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Adam Hizzett, director at HD Law

Eclipse Legal Systems, the sole Law Society Endorsed legal software provider, has implemented its Proclaim Case Management solution at new start-up firm, HD Law.

The Bradford-based practice specialises in litigation involving the Consumer Credit Act 1974, in general recovering compensation for those who have fallen victim to mis-sold financial products or products purchased using credit.

This includes a wide range of claims including mis-sold insurance policies such as PPI, under-performing investments, timeshare and renewable energy products and interest rate hedging products.

The new start-up has opted for an entirely bespoke Proclaim Financial Claims Software solution which will facilitate a secure approach to individual client files, bringing with it a high level of efficiency to the firm’s operations and enabling staff to seamlessly share cases with an established Leeds-based practice.

Furthermore, Proclaim will help to streamline processes for HD Law by collating all incoming documents, ensuring every piece of client matter is stored, ready for extraction, in the relevant case.

The firm has also implemented Eclipse’s Task Server tool which will eradicate hours of administration time by carrying out various time-consuming yet vital tasks – ideal for a busy start-up practice.

Adam Hizzett, director at HD Law, comments:

“From previous experience with Eclipse and Proclaim I knew the software was the market leader and definitely the best placed solution for our business. As a new start-up it’s essential we are able to establish ourselves and maintain the impeccable standards we promise to our clients.

“Thanks to Proclaim, I can be confident moving forward that our claims processes can be handled expertly within the system, allowing us to focus on expansion and outgrowing our competition.”




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Ministry of Justice

MoJ: “simply untrue” that it is not using the personal injury portal

Thompsons Solicitors has accused the Ministry of Justice (MoJ) of double standards for failing to use the portal for lower value personal injury claims.

The firm said that in the last 12 months, it had lodged 172 cases involving the MoJ on behalf of injured clients but in each instance found that the MoJ had not registered itself on its own system.

The MoJ has denied this, saying it was “simply untrue to suggest we do not use the personal injury portal”.

Tom Jones, head of policy at Thompsons Solicitors, said: “Despite having forced through its use by everyone else in all cases, the MoJ hasn’t bothered to register itself on a portal it insisted was set up,”

“As they aren’t registered on the portal, we aren’t able to use the portal system to communicate with them as defendants. This means we’re incurring additional costs which they then refuse to pay,” he said.

“It’s an absolute farce that the government brought in major reforms to the legal system – and will bring in more if it gets its way – and yet can’t get its own house in order to use them.

“This is yet another example of the government making one rule for themselves and one for everyone else. They harp on about addressing the so-called ‘fraud culture’ and the issue of ‘excessive costs’ but they are being dishonest themselves – not adhering to their own rules and running up costs they won’t pay back.”

However, a spokeswoman for the MoJ said: “It is simply untrue to suggest we do not use the personal injury portal.

“Claims involving the Ministry of Justice or National Offender Management Service go through the portal via the independent company that handles claims on our behalf.

“We are absolutely committed to providing excellent health and safety, and the portal allows claimants to gain resolutions in an efficient and satisfactory way.”




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NHS trusts: warned on high risk and uncertainty

NHS trusts: warned on “uncertainty and high risk” of private insurer option

Global insurance broker Lockton has held talks with 17 NHS trusts interested in insuring themselves privately and leaving the NHS Litigation Authority (NHSLA), it has emerged.

Mark Riley-Pitt, senior vice-president of global insurance brokers Lockton, told Litigation Futures that private insurance “could be cheaper”, although the trusts’ liabilities under the current scheme would have to be dealt with.

“Monopolies aren’t good,” he said. “They stifle competition and innovation. Innovation, and providing solutions to problems is something the insurance industry is good at.”

Mr Riley-Pitt said France had its own version of the NHSLA, which continued to exist. However, French hospitals had been allowed to insure themselves privately for the last few years and some did, including in London.

“Insurers make a profit by managing risk,” he said. “I’m not overly impressed by the way the legal community gets a hammering on the litigation aspect of risk.

“Someone has to represent these clients. The length of time taken for people to get redress is something that everyone is responsible for. Even when liability is not disputed, there can be terrible delays in agreeing quantum.

“There are some cases where fees are disproportionately high, but there is normally a reason why. If we were more robust in tackling delays, it could make a significant difference financially.”

Mr Riley-Pitt added that the Department of Health’s plans to cap fees for medical negligence cases was “potentially a knee-jerk reaction”.

A spokesman for the NHSLA said: “We are aware that brokers who wish to break into the clinical negligence market will actively market alternatives. We do not know whether and how this may be backed in the long term.”

He said the NHSLA understood that the cover currently being marketed by was “not on a like-for-like basis” and came with conditions, limits and costs which were not a feature of the non-profit making and state-backed clinical negligence scheme for trusts (CNST).

“We are committed to working with our members to make sure that their indemnity cover and the services we provide meet their needs,” he said.

“CNST works on a pay-as-you-go basis, which ensures that money is not tied up in reserves for future claims or diverted to insurer profits and additional costs such as insurance premium tax.

“Members benefit from a state-backed scheme which removes the uncertainty and high risk associated with an insurer who may or may not remain in the clinical negligence market.”

In a separate development, well-known medical negligence specialist Hudgell Solicitors has published detailed facts and figures challenging the Department of Health’s plans to impose fee caps for low-cost cases.

In one case a client suffered cuts to her mouth and tongue when she attended hospital for adjustment of a brace. The firm sought an admission of liability and a £2,500 settlement for pain and suffering.

Senior solicitor Simon Wilson said it took 15 months of legal proceedings before the trust involved offered a settlement of £1,000 to the client, which was accepted. Mr Wilson said the total cost to the public purse was £13,800.

In another case, a patient developed skin issues after treatment on a cyst on her hand. “Less than two months after proceedings were served – but more than two years after the initial letter of claim was sent – the trust involved finally made an offer of £8,000 compensation, before settling at £10,000 after further representation.”

Mr Wilson said the total legal costs over two years included fees of £32,500, including counsel’s fees of £4,300 and insurance costs of £7,650.

“This was one of the relatively low-value claims that the government is claiming is down to ‘excessive charging’, but this was clearly not the case.

“Had the trust settled early on, the only costs would have been a records fee of £100, a liability and causation report fee of around £1,150 and a condition and prognosis report of £450. You are looking at thousands of pounds worth of avoidable costs.

“Interestingly, in that particular case, the offer of settlement was actually made before a defence was ever filed, evidence in itself that it was always going to be a difficult case to defend, so why drag it all the way through a legal process until proceedings are served. It basically suggests they were hoping the claim would simply go away and the patient give up.”

Mr Wilson added: “There is a lot being said about excessive charging and capping the legal costs in medical negligence cases, but there is a real danger here that the NHS will simply be able to deny all allegations they face, knowing it won’t be worth the time for solicitors to take on cases due to limitations on how much investigation they can put into a case.”




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Wells: certainty of German market attractive

The certainty provided by Germany’s legal services market makes it a viable alternative to the UK as a location for big-ticket investors, according to the head of a major third-party litigation funder.

Speaking at the recent listed law conference in London, investment banker Mark Wells, managing partner of Calunius Capital, said that the German litigation market was 85% as big as the UK’s, and was “particularly attractive” for a number of reasons.

Calunius had decided to focus on Europe and avoid the US market – far and away the world’s largest – because “we know enough about the US know that we know nothing”, he said.

He pointed out that the first litigation funder to list in Europe was in Germany, in 1999 – eight years before the first to list in the UK.

Among several reasons for litigation funders to find Germany appealing was that there a third party can own a claim, “so as an investor we can take absolute control of the claims”, he said.

Also in Germany, apart from a small number of exceptions, conditional fee agreements were not allowed. “If you want to retain the lawyer you have to pay them cash money… The good thing from a funder’s point of view is that there is no competition from law firms… who are able to offer a ‘no win, no fee’ arrangement.”

Lastly, Mr Wells said, “In any investment an attractive feature is certainty as to what the project costs are going to be”.

In Germany, legal fees were fixed by statute, including adverse costs, and capped. “So in the very large claims the costs per unit claim compare very favourably with investments in Anglo-Saxon markets. The great advantage to an investor of the German system is certainty… a very significant advantage.”

However, the benefit of certain fees was double-edged, he said, because it made litigation “pretty cheap”. He added: “The challenge is that a lot of claimants who would be priced out of the UK market can get into the German market.”

In another disadvantage, whereas in England and Wales and high-value cases would be heard invariably by expert judges, in Germany the federal courts system meant that a junior judge might be allocated to a high-value case.

Concluding, Mr Wells said while Germany had some pros and cons, “it does open up to some business opportunities that would be exceptionally difficult to replicate in a UK or Anglo-Saxon context”.

Meanwhile, AIM-listed Burford Capital has raised £175m through an oversubscribed issue of bonds on the main market of the London Stock Exchange.

The bonds will pay interest at an annual rate of 5% and mature on 1 December 2026.

Burford said the new capital will allow it to continue growing its legal finance business, which already stands at more than $2bn invested and available.

The money will also be put towards repaying early the $43.75m of loan notes due in 2019 which were created as part of the December 2016 acquisition of Gerchen Keller Capital.

Christopher Bogart, Burford’s chief executive, said the issue had exceeded both of its previous issues.

“Law firms and corporate clients are coming to us with needs which have evolved far beyond the single-case financing model on which this industry is founded – although that remains a core area of our business.

“This additional long-term capital will enable us to continue to meet the global demand for Burford’s services and further solidifies our position as the industry leader with the industry’s lowest cost of capital.




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Car crash: consumers unsure what cover their LEI provides

Consumers have a much poorer understanding of motor legal expenses insurance (MLEI) than providers believe – but it is a useful product that helps consumers find specialist solicitors, a review by the Financial Conduct Authority (FCA) has concluded.

As a result of its work, the FCA has called on insurers to reconsider the basis on which MLEI is provided – particularly whether it is opt-in or opt-out – the quality of explanation of the product, and the extent of the cover provided.

Consumer research undertaken as part of the review found that while consumers have a relatively high awareness of MLEI, there is “little understanding” of what it does and the benefits it provides.

Consumers thought MLEI provided general protection in the event of litigation against them, this being their overriding concern. They were not able to distinguish between the cover provided under their motor policy – that is, protection against being sued for damages – and the MLEI policy enabling them to pursue their legal rights to recover uninsured losses from the at-fault driver and, where provided, legal representation in the event of criminal prosecution.

Further, the experience of those who had sought to use MLEI at the point of claim was very variable, while those providing cover for criminal prosecutions similarly varied in what they would pay for – one was worded in such a way that the FCA said it could be used to deny virtually any claim.

The FCA suggested that the variety of labels applied to MLEI is also “likely to fuel consumer misunderstanding”.

However, asked to indicate on a scale of 1 to 5 (5 being strongly agree) whether they agreed with the statement that ‘consumers understand MLEI’, most of the 16 insurers and intermediaries that took part in the project gave a 4, 4/5 or 5.

Concerns over the sales techniques included making it an opt-out product; a majority of providers took this approach and the FCA said consumers often lacked the confidence to override the ‘authority’ of the insurer or intermediary that MLEI was needed – and when they did try to, some websites issued alarmist warnings.

The FCA said: “We came to the view that it is hard to see opt-out selling of MLEI as consistent with good consumer protection.” It was also critical of the difficulty consumers would have to understand some insurers’ policy wording.

“Overall, we came to the conclusion that in the current market context MLEI is a product which can be useful for consumers,” it said. “It enables them to pursue their common law legal rights to recover their uninsured losses following a motor accident for which they are not at fault. There are the additional benefits, where provided in the policy, of motoring prosecution defence and access to a legal helpline. MLEI is a ‘convenience’ purchase in that it packages together these legal services upfront.

“Historically recovery of uninsured losses could often be sourced through other means, notably a CFA with a solicitor for pursuit of a personal injury claim. However, in such cases, the not-at-fault motorist would have to search out a solicitor after the accident and it could be difficult for the consumer to determine whether the solicitor was in fact a specialist in personal injury claims or not.

“In this regard another benefit of MLEI is that the legal expenses insurer performs a quality assurance role. Cases referred through them will be to specialist solicitors, which is likely to increase the chance of successful recovery.”

Benefits of MLEI that could not be found through going direct to a solicitor, it said, included pursuing personal injury claims valued below the current £1,000 small claims limit – the importance of which will increase if the limit goes up to £5,000 as the government is considering – and claims involving non-UK registered drivers involved in an accident in the UK and accidents abroad involving UK motorists. “Neither of these types of case is likely to be accepted by a solicitor under a CFA because of the unlikelihood of their costs being recovered,” the FCA said.

Simon Green, head of general insurance and protection at the FCA, said: “We have discussed our findings with insurance firms, trade associations and consumer representatives. The firms that participated in the project are changing the way MLEI is sold.

“We now want all motor insurance providers to similarly reflect on our findings. We ask firms to pay particular attention to what customers are saying about their understanding of MLEI and motor insurance in general. We will revisit this work in 2014 to assess how the market has responded.”




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Spencer: enormous effect on NHSLA in short term

The 1 April Jackson reforms start date is creating a “hump” of conditional fee agreement (CFA) cases that will take years to clear the courts, a leading clinical negligence barrister has predicted.

Martin Spencer QC of Hailsham Chambers said claimant firms have been frantically signing up CFAs to beat the end of recoverability of after-the-event insurance (ATE) premiums and success fees.

Speaking last week at a forum on costs and children’s claims held at Pattinson & Brewer, Mr Spencer said that in his experience “in their fear and indeed concern about the future many claimant firms have been signing up to CFAs by the dozen or the hundreds”.

He added: “That also involve signing up to ATE insurance premiums and all the ducks being in a row before 1 April.”

The QC, who specialises in professional negligence, particularly in respect of nurses and doctors, predicted that it would take years for the effects of the rush to clear. “There is going to be a hump of cases which are going to be seen through over the next two or three years.”

In the short term it would have an “enormous effect” on the NHSLA and the amounts it would have to pay out, he said. In the longer term: “We will see eventually the new regime coming through and the impact that has on the amounts paid out by the NHSLA and the insurance companies.”

Mr Spencer described the absence of detailed information on costs until just weeks from the 1 April start date as “really outrageous”. He continued: “It’s only when you look at the detailed provisions and you get into the detail that you are able to start planning for the future properly. The very recent publication of the regulations for a regime which is only just a month away makes it really very difficult for everybody.”

Also speaking at the forum, law costs draftsman Paul Kay of R Costings predicted that after 1 April “bullish” defendants would make “early competitive offers” and lawyers would “have to get a handle on quantum” earlier in the case than they were used to. Cost budgeting represented a “sea change” in the way practitioners work and would necessitate lawyers talking to their opponents about the budget.




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Iain Cherry promoted to associate in Manchester

Just Costs Solicitors has announced eight internal promotions, with two non fee earners taking up senior positions at the firm.

Promoted to Senior Associate is Mary Doohan who is based at the firm’s Chesterfield office.

Promoted to Associate are Slava Krizalkovicova  (London), Phil Bradbury (Manchester), Simon Gayfer (Manchester), Sarah Slesser  (Chesterfield), Paula Burnett (Chesterfield) Iain Cherry (Manchester) and Pauline Lyndon (Manchester).

Six of the eight promotions are fee earners, while Northern Region Business Development Manager, Iain Cherry and Finance Team Leader, Pauline Lyndon, are non fee earners.

The promotions complement Just Costs’ recent recruitment drive which has seen the firm create 30 new jobs across Manchester, London, Leeds and Chesterfield.   The firm, which was granted an ABS licence last year,  has also appointed Kevin Doolan, formerly Head of Client Relations at Eversheds, as a consultant and non-executive director.

Announcing the promotions at the firm’s AGM, Managing Director Paul Shenton said:

“These promotions reflect our planned programme of targeted growth across the business.  As well as recruiting externally, we are committed to recognising and rewarding home grown talent.”




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Bundles: plenty more where these came from for Mr Justice Garnham

A High Court judge has described as “absurd” the conduct of parties in an employment dispute that produced thousands of pages in bundles – but only referred to 100 of them – and skeleton arguments more than seven times the expected length.

Mr Justice Garnham warned that he was likely to penalise them in costs.

In ICAP Management Services Ltd v Berry & Anor [2017] EWHC 1321 (QB), the judge was deciding whether to continue interim injunctions placed on the first defendant, the former chief executive of a division of the claimant, that enforced the rest of his gardening leave – until July – and post-termination restraints on competition, dealing with the claimant’s clients and poaching its staff.

The Queen’s Bench Guide says skeleton arguments should not normally be longer than 20 pages of double-spaced A4 paper.

But in preliminary comments in his ruling, Garnham J said the claimant’s turned out to be 151 pages, plus 35 pages of appendices. For the first defendant, the figure was 158 pages, plus eight pages of appendices; for the second defendant (his prospective employer), it was 51 pages, plus six pages of appendices.

“There was, in fact, no significant issue between the two defendants; the provision of two separate skeletons of such length making similar points was singularly unhelpful,” the judge said.

“This was a case with a time estimate of six days including two days for pre-reading. The issue at stake was the enforcement of the terms of an employment contract for something less than three months.

“The overriding objective, set out in CPR 1.1(2), directs the court to ensure that cases are dealt with ‘justly and at proportionate cost’. That includes allotting to the case ‘an appropriate share of the court’s resources’. As I made clear to the parties at the commencement of this hearing, skeleton arguments of the length described above, in a case such as this, are inconsistent with that overriding objective.

“The skill in drafting a skeleton argument lies in the production of a concise outline of the essential elements of the argument which is to be developed orally in court.

“It is evident that the authors of the skeletons in the present case were proceeding on the assumption that they could demand of the court such judicial time as they thought necessary. In that they were mistaken.”

It meant, the judge explained, that the vast bulk of the pre-reading time was devoted to reading the skeletons, rather than underlying documents.

“In fact, in this case, the length and complexity of the written argument served to obfuscate the real issues in the case. In truth, these were not skeleton arguments at all; the arguments contained in these documents were fully fleshed out and dressed in much unnecessary finery.”

He went on to complain about the “grossly excessive volume of documentation” provided.

The primary bundles for use in court ran to 13 volumes. There were also a further 44 lever-arch files of allegedly confidential documentation. Of the 14,000 pages within them, the judge was referred at the hearing to less than 100. He was also provided with six volumes of authorities.

“The provision of that sort of volume of material in a four-day case is absurd. It too is contrary to the overriding objective. It betrays a failure by those acting for all the parties to adopt a sensible and constructive approach to preparation.”

Garnham J warned the parties that, subject to submissions, “a substantial part” of the costs of preparing the skeletons and bundles would be disallowed.

He concluded his preliminary comments by making clear that he did not intend to address “each of the numerous arguments set out in the skeleton arguments, summary cases and closing submissions”.

Garnham J explained: “Were I to do so, this judgment would run for hundreds of pages and would not be delivered until after that period for which the permanent injunctions are sought, thus rendering the exercise pointless, at least for the purposes of this action. I propose to do no more than is strictly necessary to decide the case.”

Daniel Oudkerk QC, Jane McCafferty and Edward Brown, instructed by Macfarlanes, acted for the claimant; Matthew Sheridan and Alexander Robson, instructed by Doyle Clayton for the first defendant; and Paul Goulding QC, Diya Sen Gupta and Kerenza Davis, instructed by BGC Legal, for the second defendant.




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Longmore LJ: appeal judges stood by their judgments

Appeal judges have rejected a claim that they failed to “properly and fairly” consider an appeal after one of them described the appellants as “crooks”.

Lord Justice Longmore said Lord Justice Vos “did indeed comment on the first morning of the hearing that the judge had found that the appellants were ‘crooks’ – a colloquial word indicating that they had behaved dishonestly in relation to these transactions. But that was exactly what the judge had found”.

Longmore LJ went on: “The comment was made because the appellants’ counsel repeatedly asked the court, in effect, to accept the appellants’ explanations for their conduct, when the judge had expressly rejected those explanations.”

Longmore LJ said the Court of Appeal was “seeking to make clear to counsel for the appellants” that he had not appealed the judge’s findings of fact and could not succeed by asking appeal judges to accept facts or explanations which Mrs Justice Rose had rejected.

The court heard in Goldtrail Travel v Aydin and others [2016] EWCA Civ 439, that counsel for four of the six defendants in the case applied under CPR 52.17 for permission to reopen the appeal.

“According to the skeleton argument of the appellants’ counsel, the reopening of the appeal is necessary to avoid real injustice, arises in circumstances that are exceptional and where there is no alternative effective remedy,” Longmore LJ said.

A statement by their solicitor said that in light of Vos J’s comment, one of the appellants “considered that the Lords Justices had decided prior to the hearing of the appeal that he and the other [appellants] were crooks and that their appeal had not been properly and fairly considered by the Court of Appeal.”

Other grounds included allegations that “the judges had not read any of the documents and witness statements, that they had interrupted the submissions of counsel for the appellants, and that the court had a number of factual misunderstandings”.

Longmore LJ said the Court of Appeal did not “propose to deal with the challenges to the correctness of our judgments”. He described the criticisms as “simply wrong or at least insubstantial, semantic or one-sided”.

Longmore LJ noted that it was “not the first time” the appellants had “attacked the behaviour of the court” and “repeatedly suggested” Mrs Justice Rose had behaved unfairly towards them.

The judge rejected the argument that the court had not read the documents, saying that all its members had read the papers for one day and Lord Justice Vos for two.

“In our judgment, the appeal was conducted in an entirely fair and conventional manner. The appeal lasted two court days and the appellants’ counsel made submissions for more than one of those days.

“The court raised issues of concern with counsel as it customarily does. The court’s concerns were not adequately dealt with by counsel for the appellants and he repeatedly reverted to trying to persuade the court to accept explanations offered by his clients for the transactions, which had been rejected by the judge.

“These aspects are reflected in Vos LJ’s judgment with which the other members of the court agreed.”

Longmore LJ accepted that Vos LJ had misread one paragraph of the amended particulars of claim, but the error did not affect “the substance of our decision”.

Dismissing the application, Longmore LJ said the reopening of the appeal was not necessary to avoid injustice and there were no exceptional circumstances. “There was no basis whatever for a submission that the integrity of the litigation process in this case has been undermined, either critically or at all.”

Lord Justices Vos and Kitchin contributed to the judgment.




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Warby: no jurisdiction after order was sealed

A High Court judge has refused newspaper columnist Katie Hopkins permission to appeal against his high-profile ruling that she had to pay £24,000 in damages over two libellous tweets, saying she applied too late.

He indicated that he would not have granted permission anyway.

Mr Justice Warby handed down judgment on 10 March in favour of blogger and campaigner Jack Monroe, and then heard argument and made his decisions on costs. These included an order for an interim payment of £107,000 on account of costs. The formal order reflecting these decisions was sealed on 21 March.

In his ruling yesterday, Warby J recorded: “During this process there was no application for permission to appeal. The skeleton argument for Ms Hopkins stated that she was considering her position in relation to an appeal but was not making or seeking an extension of time for doing so.

“It would appear that the question had been considered and a conclusion reached that no application would be made at that time. It was said that any application would be made to the appeal court.”

On 23 March, Ms Hopkins’ solicitors, Kinglsey Napley, told the judge that she intended to appeal and that leading counsel had advised that it would be desirable to seek permission from him, prior to applying to the Court of Appeal.

However, Warby J decided that, as the order had been sealed, he no longer had jurisdiction over the case.

“A reserved judgment is given, and the decision is made, when the judgment is handed down at a hearing in court. On the face of it, the application to the lower court must be made then, or at some later date to which the hearing is then adjourned for that purpose, at the request of the potential appellant or at the instigation of the court.

“If an application is not made at one or other of those times, it can only be made to the appeal court. This is a clear and understandable regime, which places the onus on the party who may wish to appeal to make a decision, or to ask for time to make one.

“The standard practice of circulating reserved judgments [as was done here] should make it easier for a party to decide whether to seek permission, and to identify grounds of appeal which can be argued at the hand down.  It is inherently desirable to avoid afterthoughts, and to avoid the uncertainty for the opposite party that would result if these were permitted.”

Kingsley Napley said the judge could still comment on the proposed grounds of appeal, but having concluded that he had no jurisdiction, the judge declined to do so.

“But I will say this. I would have refused permission, as I do not consider any of the four grounds of appeal to have a real prospect of success or that there is any other compelling reason for an appeal to be heard.

“This was not a case which raised any great issues of legal principle. It turned essentially on its own facts. The points of law that are raised are in my view untenable. The Court of Appeal will not lightly interfere with findings of fact.”

Warby J also refused to stay payment of the £107,000 and the assessment of the costs.

“The point is made that the claimant’s solicitor has declined to give any undertaking or comfort as to repayment of the £107,000, if the court decided that should be done.

“It is Ms Monroe herself who would be liable to repay, and it is said that she is of limited means. I do not consider that the information before the court discloses a sufficient risk of these monies being lost, to justify the imposition of a stay.

“The question of whether to stay assessment can be reconsidered if an application is made to the Court of Appeal, and the single judge takes a different view from mine on the merits of the proposed appeal.”




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Sue Nash

Posted by Sue Nash, costs lawyer and founder of Litigation Futures sponsor Omnia Legal Software

Storm clouds have been gathering above the heads of costs lawyers in recent weeks and months, as the impending implementation of the costs budgeting reforms draws ever closer – J Day (cue thunder claps!). But in keeping with a change in the seasons, costs lawyers of a sunny disposition might find something to smile about under the new regime.

While costs specialists’ roles will inevitably change, that is not necessarily for the worse. The introduction of fixed recoverable costs for volume, low-value cases and the reduction of publicly funded work will mean that costs lawyers won’t be needed for these areas of work, but on the flipside there will be an increased need for costs’ lawyers costs management, consultancy  and advocacy skills.

Firstly the budget preparation, and crucially, monitoring requirement will no doubt prove tricky over the next few months as we familiarise ourselves with the new system – it will be a far from straightforward exercise given that budgets will be set by phases and that each will need to reviewed regularly.

Costs lawyers must work alongside their solicitor clients to meet the new costs budgeting requirements, scoping out the draft budgets for each phase of litigation and highlighting when actual costs are closing in on budgeted costs to manage the monitoring requirement.

The arguments that costs lawyers deal with retrospectively at detailed assessment on a daily basis – grade of fee-earner used, hourly rates, use of counsel and any experts etc – will be dealt with prospectively at the initial costs management hearing under the new system. And it isn’t as though costs lawyers will then need to go back from whence they came once the budgets are set; there is the other side’s budget to consider and advice to be given in matching actual to budgeted costs at each phase of the litigation.

Out of this, the advice that costs specialist can give to guide their clients through the plethora of changes should prove invaluable.

Costs lawyers’ roles may well become more based on analysis and advocacy from next month, but that isn’t necessarily a bad thing as it gives an opportunity for the value of costs expertise to be truly recognised. Now if only the sun would show its face…




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Budget: guidance needed

A second regional costs judge has ruled that an approved budget does not hinder a detailed assessment, but also called on the higher courts or the rule committee to give a definitive view.

District Judge Hale in Nottingham explicitly agreed with the ruling of his Birmingham-based colleague, District Judge Lumb, in Merrix v Heart of England NHS Foundation Trust.

In Bhojani v University Hospitals of Leicester NHS Trust, DJ Hale said: “Like Judge Lumb I think the answer… has to be more nuanced than the claimant’s contention for a fixed figure and the defendant’s contention for an entirely unfettered entitlement to attack a bill on detailed assessment.

“The budget will be a strong guide to what will be allowed on a detailed assessment and because the receiving party’s costs have already passed scrutiny once, the scope for further reduction might prove to be limited.”

Describing the budgeting stage as involving “a consideration of the landscape and assessment as a more detailed survey of the terrain” he said budgeting was not intended to replace detailed assessment.

“Had that been the intention of the rule committee, they would have made the appropriate and specific changes to CPR parts 44 and 47 and they did not.”

He added that whether or not the case management judge recorded an opinion that incurred costs were disproportionate, those costs must always be subject to a line-by-line detailed assessment.

DJ Hale said: “It seems clear to me that without an authoritative and binding ruling from the higher courts or a clear and unequivocal change to the Civil Procedure Rules, parties and judges alike will continue to operate in an atmosphere of uncertainty.

“Clarification and guidance is required urgently and whilst I have reached a conclusion, I have not done so without significant hesitation. For those reasons I have indicated to counsel that I shall readily grant permission to appeal and would hope that any appeal would be dealt with as speedily as possible.”

In December, the rule committee heard that this was a difficult issue that needed to be put out to consultation.

The judge did not accept that his decision was inconsistent with Lord Justice Jackson’s intentions. “At a detailed assessment the budget will still be an important factor in the judge’s mind. In particular he is likely to be reluctant to reduce the receiving party’s costs on grounds of proportionality when the budget has already been approved as being proportionate.

“In fact I would go as far as to say that in most cases there will be little if any scope for a further reduction on the ground of proportionality alone in the absence of a significant change of circumstances since the approval of the budget.”

But he did acknowledge that this approach would not do much to reduce the number of detailed assessments. “So far there is much anecdotal evidence that budgeting has done little if anything to reduce the number of detailed assessments taking place and the points of dispute are no shorter than they ever have been.

“However, this was not the primary objective of costs budgeting. Costs budgeting does bring with it a degree of certainty in the sense that the parties will know at the outset what the upper limit of recoverable costs will be at the end of the case unless there is a significant change of circumstances.

“It is true to say that a party cannot be certain that his recoverable costs will not be further reduced at a detailed assessment but it seems to me that certainty can never be achieved except where a fixed costs regime is put in place.”

The decision of the Court of Appeal last year in SARPD Oil has also caused confusion, and in light of that, rule 3.15 is to be amended on 6 April to make it clear that the case management hearing is not the forum to debate incurred costs, although the judge will be able to record comments on them to be taken into account at a later assessment.

Christopher Perry, instructed by Shakespeare Martineau, acted for the claimant. Robin Dunne, instructed by Acumension, the costs firm which also worked on Merrix, represented the defendant.




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RCJ

Patten LJ: “not one sentence in which he makes any specific findings of fact”

The Court of Appeal has strongly criticised a district judge who failed to produce “any adequate reasons” for reaching his conclusions in an adverse possession case.

Ordering a retrial of the case heard by District Judge Rouine at Preston County Court, Lord Justice Patten said: “In place of an analysis of the evidence and the submissions on both sides as to its credibility or relevance, the judge has given blanket acceptance to the claimants’ evidence and a blanket rejection of that of the defendant’s witnesses.

“In the whole of his judgment on the facts there is not one sentence in which he makes any specific findings of fact or gives the reasons for doing so.

“Nor is any attempt made to deal separately with the various parcels of land in dispute even though different witnesses gave different evidence in respect of each of them.”

The court heard in Weymont and Weymont v Place [2015] EWCA Civ 289 that Mr and Mrs Weymont sought damages for trespass and an injunction regarding the use by Mr Place of land around his farmhouse in Lancashire.

Mr Place responded by arguing that either the land came within his registered title or, alternatively, that he and his father had acquired the title by adverse possession.

Lord Justice Patten said judges were not required to deal with “every point raised in argument, however peripheral, or with every part of the evidence”, but the parties were “entitled to have explained to them how the judge has determined their substantive rights and, for that purpose, the judge is required to produce a fully reasoned judgment which does so”.

Patten LJ said the Court of Appeal and Supreme Court had “repeatedly recognised” the advantages which the trial judge enjoys in hearing live evidence and assessing credibility of witnesses.

“The function of the appeal court is not to re-hear the case but to review the decision which the trial judge has made,” he said.

“For this reason, it will only interfere with his findings of fact if it becomes clear that there was no evidence to support them, that the judge misunderstood the evidence, or that he made findings which no reasonable judge could, in the circumstances, have made.”

However, Patten LJ said the “relative immunity” of the trial judge’s findings of fact depended on that judge having properly considered and understood the evidence, taken into account the criticisms of the evidence advanced by lawyers and reached a “balanced and objective” conclusion.

“An important aspect of this process is the production of a properly reasoned judgment which explains to the parties and to any wider readership why the judge has reached the decision he has made.

“This includes making a reference to the issues in the case, the legal principles or test which have to be applied and to why, in cases of conflicting factual evidence, the judge came to accept the evidence of particular witnesses in preference to that of others.”

Patten LJ allowed the appeal by Mr Place and ordered a retrial before a Chancery circuit judge. Lady Justice Hallett and Lord Justice Christopher Clarke agreed.




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Cancelled flights

“No little inconvenience” after flight delayed by 27 hours

Cheshire firm Bott & Co – which has pioneered a service enabling passengers to seek compensation for delayed flights – said that a Court of Appeal decision yesterday has opened the way for “millions” to bring claims.

The firm said it already had over 2,000 cases which could go ahead after yesterday’s ruling, together with several hundred more which were stayed pending the outcome.

A spokeswoman for the firm said the ruling had “clarified the law for millions of passengers”, who could “rightfully claim compensation for delays due to technical problems”.

She went on: “We’re disappointed that after three court hearings the airline is still trying to avoid paying out, and asking for further clarity when the Court of Appeal gave that clarity.”

She said the decision followed German, Dutch and European law, and the firm would be in a “confident” position if the case did end up at the Supreme Court.

Giving judgment at the Court of Appeal, Lord Justice Elias said 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.

Ruling in Jet2.com v Huzar [2014] EWCA Civ 791, Elias LJ said the carrier argued that the delay was caused by a wiring defect in the fuel valve which “could not have been prevented by prior maintenance or prior visual inspection”.

Elias LJ said that “difficult technical problems arise as a matter of course in the ordinary operation of the carrier’s activity”.

He went on: “Some may be foreseeable and some not but all are, in my view, properly described as inherent in the normal exercise of the carrier’s activity. They have their nature and origin in that activity. They are part of the wear and tear.”

He dismissed the airline’s appeal. Lord Justice Laws and Lady Justice Gloster agreed.

Bott & Co announced in November that it had settled its 1,000th airline compensation case, nine months after opening the specialist department.

 

 




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“Proclaim is by far the easiest system to use”

Hilary Meredith of this award-winning serious injury claims practice talks about how Eclipse Proclaim enables superior service and communication.

 

About Hilary Meredith Solicitors:

  • Leading practice for military accident / armed forces compensation
  • Employing 50 staff
  • Multiple award winning practice

 

 

 




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Court of Appeal: time to challenge a budget is at the CCMC

Court of Appeal: time to challenge a budget is at the CMC

A High Court ruling denying an order for security for costs even though the party involved refused to show that it could pay costs was “illogical and unacceptable”, the Court of Appeal has decided.

The lower court had found this to be a litigation tactic, but Lord Justice Sales said it was reasonable to believe that a party could not pay the other side’s costs if it deliberately refused to show that it could.

The court was ruling in Sarpd Oil International Ltd v Addax Energy SA & Anor [2016] EWCA Civ 120, in which Addax appealed against Mr Justice Andrew Smith’s decision last August not to make an order for security of costs in a £1m claim that a delivery of gas oil did not meet the contractual specifications.

Smith J said: “It can only strengthen Sarpd’s hand in any negotiations if it leaves Addax in doubt about whether it will recover its costs even if it defeats the claim… The uncertainty may be awkward for Addax, but there is no reason that Sarpd should volunteer information to alleviate its difficulty.

“More importantly, this obvious explanation for Sarpd’s reticence about its financial position means, in my judgment, that on the evidence it is no reason to believe that it will be unable to pay an order for costs.”

Giving the appeal court’s judgment, Sales LJ said: “We consider, with all due respect to the judge, that he was plainly wrong. If a company is given every opportunity to show that it can pay a defendant’s costs and deliberately refuses to do so there is, in our view, every reason to believe that, if and when it is required to pay a defendant’s costs, it will be unable to do so.

“The judge said that the obvious explanation of the refusal was that Sarpd wanted, for the purposes of settlement negotiations, to leave Addax in doubt about whether it would recover its costs, even if it defeated the claim. But the thinking behind that is that it is permissible for Sarpd to give Addax reason to believe it will be unable to recover it costs but at the same time assert that there is no reason for the court so to believe. That is illogical and unacceptable.

“[Sarpd’s counsel’s] alternative explanation in oral argument was that Sarpd might just want to keep its financial position confidential for business reasons. But as Sales LJ pointed out, arrangements can always be made by the court if a litigant has legitimate business reasons for keeping something confidential. No application was made for the court to sit in private or to avoid referring in public to relevant financial amounts.”

Addax had told Smith J that the practice in the Commercial Court was to order security for costs in circumstances such as these: where a claim was brought by a company that has not filed accounts that were publicly available, which has no discernible assets and which declined to reveal its financial position.

The judge responded: “I suspect that [counsel] might be right about that, but if such a practice has developed, I cannot think it justified and I decline to follow it.”

But Sales LJ said the judge had been wrong. Such a practice, if it had developed in the Commercial Court, was “sound”. Lord Justice Lewison had granted permission to appeal on the basis that this was an important point of practice which should either be upheld or rejected at appellate level. “We would uphold it,” said Sales LJ.

In addition, Smith J indicated that, had he ordered security, he would have done so with reference to Addax’s approved costs budget. Sarpd argued that in such a situation the judge should go behind the budget to examine for himself whether certain sums were reasonable and proportionate.

But on this point the Court of Appeal agreed with the judge, on the basis that Sarpd had had its chance to challenge the budget at the case management conference.

Sales LJ said: “It would be contrary to the overriding objective to allow Sarpd to try to re-open costs issues which it had already had a fair opportunity to address. It would not be just to permit it to do that and it would add disproportionate cost in dealing with the case if a court had to go behind the settled costs budgets in a case like this.”




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Tulk: iSaaS co-founder

The Quindell Portfolio acquisition spree continued today with the purchase of medico-legal service iSaas Technology for nearly £5m.

Quindell, an alternative business structure following the acquisition of three law firms last year, said the move would allow it to offer a cloud-based SaaS (software as a solution) service to others in the market.

iSaaS was co-founded by former Russell Jones & Walker partner Adam Tulk, and its acquisition is being paid for by the issue of 38,057,143 Quindell shares (currently trading at 11.72p – valuing the shares at £4.46m) and the payment of £1.34 million in cash.

The shares will be subject to lock in of between 12 and 36 months. The iSaaS management accounts for the three months to 31 March 2013 forecast turnover of circa £0.5 million and profit before tax of circa £0.4 million. “The acquisition is expected to be earnings enhancing in the current year,” said a Quindell statement.

In November, iSaaS launched ‘ePIsource Legal’, using web-based technology to support the administrative function carried out by medical reporting organisations, separating the evidence procurement process from the expert analysis.

It continued: “Through its unique combination of service offerings, Quindell has already put in place outsourcing solutions for insurance companies, brokers and other intermediaries that survive the changes of legislation brought on by LASPO on 1 April 2013.

“iSaaS offers a similarly highly disruptive SaaS-based model that is effective post these changes for the legal profession, doctors and rehabilitation specialists as well as for insurance businesses that cannot replicate the Quindell model but want to operate legal practices in-house with their own independent iSaaS medical reporting network in support of their personal injury work.

“Quindell’s strategy is to provide outsourced services, consultancy and technology directly to its customers, whilst also offering them alternative models including SaaS-based solutions such as those provided by iSaaS. As a result, Quindell has grown its share of the insurance outsourcing market over the last 12 months and also pursued a strategy of providing licenced software to other market participants in order that, as a group, it can benefit from market share beyond that which it is servicing directly.

Rob Terry, the chairman and chief executive of Quindell, said: “Our strategy is to provide outsourced services, consultancy and technology directly to our customers, whilst also offering them alternative models including SaaS-based solutions such as those provided by iSaaS…

“Over the last year we have grown our share of the insurance outsourcing market, but we are similarly comfortable with a strategy of providing licenced software to other market participants.”




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Coupland: Working with Proclaim will enable us to achieve ‘Top 25 Status’ in 2014

In 2013 Advantage Property Lawyers (APL), with the assistance of Eclipse‘s Proclaim Practice Management Solution, won 3 major awards:

– Large Conveyancer of the Year (silver) – Sunday Times Estate Agency of the Year
– Yorkshire & North East Conveyancing Firm of the Year (gold) and
– Conveyancing Firm of the Year (silver) – LFS conveyancing Awards

The challenge

In 2009, as a new start-up, APL needed a Practice Management solution that focused specifically on residential conveyancing. Software was needed that would allow the firm to offer its clients and introducers an outstanding level of service and customer care, whilst maintaining best practice at all times. The solution would also have to be reliable and offer easy scalability in line with APL’s aspirations to become one of the UK’s biggest and best conveyancers.

The solution

Eclipse’s Proclaim Practice Management solution was implemented at APL’s inception as it provided a centralised, secure desktop toolkit for every property transaction – utilised by all staff. Proclaim was also chosen for its out-of-the box conveyancing focus and ease of integration with third party complementary software – as most work came from large corporates and major estate agents.

The results

Proclaim has proved to be an essential ‘enabler’ for providing a superb client experience and reducing turnaround times. Proclaim facilitated APL to achieve over 4,000 completions and increase turnover by 40% in 2013. The financial and reporting toolset is used to provide instant data retrieval with on-going monitoring and analysis of KPIs assisting with the management of systems, processes and risk calculations.

APL is using Proclaim to automate a vast number of administrative processes including document production and hopes to move towards a paperless office soon.

Since implementing Proclaim, APL has grown rapidly requiring an increase in staff numbers by over 200% from 15 to over 50. The firm is now represented on the management board of The Conveyancing Association and was the first conveyancing firm to receive the ‘Legal Eye’ quality standard.

Stephen Coupland, head of sales & marketing at APL says: “Working with Proclaim will enable us to achieve ‘Top 25 Status’ in 2014.”

 




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Andrew Watson, Ringrose Law’s finance director calls Eclipse the “number one choice by a fair margin”

Full service law firm, Ringrose Law, is implementing the Proclaim Practice Management Software solution from Eclipse Legal Systems.

Ringrose Law operates from seven offices providing a broad portfolio of services to private individuals and businesses across Lincolnshire and Nottinghamshire.  Lexcel accredited for ten years, the practice employs over 130 staff and has been at the forefront of local legal services for over 100 years.

With a history of successfully reshaping as markets and legislation have changed, Ringrose Law entered a rigorous and lengthy selection process to replace the incumbent Matter Management and financial accounting systems.

Ringrose Law is rolling out the integrated Proclaim Practice Management solution across the entire firm, providing instant desktop access to productivity, financial and client management toolsets.  Proclaim Process Management solutions will be introduced for the conveyancing and personal injury departments, while for less prescriptive work areas (including court of protection, employment, family, probate and crime), Proclaim Matter Management solutions will be utilised.

As part of the practice-wide integrated solution, Ringrose Law will be utilising Proclaim client inception and CRM tools, to manage the ‘new enquiry’ process and introduce business on-stream in a consistent manner.

Taking this further, the practice will also benefit from Eclipse’s client self-service toolsets – TouchPoint, SecureDocs and FileView – enabling clients to agree documents online, monitor file progress, and communicate with the firm through the full life of a matter.

As an integral part of the system rollout, Eclipse will be carrying out a conversion of both client and financial data from Ringrose Law’s incumbent software systems.

Andrew Watson, finance director at Ringrose Law, comments:

“When we first met Eclipse in 2013, at the Legal IT exhibition in London, we were taken both by the approachability of the Eclipse team and the power of the Proclaim solution.  As part of our ongoing growth strategy we were investigating software solutions that could further improve our internal processes and provide consistency across how teams perform and are measured.

“What we found in Proclaim was that the system could not only improve internal efficiencies, financial management and compliance, but it could also provide direct client-facing systems to enable online self-service for the people and businesses we help every day.  The fact that Proclaim provides this broad business benefit for us made the system our number one choice by a fair margin.”




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Denis-Smith: costs risk

Denis-Smith: costs risk

It is a mistake to think that putting forward a budget that looks acceptable overall means the court will not look at the individual phases and costs within them, litigators have been warned.

The decision in King & Anor v Thipthorp & Ors is “contrary to the intended approach of the court, which is to adopt a global approach when considering reasonableness”, one costs specialist said. 

The Technology and Construction Court ruling, which has yet to be reported, involved a construction dispute. According to John Denis-Smith, who acted for the successful party, the budgets were approved subject to alterations to individual items which were deemed unreasonable and disproportionate.

The dispute related to alleged defects in the building of a leisure centre and had been listed for a six-day trial with about 10 factual witnesses and eight expert witnesses. While the first and second defendants’ costs budget of £195,000 was accepted by the other parties, they took issue with the costs budgets proposed by the claimants and the third defendant of around £392,000 and £322,000 respectively.

Mr Denis-Smith said the court held that on one view, the correct approach was to look at the parties’ overall budgets and decide whether they were reasonable and proportionate without any further investigation. Considering proportionality, here the sums in issue were not large, particularly by TCC standards, the litigation was not complex but was typical of a defects claim, and there was a question of reputation involved.

“There was nothing to justify expenditure over and above what was the norm for a six-day trial of this type,” he reported. “However, the court had no indication of what a normal sum for such a trial would be. In those circumstances, it could not conclude simply by looking at the bottom-line figures that the claimants’ and third defendant’s budgets were unreasonable and disproportionate.”

Further, the court found that even if the overall budget figure was not unreasonable, it could still consider the objections raised in relation to individual items claimed in those budgets. Here some items did appear disproportionate and were reduced.

The court also made a costs order against the parties whose budgets were amended.

Mr Denis-Smith said the case showed “that a party whose cost budget cannot be justified in terms of hours and disbursements proposed may find that it has to pay the costs of the party which challenges the budget, as well as incurring its own irrecoverable costs of the challenge”.

In a blog on the case, Sue Fox, head of costs budgeting at Leeds law firm Clarion, said the decision ran “contrary to the intended approach of the court, which is to adopt a global approach when considering reasonableness. Furthermore the CPR is to be amended with regards to this global approach, confirming that hourly rates within budgets should not be set”.

This referred to changes to the costs practice direction approved by the Civil Procedure Rule Committee, but yet to be introduced, that will say: “The making of a costs management order under part 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.”

Ms Fox said the case, and another amendment that will require parties to submit an agreed budget discussion report – setting out the agreed and disputed areas for each phase and a brief summary of the grounds of dispute – meant that negotiations around costs budgets “have never been so important”.




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Havenhand: major cultural change for the district judges

The questions raised by the Mitchell ruling, such as the effect on a part 36 offer of a budget being disallowed, are already emerging as the impact of the Court of Appeal’s decision is felt.

Barrister Barry Havenhand of Clerksroom has supplied Litigation Futures with details of one case where the failure to file a budget in sufficient time saw the defendant’s budget restricted to its court fees, as in Mitchell.

On 2 December he was representing the claimant at a telephone case management conference (CMC) in a county court case which had already been allocated to the multi-track. It was the first CMC, meaning the parties needed to file their Precedent H costs budgets.

The claimant’s budget was filed on 22 November, but the defendant did not file theirs until 29 November.

Near the end of the hearing, which mainly dealt with directions, Mr Havenhand raised the issue of when the budgets were filed and sought an order that the defendant should get no costs, other than court fees.

According to Mr Havenhand, the deputy district judge asked his opponent – a trainee – for her comments; she said her principal had not told her about this, and went on to say that they had not known they needed to file a budget, and had only done so when they received the budget from the claimant.

“As the judge remarked, when duly making the order I sought, that probably scuppered any chance of an appeal,” he reported.

However, in this case, the sting for the defendant was effectively removed, because it had already admitted liability and so was not going to get its costs anyway. “But what part 36 offers?” he asked.

“If they make an early offer which the claimant rejects, goes to trial and fails to beat, does the defendant get costs from the expiry of the offer period, under the part 36 procedure, or does the Mitchell costs order take precedence, meaning the defendant can never get their costs? If so, does that not undermine part 36?”

More broadly Mr Havenhand questioned how district judges will apply Mitchell on a day to day basis.

“District judges are used to doing ‘justice’ by applying a combination of rules and flexible common sense, to achieve the right result in individual cases. The DDJ in my case had no problem in applying a rigid rule, in relation to an unimportant error, despite the potential consequences – but it is a major cultural change for the district judges, and some may be resistant.”




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Offer acceptance: no provision in rules for second period

In what is understood to be the first ruling on the costs consequences of accepting a “less advantageous” part 36 offer, a court has ruled that a claimant effectively had no chance to accept the variation.

Amy Burrett failed to accept a part 36 offer, made in July 2013 by Mencap, for injuries sustained during her employment with the charity. Portsmouth County Court heard that the 21 days allowed for acceptance expired, and the offer “lay on the table”.

District Judge Ackroyd said Mencap later sent Ms Burrett a letter in January 2014, which was not a notice but “specifically a variation”, changing the terms of the July offer under part 36.3(6). This enables the offeror to change the terms of an offer “to be less advantageous” without the permission of the court.

James Manning, chartered legal executive at Plexus Law, which acted for Mencap, said that, following video surveillance, the charity decided to cut its offer from £15,000 to £2,500, but to do this through variation, rather than withdrawing one part 36 offer and putting a new one in its place.

Ruling in Burrett v Mencap(Case no.3YJ59826), DJ Ackroyd said the reduced offer was accepted 16 days after it was made. The claimant applied for a determination on costs on the premise that the second offer constituted a fresh part 36 offer and therefore she was entitled to her costs up to the point it was accepted.

The judge said it might have been thought that where an offer had been changed, there should be “a period of time allowed to the claimant to at least reflect on that change and what the consequences of acceptance or refusing the offer bring to the claimant. That also would make good sense”.

However, the judge said he was “constrained by the rules themselves” and “should not seek to wonder and deliberate with myself what Parliament or the draughtsman there had in mind when the rules were drawn”.

DJ Ackroyd went on: “The fact is that 36.7 is entirely silent as to any extension or renewal or replacement of the time for acceptance. There was the opportunity for it to be specified. It does not.

“36.7(1) tells me when it is made and it tells me when it is effective. It does not tell me if there is a further time allowed for contemplation and I believe that it would have done. I see no authority and no basis from anything I have read or any of the submissions that allows me to find there is an implied entitlement to a period, the relevant period being, as it were, renewed at that point.

“For those reasons, therefore, I find that the terms of the original offer stand and the time that is given in that original offer is the one that applies.” He dismissed the claimant’s costs application.

Mr Manning said that once the ruling, which was published in July, became more widely known, the tactic of varying part 36 offers would be used by others. “I will definitely use it again,” he said. “They thought I was talking nonsense, but the judge agreed with me.

“The claimant thought she had 21 days to accept the reduced offer, but in fact she had no chance. There is no provision for a further period in the rules.”

Mr Manning described the tactic as “all or nothing”, because if the claimant had gone on to beat the less advantageous offer in court, the defendant would be penalised on costs from the date of the original offer.




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karon-harrison-hansells

Karon Harrison, IT manager at Hansells

“As an established practice, we continually develop our services to meet the needs of our clients and the ever-changing legal sector. Proclaim is a fantastic solution for us – its flexibility allows us to give a better, cost-effective service by enabling us to rapidly adapt to client and sector requirements.”

Karon Harrison, IT manager at Hansells

Established in 1827, Hansells Solicitors and Financial Advisors has substantially grown over the decades and is now a leading name within the UK.

Following a number of successful mergers, today the firm has over 115 staff and partners, all working from seven offices across Norfolk.

Hansells boasts an enviable reputation due to its ethos of continually developing and improving its services to meet the changing needs of both personal and corporate clients.

Delivering a full service offering, Hansells needed a Practice Management Software solution to handle its broad range of cases, and to provide sophisticated levels of flexibility in terms of tailoring workflows to ensure staff could accommodate all client requirements.

Furthermore, Hansells required a Practice Management solution that could effectively reduce the cost of routine tasks and allow staff to continue to provide a personalised and tailored service to clients, whilst processing cases quickly and efficiently.

After an extensive initial search and follow-up meetings with several legal software providers, it became clear to Hansells that Eclipse offered the best solution for the firm’s requirements due to its ease of use and sheer scope of functionality.

Eclipse’s Proclaim Practice Management solution was selected to provide the practice with complete flexibility and low maintenance overheads. Staff at Hansells now benefit from a fully centralised and user-friendly system, whilst the integrated practice management and accounting toolset provides senior staff with an at-a-glance view of financial data.

Since implementation, Hansells has seen enhanced efficiencies firm-wide. With Proclaim, both fee earners and accounts staff can view and manage case details simultaneously, ensuring data is continually updated, and comprehensive, real-time overview is available upon case opening.

Furthermore, Eclipse’s CaseViewer tool has proven vital to Hansells, providing an external Costs Draftsman with access to Clinical Negligence cases within a secure environment, whilst fee earners in the Civil Litigation department have found it particularly useful to view entire case histories electronically when in court.

The sheer scalability of Proclaim means the system can effortlessly grow with Hansells as the practice continues its expansion. In the future, the firm is hoping to implement a number of additional Eclipse toolsets including SecureDocs which will take client service to the next level.

The secure online document delivery and acceptance tool will enable a much quicker turnaround for client capture, ultimately resulting in speedier case progression.




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Richards LJ: approved clinical negligence change

The judiciary is considering a change to model directions that would allow parties to agree a 28-day extension to time limits without the need for court approval, it has emerged.

The move – which appears aimed at reducing the flow of Mitchell-inspired extension of time applications – has already been made to the clinical negligence model direction used by the Queen’s Bench Masters.

It was approved by the president of the Queen’s Bench Division, Lord Justice Leveson, and the deputy head of civil justice, Lord Justice Richards.

The direction says: “The parties may, by prior agreement in writing, extend the time for directions, in the order dated X, by up to 28 days and without the need to apply to court. Beyond that 28-day period, any agreed extension of time must be submitted to the court by e-mail including a brief explanation of the reasons, confirmation that it will not prejudice any hearing date and with a draft consent order in Word format. The court will then consider whether a formal application and hearing is necessary.”

A statement from the judiciary to this website said: “No decision has been taken on whether there should be any general change to model directions or to standard directions under the Civil Procedure Rules. This is the subject of discussion within the Civil Procedure Rule Committee and any decision will require the approval of the Master of the Rolls.”

In a blog about the new direction, well-known solicitor Kerry Underwood, a leading critic of the Mitchell decision, said: “This is a major policy change and a major blow to the Jackson-Mitchell courts and thus a huge victory for the traditional principles of British justice.”




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Replacement vehicle cost: ruling introduces uncertainty

Replacement vehicle cost: ruling introduces uncertainty

The insurance industry today claimed they had achieved a major success after the Court of Appeal ruled that judges evaluating credit hire claims involving pecunious claimants should adopt the “lowest reasonable rate”.

But the case is likely to trigger a period of uncertainty in the market, the claimant’s solicitor has warned.

The successful defendant in Stevens v Equity Syndicate Management [2015] EWCA Civ 93 said that the judgment “brings to an end the ability of the credit hire companies to recover the inflated rates that have been allowed in recent years and in those cases where there has been a failure to prove that the claimant was impecunious, credit hire charges could be reduced by in excess of 50%”.

The case involved a credit hire vehicle provided by Accident Exchange at a cost of £194 (including VAT) per day, with a total cost of over £5,000 for a 28-day period. The appeal concerned the sum attributable to the basic hire rate (BHR) of the replacement vehicle that the claimant hired.

Giving the court’s judgment, Lord Justice Kitchin said a judge’s analysis must be directed to stripping out the irrecoverable costs from the basic hire rate the claimant has agreed to pay or, conversely, ascertaining the part of the charge which is attributable to the basic hire of the particular vehicle the claimant has chosen.

He said: “A judge faced with a range of hire rates should try to identify the rate or rates for the hire, in the claimant’s geographical area, of the type of car actually hired by the claimant on credit hire terms. If that exercise yields a single rate then that rate is likely to be a reasonable approximation for the BHR.

“If, on the other hand, it yields a range of rates then a reasonable estimate of the BHR may be obtained by identifying the lowest reasonable rate quoted by a mainstream supplier or, if there is no mainstream supplier, by a local reputable supplier…

“This is an objective exercise and the evidence of the claimant about what he would have done had he gone into the market to hire a vehicle on standard hire terms is likely to be of little assistance to the judge seeking to carry it out.”

The Court of Appeal refused permission to appeal, but Accident Exchange will now petition the Supreme Court.

Peter Smith, claims director of ESM, said: “We are delighted with the result not only for this particular case, but moreover in the clarity that it provides for future claims. This judgment leaves absolutely no room for ambiguity in determining the correct sum payable for hire to the pecunious claimant, and that sum should be the lowest rate quoted by a mainstream provider.

“It is a true common sense approach that represents what a reasonable person in the position of the claimant would do. The judgment is therefore a much-welcomed step in the control of claim and frictional costs between insurers and credit hire organisations.”

He suggested that all insurers will now review and in certain circumstances withdraw existing offers in similar cases, “placing significant stress on the cash flow and very business model of the credit hire organisations. The CHOs may now be required to investigate the claimant’s financial circumstances before the provision of a credit hire vehicle in far greater detail.”

Kieran Magee, partner at the claimant’s solicitors, True, said the judgment conflicted with established case law “and so we are surprised by the result and thus a petition to appeal to the Supreme Court is being drafted”.

He continued: “Rather than clarifying credit hire, this ruling has effectively opened the door to the potential of an awful lot of litigation. Specifically, the argument will be about the rates available to the specific claimant, for the specific car hired and in the claimant’s geographical area.

“If you think of checking for cars on hire in a 10 mile radius of the claimant’s home address then there will not be that many. When you tie this in with claimants who might have points on their licence or be of a certain age, then a mainstream hire provider may well charge more than a credit hire company and the latter being the cheapest rate.

“This is especially true when the judgment talks about ‘the type of car actually hired by the claimant on credit hire terms, meaning that any rate the defendant seeks to rely upon must be of similar terms hired to the claimant. As an example, hired to with no excess charge. So if a defendant can’t prove there is a cheaper rate, on the same terms, then the rate charged will be the rate recoverable.

“However, whilst this has the potential to cause disruption and increase litigation, the likelihood is that insurers and credit hire organisations will continue to work together through the General Terms Agreement, that already sees 500,000 claims a year settle amicably, to ensure some certainty remains on both sides.”




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Mitchell case: from the gates of Downing Street to the Court of Appeal

Our monthly summary of key costs-related court decisions is provided by CaseCheck

Simpson & Ors (t/a Harrow Solicitors and Advocates) v Godson & Ors [2013] EWCA Civ 1339

Application for permission to appeal a costs order following the grant of summary judgment in a claim for the return of sums obtained by forged cheques drawn on a firm’s accounts.

Permission to appeal granted. Held: The order was drafted too broadly and did not reflect that the claimant had succeeded in obtaining summary judgment against the defendant for a smaller sum. Defendant ordered to pay 25% of the claimant’s costs of the application against her, the remaining to be costs in the case. Costs to be paid to be assessed on the standard basis but not to be enforced without permission of the court (section 11, Access to Justice Act 1999).

Full ruling here.

Salekipour v Parmar & Ors [2013] EWCA Civ 1376

Following a judgment refusing permission to appeal, the court requested submissions on whether the effect of an order stating that the appellant, a third party, was liable for costs ‘in accordance with the default costs certificate’ issued against the claimant only, was to remove their opportunity to challenge the extent of their liability in the Senior Court Costs Office (SCCO).

Order refusing permission to appeal recalled. Held: In the present case, the judge was wrong to order that the costs to be paid by the third party pursuant to section 51(3), Senior Courts Act 1981 should be those shown in the default certificate. The certificate was not binding on the appellant, who should have been provided with an opportunity to be heard on the respondents’ costs schedule.

Full ruling here.

Scott v Russell [2013] EWCA Civ 1432

Application to appeal costs orders against a litigant in person made by the employment tribunal and Employment Appeal Tribunal (EAT) on the basis of the unreasonable conduct.

Application refused. Held: Employment tribunals are entitled to take a broad brush approach on questions of costs, looking at the totality of the relevant circumstances. It is not necessary to analyse each component of conduct or to determine a precise causal link.

Challenges to costs orders are particularly difficult because they generally involve challenges to the exercise of judicial discretion on which experienced judges may sensibly differ. In particular, a challenge will face formidable difficulties where there is a sufficient factual basis for striking out claims and a finding that a claimant has acted vexatiously, abusively, or unreasonably.

In the present case, the applicant sought an inappropriate over-analysis. The EAT was exercising its broad discretion and sufficiently identified the relevant unreasonable conduct and its effect.

Full ruling here.

TFL Management Services Ltd v Lloyds Bank Plc [2013] EWCA Civ 1415

Appeal against strike-out raising the issue of whether an unsuccessful claimant may recover costs against a third party who benefits from the final judgment on the ground of unjust enrichment. The respondents sought summary judgment.

Appeal allowed. Application for summary judgment refused. Held: The courts do not normally award parties the costs of issues on which they have lost against counterparties who have taken no part in the proceedings. However, whether the benefit conferred on the third party was incidental and therefore an exception to unjust enrichment was a distinct and undecided point of law better decided against actual rather than assumed facts.

Sir Stanley Burnton, dissenting, found the claim sought to circumvent the costs jurisdiction of the court and lacked a justiciable basis.

Full ruling here.

Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537

Application for relief from sanctions limiting the appellant’s costs budget to court fees due to a failure to file a budget in time raising the issue of the correct approach to non-compliance with Civil Procedure Rules.

Appeal dismissed. Held, inter alia: The overriding objective to consider the need, first, for litigation to be conducted efficiently and at proportionate cost and secondly, to enforce compliance with rules, practice directions and court orders, are of paramount importance and to be given greater weight.

In relation to CPR 3.9, the starting point is a consideration of the nature of the non-compliance. If it is trivial, the court will usually grant relief provided an application is made promptly. Applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event.

If the non-compliance is not trivial, the burden is on the defaulting party to persuade the court to grant relief. Good reasons are likely to arise from circumstances outside the control of the party in default. Merely overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason.

An application for relief from a sanction presupposes that the sanction has been properly imposed and complies with the overriding objective. If a party wishes to contend that it was not appropriate to make the order, that should be by way of appeal or, exceptionally, by asking the court which imposed the order to vary or revoke it under CPR 3.1(7), applying the Tibbles [2012] EWCA Civ 518 criteria. It is not open to that party to complain that the sanction does not comply with the overriding objective or is otherwise unfair.

In the present case, the master was entitled to make the order, which she did in the knowledge that the claimant would have the opportunity to apply for relief. The decision to impose the sanction was in accordance with the overriding objective. The master did not err in applying the CPR 3.14 sanction by analogy. The result was not a Draconian costs sanction but a justified penalty in light of the revised regime. CPR 3.14 could not be interpreted as being directed only to the case of a party who files no budget – such an interpretation would defeat the overriding objective.

Full ruling here and Litigation Futures story here.

 




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The government also plans to cap fees for expert reports

The Association of Personal Injury Lawyers (APIL) has said it can “see the rationale” for fixing medical negligence fees for claimants in cases worth up to £25,000, where the NHS Litigation Authority (NHSLA) admitted liability.

The upper limit being considered by the Department of Health (DoH) for fixed fees is £250,000.

APIL said other personal injury claims already had fixed costs for claims up to £25,000, the fast-track civil claims limit was £25,000 and the limit would cover those injuries “most likely to resolve within 12 months of the incident”.

Responding to a DoH pre-consultation letter, the association said: “Even within the cohort of claims up to £25,000 in value, certain cases should be exceptions to the fixed costs regime: fatal claims, still-births, claimants lacking mental or legal capacity, claims where the claimant has a very short life expectancy.

“APIL has always been prepared to discuss fixed costs for minor claims. Indeed, we worked with the NHSLA in 2013 on a proposed low-value clinical negligence claim scheme until the NHSLA refused to negotiate further.

“Claims valued at more than £25,000 involve life-changing injuries and putting fixed costs on those cases reduces the quality of the access to justice for those injured people, by limiting the amount of work the claimant representative can afford to do to prove liability and/or causation, for example.

“This can be avoided by ensuring the fixed costs regime applies only to cases where the defendant admits liability in accordance with the pre-action protocol.”

APIL said that in existing low-value fixed fee regimes for road traffic, employer’s liability and public liability cases, ‘low value’ meant £25,000 – a figure “dwarfed” by the £250,000 top limit suggested by the DoH.

The association argued that claims valued at between £25,000 and £50,000 were “often complex, requiring several experts”.

The DoH also recommended that experts’ fees should be capped in lower value cases.

“If there is to be capping of expert fees, then they should be capped for both claimant and defendant,” APIL said. “There should be a level playing field with both sides of the litigation process equally restrained on the number and cost of their experts.”

The association concluded: “If a claim is properly investigated by both sides in the pre-issue stage, more often than not it should be possible to avoid litigation and keep costs down.

“As it is, the scheme proposed here by the DoH offers no incentive to the NHSLA to engage in constructive pre-issue negotiations and to settle early and instead creates an artificial incentive for the claimant to issue proceedings.

“Parties will become polarised and the benefits of the new clinical negligence pre-action protocol will be lost. We predict that there will be a substantial increase in the numbers of litigants in person, as firms turn away low-value claims. It is doubtful that any money will be saved.”

APIL added that the government had allowed no time for changes such as the new clinical negligence pre-action protocol, the LASPO limits on recoverability and costs budgeting to take effect.

“We question why, in the light of those changes, these proposals are being brought forward now. An opportunity has been missed to wait for the effects of changes already implemented to bear fruit.”




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Bogart: pioneering new markets

Litigation funder Burford Capital has announced its strongest ever results, with profits for the first half of 2017 greater than the whole of 2016, driven by rising client demand.

Highlights from the financial results for the year ended 30 June 2017 included an increase in income by 130% to $175.5m (£133.5m), operating profit up by 151% to $155m, and profits after tax up by 170% over the previous year to $142.7m.

A total of 11 successful investments contributed to the results, including the sale of just 25% of one complex claim generating $100m in cash profit alone – more than five times the investment.

In the first half of 2017, investment income increased by 148% to $161.6m.

The interim report said cash generation of $173.7m from investments on balance sheet exceeded every previous half-year period.

During the first half of 2017, eight-year-old Burford has made $488m in new investment commitments, more than double its commitments in the first half of 2016.

An investor in the original Burford share offering in 2009 would have seen a return on investment of more than 1,000% by this month.

Burford’s acquisition of US rival Gerchen Keller Capital in December 2016 has created what it described as “the industry’s largest fund manager”, with $1.7bn in assets under management at 30 June 2017.

In March, the litigation funder announced a 75% increase in net profits for 2016, but warned that the Jackson reforms had made it impossible to provide after-the-event (ATE) insurance for “large and complex” commercial cases.

Sir Peter Middleton, Burford’s chairman, said: “In just under eight years, Burford has grown from an £80m start-up to become the clear industry leader.  In six months, we have committed almost half a billion dollars to new investments.”

Christopher Bogart, the funder’s chief executive, said: “Burford has had an exceedingly active first half. Our continued strong growth has been driven by rising client demand as well as our ongoing investment in broadening our product offering and pioneering new markets.

“As the industry advances, we continue to innovate legal cost and risk management techniques while delivering strong investment returns for shareholders.”




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the road of money

Employment tribunals increased recoveries by 10%

The civil courts have missed their 100% costs recovery target for 2014-15, it has emerged.

As a whole, the civil courts recovered 92% of their expenditure in fees during the financial year 2014-15, with the family courts (including the Court of Protection) recovering 87%. The civil, non-family, courts recovered 94%.

The figures, set out in HM Courts & Tribunals Service (HMCTS) annual report and accounts, were an improvement on the previous year, when total civil business collected 82% of its expenditure in fees and family 79%.

Costs recovery in the tribunals runs at much lower levels, with employment leading the way on 17%, followed by asylum and immigration on 11% and other tribunals (including land and gambling) on 9%.

However, employment tribunals raised 10% more than the previous year, where they were bottom of the table, following the introduction of a new fee structure.

When the tribunals are included, costs recovery for the whole of HMCTS for the last financial year was 74%.

HMCTS said in its 2012-13 annual report that it aimed for “full cost recovery for civil and family business” by March 2015.

In this March this year, huge fee rises came into force for civil claims worth more than £10,000, with claimants paying 5% of the value of their claim, up to a cap of £10,000.

The Law Society commenced judicial review proceedings in February, at one point citing the Magna Carta’s ban on the buying and selling of justice. However, after obtaining a counsel’s opinion, the society dropped the action in April.

Commenting on the HMCTS figures on costs recovery, A Ministry of Justice spokesman said: “Taxpayers should not have to subsidise the civil courts, which is why we want to recover all running costs through fees.

“We made a lot of progress last year, with a significant increase in the amount recovered. We expect further progress this year following changes introduced in March.”




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National providers: Number of tier 1 MROs has fallen

MedCo has for the first time revealed the number of medical reporting organisations (MROs) on its system following the recent annual audit programme.

It came as one of the legal challenges that has beset MedCo of late was published, in which On Medical failed in its bid to halt being downgraded from a tier 1 MROs – that is, a high-volume national provider – to a tier 2.

MedCo told Litigation Futures that, as at 31 December 2017, there were seven tier 1 MROs and 113 tier 2 MROs.

A MedCo spokeswoman said: “Numbers for previous years are not currently publicly available. The MedCo board is reviewing its policy on publishing retrospective data.”

We understand that the tier 1 firms are CL Medical, Doctors Chambers, Mobile Doctors, Premex, Premier Medical, Speed Medical and UK Independent Medical.

The number has shrunk over the past year and is now around the figure industry experts had expected at the time MedCo was set up.

The increase in litigation was one of the reasons cited by MedCo last month for hiking registration fees.

Last month we reported that a High Court judge threw out judicial reviews brought by two MROs against their suspension from the MedCo portal, and we are aware of other cases in which MROs have brought successful actions.

The ruling published yesterday, though handed down in November, saw On Medical seek interim injunctive relief to stop MedCo from downgrading it while it went through the ‘escalation procedure’, that requires MROs to engage in ADR before going to court.

On Medical, an offshoot of Newcastle law firm Winns Solicitors, told the court in Manchester that it acted for around 300 law firms and a number of insurers nationwide. It employed 61 staff, including about 25 dedicated medical legal staff, and has a turnover of about £10m.

It said having tier 2 status would reduce turnover to about £6m and cause an annual £1m loss.

On Medical argued that MedCo had no contractual entitlement to downgrade the claimant and that it did so without any proper notice, without providing any guidance to the claimant, and without any written warning.

It also said that it was unfair, and constituted inconsistent treatment, for MedCo to refuse to provide On Medical with a reasonable opportunity to submit evidence showing substantial compliance with audit recommendations.

In response, MedCo told the court that On Medical was found to have substantially failed to comply with the qualifying criteria applicable to tier 1 MROs and to be in partial non-compliance with the minimum qualifying criteria which all medical reporting organisations are obliged to meet.

His Honour Judge Hodge QC, sitting as a High Court judge, ruled: “Even if there is, as I say, an arguable claim by the claimant for breach of contract, it does not seem to me that the claim is a particularly strong one, or that its prospects of success are particularly high. The fact is that even on the claimant’s own case, there are continuing breaches of the qualifying criteria.”

While acknowledging the “serious financial and reputational consequences” of being downgraded, he said the grant of interim injunctive relief “would cause serious damage to the defendant, and to the system which it was established to promote and administer”.

HHJ Hodge said it had to be right that MedCo has the power to downgrade MROs if they no longer satisfy the tier 1 criteria.

“It does not seem to me that, pending the working through of the escalation procedure, the court ought to be interfering with the defendant’s decision.

“I take into account the presence of the escalation clause and also the impact upon users of the portal if the injunction sought were to be granted on an interim basis.

“I appreciate that, as a result, the claimant will suffer significant financial and reputational damage; but that, it seems to me, is the price that has to be paid by those who seek to be registered as users of the portal.”

The judge ordered On Medical to pay costs of £30,000.

Ian Scanlan, On Medical’s commercial director, told Litigation Futures, that the company and one other firm that was downgraded have elected to undergo a re-audit.

“We already have an audit date and will simply go through the process again. We are confident of re-instatement.

“On Medical were upgraded to tier 1 in August 2016 being the only agency to transition from tier 2 to tier 1. Following the revised qualifying criteria, we were audited again in April 2017. We heard very little from MedCo until 30 October, when we received a call advising a downgrade.”


Blog

The increasing appetite for third-party funding in Europe

Ross Nicholls

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

April 10th, 2018