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Djanogly: objective is to reduce insurance premiums

It will be impossible to extend the RTA portal either to larger claims or to employer’s and public liability claims by the target date of April 2013, the Ministry of Justice (MoJ) has been told.

The MoJ held its first stakeholder meeting on extending the RTA portal last Thursday, and Legal Futures understands that a paper submitted by the company behind the portal said it would take 11 months to amend the portal to encompass RTA claims worth up to £25,000, and two years and seven months to build and test a new system for EL and PL.

Further, it said this work could only begin once the Civil Procedure Rule Committee has set the rules and we believe the committee has been asked to complete this work by December.

John Spencer, who represented the Motor Accident Solicitors Society at the meeting, said: “You can’t compress two and a half years’ work into one year. You either challenge the premise that it will take that long, which they [the MoJ] haven’t, or you have to start taking notice.”

More broadly claimant groups at the meeting cast doubt on whether in practice a portal could be made to work for EL and PL cases at all given their far greater complexity.

Legal Futures has heard suggestions that the simpler approach for the government – given that its focus is on reducing cost – would be to return to the fixed-cost matrix for fast-track personal injury cases in appendix 5 of Lord Justice Jackson’s final report.

Tim Wallis, the independent chairman of RTA Portal Co, told Legal Futures: “It is not appropriate for me to comment on the detail of particular aspects that are the subject of ongoing discussion. Stakeholders are kept informed via their board representatives.

“Timetables can be challenging and we shall be advising the MoJ about technical aspects of process and portal extension and how and when they can be delivered.”

The meeting was chaired by justice minister Jonathan Djanogly. A range of bodies were around the table, including the Law Society, Association of Personal Injury Lawyers (APIL), Motor Accident Solicitors Society, Personal Injuries Bar Association, Trades Union Congress, Association of British Insurers, Forum of Insurance Lawyers, Claims Standards Council, and Motor Insurers Bureau.

Also on the agenda was the level of fixed costs payable under the RTA portal, which the government expects to fall as a result of the ban on referral fees. We understand that the ABI suggested that the £1,200 currently paid for the first two stages should fall to £3-400.

However, an APIL spokeswoman said there was little evidence of research into solicitors’ costs in conducting portal cases, pointing out that plenty of firms do not pay referral fees at all. “We need to be convinced that this will be taken into account,” she said. “You can’t just arbitrarily cut costs without cutting the professionalism of the service.”

A Law Society spokesman said: “In the words of Jonathan Djanogly, it was ‘an exercise with a purpose’ and ‘the objective is to reduce insurance premiums’. He wants expert input into the initiative and requested data to support the arguments from all interested parties and wanted to keep a dialogue going in order to achieve suitable results. 

“He confirmed that it is the government’s intention to extend the existing streamline RTA portal process to employer and public liability claims but realised that there would be hurdles to doing this. The government will introduce the new claims procedures by April 2013 and Mr Djanogly accepted that in those circumstances the processes may have to be simple rather than detailed.

“The Law Society welcomes the opportunity to be involved in this and appreciates Mr Djanogly’s willingness to listen to us and consider the evidence which we will be providing… We are consulting with the profession and asking them to provide data which will assist us in this task.”

An MoJ spokeswoman said it was a “constructive” meeting and pledged that “everyone will have the opportunity to feed their concerns in”.

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Thomas: disproportionately adverse impact on SMEs

Thomas: disproportionately adverse impact on SMEs

The senior judiciary and Civil Justice Council (CJC) have outlined their “deep concerns” about the new 5% court fee for all money claims worth £10,000 or more – which will mean an increase on the current levels of up to 622%.

The fee is capped at £10,000 – which will be the fee for any claim worth £200,000 or more – but calculations by the CJC showed how extreme the increase will be on claims.

It peaks at claims for £190,000, where the current fee is £1,315 but under the new regime will be £8,185, an increase of 622%.

For claims worth £15,000, the fee will increase from £610 to £750, a 23% uplift. For £100,000 claims, it goes from £1,115 to £5,000 (348%); for £200,000, from £1,515 to £10,000 (576%); and for £500,000, from £1,920 to £10,000 (421%).

Both were writing last month as statutory consultees of the Ministry of Justice as it decided to press ahead with the proposal first made a year ago. They were only published once the government issued its paper on the way forward last Friday.

Writing on behalf of the senior judiciary, the Lord Chief Justice, Lord Thomas, said there was likely to be a “disproportionately adverse impact” on SMEs and litigants in person.

He said: “It needs to be borne in mind that while the court fee normally represents a relatively small proportion of total litigation costs, it has to be paid up front and in full; whereas for individuals and smaller businesses the funding of litigation is often after the event, post-judgment. And these are significant sums.”

Lord Thomas also highlighted the difficulties of applying the new fee to unspecified money claims, either because the valuation of the claim has not been completed at the start of the case, especially in personal injury cases, or because the primary purpose of the claim is a non-monetary outcome, such as an injunction or other remedy.

The CJC said the new approach could act “as an effective barrier to entry to the justice system through pricing many court users out of the courts”, as well as making alternative to the civil process far more attractive – “thus undermining the very intention behind the court fee increase and thereby risking significantly reduced fee income”.

Both were also highly critical of what they saw as insufficient evidence underpinning the reform.

However, they welcomed the decision not to introduce a higher limit for commercial claims and not to introduce daily hearing fees.

The Association of Personal Injury Lawyers said the increases “could have a profound impact on access to justice”.

“The government’s claim that fees are not a major factor in a person’s decision about whether or not to go to court is completely disingenuous,” said president John Spencer. “This move is bound to discourage people from making valid claims – people who have every right to make them. And the idea that seriously injured people making higher-value claims are more likely to be able to afford the new fees is outrageous.

“The severity of an injury has nothing to do with the injured person’s capacity to pay. This new regime will dictate that some seriously injured people will be expected to pay £10,000 up front to bring their cases to court, and many simply won’t be able to afford it.”

In its consultation response, the Ministry of Justice concluded that the increase would not make it harder to access the courts.

It said: “The research we have undertaken indicates consistently that fees are a secondary consideration in the decision to litigate, with the prospects of success and the likelihood of recovering the debt being primary considerations. Fees represent a small proportion of the overall costs of litigation and can, in successful civil proceedings, be recovered from the losing party.

“In addition, the fee to commence the large majority of money claims will remain unchanged under these plans [as] 90% of money claims are for sums of £10,000 or less; the fee is proportionate to the sums in dispute and is capped at £10,000; fee remissions are available for those who qualify; money claims can be brought under a ‘no win, no fee’ conditional fee agreement; and in limited circumstances legal aid remains available.”

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Coulthard: King and Murrells rulings based on sound policy grounds

Posted by Lee Coulthard, assistant regional manager in the Leeds office of Litigation Futures Associate John M Hayes

Before the Jackson reforms, the relationship between proportionality and additional liabilities was clearly defined. Section 11 of the Costs Practice Direction in force before 1 April 2013 provided:

“11.5 In deciding whether the costs claimed are reasonable and (on a standard basis assessment) proportionate, the court will consider the amount of any additional liability separately from the base costs…

“11.9 A percentage increase will not be reduced simply on the ground that, when added to base costs, which are reasonable and (where relevant) proportionate, the total appears disproportionate.”

As a consequence, additional liabilities were very rarely reduced on grounds of proportionality.

One of the key reforms was the introduction of a new proportionality test. Under CPR 44.3 (2), on a standard basis assessment, “costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred”.

Unfortunately, the new rules are silent as to the application of this test to additional liabilities. This is probably unsurprising, because additional liabilities ceased in the main to be recoverable between the parties. Unfortunately, there are significant classes of cases where additional liabilities are recoverable between the parties and yet the new proportionality test applies, namely:

  • The run-off of cases where the funding arrangement was entered into before 1 April 2013, proceedings were not entered into before 1 April 2013 and work was undertaken after 1 April 2013;
  • The run-off of insolvency cases where the funding arrangement was entered into before 6 April 2016;
  • Mesothelioma cases;
  • Publication and privacy cases; and
  • Clinical negligence cases, in respect of the recoverable element of the after-the-event (ATE) insurance premium relating to insuring the cost of obtaining own liability and causation evidence.

Even more unfortunately, the judges at the Senior Courts Costs Office are in disagreement as to the interplay between the new proportionality test and additional liabilities in these cases.

BNM v MGM was a publication and privacy case. A conditional fee agreement (CFA) was entered into with solicitors on 18 April 2013, with counsel on 7 May 2013 and 30 July 2013; and an ATE policy was taken out on 25 July 2013. All of the funding arrangements therefore post-dated the new proportionality test.

Master Gordon-Saker considered CPR 48, which is the overarching transitional provision in respect of additional liabilities. CPR 48 provides that the rules relating to funding arrangements would continue to apply as they were immediately before 1 April 2013 in respect of any pre-commencement funding arrangement.

The practice direction identifies some of the relevant rules. Despite this not appearing to be an exhaustive list (relevant provisions are said to ‘include’ those listed), Master Gordon-Saker considered it to be particularly relevant that the old proportionality test was excluded. He determined that the proportionality test was not a rule “relating to funding arrangements” and therefore did not survive in respect of additional liabilities.

In King v Basildon & Thurrock University Hospitals NHS Foundation Trust, the claimant made a clinical negligence claim. The additional liabilities predated 1 April 2013. Whether additional liabilities were to be considered separately for proportionality purposes was significant. Base costs had been assessed at £88,337, which was considered to be proportionate; the total costs including additional liabilities were assessed at £234,251, which would have been disproportionate if (and only if) the new proportionality also applied to the additional liabilities.

Master Rowley expressly declined to follow BNM. There were two strands to the reasoning, one technical, and one based on policy.

The technical reasoning was that under the old rules, the definition of costs included additional liabilities. Under the new rules, additional liabilities are not included in the definition of costs. Where the new proportionality rule states that “costs are proportionate if they bear a reasonable relationship” to various factors, then additional liabilities are excluded from that definition.

The policy reasoning was that Parliament has expressly and deliberately preserved the recoverability of additional liabilities in those cases where they continue to be recoverable. Aggregating additional liabilities with base costs in order to determine proportionality would risk rendering those additional liabilities “irrecoverable in practice”.

Murrells v Cambridge University Hospitals NHS Foundation Trust was also a clinical negligence case where the CFA was entered into on 4 September 2012 and ATE premium on 11 September 2012.

Master Brown also expressly declined to follow BNM. The decision in King was referred to, and Master Rowley’s reasoning adopted.

Master Brown further reasoned that in many run-off cases, the success fee might be fixed. It would be odd, to say the least, that despite being fixed, the sums could then in effect be reduced by the aggregation of additional liabilities and base costs when considering proportionality.

A further reason was that parties would have entered into the funding arrangements before the proportionality test was introduced, possibly in some cases before the wording of that proportionality test was known.

In such cases, claimants would still be liable to their solicitors and ATE insurers for the additional liabilities even if they could not recover them from the opponent on the grounds of proportionality. In lower-value cases, this might lead to good claims having to be abandoned, which could not be Parliament’s intention.

It would have been possible to distinguish the situations in BNM as opposed to King and Murrells, on the basis that in the first case the funding arrangements post-dated the change in the proportionality test, and that they pre-dated that change in the latter cases.

The hook on which to hang such a distinction is potentially provided by CPR 44.3(7)(b), which applies that the new proportionality test does not apply in relation to “costs incurred in respect of work done before 1st April 2013”. It would stretch the language to describe entering into the CFA or taking out the ATE insurance as ‘work done’, but probably not to breaking point.

However, despite recognising this as a potential escape route, both Master Rowley and Master Brown declined to do so. All three decisions made no distinction in their reasoning between pre- and post-1 April 2013 funding arrangements.

Further guidance on this issue is expected – BNM is due to be heard in the Court of Appeal but not until October. In the meantime, it is to be hoped that the reasoning in King and Murrells, which is based on sound policy grounds as well as being a perfectly justifiable reading of the rules, prevails.

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New litigation firm, JPS Walker, is implementing the Proclaim Practice Management Software solution from Eclipse Legal Systems, the Law Society’s sole endorsed provider.

Based in Manchester, the firm has been launched by a team of expert solicitors, and will specialise in niche areas of litigation, including financial mis-selling and holiday claims. The boutique firm aims to maintain traditional values, and with proven success and years’ worth of experience within its chosen areas of law, the team will be able to offer a first class client service.

JPS Walker is initially implementing Eclipse’s ready-to-go Proclaim Case Management system for Financial Claims and Personal Injury work, facilitating a secure approach to individual client files, and bringing with it a high level of efficiency to operations. To ensure the team benefits from a fully centralised system, JPS Walker is also implementing the integrated accounting toolset which will provide a detailed analysis of the firm’s financial management data.

Additionally, the practice has selected Eclipse’s secure online document delivery and acceptance tool, SecureDocs, to further complement the system. Not only will this reduce turnaround times, and as a result increase caseload volumes, it will also eliminate the risk of sending confidential information to the wrong recipient.

Following the first phase of implementation, JPS Walker will look to work in conjunction with Eclipse and its dedicated Consultancy team to create a bespoke Holiday Claims system, designing and creating specific workflows and documents to cater for all aspects of this complex area of law.

Michael Walker, Founding Partner of JPS Walker, comments:

“In order to effectively stay ahead of the competition – both within our chosen areas of law, and the industry as a whole – we need a powerful practice management system that can deliver robust, yet customisable workflows. Proclaim will provide us with unrivalled accuracy, teamed with the ability to handle the increasing workload anticipated.

“Furthermore, Eclipse’s extensive knowledge of the industry means we can be confident in working with the team to create a future-proof solution that will serve to enhance efficiencies and ensure the quality of service remains at an optimum level, even as we grow. We’re looking forward to a long and fruitful relationship with all at Eclipse.”

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SDT: solicitor should have admitted mistake

A solicitor whose corporate client had a summary judgment entered against them because he failed to attend a court hearing, has been struck off after making a false statement denying he knew about it in advance.

Michael Brendan O’Maoileoin, who at the time was establishing an insolvency practice as a senior associate in the London office of Hugh James, claimed that the pressure of litigation contributed to his conduct.

The solicitor, aged 50, who qualified first as a barrister in 2004 and as a solicitor in 2009, admitted he dishonestly provided a false statement for the purpose of High Court proceedings.

The misconduct took place between August 2014 and April 2015. In July 2015 he and a colleague were made redundant. After that, Mr O’Maoileoin worked as a self-employed consultant for dispersed law firm gunnercooke.

The solicitor failed to attend the hearing of an application for summary judgment against his client, following which insolvency proceedings were issued to recover almost £150,000 and then a winding-up petition in January 2015.

At that point, in a belated attempt to set aside the summary judgment, he falsely claimed in a statement of truth that due to a “clerical error” the first he knew about it was in January 2015, when in fact he had known at the time of the summary judgment application in August.

Striking him off, the Solicitors Disciplinary Tribunal said that instead of admitting his error, “he concealed what had happened by… using a cover-up which was much more heinous than the original mistake”.

Even if, after admitting the mistake, Mr O’Maoileoin had failed to set aside the summary judgment, the tribunal continued, “any negligence was capable of being compensated by [his firm’s] insurance policy”, which would at least have meant he was “unlikely to have come before the tribunal”.

It concluded: “The appropriate mature action was to act with integrity and own up to his error, at an early stage.”

Explaining what happened,  Mr O’Maoileoin told a partner at his firm soon afterwards that “due to an oversight on my part” he had failed to note the 4 August hearing date and confused it with 14 August.

He continued: “This is not something that I have ever done before (nor since) and I simply panicked when I discovered that not only had the claimants obtained summary judgment but then went on to rely on it in support of a winding up petition against the company.”

Rather than come clean, the tribunal recorded, he told the partner “he just wanted to hide it away from… the client. He… just froze and couldn’t explain why… The matter had broken him down.”

Appearing before the tribunal, the solicitor said he had been suffering from “extreme pressure, both personally and professionally” and after giving a false statement out of “sheer panic…the case snowballed and I just could not change it”.

He admitted that his conduct had been “effectively perjury” but said that his work was especially difficult: “Whilst stress is part and parcel of the job, there were some moments that were more stressful than others, particularly in litigation.”

The tribunal did not consider that the solicitor’s arguments in mitigation amounted to the exceptional circumstances necessary to arrive at a sanction short of strike off. His dishonesty had been “very serious” and his motive had been to protect his reputation.

If he had needed to discuss the pressure of work with his firm, Mr O’Maoileoin could easily have done so by simply “pick[ing] up the telephone… to start the conversation”.

The tribunal continued: “This was a case of deliberate dishonesty which continued over a period of time. The respondent made a conscious decision to lie in his witness statement.”

He was “an experienced solicitor in a supportive environment [who] made a mistake and covered it up with lies to the court. He was, ultimately, found out in his deception. The respondent repeatedly said that he ‘panicked’ but dishonesty, not panic, was at the root of [his] conduct”.

He was ordered to pay costs of £7,400.

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Overly long skeleton arguments in the firing line

The Court of Appeal has hit out forcefully at unnecessarily long bundles and skeleton arguments that are anything but.

Lord Justice Aikens warned that “a wholesale failure to comply with the practice direction on written submissions and, I would add, failure to use common sense in working out more precisely what bundles are needed for the appeal, may well lead to strict adverse costs orders”.

Caldero Trading Ltd v Leibson Corporation Ltd & Ors [2014] EWCA Civ 935 was an appeal against an order made in the wake of an unfair prejudice petition presented under section 994 of the Companies Act 2006.

Lord Justice Rimer recounted that the appeal was listed for three days, but in the event the argument lasted for only about four hours.

“We were presented with some 17 lever arch files of documents and authorities. Only one authority was actually cited to us and I doubt if we were referred to more than about 24 of the thousands of pages that were copied. I regarded the skeleton arguments on both sides as too long, the appellants’ (which included a schedule and four appendices) occupying 72 pages, and Caldero’s (with no schedule, but also four appendices) 67 pages.”

He pointed out that the requirements of paragraph 31 of practice direction 52C are that skeleton arguments should not “normally” exceed 25 pages; though Caldero defended the length of its skeleton by saying that this was not a ‘normal’ appeal, the judge said he still regarded both skeletons as having been too long.

“It is a travesty to call such written submissions ‘skeleton’ arguments,” he said.

Aikens LJ endorsed the comments. “There are far too many appeals where the parties simply copy all the trial bundles without thinking out what is actually needed for the appeal hearing,” he complained.

“This is not only costly and wasteful but it demonstrates that the parties have not actually thought about the issues on the appeal and how to deal with them.”

Not only were very few documents in the bundles actually referred to, but there was also no attempt to produce a ‘core bundle’, “which at least would have helped”, he said.

Aikens LJ continued: “The authorities bundles were also produced without any proper thought as to what actually might be needed in an appeal on fact, not a point of law. The so-called ‘skeletons’ of both sides were disgracefully long and showed a disdainful regard for CPR PD 52C paragraph 31.

“In my view there was nothing in this appeal that required that the ‘normal’ length of 25 pages to be exceeded by either side. It also seems that the parties had not given sufficiently serious thought as to how long the appeal would take. It is the duty of both parties to consider the time estimate, not just the appellants.”

Such failures “may well lead to strict adverse costs orders”, and he said this is “something we shall have to consider carefully in this case”.

Aikens LJ referred to a previous judgment of his, in which he noted “somewhat ruefully” that the punishment for prolix pleadings imposed on the miscreant in the 1596 case of Mylward v Weldon may no longer be available today – they were hung around his shoulders and he was led around the courts in shame.

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Rob Crompton of this rapidly expanding Leeds based practice talks about how Proclaim enables service excellence and rapid file progression.

About Michael Lewin Solicitors:

  • Employing 150 staff
  • Specialising in litigation work including injury claims and debt recovery
  • Experienced 700% growth since implementing Proclaim

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Deadline: don’t be rushed, experts told

Experts witnesses must not be bullied by solicitors into meeting unrealistic report deadlines and should not have to “share the pain” when courts cap legal costs, it was claimed last week.

The Jackson reforms may have created tensions between solicitors and the expert witnesses they instruct, as solicitors come under pressure to meet tight timetables, but chartered building surveyor Rodd Appleyard told delegates at the Bond Solon expert witness conference: “When it comes to expert reports, experts are in charge.”

Solicitors, he said, will demand reports to be submitted in a single week and then sit on them for weeks before calling back with questions or requests for further information.

Mr Appleyard said he is straightforward with those who instruct him, telling them that once his terms and conditions have been accepted and subject to the availability of the client, he will get the report back to them in four weeks.

Being straightforward may cost you instructions, he said, but it is required to ensure quality, adding that he gets repeat business. “Don’t be scared of telling them [solicitors]. Don’t be bullied because they will bully you,” he told delegates.

When it came to costs, Mr Appleyard advised his colleagues to do as he does and include a clause in their terms and conditions that they will receive the agreed fee regardless of any determination of the court that caps costs.

One solicitor for whom he had prepared a report told him the judge had awarded only 65% of costs claimed and asked if he would like to share the “pain”. Mr Appleyard said: “It took me two nanoseconds to tell him I did not want to.”

Bill for what is fair, but if the solicitor has agreed your terms and conditions, they must pay you in full, he reminded his fellow experts.

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EY: 2018 looks like a good year for insurers too

Premium increases, a fall in injury claims and the release of reserves for large claims due to an “improved outlook” on the discount rate made 2017 the best year for motor insurers since 1994, new figures have shown.

They also predicted that motorists would indeed save £35 from the Civil Liability Bill reforms, as the government and insurance industry have been saying.

The figures come as the bill has finished its passage through the House of Lords and has been introduced to the House of Commons.

According to EY’s annual UK motor insurance results report, the net combined ratio (NCR) – the sum of net claims, commissions and expenses divided by net earned premium – was 96.8% last year, meaning that for every £100 of premium received, insurers paid out £96.80.

The figure was 109.4% in 2016, but the 2017 outcome was the second best result since records began in 1985.

It said that, in 2017, personal motor insurance cost consumers on average £480, up 8.7% from £442 in 2016, and reaching a peak of £491 in the fourth quarter of the year, with the main driver being the original discount rate change.

However, EY said premiums began to reduce in the early part of 2018 and were expected to remain on a downwards trend until early next year.

“The key reasons are the increasing competition by insurers for a share of the market, together with reductions in the level of whiplash claims from the anticipated effect of the whiplash reforms in the Civil Liability Bill which is currently progressing through Parliament.

“EY predicts prices to fall to £471 over 2018 and £455 over 2019; with the benefit of the whiplash reforms equivalent to approximately £35 per policy.”

With the bill also set to change the way the discount rate is calculated, “some insurers have been able to release some of these reserves from their balance sheets”, EY said, estimating that, without this effect, the 2017 NCR would have been around 1.6% higher.

The report predicted that 2018 would be another good year, with the NCR declining slightly to 97.7%.

“Despite rates beginning to fall in the market, business written during 2017 will continue to perform well, and further reserve releases are possible if the Civil Liability Bill receives Royal Assent.”

However, in 2019, EY expected that “the current softening of premium rates will catch up with the changing claims environment”.

It explained: “While the whiplash reform element of the Civil Liability Bill should come into force during the year, the government is likely to put pressure on the market to pass savings directly to consumers, resulting in little net benefit for insurers.

“Reserve releases are also expected to return to normal levels. EY predicts an underwriting result back in the red, with an NCR of 102.5%.”

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Vara: legal services still offer excellent value for money

Vara: legal services still offer excellent value for money

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

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

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

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

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

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

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

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

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

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

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

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

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

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Rowles-Davies: original UK focus now completely global

Hundreds of millions of pounds are to be poured into backing litigation after both Vannin Capital and Harbour Litigation Funding unveiled significant funding boosts.

The highest profile of a series of developments in the third-party funding market, Vannin now has £100m available for this year – four times that originally planned – while Harbour has successfully closed a new fund, raising £120m of new capital.

Bramden Investments, which backs Vannin, originally allocated four years of funding at £25m per year. However, the company said that due to the volume of business the funder is receiving, this has now been increased to an overall facility of £100m to be drawn down when required and will be reviewed again, upwardly, within 12 months.

Vannin, which launched in June 2011, said it has already committed in excess of its original year one allocation of £25m. The revised capital figure will see Vannin expand in the US, where it has already signed some high-profile cases.

“As well as high volumes of quality litigation in the UK and US, we are also seeing a good number of international arbitration cases,” said solicitor Nick Rowles-Davies of Vannin Capital. “Our initial remit and capacity targets have expanded many fold since inception, with our original UK focus now being completely global.”

Harbour’s new fund’s portfolio is expected to comprise over 50 cases with a minimum claim value per case of £3m. The fund has a six-year life span, with a targeted spend of over £40 million per year over its three-year commitment period. Investors in the new fund include endowments, family offices, private wealth managers and high-net worth individuals.

In 2010 Harbour closed its first found, worth £60m, and said that last year alone it invested £40m in claims worth in excess of £1bn. While its main focus is the UK, it is already funding cases in the US, Channel Islands, New Zealand and the Caribbean.

Harbour chief executive Brett Carron said the regulatory environment since the publication of the Jackson report and the formation of the Association of Litigation Funders has “definitely advanced the acceptance of litigation funding to the highest levels of the judiciary”.

Susan Dunn, head of litigation funding at Harbour, added: “While we expect an increase in the use of funding for commercial litigation in the UK and other jurisdictions, there is a long way to go. We estimate that only 10% of litigators have used litigation funding.”

Elsewhere in the market, Woodsford Litigation Funding has acquired IM Litigation Funding – which pioneered third-party funding in the UK – including the name, its goodwill, website and ongoing rights relating to certain invested claims.

Annual results from AIM-listed funder Juridica, which is mainly focused on the US, showed total cash profit up 578% to $12.9m (£8m) for 2011 through the full or partial settlement of six cases. It currently has 18 investments worth $155m in 23 different competition, patents and commercial cases.

Burford Capital’s 2011 results, also released last month, showed that the London Stock Exchange-listed funder generated $15.9m in profit in 2011, a 965% increase on 2010, from nine cases which concluded. Buford, which has now formally completed its acquisition of after-the-event insurer Firstassist to pave the way to invest in UK litigation, invested $180m in new litigation last year.

Finally, Therium Capital Management has agreed its first mandate to manage an account for an institutional investor. Therium will act as exclusive investment adviser for this investment of an initial £5m fund in a portfolio of litigation and arbitration claims. It is the parties’ stated intention, in due course, to increase the size of the fund to up to £15m.


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High Court: percentage costs order was best approach

High Court: percentage costs order was best approach

A defendant that “resisted all early attempts at discussion or negotiation” has become the latest to have its conduct penalised in costs.

Mrs Justice Whipple said it was a case “crying out for some sensible attempt at negotiation before costs racked up and the parties’ attitudes hardened”.

She was ruling in Kupeli & Ors v Sirketi (t/a Cyprus Turkish Airlines) & Anor [2016] EWHC 1478 (QB), the costs judgment that followed her main judgment over losses suffered by passengers who failed to get on a replacement flight with the second defendant, Atlasjet, which had agreed to step in after the first defendant lost its air operator’s certificate.

She decided that the claimants had won, even though only a minority of claims and arguments had been successful, because ultimately the claimants were to receive a cheque from Atlasjet. “I conclude that the claimants’ success is not so modest that it can or should be treated as immaterial,” she added.

The judge said there should be a percentage costs order, rather than an issues-based one. She said: “That avoids the difficulty of identifying the issues to which the particular costs attach, which might be a very difficult exercise to perform in retrospect (for the parties and any costs judge in due course).

“That also avoids the prospect of continuing disputes over costs which might go on for months or years, noting that this is a case which has already been ongoing for a long time, appears to have generated a fair amount of ill feeling between the parties, and which quite clearly needs to be brought to an end.

“Finally, that avoids the spectre of what I would consider to be an undesirable and unfair outcome, namely of the claimants’ overall win (as I have found it to be) being eradicated (in effect) by the defendant’s costs attributable to particular issues. It is much better to determine the end position on costs now.”

In coming to a figure, Whipple J said that the defendant’s success at trial on every matter on the ‘list of issues’ before the court and in relation to the majority of contractual claims, had to be balanced against Atlasjet’s failure to make full disclosure and refusal to consider early settlement.

She said: “Atlasjet did not answer the claimants’ pre-action protocol letter (in fact Atlasjet was not served with proceedings until August 2012, over two months after that letter was sent, showing that the claimants were open to an informal response; the claimants are justified in saying that they had no option but to serve proceedings, given Atlasjet’s silence).

“The claimants’ Calderbank letter dated 24 April 2015 was, as things turned out, pitched too high; but it was at least some attempt at settlement. Atlasjet refused the offer and made no counter offer. The Calderbank offer was undoubtedly an admissible offer to settle to which I must have regard under CPR 44.2 (4)(c).

“Mr Adkin [for Atlasjet] is right to say that we will never know if this case could have been settled, but there are two further points to be made. The first is that even if the case could not be settled, an early meeting would surely have focused the minds of those involved, and is likely to have led at least to some narrowing of issues, which would in the end have saved costs.

“The second point is that there is a world of difference between a case which comes to trial after reasonable efforts at settlement have been made but settlement has proved impossible, and a case where one party has simply refused to engage, preferring to take the view that it will see its opponents in court. This is the latter type of case. That attitude inevitably gets weighed in the balance when it comes to costs, if that party fails.”

Whipple J ended up ordering that Atlasjet pay 33% of the claimant’s reasonable costs. “This percentage reflects the overall outcome of the case, the outcome on particular issues in the case, and the conduct of the parties in relation to the case.”

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Lotus case: three separate budgets would merely have added to the costs

The High Court has rejected a Mitchell challenge to a budget that could have left well-known car manufacturer Lotus with hundreds of thousands of pounds of costs up in smoke.

Master Kay QC said Mitchell “does not provide that a party should be penalised where the balance of justice and fairness would indicate that a contrary approach is appropriate”.

Lotus Cars v Mecanica Solutions [2014] EWHC 76 (QB) was one of three separate claims for which the claimant had submitted a single budget of nearly £600,000, the parties having agreed by a consent order that they would be joined for the purposes of case management and trial.

However, the defendant said the terms of the order, and of an allocation order made a week later, meant the claimant should have filed three separate budgets, as it had.

However, Master Kay comprehensively rejected the challenge, saying the wording of the orders – which were in places in conflict with each other – did not specify separate budgets.

He said: “In the case of large group actions where the management of the various cases is to be treated as common and is dealt with accordingly, there is no sensible reason why the cost budgeting should always be considered separately and some good reasons why it should not.”

He added that as a “significant purpose” of budgeting is to ensure that cases are handled as economically as possible, “it seems logical that if cases are to be managed and tried together, a single costs budgeting exercise should be sufficient. The provision of three separate budgets merely adds to the costs”.

Even if he was wrong, the master said he would have allowed relief against the sanction of limiting the claimant to the applicable court fees.

He said the failure in Mitchell was “much more serious” than here and in this case the claimant was trying to comply. Such default as there had been was trivial “and if it was not, there was an understandable reason for the default which did not arise from the solicitor’s failure to act promptly or dereliction of duty”.

“Although the decision in Mitchell indicates that a more robust approach should be taken with applications [for relief from sanction], it does not provide that a party should be penalised where the balance of justice and fairness would indicate that a contrary approach is appropriate,” Master Kay said.

“In my view, the reality of this case was that the claimant was trying to comply with an aspect of the orders and the rules which were not entirely clear and if, with hindsight, it is found that it failed to do so properly, I think that it would be contrary to the overriding principle to apply the penalty required by the defendant.”

The master also cited Mr Justice Coulson’s pre-Mitchell dicta last year in Willis v MRJ Rundell & Associates Ltd that the court should be cautious about penalising a party in respect of non-compliance with the cost budgeting rules.

The defendant’s solicitor, Philip Rubens of Cooke Young & Keidan, confirmed that there would be no appeal. Olswang, which instructed Thomas Croxford of Blackstone Chambers, is acting for the claimant.

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Petyt: have to make a step-change

Kain Knight, already one of the UK’s largest costs firms, is planning up to six acquisitions in a strategy to consolidate the highly fragmented costs market, Litigation Futures can reveal.

The first deal is likely to be announced this month as Kain Knight takes the lead in reshaping the post-Jackson costs market.

Chief executive Peter Petyt said the goal was to have “resources in the right parts of the UK to service law firms” and grow Kain Knight from a £6m business to one with a turnover of £12m-15m. He said this probably meant five or six acquisitions.

The firm – which has offices in Hertfordshire, London and Kent – is eyeing up expansion to the west country, north-west and north-east.

Kain Knight is also talking to potential investors to help fund both the acquisition programme and the development of new products and services, as well as assist in the firm’s expansion into “other markets”, Mr Petyt said.

While Kain Knight is already a “profitable, well-run organisation”, he explained that “we’ve got to make a step-change to take the firm to a new level if we want to interest investors”. Costs firms in the post-Jackson world need to be “cleverer in developing value-added services”, he suggested.

This financial backing will enable Kain Knight “to show goodwill by putting a reasonable amount of money on the table upfront” for acquisitions, with the rest of the purchase price paid over time through earn-out arrangements. Potential sellers have responded well to this, Mr Petyt said.

“Because of all the changes it is pretty difficult for small, independent entities to find a way forward. It is understandable that they would want to become part of a larger group,” he explained.

As part of its strategy, Kain Knight has appointed Mercer & Hole as its new auditors and tax advisers on the back of the accountants’ experience and reputation in helping SMEs and family-run businesses to grow.

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Here we go again: will hostilities start again in the courts?

Posted by Neil Rose, Editor, Litigation Futures

It may appear that little is happening on the Jackson reforms, and concern rises another notch as every day ticks over and takes us closer to 1 April 2013, but there is a considerable amount of activity going on beneath the radar.

This is in the form of mini-consultations with key stakeholders. Last week we reported on the Civil Procedure Rule Committee’s consultation on the draft pre-action protocols that will underpin portal extension, while I learned last Friday that it was the final day of a consultation on the draft Conditional Fee Agreements Order 2012 and the draft Damages-Based Agreements Regulations 2012.

Before making these, the Lord Chancellor is required to consult the designated judges, the Bar Council, the Law Society and “such other bodies as the Lord Chancellor considers appropriate”. The consultation also included the draft Conditional Fee Agreement Regulations 2012 and the draft Offer to Settle in Civil Proceedings Order 2012, neither of which require formal consultation.

The reason I’m writing this as a blog rather than a news story is that, now I’ve seen them, they reflect what was announced as the government’s policy decisions at the start of the month, such as the 50% cap on all damages-based agreements (DBAs) except where they are in personal injury or employment, where the caps are 25% and 35% respectively.

But what caught my attention, and that of others who have seen the drafts, is the wording around the information requirements. The draft CFA regulations say that before a CFA is made, the lawyer “must” provide information to the client in writing about the circumstances in which the success fee will be payable, how the success fee will be calculated, and the reason for setting the success fee at the level agreed.

When it comes to DBAs, the lawyer must tell the client in writing the point at which expenses become payable and a “reasonable estimate of the amount that is likely to be spent upon expenses, inclusive of VAT”. In personal injury cases the lawyer must also explain how the payment will be calculated, while there are additional information requirements for employment cases carried over from the current regulations.

The 2012 regulations, once brought into force, will revoke the 2000 CFA Regulations, the litigation from which is to a large extent the reason we are where we are today. But might they live on in spirit? It was the prescriptive nature of those regulations, the demand that solicitors “must” take certain steps, that caused so many problems and led to some of the most ridiculous technical challenges that any litigator has ever dreamed up (the challenge on the basis that the CFA did not say that there was no postponement element in the success fee has stuck with me as an example).

Should this be the case, the ingenuity of defendant lawyers will come up against the avowed intention of the new Master of the Rolls, Lord Dyson, to clamp down on satellite litigation post-April.

In his first speech since slipping into the robes earlier this month, Lord Dyson said that “while it is inevitable that new rules and procedures will give rise to some satellite litigation, it is vitally important that the courts and lawyers do what they can to minimise the risk of [it]”.

This means the rules providing “as much certainty as possible” and then clear, authoritative guidance from the Court of Appeal. How will this be achieved? Through “consistency in approach”, Lord Dyson said. A small number of Court of Appeal judges will be designated to deal with procedural cases; he will also sit on those appeals, as will the deputy head of civil justice. “We will not sit on all the appeals, nor will we form the entire constitution which hears those appeals. But at least one of the designated judges will sit on each procedural appeal.”

Lord Dyson hoped such guidance will not be needed often. “But we must be realistic,” he said. The lesson is there from the costs war. Is battle about to recommence?


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Tracy Blencowe

Tracy Blencowe, Business Solutions Director, Eclipse Legal Systems

Eclipse Legal Systems, the Law Society’s endorsed legal IT provider, has announced updated functionality in its Proclaim solution to enable firms to utilise the new Electronic Bill of Costs.

In April 2018 a new format was introduced for the billing of personal injury matters, mandated for completion via the new ‘Precedent S’ electronic bill.  The intention is that electronic bills will provide greater transparency regarding the value of costs being claimed, be easier to compile, and less expensive to prepare by using automated calculations.  It is also intended that costs incurred in a claim will be easier to understand (especially where there has been a costs budget agreed).

Eclipse’s Proclaim case and practice management solutions have been updated to enable the management of these changes to time recording, as well as providing users with the ability to produce the new Precedent S Electronic Bill from the history of the digital file.  All data is arranged into the relevant mandated categories of phase, task and activity.

Tracy Blencowe, business solutions director at Eclipse, comments:

“Mandated changes to existing ways of working are always a challenge for practitioners, and we see our role as enabling them to adapt to change as smoothly and as easily as possible.  Our new Precedent S solution is already rolled out to those clients of ours that have requested it, allowing for a minimum of disruption for them to transition to the new electronic bill.  To make our solution as widely available as possible, we can even provide three different ways of implementing the enhancement in order to suit firms of all shapes, sizes, and complexity of caseload.”

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Steve Rowley

Steve Rowley, Business Development Manager, Allianz Legal Protection

Allianz Legal Protection (ALP) has launched a new partnership with leading South West law firm Tozers Solicitors LLP.  ALP will provide After the Event (ATE) insurance on a range of personal injury and clinical negligence case types to protect customers against the disbursement and adverse cost risks associated with litigation.ALP’s Equity ATE insurance product will provide Tozers’ clients with financial protection against defendant costs and for any unrecovered disbursements incurred during the claim. This will include expert reports, counsel fees and court issue charges in the event that the case loses or is discontinued.

A key feature of the ATE arrangement is the damages based pricing structure which will help ensure that premiums remain proportionate. Full delegated authority is also provided. This will allow Tozers to quote and provide cover for clinical negligence and personal injury claims regardless of the damages value being claimed.

Allianz Legal Protection’s business development manager, Steve Rowley, commented: “Tozers are recognised experts for handling clinical negligence cases with a strong regional presence in the South West. This expertise was evident when we were discussing their needs for ATE insurance, and I’m delighted that ALP has been chosen as their preferred ATE insurer”.

Stuart Bramley, co-head of clinical negligence at Tozers LLP added: “The Clinical Negligence and Injury team at Tozers are very pleased to be working in partnership with Allianz, giving our client base the option of complete protection against defendant costs. We look forward to this arrangement benefitting our injured clients as we work to secure justice and redress for those harmed by medical accidents.”

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Volkswagen: 26 October cut-off date to join action

Eleven law firms have enough claimants so far to form part of the group action over the Volkswagen emissions scandal, the senior Queen’s Bench master has decided.

Master Fontaine named Slater & Gordon and Leigh Day as the lead solicitors of what is now officially known as the VW NOx Emissions Group Litigation, with Chesterfield firm Your Lawyers joining the pair on the steering committee.

The other firms forming the solicitors’ group in the action are: Curtis Law, R James Hutcheon, Attwood Solicitors, Burd Ward, Jefferies Solicitors, Michael Lewin Solicitors, Simon Burn Solicitors, and E Rex Makin & Co.

Other firms may be added to the group if they have been instructed by 20 or more claimants.

At the time of the hearing earlier this month at which the group litigation order was made, there were 7,000 claimants. The cut-off date for joining the action is 26 October.

The action is against Volkswagen, Audi, ŠKODA, SEAT, Volkswagen Group United Kingdom Ltd, Volkswagen Financial Services Ltd and authorised dealerships by individuals or businesses who owned or leased vehicles with EA189 engines which were owned or obtained on finance or leased by a claimant on or before 1 January 2016.

The order said the liability of each claimant for costs, and each party’s entitlement to recover costs, would be several and not joint.

“Unless ordered otherwise, each claimant’s share of the common costs shall be calculated by reference to the number of vehicles in respect of which the claimant claims; so that (for example) if there were a total of 100 vehicles in respect of which claims were being made, a claimant claiming in respect of one vehicle would be severally liable for one one-hundredth of the common costs (both the claimant’s common costs and any liability for the defendants’ common costs), and a claimant claiming in respect of two vehicles would accordingly be liable for two one-hundredths of such common costs.”

There will be an initial case management conference on the first open date after 20 November, with a time estimate of two days.

Aman Johal of Your Lawyers said: “The group litigation order against Volkswagen over Dieselgate is now live and drivers must seize the opportunity to sign up.

“Your Lawyers is proud to be on the steering committee and to lead the class action against the automotive giant.

“Owners of 1.2million vehicles in the UK can claim for the human, environmental and financial impact of Volkswagen’s installation of their illegal defeat devices. Volkswagen must be held to account for its reprehensible actions.”

Last year, London firm Harcus Sinclair was forced to withdraw from the action it was helping to co-ordinate because of a breach of a non-disclosure agreement it signed before the case began.

The High Court ruled that the firm had agreed with Your Lawyers not to work for any claimants in the litigation other than those represented by Your Lawyers after it approached Harcus Sinclair to help with running its group in April 2016.

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Jennings: skills and insight

Burcher Jennings came away with an impressive glass trophy, the prize for New Entrant of the Year, at the 2014 Modern Law Awards. The award was presented by former MP and celebrity raconteur Giles Brandreth at a glittering ceremony at the Park Lane Hilton.

Burcher Jennings is an innovative lawyer-run business taking a unique approach to the most crucial legal industry issues in 2014 – pricing and billing. Burcher Jennings was created in April of this year from the fusion of law firm pricing consultancy Validatum and Jennings Costs.

At the heart of the business lies the desire to enable legal sector businesses to incorporate sophisticated pricing and costing best practice into existing structures. The aim is to provide legal sector businesses with a tangible method for improving profitability and cash flow, and to deliver genuine value for money to clients through the use of better practices.

Traditionally, pricing and costing have often been left to internal departments within a legal sector business. It has predominantly been a secondary function to the main focus of winning and completing legal work. However, the impact of poor pricing and costing methods is often deeply felt, whether in the context of losing tenders or poor margins or inadequate costs management.

Whilst the consequences of poor cost and pricing practices can be broadly felt, until now it was hard for the leaders of law firms to find the support they needed for a change of mindset. The legal profession is often accused of being set in its ways and resistant to change but Burcher Jennings has developed a way for providing easy to incorporate solutions to any aspect of pricing and costs in the legal sector. It was this transformative impact which impressed the Modern Law Awards judges.

Richard Burcher, chairman of Burcher Jennings said: “We’re delighted that the big step we took earlier this year to combine our talents has been acknowledged by the Modern Law Awards judges, but even more importantly by our colleagues and client firms.

“The age of law firm mergers, cutbacks, economic pressures and the constant demand to create more efficiency within existing best practice demanded some fresh thinking. Uniquely we offer an holistic, one-stop shop approach, tailored exactly to the needs of the legal sector and of each firm – this is not a generic one size fits all offering.

“As well as the judges, I’d like to thank the leaders of the law firms with whom we have worked. Their willingness to embrace change represents a very promising future for the sector.”

Martyn Jennings, CEO of Burcher Jennings said: “I’d like to say a big thank you to the Burcher Jennings team, who work very hard to constantly improve and extend the insight and services we offer to law firms. This award is testament to their success.

“Costs and pricing have been seen as dusty, perhaps even boring back-office disciplines. We give firms the skills and insight to turn costs and pricing into beneficial best practice, rather than processes which hamper productivity and progress. Our services are refined to reflect up-to-the-minute market developments – such as the increasing demand for fixed-fee pricing and the escalating importance of costs budgeting. We also offer coaching and training, including pricing workshops, of which we have already hosted several hundred.

“Firms with whom we have worked say that they benefit from standing out from their competitors, increased profitability and stronger working relationships with happier clients.”

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Getting the scales of justice right: does low risk mean high reward?

Posted by Neil Rose, Editor, Litigation Futures

The Damages-Based Agreement (DBA) Regulations 2013 were up for review pretty much as soon as they became law on 1 April 2013. Since then there has been much talk, many complaints, little take-up, and increasingly urgent calls for reform.

So yesterday the Ministry of Justice (MoJ) finally responded to all of this by calling in the Civil Justice Council (CJC) to conduct a review of where improvements to the regulations could be made – but specifically excluded any changes to enable ‘hybrid’ DBAs, the source of most of the talk and complaints.

These would allow for firms to mix hourly rates with a contingent element, the reasonable argument being that only firms with a commercial death-wish or incredibly deep pockets would run a large case that could take some years on a pure contingent basis.

This does not seem overly controversial. Just last month Lord Justice Jackson came up with no fewer than eight reasons why hybrid DBAs should be allowed.

But, the CJC reported, “the government has ruled this out as it considers such arrangements could encourage litigation behaviour based on a low risk/high returns approach”.

This argument doesn’t stand up to examination. A ‘low risk’ DBA would be one where the firm put only a small proportion of its fees at risk; the return, if successful, would be similarly modest. To get a high return, you have to take a high risk.

As Sir Rupert also pointed out, there is no logic to banning hybrid DBAs while allowing ‘no win, low fee’ conditional fee agreements (CFAs), and also to allow third-party funding (TPF) to operate on a hybrid basis where funders meet some or all of the litigation costs if the case fails, and receive a share of the winnings if they succeed.

He said: “Indeed, it is worse than illogical. DBAs are a more efficient form of funding than TPF, because only two entities (rather than three) have a stake in the litigation. Therefore the law should not be sidelining DBAs in favour of TPF.”

So what has happened? Jackson LJ suggested that opposition to hybrid DBAs was coming from those who disliked DBAs in principle – those on the receiving end of claims. He called for “those in authority” to stand up to “powerful vested interests within the ‘big business’ camp”.

Certainly the American Chamber of Commerce, which was lobbying MPs and peers to clamp down on third-party litigation funding and DBAs during the passage of LASPO, continues to be active behind the scenes. Opposition to the introduction of opt-in class actions (for which DBAs are to be banned anyway) is their current focus.

So mark it up as a victory for big business over the little guy for whom DBAs offered the chance of justice? The government’s reasoning certainly sounds like it. It is important to remember that a key element of Jackson LJ’s rationale for allowing DBAs was that following the abolition of recoverable success fees, it was important to open up as many other options for funding as possible.

But I believe there is another reason too. The profession has never convinced the Ministry of Justice that it would actually use hybrid DBAs – instead, officials wondered whether all the agonising over the uncertainty around the regulations was actually just a convenient excuse not to embrace DBAs, particularly among the big City firms.

After all, as Jackson LJ noted, solicitors have long been able to offer ‘hybrid’ CFAs, which are a very close relation. Yes, it may be illogical to allow one but not the other, but equally, are any large firms (or indeed is anyone) actually offering hybrid CFAs? I’d be very keen to hear from readers who can correct the impression that they are the legal equivalent of hen’s teeth.

So if firms don’t do hybrid CFAs, there’s not much reason to suppose they would embrace hybrid DBAs. Maybe if they start doing so now that the DBA option has been closed off, the MoJ could be convinced to think again.

In the meantime, the winners may well be third-party funders, which have been coming up with arrangements that get around the hybrid DBA problem that sees the firm put skin in the game. For example, the law firm enters a full DBA with the client, and then does a deal with a funder to bankroll some of their fees in return for a share of the contingency fee if successful.

The ‘synthetic’ model promoted by Burford Capital involves the client entering into a traditional TPF agreement and a normal retainer with their solicitors. Meanwhile, the funder has a back-to-back agreement with the law firm, which sees the solicitors put some of their fees at risk in exchange for a share of the funder’s cut of the damages.

Then again, why not just go for a conventional funding agreement with the firm on a CFA?

So is this the end of the road for DBAs, before they’ve even got going? Not quite yet. Let’s see what the Civil Justice Council comes up with first.

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Hudson: transparency in policymaking needed

The Law Society has challenged the government to show the evidence on which it based the decision to slash the RTA portal fee after having a Freedom of Information Act request rejected, which Chancery Lane suggested may indicate that it does not exist.

The move increases the pressure on the government, which has been strongly criticised by the claimant lobby for failing to explain explicitly the basis for its proposed fee cut.

This should be tested next Friday when the High Court hears the judicial review application brought by the Association of Personal Injury Lawyers and Motor Accident Solicitors Society.

Chancery Lane had sought disclosure of the full version of the report on the first year of operation of the portal, which the Ministry of Justice commissioned from Professor Paul Fenn. However, publication was delayed until after the decision to extend the portal had been made; when it was published, the findings did not support extension at this stage.

The society has cause to believe that there is unpublished material – although what is in it is unknown – and has requested a review of the refusal, arguing that “the government is hiding behind a misapplication of the Freedom of Information Act in order to save its blushes”.

It is not the first attempt to use the Act to secure the background information used to calculate the new fee; north-west firm Forster Dean submitted a request in November and has been through the appeals process, but did not receive the key information it was after.

Law Society chief executive Des Hudson said: “It is hard to understand why the government is refusing to share or publish in full the research which it commissioned from a respected academic. Since it received Professor Fenn’s evidence, government has published its proposals for changing fixed recoverable costs relating to personal injury claims in road accidents. Presumably the government commissioned the factual study to inform its thinking on how fixed costs might be changed.

“The government should base its policymaking on a sound factual basis. The alternative is that the government’s proposals are based on ministers’ own preconceived ideas or on lobbying from the insurance sector. Why will it not now share that factual evidence? Is it perhaps that the changes the government has proposed are not supported by Fenn’s study?

“This matters for anyone injured in a car accident. Lower fixed costs reduce their chances of securing their proper payout from the insurance company… The factual evidence should be published so that we can all see it for ourselves. Transparency in policymaking will help to reinforce trust in government and the political process.”

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Campbell: the risks of AG going part-paid were high

Campbell: the risks of AG going part-paid were high

A costs judge has upheld Addleshaw Goddard’s (AG) claim for £12.7m in unpaid fees from the administrators of the estate of Boris Berezovsky and ordered that the firm rank as a secured creditor.

Master Campbell said: “The fees were hard earned on AG’s part and without the firm’s exertions, the creditors could usefully reflect that there would have been no fund over which they can now lay claim.”

Though best known for its work on Mr Berezovsky’s failed action against Roman Abramovich, AG was also retained in an action to claim 50% of a joint venture with the late Arkadi Patarkatsishvili, and more than 30 other matters, including two “relatively substantial” actions in the Chancery Division.

The terms of AG’s retainer were that it would receive 50% of its fees in the event of losing, but two tranches of 100% success fees if the actions succeeded.

It was paid all but £1.4m of its first £5.6m invoice rendered in 2012 after the ‘level 1 success fee’ was triggered, but none of the £11.3m it billed the administrators (Mr Berezovsky having died in 2013) in 2014 when the level 2 success fee fell due.

The outstanding sum was contested on various grounds, but AG won on every point before Master Campbell, sitting in the Senior Court Costs Office in April shortly before his retirement from the bench.

The lengthy ruling, published yesterday, showed that Master Campbell found on the facts that the retainer was a contentious business agreement (CBA) under the Solicitors Act 1974, rather than a discounted conditional fee agreement. This meant it could be enforced under section 61 of the Act.

He went on to reject an alternative argument that the CBA was not properly explained to Mr Beresovsky, citing evidence from the Abramovich case that the one-time oligarch had “a team working for him including lawyers, whose brief included the task of providing advice about legal documents”.

He took a similar line over a challenge to the 100% success fee. It was complex litigation where “the risks of AG going part-paid were high”.

Master Campbell continued: “Not only that, the sheer size of the litigation across all the actions would have tied up many of AG’s fee-earners for significant periods with the possibility that at the end of it all (as proved to be the case in the Abramovich action), the firm would have had to be satisfied with the Reduced Fee and nothing else.

“Next, it must be remembered that this was a business agreement between people whose work was business and the supply of business services, in which Mr Berezovsky did not have the financial luxury and ability of being able to meet his legal bills as and when they fell due. The commercial solution to that problem was to enter into a retainer which had elements of ‘give and take’ on both sides.

“For Mr Berezovsky, the CBA gave him the ability to finance the litigation without all the fees having to be paid “up front”. For AG, the firm took the risk that if the litigation failed, millions of pounds worth of work would have to be written off, but the quid pro quo for that was that if the actions succeeded, the firm would receive a bonus.”

Master Campbell also rejected a call to look into the number of hours AG worked to ensure they were not excessive, saying it was clear that Mr Berezovsky’s team had approved the charges.

As a result, the judge found that AG had a charge over the funds held by the administrators under section 73 of the Act until the fees were paid. He said that upon settlement in the litigation being reached, “AG acquired a chose in action which crystallised upon the agreement and not upon the payment of the money. In doing so, the lien that thereby arose attached to a fund which, although not in AG’s possession, was ‘in sight’, so the firm’s right to it arose before Mr Berezovsky’s death and subsequent insolvency”.

Finally, Master Campbell refused to grant a stay. “The outcome of the application is that upon the grant of a charge, AG will rank as a secured creditor whose right arose before Mr Berezovsky’s insolvency and accordingly is unaffected by it,” he ruled.

“Accordingly, the charge will not be avoided and no validation order will be required and it follows that I see no reason why the money should not be paid out now. The fees were hard earned on AG’s part and without the firm’s exertions, the creditors could usefully reflect that there would have been no fund over which they can now lay claim.

“Given too, that but for his death, the money would long since have been paid to AG, I consider it is only just that the firm’s bills should be cleared without further delay. The application for a stay is refused.”

AG instructed Nick Bacon QC and Daniel Saoul of 4 New Square, together with John Briggs of South Square, while Stephen Atherton QC of 20 Essex Street and Robert Marven of 4 New Square, instructed by Holman Fenwick Willan, represented the administrators.

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Ellis: wriggle room is now extremely narrow

Yesterday’s Mitchell costs ruling received a hostile reaction from many lawyers, with warnings of a return to tactical litigation, more satellite litigation, and a knock-on effect on firms’ professional indemnity insurance.

Others focused on the clarity of the message that the courts will need considerable persuasion to grant relief from sanctions for failures to comply with rules, orders or directions, and that solicitors need to get their houses in order to avoid getting themselves into the situation in the first place.

Nick Bacon QC of 4 New Square – who together with Roger Mallalieu represented the successful defendant in Mitchell (instructed by Louis Charalambous at Simons Muirhead & Burton) – told Litigation Futures that “we are on a one-way ticket to Singapore” – a reference to the no-nonsense Singaporean approach to compliance with rules and directions after its own Jackson-style reforms.

“Expect turbulence on the way,” Mr Bacon continued. “There will be casualties in the short term. Solicitors will have to improve case management systems and up their game on meeting deadlines.” The “journey time” would be two to three years, and litigators should “expect no further delays”.

Andy Ellis, managing director of costs firm Practico, which also acted for the defendant, said: “This decision will have come as less of a surprise to anyone who was in court for the appeal hearing and was able to gauge the mood music.

“The position of the claimant was not helped by the absence of evidence as to any prejudice he may have suffered as a result of the refusal to grant relief. It was also evident that mere inadvertence or pressure of work – unkindly described by some as ‘the dog ate my homework’ form of excuse – will not get you home when seeking relief from sanctions.”

He emphasised that the new culture is not zero tolerance – the court was clear that it is not concerned with trivial breaches. “But the wriggle room is now extremely narrow when delay will result and especially if the court is inconvenienced.”

Mr Ellis added: “It is also telling that the first major decision that will help shape the administration of civil justice post-Jackson concerned compliance with costs management. There have been whispers that the courts’ commitment to budgeting might be waning – Mitchell shows that this is far from the case.”

Murray Heining, chairman of the Association of Costs Lawyers, said having firm guidance on how courts should approach breaches of orders and rules is “surely welcome”.

“This a judgment that will give Ethelred the unready-type lawyers sleepless nights. Those lawyers working with a team of experts, including costs lawyers, should sleep more comfortably.

“The court expressed hope that the decision would send out a clear message to litigators. Those practising in civil litigation, if they have not already reviewed their practices and procedures, must do so now and ensure that they have the resources to ensure compliance with the CPR and all orders made. They must also ensure that they have the resources to meet procedural obligations.”

Rod Evans, the president of the Forum of Insurance Lawyers, said that while many will understand “the positive reasons why such a robust approach has been adopted, this may well mark a retrograde step in personal injury litigation”.

He explained: “For years we have been encouraged to adopt a ‘cards on the table’ approach to litigation and to work sensibly together to resolve the matter as soon as possible at proportionate cost.

“The Court of Appeal’s (almost) zero tolerance to delay will mark a return to the tactical litigation that had reduced significantly, certainly in the most serious cases. I have no doubt that parties will now be tempted to try and catch each other out. In particular, this decision reinforces the advantages to the claimant of frontloading a case prior to issue and then forcing the defendant on the back foot with strict timetables.

“This decision will also encourage opposed applications rather than consent orders, which may well negate the Court of Appeal’s desire to avoid satellite litigation. This will make Mr Justice Ramsay’s review of pre-issue conduct next year even more important.”

Francesca Kaye, president of London Solicitors Litigation Association, agreed that the assertion strict adherence to the rules would stem a rise in satellite litigation was “questionable”. She said: “There’s every chance that there will be a great deal of satellite litigation around professional negligence claims. So, we may simply be moving the problem not eliminating it.”

Sue Nash, founder of Litigation Costs Services, argued that whilst the sanction itself was Draconian, “the reasoning behind the first instance judgment was sound – Master McCloud made reference to the Master of the Rolls’ 18th lecture in the implementation programme of the Jackson reforms, in which he highlighted ‘the need to further the proper administration of justice, where that goes beyond the interests of the immediate parties’.

“Whether this judgment sees a knock-on effect in terms of paving the way for more professional negligence claims brought against solicitors who make costs budgeting errors remains to be seen.”

Certainly James Field of Triton Legal thought it would do. “Negligence claims can be expected to be for bigger amounts than before,” he said. “Previously, the quantum of negligence claims relating to procedural errors were often restricted to the limited cost of a court application to put matters right. From now on lawyers and their insurers can expect to pay more in compensation for negligence claims arising out of litigation errors.

“How will this impact on insurance brokers and insurers? It may be that the Mitchell decision will make firms with a litigation department a less attractive risk. Firms could see their insurance premiums increase from next renewal to reflect this.

“It may be that a litigation firm’s diary systems will be under even more scrutiny than before from insurers, and brokers may face difficulty placing insurance for firms whose systems are not sufficiently robust. While most firms are now pretty good at keeping track of key dates such as expiry of limitation or deadlines for service, an equally rigorous approach will now be vital for all other deadlines and procedural steps in litigation.”


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Eclipse2014 200x200Eclipse Legal Systems is implementing its Law Society Endorsed Proclaim Case Management Software solution at new start-up, McDermott Smith Law.

The Liverpool-based firm has been founded by Andrew Smith and Joseph McDermott and will focus solely on Personal Injury work.

Possessing a wealth of experience from larger firms, Andrew and Joseph took the decision to establish their own practice in order to offer friendly and expert advice, combined with truly individual client service.

As a new start-up within the Personal Injury sector, McDermott Smith Law recognised the need for a comprehensive and centralised software solution. The practice has selected Eclipse’s Proclaim Personal Injury Case Management system to ensure maximum productivity from its inception.

Furthermore, Proclaim will eliminate a number of administrative duties including document production, and will enable staff to focus on building strong client relationships.

In addition, McDermott Smith Law will benefit from Proclaim’s integration with the MoJ’s RTA and EL/PL Claims portals. Access from the desktop application will be 2-way, ensuring a quick and efficient method of processing cases and resulting in full compliance with the MoJ’s claims process.

Andrew Smith, director at McDermott Smith Law, comments:

“Joseph and I have both worked with Proclaim at previous firms so we knew when starting our own practice that it would provide us with a solid platform on which to develop and expand.

“The Personal Injury sector is incredibly competitive, and involves considerable volumes of document production. Implementing Proclaim means we can overcome these hurdles and benefit from high levels of automation, ultimately resulting in our time being spent on client relationships and business development.”

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Nicholas Ellor

Nicholas Ellor

Specialist legal expenses insurer, Temple Legal Protection is delighted to announce the appointment of Nicholas Ellor as a Senior Underwriter to join its commercial underwriting team.

Nicholas brings with him twenty years’ worth of experience working as a solicitor in London on both contentious and non-contentious company commercial and corporate matters. Having been a practitioner, he is fully aware of the pressure and time constraints a commercial litigator has to operate under and will be able to bring his insights to the table and provide a fast and professional service. His experience and knowledge will enhance the existing teams’ abilities to quickly and expertly assess claims and to provide intelligent and timely support throughout the legal process. He will be based at Temple’s offices in Guildford.

Commenting on Nicholas’ appointment, David Chase – Senior Underwriter said: “I am very pleased to welcome Nicholas to Temple’s underwriting team. We are an experienced team who are decision makers and ready to do business and Nicholas’ appointment further supports our ambitions as a major player in the ATE market.”

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Norris: costs order must be “practically workable”

Judges should be content to do “broad justice” when making costs orders to avoid “complicated attempts” to attribute them between a number of cases, the High Court has ruled.

The ruling follows the success of Redstone Mortgages last October in two of four negligence test cases it brought in the against Home Counties law firm B Legal.

Mr Justice Norris said a costs order must do justice between the parties, but “the judge must be content to do broad justice if an attempt to do exact justice is likely to involve the parties and the costs judge in complicated attempts to attribute what are essentially common costs between different claims and different issues within those claims.

“That is particularly true where (as here) these were four separate sample actions directed to be tried together.”

Norris J went on: “Whilst of course one has to consider the order for costs on an issue by issue basis, one ultimately has to arrive at an order that fairly reflects the outcome, that is practically workable (bearing in mind the difficulties faced by skilled costs judges) and which does not commit or encourage the parties to indulge in expensive satellite costs litigation.

“My solution is not perfect, but its imperfections are no greater than the alternatives.”

Delivering judgment on costs in Redstone Mortgages v B Legal [2015] EWHC 745 (Ch), the judge said the general principles to be applied were not in doubt.

“First the court must decide whether to make an order about costs at all. Second, if the court decides to make an order about costs then it will in relation to each action seek to identify who is the successful party, in which event the general rule will be that the successful party is entitled to its costs.

“Third, before making such an order the court must, however, consider all the circumstances of the case, which might indicate a departure from the general rule.”

Norris J said the court was “not confined to considering the costs as a whole”, and may make an issues-based costs order, but in this case it must bear in mind that “almost invariably overall success involves losing on some issues”.

In the two of the four test cases which Redstone lost, Welch and Sher, the judge ordered that the lender should pay B Legal’s costs on the standard basis, together with a quarter of the “generic costs” of all the cases. He defined “generic costs” as costs incurred by B Legal which were not attributable to a particular case.

In the other two, Howard and McOwen, Norris J said Redstone established at the earlier, preliminary issues hearing that B Legal had failed in its duties to the lender, but causation and damages had still to be determined.

Rejecting arguments put forward by B Legal in a “35 page and 92 paragraph skeleton argument”, the judge ruled that Redstone’s costs in Howard and McOwen should be treated as claimant’s costs in the case. In each of them, a quarter of the generic costs should be added, and the parties should be free to apply to vary the order if a part 36 or other offer was made.

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Disney: Prevention is always better than remediation

Posted by David Disney, director and head of the south-west region of Litigation Futures Associate John M Hayes

Have you been caught out by fixed costs on a high-value RTA or EL/PL claim that settled prior to allocation to the multi-track? Over the past couple of months, we have seen this issue arise on a number of occasions.

So, in what circumstances do fixed recoverable costs (FRC) under part IIIA of CPR 45 apply to high-value claims?

Pursuant to CPR 45.29A and the decision in Qader v Esure [2016] EWCA Civ 1109, FRC apply if a claim was submitted through the portal but no longer continues under the relevant protocol and the matter is not allocated to the multi-track.

The application of fixed costs is therefore quite straightforward. If a seemingly low-value claim is started under the portal but later becomes more complex and/or increases in value, and subsequently exits the portal, it will be subject to fixed costs if settlement is reached before allocation to the multi-track.

This is the scenario we are finding to be quite common in practice and something which practitioners should become familiar with in order to avoid the pitfalls of fixed costs.

To avoid fixed recoverable costs before/during the claim, prevention is always better than remediation.

There are two immediate and obvious ways in which FRC can be avoided, although both require more case management. The first is not to submit the claim via the portal in the first place (if there is reasonable justification), the second is to ensure the claim is allocated to the multi-track as soon as possible (CPR 45.29B) or, if possible, delaying settlement until after allocation.

The first method will likely require time to be spent by senior fee-earners assessing the potential quantum of claims at the outset, in an effort to avoid incorrectly submitting claims through the portal. It also carries an element of risk in that the defendant may be ordered to pay no more than FRC if “the court considers that the claimant has acted unreasonably… by valuing the claim at more than £25,000, that the claimant did not need to comply with the relevant protocol” (CPR 45.24).

Although costly, it will arguably be time well spent when hourly rates costs are obtained.

The second method should not be relied on as a standard practice as it is not always within the claimant’s control. For example, the defendant could make an acceptable part 36 offer, more than 21 days prior to the initial case management conference, which would almost certainly result in settlement.

Even if the claim did not settle and was later allocated to the multi-track, the defendant could still raise the argument that had the claimant accepted the offer within the relevant period, fixed costs would have applied.

What can you do if fixed costs apply?

If fixed costs apply once the substantive claim has settled, then the claimant has a couple of possible avenues.

They could make an application pursuant to CPR 45.29J – which allows the court, if it considers there are exceptional circumstances, it summarily assess the costs or make an order for an amount of costs which is greater than fixed costs.

Whether a case is exceptional or not will turn on its own facts as ‘exceptional circumstances’ is not defined and there has not been any case law to determine what the threshold is. We do, however, know that the threshold for proving exceptional circumstances was quite high under the previous FRC provisions (which are now covered under CPR 45.13 – please click here for a previous article on this point) and therefore one would assume the threshold will be at a similar level.

Another possibility is making an application pursuant to CPR 46.13(a): “Where the court is assessing costs on the standard basis of a claim which concluded without being allocated to a track, it may restrict those costs to costs that would have been allowed on the track to which the claim would have been allocated if allocation had taken place.”

If the claim would have been allocated to the multi-track, there may be an argument that fixed costs would not apply. However, due to the clear wording of CPR 45.29B, there is no ambiguity as to the costs that should apply: “For as long as the case is not allocated to the multi-track, if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are the fixed costs in rule 45.29C.”

It may therefore be that this argument is used in support of an application made pursuant to CPR 45.29J rather than as a standalone application.

If the court is persuaded that exceptional circumstances exist, it will either summarily assess the claimant’s costs or make an order for detailed assessment of the claimant’s costs.

However, you should beware that there is a possible sting in the tail. If the claimant’s assessed costs are not 20% more than the fixed recoverable costs they would have received had they not obtained an order for hourly rate costs, the court will only allow the lower of assessed costs and fixed recoverable costs, and may order that the applicant pay the costs of the assessment (CPR 45.29K and CPR 45.29L).

It will therefore be necessary to undertake an analysis of the likely recovery under assessed costs before making such an application.

Take time to assess claims upon receiving initial instructions and consider whether a letter of claim is more appropriate than submission through the portal; the costs implications of these initial steps are significant.

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Court fees: on the rise

The government has refused to bow to sustained criticism of its plans for steep court fee increases and announced that they are to go ahead – but it has yet to decide on whether it will introduce ‘enhanced’ fees that are above cost price.

Issuing its response to the highly contentious consultation on court fees – which attracted 162 submissions – the Ministry of Justice acknowledged that many did not agree with the proposals, which it estimated will generate an additional £105m in fee income a year.

But minister Shailesh Vara said: “I am satisfied that we must press ahead. No one could seriously argue that it is right for the taxpayer to continue to subsidise those who use the courts, by underwriting, year after year, unplanned deficits in court income. We need to get on top of this problem once and for all.”

Mr Vara indicated that enhanced fees will go ahead, saying that “we will be bringing forward our plans for reform in due course”.

To support its decision – and in the face of criticism of the lack of evidence underpinning the proposals – the government published new research conducted by IPSOS Mori, involving 54 qualitative interviews with a range of civil claimants and family applicants.

This said that “overall, most participants reported that court fees were affordable and did not influence their decision to start court proceedings. Many participants felt they would not have been deterred from starting court proceedings if court fees had been higher”.

However, some civil claimants making specified money claims reported that they would weigh up whether the likely cost of court proceedings would be worthwhile against the value of the claim they were hoping to recover.

Also, the study did not cover those who resolved disputes using alternative means, or who had been deterred from bringing their case to court for any reason.

There have been a handful of amendments to the original proposals. Noting the concerns expressed about the proposed £680 for a judicial review hearing or oral renewal, it will instead charge £350 for an oral renewal, with a further £350 charged if permission is granted and the case proceeds to a hearing. (These figures, like others in the consultation, have been uprated to 2013/14 prices.)

“This will mean that those found to have an arguable case will continue to pay no more than had permission been granted in the first instance, while lowering the cost of an oral renewal application.”

The changes will come into force on 22 April. For the full list of new fees, see from page 41 of the consultation response here.


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Hodgkinson: tipping point

Hodgkinson: tipping point

Pure Legal Costs Consultants, the firm set up by former Compass Costs founder Phil Hodgkinson, has made its first acquisition by bringing on board York firm Connect Costs for a “six-figure sum”.

The deal brings 13 new staff to Pure, although the current management team will remain in place, headed by Jon-Paul Burnett.

Mr Hodgkinson said: “Connect Costs have a fantastic and hugely experienced team of costs draftsmen, who specialise in clinical negligence, catastrophic injury, high-value commercial litigation and multi-claimant product liability cases.

“These are all areas which require specific expertise, and as our incoming work volumes in these areas continue to rise, it was imperative that we increased our skills set and capacity to take work.”

He added that he had learnt from past mistakes: “Historically costs firms provide a good service for a few months, but fail to assess the size of their talent pool, therefore not recognising the tipping point at which the service they provide begins to suffer, which then results in loss of quality, poor service and poor results… We are fast approaching our tipping point.”

Around 150 people currently work across the whole Pure Legal group – which late last year made its first law firm acquisition by buying York firm Pryers – and Mr Hodgkinson said two more acquisitions in the pipeline should take the headcount to 250 in a couple of months’ time.

There are signs of the costs market slowly consolidating and the bigger practices looking to expand, with Burcher Jennings recently opening offices in Manchester – in a deal with Kings Legal Costings – and Truro.

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Cases with experts: case management conference directions set to change

Concurrent expert evidence – known as hot-tubbing – should only be carried out in the “classic” manner where experts are sworn and give evidence at the same time, the Civil Procedure Rule Committee (CPRC) has decided.

Asked to give a steer to the sub-committee redrafting PD 35.11, the committee decided against an alternative approached that treated concurrent expert evidence as “embracing the full range of methods, including back-to-back, issue-by-issue expert evidence, and ‘hybrid’ procedures”.

The sub-committee is redrafting the PD so as to promote the use of hot-tubbing, and also putting forward changes to standard-form case management conference directions, directions questionnaires and listing questionnaires.

The more limited approach, it told the May meeting of the CPRC, has “the virtue of greater linguistic clarity, simplicity, brevity and avoidance of confusion”.

By including procedures where the evidence is not given concurrently at all, but rather sequentially, the wider approach “would lead to more substantial expansion of PD 35.11”, the sub-committee said.

The minutes of the May meeting, released last week, showed that the CPRC “favoured the limited approach”, and also decided that it would not be appropriate within the rules to include signposts to guidance to hot-tubbing.

Earlier this year, the sub-committee – chaired by Mr Justice Kerr – recommended to the CPRC that hot-tubbing should not be made the ‘default’ position, but said it would be beneficial for it to “become, increasingly, a normal feature of expert evidence in all courts”.

In a paper to the April meeting, it said: “It is probably safe to say that hot-tubbing is unsuitable in cases where there is a serious challenge to the expertise or credibility of an expert, at least until that challenge has been determined; beyond that, adoption of criteria or guidelines for determining whether hot-tubbing is suitable, is a preferable approach.”

The moves follow a report by the Civil Justice Council last year that found hot-tubbing improved quality, saved trial time and helped judges determine disputed issues.

It suggested the practice should be used more widely, with a revised PD and a question on it added to the standard form directions and listing questionnaires for cases involving expert evidence.