to establish further our presence in the south of the country where we are rapidly expanding our business and taking on new clients.”

Both Pictons and Gordons said they had decided to review their businesses in light of last April’s Jackson reforms.

Sukh Saini, Pictons’ managing partner, said: “We are experiencing excellent growth in our commercial department and all of the other areas of the law in which we specialise.

“Although our clinical negligence department was very successful, the length of time that a case can take meant that we had to review whether we should continue to invest in this area of the law or focus our expertise on the other areas.”

Keith Gordon, managing partner of Gordons, said: “Our personal injury department, while making a real contribution to our turnover and profit, has always been marginal in the context of the corporate commercial and litigation work we carry out at Marlow. At Maidenhead we are one of the largest providers of commoditised remortgaging and conveyancing services in the country.

“Following a strategic review and the advent of the Jackson reforms, we felt that our resources should be concentrated around our core strengths and accordingly we are delighted that an agreement was reached with Neil Hudgell Solicitors.

Neil Hudgell Solicitors has been on the hunt for WIP books since launching the ‘We buy any files’ website in 2011. Including these latest acquisitions, the firm has completed 23 deals totalling over £5m.




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Linetime2004Leading UK commercial law firm Shepherd and Wedderburn has invested in the Liberate matter management application from Linetime to help improve process efficiency across the firm.

The firm recognised the need to further invest in technology to maintain current high service levels. Primary requirements included a seamless link to its HP WorkSite implementation and integration into the Outlook environment, which is set up with ease of use in mind, and in a manner that can quickly be deployed.

Following a review of the systems on the market, the firm identified Liberate as the right solution for delivering the necessary integration, greater efficiencies and tighter control.

“The Liberate platform will allow us to provide matter management capabilities to our lawyers through a familiar Outlook environment that will ease user adoption and improve efficiency throughout the business,” said Steve Dalgleish, applications manager at Shepherd and Wedderburn.

Linetime development director, Phil Snee added “We are delighted to welcome Shepherd and Wedderburn on board as part of our growing community of blue chip matter management customers. This reflects our commitment to the case and matter management arena and our continued development of feature rich software that is easy to manage and maintain”.

Shepherd and Wedderburn is a leading UK commercial law firm with over 500 users in Edinburgh, Glasgow, London and Aberdeen.




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Napier: very significant reform

An 11-man expert working party will meet for the first time today to advise on how to introduce contingency fees for court work in England and Wales.

The working party, chaired by Michael Napier, has been set up by the Civil Justice Council (CJC) and is due to report back by the end of July. Its findings will then be presented to the Ministry of Justice and the regulatory bodies for the legal professions.

The CJC said a working party was appropriate in view of the significance of the introduction of contingency fees in contentious work – known formally as damages-based agreements (DBAs) – for the future of funding civil litigation.

DBAs were recommended by Lord Justice Jackson and are legislated for in the Legal Aid, Sentencing & Punishment of Offenders Bill. The government’s current plan is to allow DBAs – which are already permissible in tribunals – in April 2013, when all of the Jackson reforms will be implemented.

Also on the working party are: Nicholas Bacon QC (4 New Square), Richard Collins (Solicitors Regulation Authority), Don Clarke (Forum of Insurance Lawyers and Bolton firm Keoghs), Peter Douglas (Bar Standards Board), David Greene (Law Society and London firm Edwin Coe), Professor Rachel Mulheron (CJC and Queen Mary, University of London), Hardeep Nahal (Commercial Litigation Forum and US firm McGuireWoods), John Spencer (Association of Personal Injury Lawyers and Spencers Solicitors); Peter Smith (CJC and FirstAssist Legal Expenses); and Colin Stutt (formerly of the Legal Services Commission).

The contingency fee model recommended by Lord Justice Jackson is modelled on that operating in Ontario, Canada. It is a hybrid in that costs are recovered and set off against the contingency fee, rather than being a pure cut of the damages as in the US. Any excess will be paid by the client, in line with the end of recoverability for success fees in conditional fee agreements (CFAs) introduced by the bill.

Among the issues the working party will investigate are the conflicting interests at play; whether the percentage that lawyers should be entitled to recover should be limited or require court approval in certain circumstances; whether, and if so in what circumstances, a lawyer acting under a DBA should be liable for adverse costs; whether it should be possible to enter partial DBAs, analogous to the 'no win, low fee' CFAs; and whether there should be an obligation to notify opposing parties that the lawyers have entered into a DBA.

Mr Napier, who retires from Irwin Mitchell shortly, said: “I am delighted to have been asked to chair the working party to look at the introduction of damages-based agreements. I look forward to working with the members of the working group drawn from the legal, insurance and regulatory worlds, to consider this very significant reform to the funding of civil litigation.”

Last year Mr Napier, who was one of Lord Justice Jackson's assessors, chaired the working party that drew up the code of conduct for third-party litigation funders.

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Raab: ambulance-chasing lawyers

Raab: ambulance-chasing lawyers

Justice minister Dominic Raab and armed forces minister Penny Mordaunt are to chair a working party looking at how to prevent “any malicious or parasitic litigation from being taken against our brave armed forces”, Mr Raab revealed yesterday.

The move follows the controversial announcement last week by Prime Minister David Cameron that he wanted to end the “industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq”.

During justice questions in the House of Commons, Conservative MP Craig Tracey asked what action the government intended to take.

Mr Raab said: “The professionalism of our armed forces is second to none, but we cannot have returning troops hounded by ambulance-chasing lawyers pursuing spurious claims. The justice secretary [Michael Gove] has asked me to chair a working group with the minister for the armed forces to look at all aspects of this – no win, no fee; legal aid rules; time limits for claims; and disciplinary sanctions against law firms found to be abusing the system – so that we prevent any malicious or parasitic litigation from being taken against our brave armed forces.”

Ratcheting up the rhetoric further, fellow Conservative Michael Fabricant said “people in this House will find it despicable that two firms and possibly more are actively seeking – soliciting, in fact – people in Iraq to make spurious and bogus claims against our servicemen overseas”. He asked about newspaper report that the government still intended to give legal aid “to these appalling claims”.

Mr Raab replied: “I am concerned about the way in which the system operates. It is important to say that there is accountability for any wrongdoing, but that does not mean giving lawyers a licence to harass our armed forces. We will look at every angle, including the point about legal aid that he made.”

In his statement last week, Mr Cameron said: “It is clear that there is now an industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq. This is unacceptable and no way to treat the people who risk their lives to keep our country safe – it has got to end.

“The National Security Council will produce a comprehensive plan to stamp out this industry, including proposals to clamp down on no win, no fee schemes used by law firms, speeding up the planned legal aid residence test, and strengthening investigative powers and penalties against firms found to be abusing the system. We will also take firm action against any firms found to have abused the system in the past to pursue fabricated claims.

“Our armed forces are rightly held to the highest standards, but our troops must know that when they get home from action overseas this government will protect them from being hounded by lawyers over claims that are totally without foundation.”

A briefing paper on legal aid for such claims, published by the House of Commons library on the same day as Mr Cameron’s announcement, said: “It is not yet clear which cases the Prime Minister has in mind when he describes them as ‘spurious’.

“Such cases (if they exist) may not be funded by legal aid; as the Prime Minister’s comments recognise, they may be funded by ‘no win, no fee’ agreements…

“The eligibility criteria for civil legal aid in England and Wales are intended, through the merits test, to weed out those cases with poor prospects of success. The MoJ intends to introduce a residence test which would further restrict the availability of civil legal aid, requiring (with certain exceptions) that people applying for legal aid must have been in the UK for at least 12 months.”

Responding to Mr Cameron, a Law Society statement said: “Solicitors represent both those bringing claims against the state, and those serving in the armed forces, both regular and reserve, as trusted legal advisers. Everyone’s actions are subject to the rule of law – international human rights treaties and the law of armed conflict – and everyone’s fundamental rights must be protected…

“An independent regulatory system already exists to identify and penalise wrongdoing, including any involvement in the fabrication of claims. If lawyers contravene the rules of professional conduct, or act unlawfully, they must be subject to professional discipline. Legal aid contracts already allow the Legal Aid Agency to apply sanctions where there is an official investigation.”




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Hunt: early settlement of cases

The NHS Litigation Authority is to be renamed NHS Resolution as part of a “radical change” of approach to handling claims, health secretary Jeremy Hunt has announced.

It comes in the wake of government plans for a new administrative compensation scheme for birth injury cases that aims to significantly reduce the amount of litigation that currently takes place.

Speaking in the House of Commons yesterday, Mr Hunt said it was “part of our ambition to make the NHS the safest healthcare system in the world”.

He said: “I can inform the House that the NHS Litigation Authority will radically change its focus from simply defending NHS litigation claims to the early settlement of cases, learning from what goes wrong and the prevention of errors. As part of those changes, it will change its name to NHS Resolution.”

The Department of Health said the move would bring the NHS closer to becoming “the world’s largest learning organisation so when things do go wrong, lessons are learned quickly, shared across the system and ultimately, patient care is improved”.

There is currently no more detail on this, and Linda Millband, national practice lead for clinical negligence at national law firm Thompsons, said it needed to be “more than just another name for the same vastly under-resourced service”.

She continued: “We are all for resolutions but the NHS cannot not pay out when it is negligent – whether that is to patients or to their staff. Call us cynical but we will not be holding our breath for seismic change that really helps those injured by the NHS unless and until the health secretary publishes details of a more proactive protocol for medical negligence and work-related cases.”

Emma Hallinan, director of claims policy and technical at the Medical Protection Society, said: “The NHS’s provision for clinical negligence claims has increased dramatically in recent years, so a fresh and more preventative approach to managing claims is timely, and will hopefully reduce the number of costly court cases.

“The fact remains, however, that last year alone £1.5bn was spent on clinical negligence by the NHS at a time when it is under significant pressure. We desperately need a system which ensures compensation is reasonable for patients who have experienced clinical negligence, but is also affordable to society.

“The case for a whole package of legal reforms which tackle the root of the problem is becoming ever more pressing.”

Earlier this month, foreshadowing this change, the Department of Health issued a consultation on introducing a ‘rapid resolution and redress scheme’ (RRR) for severe, avoidable birth injuries. This would introduce a system of “consistent and independent investigations… along with access to ongoing support and compensation for eligible babies through an administrative scheme”.

It said the main aims were to reduce the number of severe avoidable birth injuries by encouraging a learning culture, improve the experience of families and clinicians when harm has occurred, and make more effective use of NHS resources.

The consultation said: “Evidence tells us that the current system for providing redress for these birth injuries is not working as well as it could. Currently when substandard care occurs during labour and delivery which results in the most severe forms of birth injury (cerebral palsy/brain damage), the only means by which families can secure compensation is through the adversarial and often lengthy process of litigation.

“The average length of time between an incident occurring and an award for compensation being made is 11.5 years. This process takes time because the court has to wait until the injured child’s prognosis is clear in order to decide a full and final compensation settlement.

“This is amplified by the adversarial culture associated with litigation, and adds further uncertainty and stress for the families involved.”

The NHSLA settles around 100 multi-million pound maternity cases a year. Over the past decade, the size of average awards has risen by around 9% per annum; the average settlement for a severe neurological birth injury case equates to a value of £6.25m, including costs paid out over the injured person’s lifetime.

The compensation package for eligible cases under the RRR scheme is likely to involve three elements: an early up-front payment of about £50-100,000 issued around the age of four, periodical payments, and a lump sum award.

Before the early payment, families of babies who are suspected to have been avoidably harmed would receive access to counselling, legal advice, and a case manager to direct them to appropriate state services. There would also be the potential for interim payments where avoidability is established earlier.

Following the early payment, families would progress through the compensation scheme to receive a further lump sum award and periodical payments, calculated in line with need. The lump sum and any periodical payments would be provided on average a year earlier than they would via the court route, the consultation said.

Periodical payments and associated care provision would undergo “a sensitive reassessment when appropriate to ensure they meet ongoing need”. This would be in line with key developmental milestones at around ages 5, 12 and 18. It is proposed that, compared to current court awards, a greater proportion of overall compensation (around 50%) will be made available through periodical payments.

The NHSLA would administer this part of the scheme, and put together a panel of independent experts for each claim, with access to legal support if required.

The consultation said: “It is important to note that this scheme is a voluntary alternative to the tort route, and does not remove a family’s ability to go to court if they were unsatisfied with the decision of the eligibility panel, or any other reason.

“This would therefore provide a route of appeal if a family is unhappy with the panel’s decision. However, any compensation already received by the family under RRR would be off-set against the final court award to prevent double recoverability.”

The impact assessment accompanying the consultation did not really consider the effect of RRR on claimant law firms. It said there were no “direct outcomes that are forced upon legal firms” – as the scheme would be voluntary.

On legal costs more generally, the assessment said: “Those in receipt of compensation from RRR no longer have defence and claimant legal fees that need to be paid as a result of lengthy litigation (note that there will still be an option to receive legal advice under the scheme).”




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Documents: more than 100 pages given to non-English speaking LiP at door of court

Documents: more than 100 pages given to non-English speaking LiP at door of court

The High Court has issued a warning to lawyers over dumping legal documents on litigants in person (LiPs) at the door of the court.

Though Mr Justice Peter Jackson’s ruling was in the Family Division, it has clear resonance with the civil courts too.

Re B (Litigants In Person: Timely Service of Documents) [2016] EWHC 2365 (Fam) – which was published with the approval of the President of the Family Division – arose from a recent final hearing in a child abduction case. Counsel’s 14-page position statement and four law reports totalling 100 pages were given at the door of the court to the mother, a non-English-speaking LIP.

This is unfortunately not an unusual occurrence, and it calls for a remedy,” said the judge.

He continued: “Where one party is represented and the other is a LIP, the court should normally direct as a matter of course that the practice direction documents under PD27A are to be served on the LiP at least three days before the final hearing, especially where the LiP is not fluent in English.

“The method of service, usually email, should be specified. Where time permits, the court should consider directing that the key documents are served with a translation. In cases where late service on a LIP may cause genuine unfairness, the court should consider whether an adjournment of the hearing should be allowed until the position has been corrected.”

Peter Jackson J observed that many LiPs, because of their inexperience, were hesitant to complain about matters such as late service. He noted that the “possible unfairness” arising from the imbalance of one party being represented and one not “have been repeatedly stressed” by the family courts.

“It might be added that late service of documents further weakens the position of LIPs by removing any opportunity they may have to seek advice and explanation ahead of the hearing from those who may be more familiar with the system and the language.

In the case before him, the judge said the position statement was of real assistance to the court and, had she had it sooner, could only have helped the mother, even though it was in English.

“As it was, time was wasted before the hearing could begin, with the mother studying the documents with the help of the court-appointed interpreter. That help was kindly provided even though the core function of the interpreter is as an interpreter and not a translator.”

He said the minimum service requirements set out in the Family Procedure Rules “should be adapted in individual cases to protect the rights of LIPs. The need for earlier preparation and service places obligations on advocates and those who instruct them, but that is necessary to prevent the intrinsic unfairness to LIPs that may arise from late service”.




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McNally: will keep regulation of funders under close review

The government yesterday rejected Labour calls to delay implementation of the civil justice reforms by six months.

It also refused to move on demands that the 25% cap on the success fee that can be taken from a personal injury claimant’s damages is calculated on the basis of all heads of loss, rather than just past loss.

It came during a relatively short, and scarcely attended, grand committee debate in the House of Lords on the motion to approve the draft Conditional Fee Agreements Order 2013 and Damages-based Agreements Regulations 2013. Having been approved, they will also have to go through the House of Commons.

Labour spokesman and solicitor Lord Beecham – who complained about how little time practitioners would have to prepare for the changes in the draft legislation – said that with all that is happening with civil justice reform, including the uncertainty over portal extension, “one might have thought that it would be sensible to bring all the changes together and to do it at a time which allows the parties and the professions to prepare adequately”.

He added: “I hope that the minister will look again at the timetabling with a view to deferring implementation of whatever regulations finally emerge for six months until October of this year.”

However, justice minister Lord McNally replied: “We are not persuaded that the timescales we have set are unreasonable, and we will not be deferred from the course that we have set… These orders will go through to take account of the fact that LASPO comes into effect on 1 April 2013.”

Both Lord Beecham and Liberal Democrat solicitor peer Lord Phillips of Sudbury cited Lord Justice Jackson’s change of heart over including future loss in the success fee/contingency fee calculation, when he said last year that he could “see the sense” of allowing it “in appropriate cases”.

But Lord McNally said the case for the cap did not rest on it being the judge’s original recommendation. “A sharp-eyed lawyer would say that the noble Lord’s quote about Lord Justice Jackson did not endorse the counterview but simply said that it had merit, which is not the same as advocating that the government change their policy.

“Even if it were, this is the government’s policy. It is the right policy because it protects the future earnings and the future cover for victims in these cases. It remains our policy on that merit, and we are willing to defend it on that basis.”

Lord Beecham raised a range of other questions and criticisms of what he described as “a pretty defective-looking set of regulations”.

Among them was a bid to exclude VAT on the success fee from the cap. But Lord McNally said including VAT “will provide further protection for the claimant’s damages and add certainty for the claimant as to the likely deduction from their damages”.

The Labour peer also focused on third-party litigation funding, and expressed concern about “a kind of hedge fund for legal claims” having control of cases. He said: “I understand that 25 funders are already established in the UK for damages-based agreements, of which only nine have signed up to their own self-regulated Association of Litigation Funders. They are not even joining their own association, let alone being responsible to any independent and impartial organisation to oversee their work.

“Again, I invite the minister to reconsider whether there should be such a system of regulation. There is apparently around £1bn already held by organisations in the UK to fund these arrangements. Some of them, interestingly, are apparently based offshore – a sort of Starbucks of the damages-based agreement world. One can only imagine where any profits will ultimately go.”

During the passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the government rejected moves to introduce statutory regulation of litigation funders in favour of giving self-regulation a chance. Both Lord Beecham and Lord McNally yesterday mentioned that they had had meetings with the US Chamber of Commerce, which has lobbied hard in the UK for statutory regulation.

Lord McNally said: “What we have decided so far is to keep the matter under review. That phrase can often hide weasel words and weasel intent, but we want to see just how much this is going to become a factor in our legal system, while making sure that some of the warning signs that the noble Lord has quite legitimately raised are on the radar of ministers as well. We will keep this matter closely under review.”

The only other speaker was Liberal Democrat barrister Lord Marks of Henley-on-Thames, who asked whether DBAs would be available to defendants. While under the regulations they will not, Lord McNally saidhe would give the matter “further thought”.




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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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Wheeler: Government treating the symptom when it should be treating the cause

Claimant lawyers reacted with caution to the Department of Health’s announcement yesterday that it is setting up a working group on introducing fixed recoverable costs in medical negligence, saying that while costs could be cut in lower-value claims, the real goal had to be avoiding clinical mistakes in the first place.

Brett Dixon, president of the Association of Personal Injury Lawyers (APIL), accepted that there was “scope to streamline the procedures and cost involved in lower-value claims”, but said this was only part of the story.

“So-called NHS ‘never events’ – injuries which are serious and largely preventable – have stayed at the same level in the past two years.

“Analysis of information provided by NHS Resolution in response to a freedom of information request shows that failures of maternity care represented a quarter of the damages paid out to injured patients in 2016/17. Failure in maternity care has been identified for years as a major problem for the NHS yet little seems to have changed.

“The urge to streamline costs and procedures must go hand in hand with a real, systemic, consistent reduction in avoidable injury. Only then will the NHS become more efficient, and only then will we see an end to the needless suffering of patients.”

Law Society president Joe Egan had much the same message: “While the Law Society does not oppose fixed recoverable costs in principle, the real savings for the NHS will come from learning from its mistakes and increasing patient safety…

“Cases which are not necessarily the highest in value can still be complex and challenging. Fixing costs could end up limiting the time specialist solicitors can spend understanding the details of an incident in care.

“Patients must not be denied the legal help they need to get the full compensation they are entitled to in law.”

Mr Egan also questioned the “worryingly short timeframe” for the working group to determine how fixed recoverable costs would work in practice.

Former APIL president Jonathan Wheeler, managing partner of London firm Bolt Burdon Kemp said fixing costs was “fine in principle, as long as the process by which claims are going to be dealt with is fixed first, and fair to both sides”.

He continued: “Those on the claimant side know this can work and have suggested a scheme to the Department of Health, although little progress to date has been made.

“My worry is that if patients’ needs are not taken into account, we are setting a dangerous precedent by allowing the wrong doer to fix the process by which they will be held to account. Where the wrongdoer is effectively the state, this throws up constitutional issues.”

He said the government was “treating the symptom, when it should be treating the cause: get your house in order, learn from your mistakes, adopt best practice, and cut down on the negligence in the first place”.

Agata Usewicz, head of the clinical negligence team at London law firm Hodge Jones & Allen, added: “It is dispiriting that the NHS’s focus remains on clamping down of ‘spiralling’ clinical negligence costs, when the most obvious way of cutting the costs of clinical negligence is to reduce incidents of harm in the first place.

“The Department of Health continues to perpetuate the myth that that is no limit on legal costs. In fact, costs are already tightly controlled, and subject to budgeting and detailed assessments”.

“The response to the consultation makes it clear that access to justice is a real concern to the majority of respondents, something else ignored by Jeremy Hunt’s comments.

“If access to justice is to be preserved, fatal claims, still-births, claimants lacking mental or legal capacity and claims where the client has a very short life expectancy must be exempted from any fixed recoverable cost scheme.”

From the defendant side, Christopher Malla, a partner City firm Kennedys – one of the firms that acts for the NHS – said claimants’ legal costs should be proportionate.

“Patient’s legal costs are often significantly higher than a patient’s damages, particularly in claims below £25,000, and these legal costs are taking vital funds away from front-line patient care.

“Any bespoke process designed by the working group must also take into account the importance of patient safety, ensuring lessons are learnt from incidents, with the overall aim of achieving the Secretary of State’s ambition of making the NHS the safest healthcare system in the world.

“This should reduce harm, clinical negligence claims and the overall cost to the NHS.”

Dr Rob Hendry, medical director at the Medical Protection Society, welcomed the commitment to a fixed recoverable costs scheme for clinical negligence claims.

“From the £1.7bn the NHS paid out on clinical negligence costs in 2016/17, legal costs accounted for 37% of that bill. It is right that we question whether such costs are sustainable for the NHS, and whether this amount of NHS money should be spent on lawyer fees.”

He said the society had hoped to see “a bolder decision” that put the threshold at cases worth up to £250,000.

“However a £25,000 threshold is a positive first step – one which we hope will be reviewed and possibly increased over time.”




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air bag

Crash: liability was hard to dispute

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 




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Aeroflot: Eight-year action

Russian state airline Aeroflot has been ordered to pay indemnity costs for the entire eight years of a fraud claim that it dropped on the eve of opening submissions.

Mrs Justice Rose said a claimant who makes serious allegations of fraud, conspiracy and dishonesty and then abandons them, “thereby depriving the defendant of any opportunity to vindicate his reputation”, should normally expect an order for indemnity costs.

In PJSC Aeroflot – Russian Airlines v Leeds & Anor (Trustees of the estate of Boris Berezovsky) & Ors [2018] EWHC 1735 (Ch), the proceedings alleged that Nikolay Glushkov together with Boris Berezovsky – both of whom are now dead – misappropriated large sums of money from Aeroflot between 1996 and 1998, and that the so-called ‘Forus defendants’ were the vehicles by which this was carried out.

The claim, issued in January 2010, was that he conspired with Mr Berezovsky to cause Aeroflot to enter into a number of substantial loan agreements with companies which he controlled in the Forus Group.

The trial of what the judge called “these complex and acrimonious proceedings” was set down for 28 days, commencing on 10 April 2018. The timetable allocated four days judicial reading time followed by opening submissions and evidence due to start in court at 2pm on Monday 16 April.

Just before 5pm on Friday 13 April, however, Pinsent Masons, solicitors for Aeroflot, sought permission to discontinue its proceedings against all defendants.

The application had to be made to the court because Aeroflot had the benefit of worldwide freezing orders against the defendants, and under CPR 38.2(2), a claimant must seek the permission of the court to discontinue where the court has granted an injunction.

Aeroflot offered to pay the costs of the Forus defendants on the standard basis as part of the discontinuance, but not Mr Glushkov.

In granting the application, Rose J discharged the freezing orders, ordered an interim payment on account of costs of £2.5m for the Forus defendants, which was about 60% of their total costs, and of £600,000 for Mr Glushkov’s costs, around 43% of his total costs.

The defendants applied for costs on the indemnity basis on two grounds. First was the High Court ruling in Clutterbuck and Paton v HSBC plc & others [2016] 1 Costs LR 13, as authority for the proposition that where a claimant proceeds with allegations of serious dishonesty and fraud against a defendant and discontinues those claims without explanation, an order for indemnity costs should usually follow.

Rose J said there was “no basis for distinguishing Clutterbuck from the present case”.

She continued: “On the contrary, the present case is stronger given that the allegations of fraud were pursued over eight years and the proceedings were prosecuted vigorously up to a few hours before the whole claim was abandoned the afternoon before the trial.”

The order for indemnity costs was likely to be the just result, “unless some explanation can be given as to why the claimant has decided that the allegations are bound to fail”.

However, Aeroflot chose not give a reason for discontinuing.

The second ground was the “more familiar test” from Three Rivers DC v Bank of England [2006] EWHC 816 (Comm) of circumstances which take the case “out of the norm”.

Again, Rose J said she had “no hesitation” in finding that the test was met.

“I have already described the seriousness of the allegations of dishonesty, conspiracy to commit fraud and theft of monies that were persisted in with vigour.

“The allegations were persisted in ‘to the bitter end’ in the sense that on 13 April 2018, only a few hours before the notice of discontinuance was served, [Pinsent Masons partner Michael] Fenn made his 26th witness statement asking the court to admit in evidence under hearsay notices the Aeroflot witness statements purporting to justify those allegations.”

The other factors she took into account were three inaccurate statements to the court during interlocutory proceedings – although the court said these were no deliberate – and the “aggressive pursuit” of some of the defendants.

Aeroflot argued that the defendants should be penalised for failing to mediate. But Rose J rejected this: “Where allegations of fraud and serious wrongdoing are made, the proceedings are intrinsically unsuitable for mediation.

“To penalise the Forus defendants in costs for the stance they took would in effect be penalising Mr Glushkov and the Forus defendants for insisting on their right to have their reputations vindicated by the decisions of the court following a trial.

“In any event I have been case managing these proceedings for some time and I am satisfied there was never any possibility of these parties making any progress in alternative dispute resolution.”

Giving guidance to the costs judge, Rose J that “since Aeroflot have declined to explain why they have discontinued these proceedings”, the appropriate order was that Aeroflot pay all the defendants’ costs to be assessed on the indemnity basis for the whole proceedings.




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CJC: there is already “substantial provision” for mediation

The Civil Justice Council (CJC) has argued against the idea that the government’s proposed small business commissioner (SBC) should set up a new mediation service.

“We see some difficulty and not very much advantage in the SBC actually providing its own mediation service, as opposed to simply signposting existing provision,” the CJC said.

“How would this be superior to that already available? Would it not lack the necessary neutrality where the dispute was small business against large business and the SBC was perceived as the champion of the small business?”

Responding to a consultation by the Department for Business, Innovation and Skills (BIS), the CJC said there was already “substantial provision” for mediation, the most obvious being the small claims mediation service, private mediation and sector-based conciliation services.

The CJC said it had “some concern” about the proposed power of the SBS to issue certificates where mediation had failed, where a party had “unreasonably failed to participate” and which could be considered at a later stage by the courts in awarding costs.

The CJC went on: “That process would be absolutely unprecedented in civil justice in this country, where courts have never sought to intervene in this way. Allegations of lack of good faith are frequently made in mediations and are highly subjective.

“Absent a very small number of extreme cases (such as cases of simple non‐attendance on the given day), this is bound to be a contentious area and the CJC does not believe that mediators will welcome this potential intrusion into the confidentiality of the mediation day or the satellite arena it provides for the parties’ grievances, which risk bringing the commissioner and its role into disrepute.”

The CJC said it was keen to draw the attention of BIS to its report on online dispute resolution for low value civil claims.

“The overlap with those proposals is striking, and both sets of recommendations share an emphasis on an initial online advice resource and on mediation to resolve disputes.”

The CJC agreed that the SBC should provide general information and advice to small business on a confidential basis, where they were involved in disputes with larger companies.

However, it warned that this year’s court fee rises were likely to have a “disproportionate effect on small businesses”.

In its response to the consultation, the Law Society argued that parties should retain their rights to independent legal advice and also warned against plans to highlight when a party has failed to participate in mediation.

Kathleen O’Reilly, a member of the Law Society’s company law committee, said: “Praising and shaming parties’ positions in disputes may risk disclosure of commercial confidentialities as well as interfere with the right to exercise freedom of choice and enforcement of contractual rights.”




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Lewis: stark reminder to all practitioners

The High Court has sent the first sign of a hardened stance against missed deadlines since the new Civil Procedure Rules (CPR) came into force.

In Venulum Property Investments Ltd v Space Architecture & Others [2013] EWHC 1242 (TCC), Mr Justice Edwards-Stuart refused an application by the claimant for permission to extend time for service of its particulars of claim, noting the “stricter approach that must now be taken by the courts towards those who fail to comply with rules”.

He became the first judge to interpret the new provisions governing relief from sanction under rule 3.9 and his ruling was in line with the pre-1 April warning from the Master of the Rolls, Lord Dyson, that parties can “no longer expect indulgence if they fail to comply with their procedural obligations”.

The claimant applied for permission to extend time after its solicitors, Shoosmiths, incorrectly calculated the deadline for service. The action, a professional negligence claim, was brought by Venulum against 13 defendants; however, only two of them (the ‘Miller defendants’) opposed Venulum’s application. They were advised by Weightmans.

The claim had been brought near the end of the limitation period and the judge’s refusal of Venulum’s application ends its claim against the Miller defendants since a fresh action would now be statute barred, but its action against all the other defendants continues.

Mr Justice Edwards-Stuart recognised that the court’s discretionary power to extend time had been “radically amended” in the new CPR, replacing the nine factors the courts used to consider with a more general consideration on “all the circumstances of the case… including the need: (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders”.

Weightmans said the ruling is the first to combine the sentiment of the Jackson reforms and the approach outlined in previous Court of Appeal rulings on the likely impact of the new rules. The judge explained that: “In general, it is not satisfactory or in the interests of justice to have claims brought in the closing weeks or months of a long limitation period. Delay is bad for justice.”

As well as this, he took into account that the claimant had as good, if not better, claim against the other defendants and so would not be prejudiced if it could not sue the Miller defendants, while “the fact that the claimant was seeking to advance a claim for bad faith that is pleaded in particularly vague terms is a course that does not merit indulgence”.

He concluded: “In my judgment, when the circumstances are considered as a whole, particularly in the light of the stricter approach that must now be taken by the courts towards those who fail to comply with rules following the new changes to the CPR, this is a case where the court should refuse permission to extend time. The claimant has taken quite long enough to bring these proceedings and enough is now enough.”

Edward Lewis, partner and head of construction risk at Weightmans, said: “Today’s judgment is extremely important in highlighting the tightening of standards and the approach that is to be expected of the courts under the new CPR. This ruling offers a stark reminder to all practitioners that we are operating in the context of a much altered litigation landscape.”




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Rowley: claimants have been struggling to find cover

Rowley: claimants have been struggling to find cover

Irwin Mitchell has launched a bespoke after-the-event (ATE) product in association with Allianz Legal Protection (ALP) for professional negligence claims against solicitors.

The firm has full delegated authority to offer the product, ‘Support4Dispute Professional Negligence’, the “unique” feature of which is a staged premium linked to the amount of damages recovered and capped.

ALP said this enables the claimant “to retain a more proportionate share of any damages recovered, especially for cases in the sub-£100,000 damages band”.

In addition, the premium is deferred until the case is settled, and only payable on successful cases.

Steve Rowley, ALP’s business development manager, said: “Customers with lower-value claims are struggling to find appropriately priced and suitable ATE insurance cover that meets their needs. This often means these cases never progress, even though the customer has suffered some form of negligence.

“We’ve worked with Irwin Mitchell over several months to jointly develop this product specifically aimed at addressing the risks and issues faced by customers trying to bring a negligence action against solicitors. Irwin Mitchell’s expertise in handling solicitor professional negligence claims provides us with complete confidence to provide the product on a delegated authority basis.”

Dan Brumpton, partner and head of professional negligence team at Irwin Mitchell, added: “Since April 2013 many clients with potentially strong claims against their former solicitors have found it difficult to fund them. We believe this new product will allow those clients the opportunity to do so.”




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Watthey: importance of such rulings cannot be overestimated

The Mitchell ruling is not to be used as a tactical weapon, the High Court has warned litigators in a case where its opprobrium was reserved for the conduct of the party on the other side of the default.

The judgment of Mr Justice Leggatt – in which he sought to distinguish the facts from those in Mitchell – is likely to be welcomed across the litigation world.

He said the defendants seemed to have viewed their opposition to a stay being lifted in the case as “a potentially free ride whereby, if successful, they would obtain a fortuitous dismissal of the claim without a trial and, if unsuccessful, would still have their costs paid by the claimants as the defaulting party”. It is, the judge emphasised, “important to discourage that approach”.

Summit Navigation v Generali Romania [2014] EWHC 398 (Comm) concerns a claim on a policy of marine insurance. Under a consent order, the claimants had to provide additional security for costs by 4pm on 5 December 2013, failing which the action would be stayed.

In the event, security was made available on the morning of 6 December, whereupon the defendants’ solicitors refused to accept it, on the basis that the action was now stayed. They refused to consent to the lifting of the stay, and the timetable was derailed: nothing was done in the claim for over two months.

While he said that a stay was a sanction, Leggatt J said not all sanctions are equal for the purposes of CPR 3.9: “There is, in my view, a significant difference between an order which specifies the consequence that proceedings are to be stayed if security for costs is not provided by a specified date and an order that, unless security is provided by a specified date, the claim will be struck out.”

The stay was intended to be “non-permanent”, he said, and rule 3.9 is “quite capable of accommodating more than one approach to applications for relief from sanctions taking account of the nature of the sanction and the nature of the relief sought”.

He distinguished the case from Mitchell: “In giving guidance as to how the amended CPR 3.9 should be applied, the Court of Appeal in Mitchell was not concerned with the ‘rather special form of order’ that is an order for security of costs, nor with the granting of relief from a sanction which was not intended to be permanent.”

Under the terms of the new rule 3.9 therefore, neither the need for litigation to be conducted efficiently and a proportionate cost, nor to enforce compliance, provided a good reason to refuse to lift the stay, said Leggatt J.

If he was wrong and Mitchell did apply, he continued, he would still grant relief. The non-compliance was ‘trivial’ – although the judge preferred to say it was not material (“since the whole thrust of the new approach is to inculcate a culture of compliance with rules and orders and to dispel an attitude which trivialises even ‘minor’ breaches”) – and the claimants’ insurance broker was responsible for the non-compliance.

And even had he not come to these conclusions, Leggatt J said he would still have considered it just to grant relief.

“The fact that the claimants missed the deadline for putting up security for costs by a day did not in itself have any impact on the efficient conduct of these proceedings, nor on the wider public interest of ensuring that litigants can obtain justice efficiently and proportionately.” To rule otherwise would have rendered compliance an end in itself, which the Master of the Rolls in his March 2013 lecture, as approved by the Court of Appeal in Mitchell, had warned against.

Indeed, “unlike the claimants’ default itself, the defendants’ response to it has had a very serious impact on the litigation. The whole timetable for the proceedings has been derailed, significant costs have been incurred and court time has been wasted to the detriment of other court users.

“In other words, the reliance placed on Mitchell in this case has had the very consequences which the new approach enunciated by the Court of Appeal in Mitchell is intended to avoid.”

The defendants had acted unreasonably in refusing to agree to lift the stay, he said, and “disregarded the duty of the parties and their representatives to co-operate with each other in the conduct of proceedings, and the need for litigation to be conducted efficiently and at proportionate cost. It stood Mitchell on its head”.

Leggatt J said he was putting his ruling in writing in the hope of discouraging other litigants from makings similar arguments. He further penalised the defendants by making them pay the claimants’ costs.

James Watthey, the barrister at Hardwicke Chambers instructed by Hughes & Dorman to act for the claimants, said: “Today’s judgment is likely to be met with relief amongst solicitors and copied by other High Court judges who are keen to distinguish Mitchell from the circumstances of other cases before them, on the basis that the sanction in question is of a different and less harsh nature.

“If litigants think that they can hitch a ‘free ride’, as the judge put it, on the on the back of their opponent narrowly missing a deadline, they are wrong…

“What constitutes a ‘just result’ remains a key question for the court to determine. The courts have not turned from dispensers of justice into machines, mechanically insisting on compliance as ‘as an end in itself’ – this is certainly good news for litigators.

“The importance of these High Court judgments cannot be overestimated. Daily, at the coal face of litigation in the county court, the junior judiciary is refusing applications for relief in circumstances where the result produces a clear injustice between the parties, despite the lack of any real countervailing imperative.”

Cubism Law and Jason Evans-Tovey of Crown Office Chambers are acting for the defendants.




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Blackburn: “exciting” ruling applies across the board

Irwin Mitchell is claiming to have won the first ever ruling punishing a losing defendant for rejecting an offer to mediate the costs of their dispute.

Partner Tom Blackburn said the ruling was “exciting” because it applied to all forms of litigation, not just medical negligence.

All previous cases involving the imposition of sanctions for rejecting offers of costs ADR had involved successful parties, who had seen their costs reduced by a certain amount, Mr Blackburn said.

Delivering judgement at the Senior Court Costs Office (SCCO) in Reid v Buckinghamshire Healthcare NHS Trust [2015] EWHC B21 (Costs), Master O’Hare said: “If the party unwilling to mediate is the losing party, the normal sanction is an order to pay the winner’s costs on the indemnity basis, and that means that they will have to pay their opponent’s costs even if those costs are not proportionate to what was at stake.

“This penalty is imposed because a court wants to show its disapproval of their conduct. I do disapprove of this defendant’s conduct but only as from the date they are likely to have received the July offer to mediate.”

Further, because the claimant also made a successful part 36 offer, Master O’Hare added a 10% uplift of £13,000 onto the defendant’s existing costs bill of £130,000.

Mr Blackburn said the SCCO had taken an even stronger line in another of Irwin Mitchell’s cases against the NHSLA, Bristow, and the ruling would be published before the end of the year. In that case, he reported, the court awarded indemnity costs for the whole of the detailed assessment proceedings, not simply for the period after the offer to mediate should have been accepted.

Despite the two rulings, Mr Blackburn said the NHSLA was still refusing the firm’s offers to mediate.

“You can imagine how much this is going to cost them in 2016,” he added.

Mr Blackburn predicted that Irwin Mitchell would consider changing tactics and pushing for wasted costs orders.

Last year, the NHSLA launched a mediation pilot, but the results of it are not known.




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The medical reporting world “like the Wild West”

The head of one of the biggest suppliers of medical reports has described government plans to introduce random allocation of experts in whiplash cases as “barking mad”.

Mark Stirrup, managing director of Capita Medical Reporting, said: “We don’t know how random allocation will work.

“There are a lot of small reporting agencies and then there are larger ones like us – we produce 150,000 reports a year. That’s why I think it’s barking mad.”

Under plans outlined by the Ministry of Justice (MoJ), lawyers would be required to obtain medical reports for whiplash cases through a portal, currently known as MedCo.

To help ensure the independence of expert reports, the MoJ said in its September consultation paper that a filter would be applied to search results on the portal preventing law firms from choosing MROs with which they had financial links.

However, random allocation had previously been mentioned in a letter from justice minister Lord Faulks in August as the preferred option.

James Dalton, assistant director at the Association of British Insurers (ABI),  told delegates at last week’s Motor Accident Solicitors Society (MASS) conference in Manchester that random allocation was a “policy decision” of the MoJ which had been communicated to stakeholders.

“It’s not my decision,” he said. “I certainly support it, but it’s a decision the ministry has taken.”

Mr Dalton said that, for competition law reasons, the name of every MRO must come up on the portal at some point.

However, Mr Stirrup described the MRO world as “like the Wild West”, and said that although Capita was a big company and “has to be seen to do the right things”, some of the smaller companies did not have the same approach to data and security.

Mr Stirrup said he backed the government’s plan of accreditation for expert witnesses in whiplash cases, due to be introduced after the portal is launched at the beginning of next year.

He called for fixed fees, introduced for whiplash medical reports at the start of last month, to be extended to reports for all personal injury cases. He said there were already signs of people charging “inflated fees” for non-whiplash medical reports.

Mr Stirrup added although he supported the principles behind the MoJ’s proposals, he was concerned about implementation.

The MoJ said in August that compulsory accreditation for medical experts would be introduced by the end of this year.

Craig Budsworth, past chair of MASS, said the government believed that the only way to ensure the independence of experts was through random allocation.

“I do not accept it,” he said. “I think work is still to be done on whether it is the correct approach and have raised this with the MoJ.”

A spokesman for the MoJ said no decision had been made on whether a search filter or random allocation was the best way forward, but an announcement would be made before Christmas.


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Are the days of the Arkin cap numbered?

Stephen Innes

The Arkin cap has come to be seen as increasingly unfashionable, and a forthcoming hearing may provide some indication of the prospects of it being consigned to the back of the wardrobe of history. As a reminder, where a claim backed by litigation funding fails, the funder may be susceptible to a non-party costs order in favour of the successful party.

October 5th, 2018