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Scale of costs “dwarf the great majority” of claims

The Court of Appeal has ruled that the effect of a Calderbank offer is not the same as a part 36 offer, in a battle over a massive £19m in costs from an intellectual property dispute.

Mr Justice David Richards said the scale of the costs involved in the case “dwarf the great majority of civil claims, including most claims in the High Court”.

He said the jurisdiction of the courts to make costs orders following a Calderbank offer – an offer made without prejudice save as to costs – derived from CPR part 44.

“I accept that the broad terms in which the discretion conferred by part 44 is expressed comes at the price of some uncertainty and some scope for argument as to costs,” the judge said.

“It is in the nature of a discretionary remedy dependent on the particular circumstances of the case that there is more uncertainty than exists than where there is a rigid rule.

“But courts are well accustomed to dealing with those cases where it is arguable that the just result is not simply that the unsuccessful party pays the costs of the successful party in full.”

He concluded that it would be “contrary to the express terms of part 44” to read across into it a “rigid approach” drawn by analogy with part 36.

The court heard in Coward v Phaestos and others [2014] EWCA Civ 1256 that the relationship between Dr Martin Coward, a mathematician and computer programmer, and his wife and business partner, Elena Ambrosiadou, broke down in 2009.

They had married in 1983, and started a quantitative trading business together in 1992. The judge described this as a “highly successful enterprise”, which was carried on through a number of firms he labelled collectively as IKOS.

He said that following the end of the relationship, Dr Coward, who had written the original software and made a significant contribution to its development, resigned and set up his own competing business.

“Each side alleged that the other was using software in which it owned the copyright,” David Richards J said. “Litigation ensued in a number of countries”.

Counsel for Dr Coward claimed that, since IKOS had failed to accept a Calderbank offer made in July 2012, it should pay his costs since that date.

Counsel for IKOS argued that the businesses did not have to show that they obtained “significantly more” at trial than the Calderbank offer. Relying on CPR 36.14 (1A), IKOS argued that “any advance on the terms of the offer” was enough to entitle it to costs.

Mr Justice David Richards ruled that the effect of a Calderbank offer was not to be assessed by analogy with the terms of CPR rule 36.14(1A), which defined a “more advantageous” judgment as one that was “better in money terms by any amount” than the relevant offer.

However, he agreed with the trial judge, Mrs Justice Asplin, that three aspects of the final order represented “substantial improvements” on the Calderbank offer.

Dismissing Dr Coward’s appeal, he said Asplin J’s exercise of the discretion vested in her by the rules “cannot in my judgment be faulted.”

David Richards J added that even allowing for “technical, factual and legal issues of some complexity”, the costs at stake seemed “very large” for a three-week trial.

He said that IKOS, which claimed more than twice the costs claimed by Dr Coward, would have to prove at assessment that they were “both reasonable and proportionate”.

Lord Justice Ryder and Lord Justice Moore-Bick agreed.

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Dyson: straightforward matter of interpretation

Dyson: straightforward matter of interpretation

A party who beats a part 36 offer in a case where fixed fees apply is eligible for indemnity costs, the Court of Appeal ruled today in the wake of conflicting decisions at circuit judge level.

As well as resolving the tension between part 36 and section IIIA of part 45, the court was clear that indemnity costs should not be equated with fixed costs.

Broadhurst & Anor v Tan & Anor [2016] EWCA Civ 94 dealt with two cases started under the RTA protocol where successful part 36 offers were made.

In Broadhurst, HHJ Robinson in Sheffield ruled that part 36 applied but there was no difference between profit costs assessed on the indemnity basis and the fixed costs prescribed by Table 6 of rule 45.29C.

In Smith, HHJ Freedman in Newcastle-upon-Tyne also held that part 36 applied but did not equate indemnity costs with fixed costs.

Giving the judgment of the court, the Master of the Rolls, Lord Dyson, analysed the respective provisions of parts 36 and 45, and concluded that as a “straightforward matter of interpretation” there was no doubt as to their true meaning: “The tension is clearly resolved in favour of rule 36.14A.”

He found further support for his decision in the wider scheme of part 36, where provision is made for it to trump fixed costs in such circumstances. “Where there is an intention for only fixed costs to be recoverable under part 36, part 36 has been modified to make this clear,” Lord Dyson said.

The MR also said that, were it needed, the explanatory memorandum to the 2013 changes to part 36 which went before Parliament could be used as an aid to interpretation.

This stated: “If a defendant refuses a claimant’s offer to settle and the court subsequently awards the claimant damages which are greater than or equal to the sum they were prepared to accept in the settlement, the claimant will not be limited to receiving his fixed costs, but will be entitled to costs assessed on the indemnity basis in accordance with rule 36.14.”

As to indemnity and fixed costs, Lord Dyson described them as “conceptually different”.

He continued: “Judge Robinson considered that Parliament could not have intended that a claimant should recover indemnity costs in a section IIIA case because of the practical difficulties that such an interpretation would entail. I accept that there are bound to be some difficulties of assessment where the costs are partly fixed and partly assessed.

“But I also accept the submission of [Ben Williams QC, for the claimant argument] and the written submissions of [John] McQuater on behalf of the Association of Personal Injury Lawyers that these were overstated by Judge Robinson.

“Where a claimant makes a successful part 36 offer in a section IIIA case, he will be awarded fixed costs to the last staging point provided by rule 45.29C and Table 6B. He will then be awarded costs to be assessed on the indemnity basis in addition from the date that the offer became effective. This does not require any apportionment. It will, however, lead to a generous outcome for the claimant.

“I do not regard this outcome as so surprising or so unfair to the defendant that it requires the court to equate fixed costs with costs assessed on the indemnity basis. As Mr Williams says, a generous outcome in such circumstances is consistent with rule 36.14(3) as a whole and its policy of providing claimants with generous incentives to make offers, and defendants with countervailing incentives to accept them…

“I am not persuaded that the problems identified by Judge Robinson, if they exist at all, are so serious that they cast doubt on the interpretation which I favour or that they justify the surprising conclusion that fixed costs are to be equated with assessed costs.”

As a result, the court allowed the appeal in Broadhurst and dismissed it in Smith.

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Thomas Blackburn, national advocacy manager at Just Costs Solicitors, considers the lessons on part 36 and indemnity costs from a recent Court of Appeal ruling

F & C Alternative Investments v Barthelemy & Anor [2012] EWCA Civ 843 is a further reminder of the need to ensure that any intended part 36 offer complies with the formal requirements in every way

It also raises some interesting points regarding indemnity costs

The background

The underlying dispute was between members of an LLP about whether ‘put options’ had been validly exercised

The claimants sought a declaration that the options had not been validly exercised and that they had no liability to pay the sums sought

The defendants made an offer to settle the proceedings by selling their interests in the LLP to the claimants for approximately £6m in total

The offer was expressly stated to be made outside of part 36

But it did state that the defendants would rely on the offer in accordance with CPR 44

3 and would invite the court to “apply the same consequences as regards costs and interest as would apply had it been possible to make the offer under part 36”

The defendants went on to obtain a more favourable result than the settlement offer they had put forward, being awarded close to £4m each

The costs

In awarding costs, the judge held that the defendants were entitled to indemnity costs and interest (significantly above base rate) from the date for acceptance stated in the offer

This was on the basis that the defendants had “good and legitimate reason” not to make the offer formally under part 36, and therefore in exercising his discretion on costs it was appropriate “by analogy” to apply the costs consequences provided under CPR 36


The claimants appealed against two aspects of Mr Justice Sales’ judgment: firstly, that the claimant pay the defendant’s costs on the indemnity basis after 16 January 2010; and secondly, that the claimant pay 3%, then 10%, then 40% then 22% inte

rest per annum on those costs (different rates applying to different periods)

The appeal

The Court of Appeal overturned the decision, finding no justification for drawing an analogy with part 36 and so no reason to award indemnity costs or enhanced interest

The court accepted that, in some circumstances, a refusal to accept a reasonable settlement offer might justify an award of indemnity costs

This was not the basis for the judge’s award in this case though, and in any event, the existing authorities make it very clear that any refusal must be unreasonable

This decision confirms that the courts will take a strict approach to the application of part 36 and, where an offer falls outside part 36, will not simply apply the part 36 costs consequences “by analogy”

Indemnity costs

In addition, it is interesting to note the fuss that parties make over indemnity costs

Costs are usually assessed on the standard basis, where any doubt the costs master (or assessing judge) has will go in favour of the paying party

Under the indemnity basis, this doubt goes in favour of the receiving party

Parties often seem to take the view that an indemnity costs order is close to a blank cheque, when it certainly is not

Master Gordon-Saker, who sits in the Senior Court’s Costs Office (and is tipped by many to become the Senior Costs Judge once the excellent Master Hurst retires shortly), is known for many first-rate judgments on difficult issues

He is also known to state that “costs masters very rarely have doubts”

And there we have it

Only when there is doubt does the standard/indemnity basis come into play

However, those seven costs masters, who make up the SCCO, very rarely express doubt when assessing parties’ costs

A lot of money is wasted chasing expensive indemnity basis costs orders, and yet it usually makes very little difference, if any

One has to wonder if it’s worth it

Finally, it is worth noting that neither party attempted to rely on the decision in AF v BG [2009] EWCA Civ 757

In that case the Court of Appeal confirmed that a defendant can be treated as a claimant in respect of its counterclaim so that it can make a “claimant’s part 36 offer” and thereby take advantage of the more favourable costs consequences applicable to such offers, including an entitlement to costs if the offer is accepted – something every litigator should note

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Grayling: turning the tide on the compensation culture

The small claims limit for personal injury cases will not be going up to £5,000, the Ministry of Justice (MoJ) announced today.

Instead it has unveiled a raft of other measures aimed at cutting the cost of motoring, including the creation of independent medical panels to detect fraudulent whiplash claims.

The government said the changes were “part of its plan to help hardworking people”, but it will be seen in legal circles as a major relief to hardworking claimant lawyers. The decision was predicted by this website just last week.

The MoJ has decided not to take forward the small claims limit increase in light of concerns raised during the whiplash consultation, particularly around giving other reforms time to settle down. However, it will be keeping the limit under review and has not ruled out a change in future.

In a statement to Parliament today, justice secretary Chris Grayling said there are “good arguments” for increasing the limit “to raise incentives to challenge fraudulent or exaggerated insurance claims”.

However, he had listened to the views of the transport select committee and others that “now may not be the right time” to raise the limit “because of the risks that it may deter access to justice for the genuinely injured and encourage the growth of those disreputable claims firms which so damage the industry”.

He continued: “At this stage, we have decided to defer any increase to the small claims threshold until we can determine the impact of our wider reforms on motor insurance premiums and better safeguard against the risks identified above. We believe that this is the right thing to do for all interests.”

The MoJ has also revealed that the number of claims management companies registered to handle personal injury work has continued to fall – from a peak of 2,553 in December 2011 to 1,902 in March 2013, before implementation of the referral fee ban, and 1,485 last month.

The MoJ said it will now “work quickly with experts” to implement the independent medical panels next year. This will include developing a scheme for accrediting medical experts who can assess whiplash injuries, enhancing the medical reporting process, improving information for medical assessments and carrying out spot checks to ensure quality.

The government claimed that figures from the AA show its LASPO reforms and “action on rogue claims firms” have already led to a 12% fall in average motor insurance premiums over the past year, equivalent to £80.

Mr Grayling said: “We are turning the tide on the compensation culture and helping hardworking people by tackling high insurance premiums and other motoring costs.

“It’s not right that people who cheat the insurance system get away with it while forcing up the price for everyone else – so we are now going after whiplash fraudsters and will keep on driving premiums down.”

Other changes to benefit motorists are a freeze on the statutory maximum price of the MOT test for a car (£54.85) until 2015, and trialling new comparison road signs which will show prices at different service stations along a route, making it easier for drivers to get the cheapest deal and encouraging competition on prices. The fees charged for the driving test will also be reviewed to identify any opportunity to save money for the 1.5m car drivers who take their test every year.

See blog here.

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Express Solicitors buys Lavin Copitch

Doing the deal: Daniel Slade and James Maxey (at the back) with Robin Pavey (front right) from Express Solicitors and Tom Lavin from Lavin Copitch

A consortium of personal injury practices formed to encourage law firm acquisitions has helped Manchester-based Express Solicitors do its first deal.

Express is part of the Pi Gateway consortium, together with Bott & Co, Hilary Meredith and Ralli Solicitors, launched last autumn.

The firm said the acquisition of Lavin Copitch Solicitors was “made possible due to a £4.1m refinancing package from RBS Corporate” following the firm’s conversion to ABS status early last month.

James Maxey, managing partner of Express, said:  “We were introduced to Lavin Copitch Solicitors through Pi Gateway and were able to make our first acquisition, which is part of our ambitious growth strategy.”

Express said the cost of acquiring the two-partner firm, based in Altrincham and Gorton, was £250,000. The purchase included several hundred personal injury files.

Mr Maxey went on:  “While there are many firms wishing to exit the market there are also plenty of acquiring firms, like Express Solicitors, who want to strengthen their balance sheet and grow turnover.

“Pi Gateway has the flexibility to co-opt other members to join the group for larger transactions.  The consortium is open to no obligation talks at any time to firms looking to exit the market and make a clean break at a fair price.”

Pi Gateway is said to have completed a number of other transactions.

Established in 2000, Express Solicitors has 148 employees, including 13 partners and 47 fee earners.


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City of London: fear regime would damage capital as dispute resolution centre

City solicitors have joined outspoken criticism of government proposals to make commercial deals with rogue states unenforceable in UK courts, arguing it will simply move overseas disputes to courts other than in London.

The City of London Law Society (CLLS) last week echoed complaints that a ‘contract sanctions’ regime would damage the capital as a forum for dispute resolution, made by the Bar Council in response to a recent Foreign Office consultation.

The consultation said the objective of the sanctions would be to deter deals with regimes that were beyond the scope of EU/UN sanctions, “further reducing [their] ability… to sustain themselves”. It would be implemented through the UN, the EU, or through UK primary legislation, “preferably in conjunction with additional states in major centres of contract law”.

If a contract sanctions regime was implemented, courts and tribunals would be prevented from enforcing contracts entered into with the targeted regime. In seeking responses, the consultation did entertain the possibility that it would harm the UK as a jurisdiction and simply displace work elsewhere.

It asked: “Should the UK become a less attractive place to settle contractual disputes, is there a long-term risk that some international businesses might move away from London towards emerging financial centres in jurisdictions where contract sanctions have not yet and might never be declared?”

Simon James, chair of the CLLS’s litigation committee, observed the consultation paper failed to cite any examples of English courts having enforced contracts that would be prevented by the proposed sanctions regime, raising doubts that it addressed any “gaps” in the current system.

He continued: “The reason there is no real gap is that, in practice, no one selling goods to a regime already subject to sanctions in the UK would agree in the contract to the English courts having jurisdiction over disputes arising from the contract… As a result, there will be no effect on the behaviour of those the proposal seeks to influence.”

He went on: “Even if the above is wrong, the UK should not act alone in imposing contract sanctions because that would have no real effect on those they are targeting, but it would drive business away from the UK to other jurisdictions. Better to act in concert with all major economies.”

Alasdair Douglas, chairman of the CLLS, predicted it was unlikely the government would risk upsetting the UK’s £25bn legal services market: “The government is acutely aware of the benefits to our economy of the use of English courts and arbitration in England by foreign litigants – I think it unlikely that they would wish to do anything to prejudice this position.”

In its response, the Bar Council took a similar line to the CLLS, saying: “The most likely result is that targeted regimes – or indeed the private sector – would simply avoid jurisdiction or arbitration clauses in favour of London. There are a number of other jurisdictions who either have already established themselves as a significant international dispute resolution [centre] or who are trying to do so [and] who, if they did not implement the same sanctions, would most likely promote themselves as offering an alternative jurisdiction to London courts and arbitration.”

There was a real risk to London, it said: “It is our view that the perception of an inability to litigate and/or enforce in this jurisdiction could have a very detrimental effect on the standing of London as a leading centre for international dispute resolution.”

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Houses of Parliament

Government had not acted in “thorough or even-handed” way

The High Court’s decision to block the abolition of recoverability for mesothelioma claims has denied victims the 10% uplift in damages they would otherwise have received, justice minister Lord Faulks has said.

Responding to a highly critical report on mesothelioma claims published today by the justice select committee, the minister said that, as a result of the court’s decision, cases would be handled on a “pre-LASPO” basis and the claimants would “of course not receive” the uplift.

Shailesh Vara, colleague of Lord Faulks, announced earlier this week that the government would carry out a second review of mesothelioma claims “in due course” before abolishing the recoverability of success fees and insurance premiums.

The justice committee said the government, “perhaps as a consequence of being forced into the concession” of initially excluding mesothelioma claims from Sections 44 and 46 of LASPO, did not prepare the ground for the review required under Section 48 of the Act in a “thorough and even-handed way”.

Referring to what has been described as a “secret deal” between the government and insurers, the select committee said: “The existence of an undisclosed ‘agreement’ between the government and the insurance industry is not conducive to the creation of trust among victims’ representatives, claimant lawyers and others that an opposing viewpoint will be heard.

“The haste with which the government embarked on a review and consultation, and the way in which it presented them, left those who favoured retention of the LASPO exemption for mesothelioma potentially disadvantaged in terms of marshalling a persuasive case.”

The select committee recommended that a further consultation, to which the government has now agreed, should “be framed unambiguously and centrally on the question of whether the LASPO provisions should be brought into effect for mesothelioma”.

It said the consultation should be “informed by an updated cost-benefit analysis” and “should not be undertaken until sufficient time has elapsed for the effects of the LASPO changes in non-mesothelioma cases to be assessed”.

The committee added: “All who are involved in formulating policy on mesothelioma claims, and in handling them within the legal process, are acutely aware of the profoundly distressing circumstances in which mesothelioma sufferers find themselves, in most cases as a result of the negligence of a past employer or employers.

“That shared awareness plainly does not translate into practical consensus on the best mechanisms to apply to ensure that claims are dealt with swiftly and fairly. Indeed, we cannot recall any subject into which we have inquired on which there has been such a pronounced binary division of opinion and approach.”

Mr Justice Davis ruled in October that the government could not go ahead with abolishing recoverability of success fees and insurance premiums in mesothelioma cases because it had failed to carry out a proper review of the impact on victims.

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Evans: fairer system

Yesterday’s announcement of how the Ministry of Justice intends to reform the discount rate and publication of the National Audit Office’s (NAO) report on clinical negligence claims drew predictably opposing responses from claimant and defendant groups.

On the discount rate, Huw Evans, director general of the Association of British Insurers, welcomed government decision that would produce a system “that is fairer for claimants, customers and taxpayers alike”.

He added: “If implemented it will help relieve some of the cost pressures on motor and liability insurance in a way that can only benefit customers.”

However, it was noted on social media that he made no direct mention of premiums falling as a result, having warned in February that the decision to cut the rate would send them up.

Backing the government, Mark Burton, a partner at defendant law firm Kennedys, said both claimants and compensators “have in any event been pragmatically negotiating settlements within the 0% to 1% range since February, regardless of the prevailing -0.75% rate, in anticipation of further reforms”.

He continued: “The new methodology may therefore lead to a new rate within a similar range to that widely adopted by the market anyway.

“The more rigorous methodology proposed in the draft reforms, including periodic reviews and independent expertise, will hopefully avoid future controversy and ensure a fairer process.”

Simon Kayll, chief executive of the Medical Protection Society, said the current framework failed to consider the impact on the NHS, the public purse “and the affordability of professional protection for healthcare professionals”.

He added: “It is vital that government gets this right if we are to avoid further sudden shocks to the cost of compensation, and the proposed new framework is welcome step which could result in a more common sense approach with the reality of how claimants invest compensation payments at its core.

“It is however dependent on implementation – the new framework will only apply if and when the proposed law is enacted and it will not apply retrospectively.

“We look forward to seeing swift progress on this – and commitment to whole system legal reform to tackle the underlying issue of rising clinical negligence costs.”

On the claimant side, Brett Dixon, president of the Association of Personal Injury Lawyers (APIL), reacted cautiously to the discount rate decision.

“Someone with a life-long, life-changing injury such as brain damage or a spinal injury cannot afford to take any risks with how his compensation is invested… We need to examine the detail of the Ministry of Justice’s response, but what I can say is that the new formula for calculating the rate will be critical to injured people.

“The last thing people with devastating injuries think about when they are lying in hospital is their insurance premiums. They think about how they are going to manage. Insurers say an increased discount rate will ‘benefit’ customers through their premiums. It is of no benefit if they are severely injured and forced to take risks with the compensation they so desperately need.”

Peter Todd, the partner at London firm Hodge Jones & Allen who advised APIL on the court challenge that led to February’s decision, was less on the fence: “The government… will now require injured people to gamble their compensation in investments with risk in order to be able to fund, in particular, the future care they need.

“Whilst many claimants succeed in their investment risks, inevitably some will fail, and will now no longer have a guaranteed safe, secure and dignified future.

“The Conservative government has prioritised the insurance industry’s profits over the secure and dignified future of injured people. It remains to be seen whether they can find a parliamentary majority to enact the proposed new legislation.”

The most radical thoughts came from Malcolm Henké, partner and head of large and complex injury at insurance industry law firm Horwich Farrelly.

He said the firm has been advocating “a rigorous system” for assessing all accident victims: “One thing for certain is that the current basis for calculation is broken and we hope that this latest news means a more radical approach will come into action.

“There is a truly massive gulf between the cost to the state of providing for catastrophically injured individuals with no claim for compensation and the damages paid to those with similar injuries but with a tortfeasor to sue.”

He called for fundamental reform of the way in which compensation is assessed. “Claimants invariably recover damages which will allow them to enjoy a Mercedes Benz package of care, aids, equipment and therapies – although they have no obligation to spend a single penny on the target expenses).

“Their counterparts, dependent on the state or their own resources, will experience anything between a clapped out old banger service and a Skoda: they are subject to the so called postcode lottery.”

He called on defendants to press for a system “by which multiplicands match actual needs and multipliers set at correct levels, again to represent actual rather than assumed investment”.

Mr Henké continued: “A more accurate parallel would be the advice given to someone with a self-invested pension, balancing the preservation of a capital sum with a regular income flow over their lifetime. The difference here is that in most cases the investment ‘pot’ will be far greater than for most pensions and would not be subject to any restrictions.”

On the NAO report, Meg Hillier MP, chair of the House of Commons’ public accounts committee, said: “The costs of clinical negligence claims are spiralling at a time of immense financial pressures on our National Health Service, taking scarce resources away from frontline services and patients.

“The Department of Health and Ministry of Justice have been too slow to work together to turn the tide, with actions to save £90m a year by 2020-21 a drop in the ocean in the face of forecast costs of £3.2bn a year by 2021. We need government to take a good hard look at the financial and personal costs of clinical negligence.

Dr Pallavi Bradshaw, senior medicolegal adviser at the Medical Protection Society, argued that legal reform was needed “to help achieve a balance between compensation that is reasonable, but also affordable – both to the NHS and to healthcare professionals who are feeling the pressure of rising clinical negligence costs through their professional protection subscriptions.

“Of course controlling the cost of clinical negligence, once a claim is made, is just one component of a more sustainable system. This must go hand in hand with continual improvements in patient safety to help prevent adverse events, and a shift to a more open, learning environment in healthcare where mistakes are routinely discussed and learned from.”

APIL’s Brett Dixon stressed the important of the NHS learning from avoidable harm, part of which was better data collection and co-ordination.

He added: “We are just starting to see the impact of cuts to legal costs, which will continue to streamline claimant costs significantly. But more savings could be made with co-operation on both sides to avoid unnecessary delays and additional work, rather than simply slashing claimant lawyers’ costs further or denying injured patients full compensation.

“In cases where fixed costs could be workable, the costs should be set to reflect a better procedure. Meanwhile, the NHS needs to put its house in order – 39% of negligence claims are the result of harm caused by needless delays in diagnosis or treatment and more than twice a week someone has a foreign object left inside of them, including broken drill bits, surgical needles, swabs, and bags used for the retrieval of specimen.

“Let’s not forget that the overriding concern here should be the cost in human misery.”

James Bell, a clinical negligence partner at Hodge Jones & Allen, accused the NAO of having failed patients: “The NAO has approached this issue with a narrow focus and seems to have air-brushed out of history the recommendations it made to the NHS to reduce clinical incidents in 2001, preferring instead to give the organisation a clean bill of health. The reality is that little or no progress has been made by the NHS to bring down the cost or number of claims.

“The continued focus on claimant lawyers as a solution for all the NHS’s financial ills is misguided and disproportionate. Lawyers’ fees are already tightly controlled, capped and limited due to recent reforms; they have to be “reasonable and proportionate” before they are paid and the courts rightly already hold the power to reduce any bill found to be excessive.

“Delays caused by trusts and NHS Resolution can be unrelenting and are hugely distressing to clients. Often legal bills are massively increased as a result of the NHS’s failure to admit fault at an early stage and the way it conducts cases.

“While the narrative remains solely on claimant lawyers, nothing will change.”

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First signs that Bristol based legal services insurer ARAG is implementing its  expansion plan are evident from the six new recruits joining Head Office in quick succession. Earlier this year the company acquired a further 60% surface area within the Georgian-fronted office complex, then renovated and upgraded the entire space.

“This is all about forward planning” comments ARAG managing director Tony Buss. “Our continuing success in attracting demanding clients with our tailor-made policy offerings means we have a continuing need to anticipate demand levels. This way we ensure we maintain our award winning service levels across all areas of our legal services and insurance businesses. We are therefore opening up new roles across the company”.

With substantial pre-LASPOA* after the event cover being booked in the first quarter of last year it is the ATE Claims Management Unit that sees two new faces with Assistants Stephanie Paul and Freddie  Pickles. Meanwhile, Judith Harper joins as Compliance Advisor after more than 30 years’ insurance industry experience and Michelle Camfield becomes HR, Facilities and Project Assistant putting her law degree and HR experience to good use.

On the before the event side Corrie Gilbert trades five years’ previous experience in a direct insurer’s complaints department for a support role with ARAG’s BTE underwriters. Concluding the line-up is Rachael Wornes, who brings 16 years’  legal expenses insurance experience into play as she takes responsibility for Group marketing activity.

“We are now in our eighth full trading year and looking ahead a similar length of time” adds Mr Buss. “It’s good to know that more high-calibre recruits are joining the team at this crucial point in ARAG’s development”.

* (Legal Aid Sentencing and Punishment of Offenders Act)

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Ramsey: stricter and more consistent application of the rules

The judiciary is undertaking a review of those recommendations made by Lord Justice Jackson that have not yet been implemented, it has emerged.

In an interview with this website to mark his appointment as honorary president of the Association of Costs Lawyers, Mr Justice Ramsey – the judge in charge of implementation – said this may lead to some “tidying up” of the CPR or even legislation to introduce further changes.

He highlighted issues such as aligning the bill of costs with the budgeting form Precedent H, and introducing pre-issue costs management as among those under consideration by a working party which he is chairing.

Ramsey J said that generally “the reforms are being accepted and dealt with as one would have wanted”. The importance of costs budgeting and the need for compliance has particularly come to the fore, and “parties are now fully engaged in preparing and discussing their costs budgets”, he said.

A key element of the reforms is that judges are less tolerant of delay and failures to comply with orders, and Ramsey J said it was clear there was “stricter and more consistent application of the rules than we had before”.

Lawyers have pointed out mistakes and inconsistencies in the revised CPR and the judge said this is always going to happen in a complex set of rules like these. Sorting them out is “the business of the rule committee”, he pointed out.

Ramsey J said his role with the ACL was to help its members come to terms with the changes in the same way that he is assisting others in the litigation world. “They are adjusting their business models to decide where their skills can be best used,” he said.

Costs budgeting is seen as a major growth area for costs lawyers. “Certainly with the Jackson reforms and costs budgeting, one has to look at the costs of running cases from the beginning,” he said.

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KainKnight200Kain Knight, one of the UK’s largest firms of costs lawyers, has appointed Scott Jarrold to join Nicholas Clark’s team as the business development manager working across England and Wales with existing clients and new business. This new appointment compliments Kain Knight’s long term policy of controlled expansion in specialist costs areas, building on their significant business development successes.

Scott has been working in the legal sector with business development roles in ATE, funding and costs for the last 7 years and has experience in commercial, personal injury and clinical negligence cases.

Scott has worked with a range of firms from magic circle firms, international, large regional and specialist boutique firms providing solutions for their costs and funding needs.

Kain Knight continue to welcome any approaches from experienced costs lawyers with specialist background in commercial, admiralty, high value personal injury/industrial disease or clinical negligence interested in joining our team.

Matthew Kain, director of Kain Knight, said:

“We are delighted to welcome Scott to the Kain Knight Group. This is the next step in our growth strategy for the UK and International markets. Scott has significant experience in high quality customer service and client retention; he also brings a wealth of knowledge in litigation funding and ATE, adding a new dimension to our business development offering.”


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Clinton: Claim over children’s privacy

The media and communications list (M&CL) in the Queen’s Bench Division, and the Chancery Division’s business list are not specialist lists and a privacy claim can be heard equally well in either, the High Court has ruled.

Chief Master Marsh said the notion of a specialist list was “not an easy one to grapple with” but the “short point” was that unless the CPR expressly provided for it, “the notion has no application”.

The master was ruling on application by Associated Newspapers that a privacy claim involving the children of Chelsea Clinton and her husband Marc Mezvinsky should be transferred from the business list to the M&CL.

The claim followed a series of articles on Mail Online in which the children’s faces were “plainly visible” and not pixelated.

Chief Master Marsh said the defendants had argued that the claim would be heard several months earlier in the Queen’s Bench Division, but it was now “common ground” that a listing in the Chancery Division was “likely to be slightly sooner”.

Counsel for the defendants further argued that the M&CL judges were familiar with “all the relevant” English and European case law on privacy and the protection of personal rights derived from the European Convention on Human Rights was “traditionally the domain of the Queen’s Bench Division”.

He argued that “only a handful of privacy claims” had been brought in the Chancery Division and none since the formation of the M&CL.

Chief Master Marsh said the M&CL, launched by Mr Justice Warby in February last year, was “not a specialist list”.

He went on: “It was not created by a provision in the CPR, or in statute, and without underplaying its significance, it is a means by which work that is already within the Queen’s Bench Division is allocated for its proper performance. The creation of the M&CL has no direct extra-divisional effect.”

He said the business list, part of the Business and Property Courts launched last summer, was also not a specialist list, though this was “less obvious than in the case of the M&CL” because it was created by a practice direction.

The master said the business of the Chancery Division was “entirely unaffected” by the creation of the Business and Property Courts, “which has been described as a rebranding as opposed to a restructuring”.

“The Chancery Division lives; but its identity has had a makeover.”

Unlike the M&CL, for which Warby J was the allocated judge, there was “no allocation of individual judges” to the business list.

“Any judge who is qualified to sit in the Chancery Division may hear any claim in that list. In practice, however, the judges’ listing function goes to great lengths to ensure that judges with appropriate experience hear particular cases.

“The work of the Chancery Division is allocated to the business list, the competition list, the financial list (with the Commercial Court), the insolvency and companies list, the property trusts and probate list and the revenue list.

“Any claim that does not obviously belong in the second to sixth of these lists will be issued into the business list, even though the subject matter of the claim cannot properly be characterised as a ‘business claim’. The list is a catch-all.

“And so a breach of confidence claim and/or a privacy claim are properly issued into the business list even though, in the case of the latter, the drop down menu to be used by the claimant at the point of issue does not include privacy claims as a category.

“There is no basis for asserting that the omission of a specific reference to privacy claims into the description of the business list has had the effect that such claims should no longer be issued in the Chancery Division.”

Chief Master Marsh warned that courts hearing applications for transfers must “avoid parochialism” and “an excess of enthusiasm for one venue over another venue risks becoming doctrinaire”.

He said the “real issue” was whether the M&CL was the “more appropriate venue”, and that the defendant had not provided any convincing evidence to show there was a “greater depth of expertise” in one division than the other.

Dismissing the application, the master concluded that both venues were appropriate.

“There are no good reasons to transfer the claim and disturb the legitimate choice made by the claimants at the point the claim was issued.”

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Court of Appeal: claimants’ liability for disbursements was real

The Court of Appeal has backed the “somewhat novel” credit agreement that saw Welsh firm Hugh James fund clients’ disbursements to the tune of £787,500 and then recover interest on them at 4% above base.

The firm represented a number of successful lead claimants in the Phurnacite Workers Group Litigation against the Secretary of State for Energy and Climate Change and Coal Products Ltd.

The high-profile group action was brought by former employees and their families of a phurnacite plant in South Wales, successfully claiming exposure to harmful dust and fumes caused mesothelioma.

But in order to progress the case through the courts, Hugh James agreed a credit arrangement with the claimants to fund the disbursements that in the High Court Mrs Justice Swift described as “at least in the personal injury sphere… somewhat novel”.

Interest was set at 4% above base rate and payable out of damages if the claims were successful. If the individual claim was unsuccessful, the credit agreements were covered by after-the-event insurance.

Swift J rejected the government’s argument that the disbursements were not recoverable, and said the interest rate was not “excessive or unreasonable”.

On appeal by the government, it was argued that as the claimants would not have to repay the interest unless recovered from the defendants, their claim was effectively a subrogated claim by Hugh James and their liability to pay interest was notional rather than real.

This should have led the judge to assess the rate of interest by reference to the solicitors’ circumstances rather than those of the claimants – and as Hugh James should be equated to a first-class borrower, the rate should be 1% above base.

Giving the unanimous judgment of the Court of Appeal, Lady Justice Sharp dismissed the appeal. She said: “These were personal injury actions brought by claimants of modest means for their own benefit. They needed to fund their claims and they borrowed to finance their disbursements at what was conceded to be a reasonable interest rate for private individuals in their circumstances, certainly in comparison to what would have been charged in the open market.

“Under clause 5 of the agreement, payment of the interest was contingent on the claim being successful and damages actually being received… this does not mean that the arrangements were ‘unreal’ or ‘notional’… The claimants won their claims and recovered damages.

“In the events which had happened, the liability had crystallised. Their interest liability was therefore no longer contingent. It was entirely real. Having succeeded, they were liable to pay for the funding advanced to them and the interest charged upon it.”

Speaking after the High Court ruling, Gareth Morgan, lead partner on the case for Hugh James, said: “This is a precedent for a personal injury case. What it means is that if a claimant enters into a funding arrangement and incurs interest on disbursements, then in appropriate circumstances, that is a cost which can be charged against the defendant in the event of a successful claim.

“This switches the burden of funding disbursements from claimant to defendant.”

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Medical examination: independence concern

A 10% cut to fixed fees for medical reports and an end to law firms owning the agencies that commission them have been put out for consultation in the latest stage of the government’s plans to crack down on whiplash claims.

The aim is for these changes to be approved by the Civil Procedure Rule Committee in the summer ahead of them coming into force on 6 October, according to a letter sent last week to stakeholders by Lord Faulks, the justice minister who has taken over responsibility for civil justice from Shailesh Vara.

As part of the work, the cross-industry working groups advising the government have also come up with a definition of a whiplash claim as “a claim brought by an occupant of a motor vehicle where the significant physical injury caused is a soft tissue injury and includes claims where there is a minor psychological injury secondary in significance to the physical injury”. This is to be included in the RTA protocol and addresses the trend of claims for psychological injury.

Under the voluntary Association of Medical Reporting Organisations agreement currently in force, a GP report costs £200; under the new proposals, this would fall to £180. The cost of an orthopaedic surgeon’s report would be cut £5 to £420. An addendum report from a GP on medical records would stay at £50. The proposed schedule of fees make no mention of the cost of an A&E report, as the AMRO agreement does.

The draft schedule puts the cost of obtaining medical records at no more than £30 plus the direct cost from the holder of the records, and limited to £80 in total. It also introduces a £180 fee for a report from a member of the Chartered Society of Physiotherapy, as well as an £80 limit on the cost of asking written questions of the expert under rule 35.6.

The paper sent out to stakeholders said the government is “committed to ensuring that there should not be a financial link between the party commissioning the medical report and any intermediary organisation through which the report is provided (or indeed with the medical examiner), other than for payment of the examination/report”.

It is therefore proposing, as a preliminary measure, to prohibit either party having a financial interest in an intermediary through which a medical report is obtained.

“However, we want to explore the issue of independence further to ensure that reciprocal arrangements cannot be established between different commissioning firms in order to subvert this prohibition. We would be interested in views on how to achieve this.

“For example, would this prohibition be strengthened by requiring that claimant and defendant representatives may only commission a specified proportion of medical reports via any given intermediary? Or should, for example, representatives be required to commission reports on a rota basis from a variety of intermediaries?”

The government is also consulting on whether to give defendants the right to give the medical expert their version of events where there is a material difference between the parties’ accounts.

Further, to discourage claimant representatives from obtaining an initial report outside the fixed fee scheme, the government is considering allowing the defendant to make a pre-medical offer – even though in general ministers want to stop this practice and plan to exempt claimant lawyers from the part 36 costs sanctions that would otherwise apply.

It said: “Claimant representatives have argued that the sanction in these circumstances should be only that the cost of the report is not recoverable, but defendant representatives are concerned that that is not a sufficient deterrent and that, in addition, a pre-medical offer should be permitted in these exceptional circumstances.”

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CJC: key role in civil justice system

CJC: key role in civil justice system

The Civil Justice Council (CJC) has been given a clean bill of health following a triennial review carried out by the Judicial Office.

A report issued yesterday – some 20 months after the review was announced – said that all those who contributed “agreed strongly” that there was a continuing need for the CJC.

“It was noted that its functions are particularly needed at the current time, when there is such a significant amount of change and reform within the CJS [civil justice system]. Litigants in person putting pressure on the system were one example given and the need for the CJS to be more accessible.”

If the CJC were to be abolished, the review said, it would only have to be reconstituted in one form or another.

It did, however, recommend that the CJC draw up a plan to improve the diversity of its membership, and that it should consider a “more formal and consistent assessment” of members.

The CJC is an arm’s length public body and the review rejected the possibility of moving it or its functions into the Ministry of Justice. “For the council to effectively fulfil its role, it is necessary for it to be independent of government,” the report said. “The council acts as a ‘critical friend’ to the MoJ, giving honest and transparent advice and feedback on government policy which would be compromised if it were to be moved into the MoJ.”

However, there were suggestions made to the review that the two could work together more closely, in particular with relevant CJC members becoming involved in drafting legislation.

The idea of merging the CJC with the Civil Procedure Rule Committee was also firmly knocked back. “In all likelihood it would increase bureaucracy, be a disincentive for council members to give their time and expertise freely, and would attract the opposition or at least strong scepticism of the senior judiciary.”

The report pointed out that the CJC and rule committee called for “very different expertise”, with the former focusing on policy development and scrutiny of the CJS in practice, and the latter being a technical rule-making body.

“By way of example, on a major reform process such as the Jackson costs reforms, the CJC looked at the pre-legislative technical implementation of the measures, and the rule committee drafted and agreed consequent rules and practice directions to give procedural effect to the policy and legislation. One was not qualified to effectively carry out the other.”

The review also rejected a merger with the Family Justice Council, saying that given their very different agendas, natures and workloads, the effectiveness of both would be diluted. Further, there was no prospect of “real administrative or substantive benefits” from doing so.

The review also covered the Family Justice Council and gave it a similar endorsement.

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Eclipse200Established in 2000, award winning Farnborough based Bakers Solicitors has grown from a one practice litigation specialist with 6 staff, to a group of 3 law firms (Bakers, OW Law LLP and Baker Law LLP) with over 70 staff across five branches providing a full range of legal services.

Initially specialising in personal injury cases referred by other law firms, Bakers Solicitors required a solution to enable its case handlers to spend more quality time on the complex legal issues, whilst still processing the cases as quickly and efficiently as possible. The solution had to be easy to use and have the built in flexibility to facilitate the rapid transformation and diversification from a single practice into a group of 3 firms, each with their own area of specialism.

A Proclaim Practice Management Software Solution was chosen for its unrivalled flexibility, allowing for a consistent approach with a single secure centralised database managing all work areas including court of protection, conveyancing, debt recovery and employment.

Proclaim’s integrated firm-wide financial management platform makes financial transactions simple for a small accounts team to manage. Proclaim’s inbuilt compliance toolset ensures risk is effectively managed and legislative requirements are met.

The highly customisable Proclaim reporting solution has been invaluable for analysing data to spot issues, deal with problems and manage staff. The batch Scanning tool has created a paperless office with no physical documents stored.

Proclaim’s integrated development toolset has allowed the firm to adapt the system to suit their own bespoke needs including the creation of a clinical negligence matter management platform.

Superb levels of customer care throughout the client journey are facilitated through Proclaim features such as the new business enquiries module which provides true end-to-end management of incoming enquiries, and SecureDocs the online document delivery and acceptance tool.


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Pickering: task was a difficult one

Costs protection in defamation and privacy cases could be achieved by a form of qualified one-way costs shifting for which both claimants and defendants could apply, a Civil Justice Council (CJC) working group has recommended.

However, this so-called ‘variable costs protection’ (VCP) could be removed by the judge if a party was deemed to have sufficient means to litigate without it.

The CJC was asked to investigate costs protection by justice minister Lord McNally during passage of the Defamation Bill during Parliament, and the working group – chaired by Irwin Mitchell chief executive John Pickering – did not have time to consider the impact of the recommendations by Lord Justice Leveson.

Its report did not come down firmly either way on whether VCP should apply by default. If so, it should only be to claimants, the group said, subject to an application by the defendant for it to be disapplied.

That application would be made on the basis that the claimant was ‘of sufficient means’ to be able to litigate without protection against the defendant’s costs being enforced in full against them.

Defendants seeking VCP would have to prove they have insufficient means to be able to litigate based on the potential costs consequences that could follow.

The report said the mechanism should be sufficiently flexible so that it does not require an ‘all or nothing’ type application. “Whilst parties should be encouraged to apply as early as possible for costs protection (if appropriate to do so), provision should still be made for such protection to be applied for at any stage in the proceedings.

Provision should also be made within the drafting of any costs protection mechanism for the assigned judges to have the power to order costs protection only in respect of a certain stage of the proceedings and/or for it to apply only above a certain level of costs.” The continuing need for costs protection should also be regularly reviewed throughout the proceedings, the working group said.

However, a minority of members of the working group were completely opposed to the introduction of any type of costs protection system at all, “because they believed the risk of facing a costs liability to be an extremely important part of civil litigation”, the report said.

Other key recommendations included:

  • Greater judicial case management, with specialist judges allocated to ensure proceedings are dealt with swiftly and at minimal cost, with early intervention, approval of costs budgets and overseeing progress;
  • Agreeing in which circumstances parties might lose their cost protection – for example if a claim is found to have been fundamentally dishonest, or has been struck out (eg, as being an abuse of the court process);
  • Applying costs budgeting measures, as adopted in other areas of law, so that parties draw up realistic budgets for cases and adhere to them under judicial supervision; and
  • Allowing the courts to continue to use their cost-capping powers to supplement VCP.

Mr Pickering said: “Our task was a difficult one. Defamation and privacy law is fast-changing and complex, not least because of the advent of social media and online publication. Ideally we would have had much more time (for example not all members were able to sign off the report), than the ministerial timetable permitted, to both consider the issues and consult widely.

“Our deliberations were also hampered by examining the issues without knowing what model of arbitration would develop in response to the Leveson inquiry.

“Nonetheless, we have done our best to weigh up the pros and cons of various methods for protecting parties from major adverse costs in bringing or defending a defamation or privacy claim, as without such protection there is a real risk of people not receiving access to justice.”

Members of the working group included media law specialists such as Desmond Browne QC (5 Raymond Buildings), Keith Mathieson (partner, Reynolds Porter Chamberlain), Lucy Moorman (partner, Simons Muirhead & Burton), Zoe Norden (in-house lawyer, The Guardian), Marcus Partington (group legal director, Trinity Mirror), and Alasdair Pepper (partner, Carter-Ruck).

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Mesothelioma: 300 victims with untraced insurers every year

New measures to speed up the process of compensating mesothelioma victims – including changes to costs rules – are to be introduced as part of a multi-million pound support scheme announced yesterday to help those who cannot trace a liable employer or employers’ liability insurer.

Claimant groups have welcomed the support scheme as a step in the right direction but criticised its scope and particularly the exclusion of sufferers of other asbestos-related diseases.

There will be an online portal for all mesothelioma sufferers to register claims and for the parties involved to exchange information in a secure electronic way in order to settle claims more quickly. A mesothelioma pre-action protocol will ensure that evidence is disclosed early.

The government is promising improvements in providing information it holds that is needed to support claims, including standardised medical diagnosis, employment schedules from HM Revenue & Customs, and information on state benefits from the Department for Work and Pensions.

The package will also address “the civil litigation costs for all mesothelioma claims, to reflect the faster claims process and in line with the government’s wider reforms”, the announcement said, without providing any more detail.

The support scheme – agreed by the government and the Association of British Insurers (ABI) – will allow around 300 mesothelioma victims across the UK who each year are unable to claim compensation because they cannot trace a liable employer or employers’ liability insurer to receive approximately £30m in payments on a tariff basis, although the details of how this will work have also not yet been released.

The scheme only applies to victims diagnosed from yesterday, and will require primary legislation to implement. The hope is that the first payments will be made by July 2014.

Membership of the Employers’ Liability Tracing Office (ELTO) – which runs an electronic database of employers’ liability policies – will become compulsory for all employers’ liability insurers, including companies who have provided employers’ liability insurance in the past, to ensure that where there is a liable insurer, they will pay the claim.

There will be a levy on current employers’ liability insurers to fund the scheme at an estimated cost of £25-£35m a year.

Otto Thoresen, the ABI’s director-general, said: “Mesothelioma is a particularly aggressive cancer and the insurance industry, working with government, is determined to do all it can to ensure that sufferers get the support they need as soon as possible. This package of measures will deliver help to claimants much faster, including to those who would otherwise go un-compensated.”

Tony Whitston, chairman of the Asbestos Victims Support Groups Forum, said the fixed payouts under the scheme would be lower than those from a Motor Insurers’ Bureau type scheme – operating on a regular civil law basis – which had previously been the government’s main option for introducing compensation.

He said: “We must welcome this first movement on untraced insurance, which provides compensation for mesothelioma sufferers, but we are disappointed at the reduced amounts payable, and we are bitterly disappointed at the exclusion of so many people who suffer from diseases such as asbestosis or lung cancer caused by exposure to asbestos.”

Deborah Evans, chief executive of the Association of Personal Injury Lawyers, welcomed the scheme but said it is “a missed opportunity to provide help for a much wider range of people with very serious asbestos-related diseases, and it stops short of providing victims with the full compensation which they need and which they would receive through the courts”. She also criticised the “arbitrary” start date.

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Melanie Homersham

Melanie Homersham, Practice Manager, Burcher Jennings

Growth driven by demand from M4 corridor law firms for business support in challenging climate

Burcher Jennings, leading provider of costs, pricing and funding expertise to the legal sector, has increased its office footprint with the opening of a new Bath office. This new office will enable law firms in Bath and along the M4 Corridor to access Burcher Jennings’ innovative and unique approach to costs, pricing and funding. These are all essential services at a time when the face of legal costing is changing, with the introduction of a new mandatory form of bill of costs delayed but still looming, and with many law firms facing a challenging business environment.

The Bath office will be led by Practice Manager Melanie Homersham, a costs lawyer with over 15 years’ experience in costs litigation.

Melanie Homersham, Practice Manager in the Bath Office of Burcher Jennings, said:

“This is an exciting time to be part of the team at Burcher Jennings with the national profile of the firm expanding so quickly, both in terms of reputation and locations. I look forward to bringing the firm’s unique approach to costs, pricing and funding to law firms in Bath, the surrounding region and along the M4 corridor. We have a strong track record of boosting law firms’ profitability and client service in the South West. The new office recognises the growth in demand for our services from many more law firms looking for ways to thrive in times of great change.”

Burcher Jennings’ office footprint now stretches from Truro to Carlisle to London, with new offices recently opened in Cambridge and Birmingham.

Martyn Jennings, CEO at Burcher Jennings, said:

“The new Bath office is part of our strategy to ensure legal practitioners across the country have direct access to our services.

“Our business is built on providing a personalised service tailored to each individual client. Law firms in Bath and throughout the M4 corridor have been turning to us, and the new office will enable us to better meet their needs.

“Melanie is a great asset to the team and remains focused on providing a bespoke service to a varied case load dealing with both Claimant and Defendant work including high volume multi track claims for costs.”

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AllianzAllianz Legal Protection (ALP) and Lawyers Inc. are delighted to announce a new partnership in which ALP will provide ATE insurance for Lawyers Inc. law firms.

Lawyers Inc. is a unique Alternative Business Structure (ABS) offering law firms the opportunity to restructure under its “umbrella”. This enables a law firm to completely outsource administration, insurance and employment matters. It also offers law firms a succession structure for its younger lawyers and an exit strategy for senior lawyers.

The ‘pod’ model has been developed over 2 years in conjunction with leading regulatory counsel and has received full approval of the SRA.

David Tucker, director and co-founder of Lawyers Inc. comments ‘We are delighted to partner with Allianz Legal Protection because they recognised the value and bought into the vision of Lawyers Inc. We wanted to offer our law firm partners the facility of an insurer who responds to the needs of law firms in their product design. We believe this agreement will assist small and medium firms to expand their PI and Medical Negligence litigation departments whilst at the same time bringing a higher quality of service to those firms.”

Steve Harvey, Allianz Legal Protection senior business developer comments “In an industry facing increasing regulatory and structural reform and the attendant financial consequences, this innovative model is notable for what it adds to the profession. Lawyers Inc. are deserved recipients of the recognition they have received, within their first year of trading, for the support they are providing to the legal sector and we are excited to be working with them.”

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HarmansHarmans Partner and Costs Lawyer Gary Knight discusses the implications of Lord Justice Jackson’s Review of Civil Litigation Costs on how solicitors recover costs on behalf of their clients.

“To improve is to change; to be perfect is to change often”. Winston Churchill

The Legal Profession has faced a period of almost continuous change since the introduction of the Civil Procedure Rules in 1999, and never more so than following the publication of Lord Justice Jackson’s Review of Civil Litigation Costs (The Jackson Report) presented in 2010.

There are many challenges to be faced, but the following may have the greatest impact on how solicitors recover costs on behalf of the client.

  • Budgets
  • Fixed costs
  • New format bill of costs


Case management powers under CPR Part 3 enabled the court to consider any available budgets of the parties, and to take into account the costs involved in each procedural step (CPR 3.17). In assessing costs on the standard basis where a costs management order has been made, the court was not to depart from the receiving party’s last approved or agreed budget unless satisfied that there is good reason to do so (CPR 3.18).

The case of Valerie Elsie May Merrix v Heart of England NHS Foundation Trust (2016) considered the relationship between costs budgeting and costs assessment and determined the extent to which the costs budgeting regime under Part 3 of the Civil Procedure Rules (“CPR”) fettered the costs judge’s powers and discretion at a detailed assessment.

The Court at first instance considered that ‘cost budgeting was not intended to replace detailed assessment’ as found against the receiving party.

The Claimant’s appeal heard by Mrs Justice Carr DBE [2017] EWHC 346 9QB found that the provisions of CPR 3. 18(a) and (b) had “shifted the burden to the paying party to show good reason at detailed assessment or summary assessment why the budget should not be departed from” given that the consideration of a costs budget at a costs management hearing was not only to establish an individual fund, but to give the parties an indication as to what was reasonable and proportionate to spend prosecuting or defending their claim. Therefore, what was reasonable and proportionate at a detailed assessment, unless the paying party could show good reason as to why it was not the case, should be in accordance with any costs budget set?

Costs Judge, Master Whalan had considered a similar issue when assessing costs in Harrison v University Hospitals Coventry & Warwickshire NHS Trust and held that there could be no departure from the incurred costs figures in the budget without good reason.

Fixed costs

In January 2016 Lord Justice Jackson caused a stir by suggesting fixed costs should be applied to all costs in claims valued up to £250,000.

His comments were perhaps borne out of frustration given the criticism aimed at the costs budgeting process and fortunately he has distanced himself from the figure.

Figures between £25,000 and £125,000 have been mooted but at the moment there are no clear recommendations, however the general view is that some form of fixed costs will be introduced.

New Format Bill

It may surprise some to discover Practice Direction 51L made under rules 47.6 and 51.2. provides for a pilot scheme (“New Bill of Costs Pilot Scheme”) to operate from 1 October 2015 to 30 September 2017.

Initial uptake has been underwhelming, however the new format will become compulsory from October 2017.

In his review of Civil Costs Jackson LJ suggested any new bill should include:

(i) a transparent explanation about what work was done in the various time periods and why.

(ii) a user-friendly synopsis of the work done, how long it took and why.

The new bill should also be:

(iii) inexpensive to prepare.

To achieve the above it will be necessary to have a compatibility between time recording systems and a revised bill format.

The idea that a bill of costs can be generated automatically and transmitted electronically is an attractive proposition however, a reliable electronic bill produced using J-codes directly from a case management system would be dependent on faultless data and high levels of quality control.

In a speech given in April 2016, LJ Jackson suggested “decoupling” J-Codes from the new format bill of costs. This has led to the introduction of the new practice direction.

Under the new pilot scheme the parties are permitted to use the new format bill of costs but will not be forced to use J-Codes.

Three major changes to be faced by the legal profession though one might say that fixed costs will make redundant the need for budgeting though if  budgets remain and are to be treated as “carved in stone” what need is there for a new format bill of costs?

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Cath Townley, case manager of the year

Proclaim CARE is delighted to announce that our very own Cath Townley was awarded Case Manager of the Year 2013 at the recent CMSUK annual dinner in London. Congratulations to Cath.  One of the other finalists was another Proclaim CARE case manager, Sue Mosiezny. Congratulations to Sue for also making it through the final nominations.

It was a very proud night for Proclaim CARE and marks another milestone in our history.

There were numerous testimonials for both Cath and Sue from Insurers, Solicitors, Clients and treatment providers.  Below are just some of the testimonials that Cath received:-

Solicitor Testimonial

“This was a case of serious orthopaedic injuries as a result of a motorcycle accident which would have long term significance.  Nothing was too much in terms of assistance for our client, he felt emotionally supported and empathy from early on and he grew in confidence with Cath as his case manager.   I believe she is an asset to her company and it ought to be recognised that she goes the extra mile”

Client Testimonials

“I feel that due to Cath’s knowledge, skills, experience and personal qualities she has helped me to return too full physical, mental and emotional health and most importantly returned to work and continue my life as it was before my accident.  I cannot thank her enough”.

“Could you please pass on my sincere thanks and gratitude to Cath Townley for all the help, advice and care she has given to me to assist my recovery following my accident.   She is a true professional and a great ambassador for your company”.

Insurer Testimonial

Cath quickly and comprehensively identified the rehabilitation needs of this client, both upon initial instruction and as the rehabilitation progressed and additional requirements arose.  She has initiated, co-ordinated and monitored all of the investigations and treatments promptly and with the clear goal of minimising the impact of a serious accident upon this client’s life.

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Lethem: deeply uneasy about that desert of applications

Lethem: deeply uneasy about that desert of applications

A leading judge has expressed his “deep unease about the desert of applications” to vary costs budgets – with practitioners responding that they are positively avoiding doing so.

A roundtable made up of judges and leading practitioners, organised by the Association of Costs Lawyers (ACL) to mark two years of costs management, also heard concerns over continuing lack of knowledge on both sides of the bench about how to do it.

District Judge Chris Lethem – a member of the Civil Procedure Rule Committee and Judicial College trainer on costs – said he “hardly ever” saw applications to vary budgets.

He said: “I am deeply uneasy about that desert of applications, because either I have achieved a crystal vision which I thought I did not possess, or the parties are storing up a heap of problems later on down the line because they did not apply to vary, and when they get to the end of the process they are suddenly going to find they have overspent.”

Francesca Kaye, a partner at Russell-Cooke and immediate past president of the London Solicitors Litigation Association, said she was “positively avoiding” making applications to vary.

She said: “The risk of making an application to amend or vary a budget is firstly that the proposed amendment, depending on why you are applying to amend, might not be allowed; secondly, we have heard some horror stories of making an application to amend, and the judge taking one look at the budget that previously had been granted, and taking it as an opportunity to have another go at it.”

This led on to a discussion about the use of contingencies in budgets, and Mr Justice Warby said he found them “problematic”. He explained: “What I have found in the few cases where I have seen this, is that people are packing their budgets with contingencies to give them a bit of wriggle room. Some of the contingencies are not even labelled; they are just ‘Contingency B’. A lot of them are wholly speculative, and it does not seem to me to be a very helpful exercise.”

Although most lawyers are getting to grips more with budgeting, the consensus around the table was that it is mainly smaller firms that are still struggling.

District Judge Margaret Langley said: “There are still a few who just do not file their budgets on time and get caught out… They do tend to be the smaller firms, and when they prepare their budgets, you do wonder if it has been done on the back of an envelope because there is no rhyme or reason to it.”

Participants shared anecdotal tales of district judges outside of London refusing to budget cases where liability has been admitted, or only budgeting some way forward in the expectation of a settlement.

District Judge Ian Besford added: “Anecdotally, I have heard some colleagues are setting up budgeting to be done by the enthusiastic deputies, which is definitely not what is meant to happen.”

Senior Costs Judge Gordon-Saker confirmed that no budgeted cases have yet reached the Senior Courts Costs Office for detailed assessment, but District Judge Lethem said he still expected there to be “huge fertile ground for detailed assessment”.

He said: “Statistically, most of these cases are going to settle. Then the whole issue arises about how much of the phase it was reasonable to have spent, because the receiving party will say, ‘Gosh, yesterday I finished taking all of my witness statements, so I will have that phase in its entirety’, and the other side will say, ‘(a) you did not, and (b) if you did, that was unreasonable’. Therefore we have still got a huge area there. Plus we have got the whole area of what is good reason [to depart from the budget].”

ACL chairman Sue Nash said: “The roundtable demonstrated that while practitioners and judges have gained a good deal of experience over the past year in particular, there is still a considerable way to go before we fully understand the best way to approach every aspect of costs management, especially those later on in the process, such as variation and detailed assessment.

“It is important that practitioners look at the process from the wider perspective of cost management, of which budgeting is part. It needs to be managed, reviewed and overseen.”

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April dilemma: no guidance from MoJ

It will take a test case to determine the position of counsel who sign a conditional fee agreement (CFA) after 1 April when the solicitor’s was concluded before the new regime came into force, the Personal Injuries Bar Association (PIBA) has warned.

A letter to members from PIBA’s executive committee said the Ministry of Justice had not responded to a request to clarify the “deeply unsatisfactory” situation. The Civil Procedure Rules Committee has indicated that the issue is not within its remit.

PIBA has approached both the Association of Personal Injury Lawyers and the Association of British Insurers to suggest a discussion of the issue with the Civil Justice Council in a bid to reach a consensus.

However, the ABI has declined to meet – suggesting it is a matter for the courts – and PIBA vice-chairman Andrew Ritchie QC said it looked like a test case is the only way forward.

PIBA has asked any member in this situation to notify the association if their substantive case is successfully concluded within the next month or two “such that consideration could be given to PIBA stepping in for the costs issue to be resolved”.

The “obviously sensible position” is for counsel and solicitor to be covered by the same regime, the letter said. Initial Bar Council guidance suggested that the barrister would be covered by the old regime if the solicitor’s CFA was concluded before 1 April, but “we have as yet been able to establish whether the Bar Council still stands by that guidance”.

It continued: “However, there is a persuasive body of opinion, expressed by costs specialist practitioners, that, given the terms of the Conditional Fee Agreement Order 2013 as it was ultimately published, this guidance is wrong. Their view is that if counsel enters into an old-style CFA on or after 1 April, then whatever the terms of the solicitors’ CFA, and whenever the latter was concluded, counsel’s CFA will be caught by the order.

“That will mean not only (i) that the success fee will not be recoverable from the defendant, but also, and importantly, (ii) that the CFA will be unforceable if it exceeds the statutory limits.”

The letter also provided members will advice on possible options in the meantime, with the caveat that PIBA cannot guarantee that any particular course is without adverse consequences.

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Laird are delighted to announce a partnership with local rehabilitation company Accident Rehab. The collaboration combines the highly efficient Expert Witness providers with the vast skills of one of the most innovative rehabilitation managers.

Laird’s director, Nik Ellis said, “We’re delighted to be working alongside Helen and her team and have a clear vision of how we can bring our systems to Accident Rehab to make a genuine positive difference to the customer journey they provide. Rehabilitation and case management creates a massive amount of admin which would be better served by automation leaving the medical team to bring their talents to benefit the client. We look forward to seeing the development of AR over the coming months.”

Accident Rehab’s director, Helen Spillards said, “We can utilise Laird’s automation to improve our efficiency by applying it to a multitude of administration tasks, leaving our medical team to use their prime skills rather than be swamped with admin. This allows us to be exceptional and our processes seamless, quick and efficient. The benefits to our clients in speed of triage & effective rehabilitation will speak for themselves. We’re very excited about further exciting developments, including an innovative triage assessment system, direct data transfer & case tracking.

Over recent years Laird have expanded beyond their traditional automotive arena providing expert witness services such as injury photography, locus reports, translation & interpretation so this is a natural step in their evolution.

For more information on Laird or any of their services, please contact Pippa Saunders on 0151 342 0670 or

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Sir Henry: government “angst” over the cost of clinical negligence

Sir Henry Brooke, former Vice-President of the Court of Appeal’s Civil Division, has called on government lawyers to “involve themselves in mediations even if they perceive that they may be losing business for themselves”.

He was commenting on two recent cases, reported by Litigation Futures, in which the NHS Litigation Authority (NHSLA) was ordered to pay indemnity costs on detailed assessment proceedings after rejecting offers to mediate.

As a lord justice of appeal, Sir Henry ruled in the important case of Dunnett v Railtrack that parties who unreasonably refused to mediate could lose the ability recover some or all of their costs, a principle upheld in the leading case of Halsey.

Writing on his blog following the two recent cases, Sir Henry said: “Since taxpayers’ money was at risk, it would be good if the claimants’ solicitors (who were the same in both these cases) could collaborate with the NHSLA in reporting to the public just how much money was in fact wasted by the stance adopted by the defendants’ representatives in each case.

“If, by way of illustration, the taxpayer had to pay £50,000 in each case more than he would have had to pay if those representing the NHSLA had behaved prudently and reasonably, that would mean that £100,000 of public money went down the drain for no real purpose. Oh dear.”

Sir Henry Brooke referred to the words of Charles Dickens in Bleak House: “The one great principle of the English law is to make business for itself. There is no other principle distinctly, certainly, and consistently maintained through all its narrow turnings.”

Sir Henry went on: “If the government is to be serious about reducing the cost of civil justice, it must get the message through not only to the panel solicitors but also to the costs lawyers and law costs draftsmen who represent it that this principle should now be regarded as being as dead as the dodo.

“All these professional men and women must always act reasonably in their clients’ interests. This entails being willing to involve themselves in mediations even if they perceive that they may be losing business for themselves thereby.”

Responding to a comment from Jonathan Dingle, barrister and co-founder of Trust Mediation, asking how much more public money would be wasted by the NHSLA, Sir Henry said the issue was “particularly poignant” because of “all the angst that government has been expressing about what it perceives to be the excessive cost of clinical negligence litigation”.

Sir Henry said that in both of the recent cases, “after a long delay the NHSLA’s solicitors refused an invitation to mediate the claimant’s costs bill in each case. In the first case (Reid) they gave no reasons at all. In the other (Bristow) they said only that the case had now been set down for a detailed assessment.

“In other words, they did not think there was any need for them to justify their refusal. In each case an experienced costs judge held that their refusal to mediate was unreasonable.”

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ATE award: (from left) host Patrick Kielty, Paul Hurley (ARAG), Keith Bushnell (CEO of HCML, the award sponsor) and Dr Harry Brünjes (judging panel chair)

ARAG was named insurance provider of the year at last week’s Eclipse Proclaim Personal Injury Awards.

The company – which also won in 2009 – beat off competition from 80e, Elite Insurance and Financial & Legal for the award, with the judges saying: “This insurer has also worked hard to save costs through streamlined policy applications, and played an active role in helping to minimise the risk to claimants with the changes contained in the LASPO Act.”

Entrants to the category had to demonstrate product development, innovation, client satisfaction and added value, and success in negotiation.

ARAG managing director Tony Buss said: “We were successful against strong opposition and have firmly established ourselves as a leader in this field. The team at ARAG should be incredibly proud and despite some challenges ahead we will continue to strive for excellence for ourselves and our customers, maintaining an innovative and customer-focused approach.”

Paul Hurley, business development and marketing director, added: “We endeavour to encapsulate all of the elements required for this award everyday and are proud that this has been recognised by the judges, all industry experts. It is a humbling experience but one that toasts the success that six years of hard work can bring.”

Meanwhile, David Greenwood from Jordans Solicitors was named claimant personal injury lawyer of the year, with the judges saying “his dedication to achieving justice and fighting child abuse is second to none”.

His defendant counterpart was David Wynn from Keoghs, whose citation said: “Our winner has brought a unique perspective and approach to claims involving a tragic and painful disease, which looks for a collaborative approach between victim's solicitors and insurers. A recognised authority in his area, he is highly respected on both sides of the litigation fence whose work has yielded exceptional results.”

Claimant personal injury team of year was the allegation of fraud team at Nesbit Law Group, while the defendant award went to the catastrophic and neurotrauma team at AXA Commercial Insurance, which “works closely with claimant organisations to create a more open and principled approach to claims resolution”.

Barrister of the year was Bill Braithwaite QC of Exchange Chambers and chambers of the year Civitas Law.

Leading claimant lawyer John Spencer was given an outstanding achievement award. The citation said: “The judges praised him for being ‘very brave’ when providing evidence to the transport [select] committee last year during its probe into the rising cost of motor insurance, where he disputed some of the arguments raised to explain car insurance premium rises and called for a clear avenue to independent legal advice for accident victims.

“He has had a major, positive impact across many areas of the sector. He campaigns every minute of every day to help those unfortunate enough to have suffered an accident. In the words of the judges, ‘his whole life is devoted to access to justice’.”

Other winners included Eddie Ryan, former head of Co-operative Legal Services, who received a lifetime achievement award; first4lawyers (claims management company of the year), Premex Services (medical agency of the year), and Fletchers Solicitors (outstanding case of the year). The awards were organised by Barker Brooks.

All the award winners

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Clinical negligence: call for calm

Clinical negligence: call for calm

Costs budgeting is starting to work in clinical negligence and government plans to introduce fixed fees in ‘lower-value’ cases worth up to £250,000 are moving too far and too fast, a Queen’s Bench Master has warned.

Master Cook said claims of more than £50,000 could not be classified as lower value and before extending fixed costs beyond that figure, “the current costs regime should be reviewed and its effects should be subject to proper scrutiny and research”.

He added: “The inevitable conclusion to be drawn is that there is now a very strong momentum perhaps an irresistible momentum towards the introduction of fixed costs in civil claims. But in my view change should not be driven on the basis of out of date statistics and the short-term financial interest of the NHS.”

His speech to a seminar at 7 Bedford Row in London came almost exactly a year after another lecture at the chambers in which he had expressed concern about the burden of budgeting in clinical negligence cases.

With a backlog building up, last year costs budgeting was temporarily disapplied for clinical negligence, and Master Cook said that following the appointment of one extra full-time master and four deputy masters, it will resume from the end of this month, with waiting times for first case management hearings “reduced to a few months”.

He continued: “The experience of the clinical negligence masters is that there are now signs that parties are adapting to the costs management process. We are seeing a significant increase in the number of cases where budgets are agreed or where a number of the phases are agreed.

“By requiring the parties to focus on the total budget per phase and requiring cash offers to be made where agreement cannot be reached the arguments are more focused. This leads to shorter hearings and in return enables more efficient use of court resources.”

However, there were also “some unwelcome signs”, such as an increase in the number of litigants in person. “I do not pretend that this increase in the number of litigants in person involves substantial numbers but it is something we have not really encountered before and to my mind it raises questions about whether these claimants are able to access effective legal advice.”

He said masters were also seeing a rise in the number of non-specialist firms attempting to move into the clinical negligence field, adding to the costs of the process.

Master Cook questioned the NHS Litigation Authority’s (NHSLA) apparent belief that fixed costs could save it more than a quarter of the costs it pays out to claimant solicitors.

“I don’t intend to submit these claims to detailed scrutiny. There is a respectable case to be made that the NHSLA has presented the statistics in a less than neutral fashion,” he said, referring the audience to Andrew Ritchie QC’s article last year on the NHSLA’s annual report.

“What I can say is that the figures used to support the NHS’s argument that claimant’s costs are disproportionate in lower-value claims are derived from the pre-costs management regime. Also left out of account as drivers of costs is the conduct of the NHSLA and hospital trusts.”

Master Cook noted that the Department of Health consultation on fixed costs, which was initially due last autumn, has still not been published, even though the planned implementation date of 1 October 2016 remains unaltered.

“It must also worthy of note that case for fixed fees was presented to the [Civil Procedure] Rule Committee by Mr Masterson of the commercial division of the Department of Health.

“I would suggest that such a state of affairs is profoundly worrying and does nothing to instill confidence in the proposals. What I find particularly concerning is how the NHSLA’s concern over disproportionate costs in ‘lower value claims’, that is claims valued up to £25,000, has morphed into a proposal to fix costs in cases up to £250,000.”

The process of running a clinical negligence cases “has a cost which means that establishing a low-value claim will always proportionally higher than a more substantial claim. I would certainly be slow to describe a claim worth £50,000 to £100,000 a low-value claim”.

This applied also to Lord Justice Jackson’s recent call for the widespread adoption of fixed costs, although he agreed with Sir Rupert that introducing fixed costs for clinical negligence on their own would lead to unhelpful “Balkanisation”.

He concluded: “My own view for what it is worth is that if this change is to come about: it must apply to all civil litigation; it must be gradual; we must start by extending the low-value part 45 scheme to all claims including the fast-track; there should be gradual extensions of fixed costs from £25,000 to £50,000 to say £150,000 and such extensions should be made in the light of experience; suitable uplifts must be agreed for difficult and complex claims such as clinical negligence, possibly in conjunction with some form accreditation scheme; alternatively, there must be some flexibility in rates (judicially controlled for difficult and complex cases); and there must be a robust and predicable mechanism to update rates paid to lawyers linked to actual costs in the real world…

“Unless fees are set at a level which make it economically viable to take on such claims, people will be denied representation…

“The past five years have seen an unprecedented period of change in the way in which civil claims are funded there has been much change in the legal market, there have been mergers and spectacular failures.

“In my opinion a period of calm is called for before more radical change. We do not have a system of justice that is worthy of the name unless people can get effective redress.”

An NHS Litigation Authority spokesman said: “We would agree entirely with Master Cook with respect to his comments on the entry of non-specialists into the clinical negligence market and the difficulties this creates in the resolution of claims.

“It is important that injured patients obtain access to justice at reasonable cost and that excessive costs are challenged appropriately in order to preserve NHS resources for patient care. This is why we have drawn attention to clear evidence of disproportionate costs being claimed, particularly on lower-value cases.”

Julie Say, a partner and head of clinical negligence at London law firm Hodge Jones & Allen, said: “It is heartening that the judiciary is contributing to the analysis of the current proposals for fixed fees in clinical negligence claims. Master Cook is echoing concerns about the flawed basis of the proposals together with ignoring cost management already carried out by the courts.”

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Pascall: Parties left to enforce the rules themselves

Posted by Matthew Pascall, senior underwriting manager at Litigation Futures Associate Temple Legal Protection

As you settle down to watch the action on the field during the World Cup, bear in mind that you will be watching players who, together, are valued at billions of pounds. And whose professional careers are matters of hugely valuable commercial interest to the intermediaries supposed to look after them.

Brown bags of money might not change hands at motorway service stations anymore, but transfer disputes involving agents are often the subject of litigation in the courts or, more frequently, in arbitrations. We know because we often insure them.

Late last year, football star Wilfried Bony of Swansea City won an appeal where the court had to decide whether the proceedings brought should be stayed to permit the matter to be decided under the Football Association’s (FA) Rule K Arbitration procedure.

The usual process for dispute resolution within football is one of arbitration as directed by the FA and tends to fall into one of the following categories: player transfers, intermediary (formerly called agents) regulation, or discrimination in some form.

There have been changes in the approach to player ‘agents’ following the 2015 decision by FIFA to scrap football agent licensing and replace it with new regulation of football ‘intermediaries’. The terms ‘agent’ and ‘intermediary’ can be considered synonymous. In reality, these changes have resulted in significant deregulation.

The new intermediary is not subject to a licensing regime. New intermediaries are now likely to be less well trained or experienced. This might well explain why, since the new regulations were applied in 2015, the number of intermediaries has more than doubled despite the number of clubs and players remaining constant.

Invariably, corruption in football involves player transfers and intermediaries. Many disputes involving player transfers are intertwined with allegations of corruption. You would expect that the FA would take responsibility for dealing with such matters but it simply does not have the resources to do so. The parties are now left with the only option of arbitrating or suing in the courts.

Arbitrations, of course, are confidential and take place behind closed doors. They are not subject to public scrutiny. The consequence is a lack of public confidence in the process, made worse by the poor reputation football has acquired since the FIFA scandal of a few years ago.

Because decisions are not reported, there is also a risk of a lack of consistency in the approach being taken to resolve these sorts of disputes.

So where are we now? The regulators – FIFA and the FA – have less capacity to enforce regulation, the regulations themselves have been substantially diluted and yet the money involved in football is increasing exponentially. The parties in dispute are left to enforce the rules themselves through private arbitration with little public scrutiny.

The case involving Wilfried Bony involved two of his former ‘intermediaries’ allegedly receiving ‘secret’ commission payments off the back of his legitimate transfer. Fortunately for Bony, it was deemed impossible for Rule K to be incorporated by reference and there was no binding arbitration agreement between the parties.

The appeal by the opponents was rejected and Bony was awarded his costs of the appeal and the hearing. It is unknown whether Bony will ultimately succeed in his claim, which will now be played out in the courts.

Arbitration will still remain popular for those working in the football industry and it can be an advantage for the parties involved that the outcome is kept confidential.

Each case must be decided on its own facts when deciding whether or not a contract incorporating an agreement to arbitrate can be implied. The Bony case makes it clear that, unless it is necessary, a court will not imply a contract between sporting participants incorporating the sport’s governing rules.

For a month in Russia, the best players in the world will be able to celebrate their passion for football and proudly represent their own country. Whilst disputes on the pitch are generally settled before the final whistle, there will be other disputes off the pitch including wrangles over transfer fees and terms of contracts that could well go into extra time.

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Does the size of your litigation practice matter post Mitchell?

Posted by Neil Rose, Editor, Litigation Futures

The result of the Mitchell appeal was the one most anticipated – to do anything other than uphold the tough line on relief from sanctions would have been seen as undermining the Jackson reforms.

This was particularly the case for the Master of the Rolls, Lord Dyson, who led the court, given the speech he gave on the eve of J-Day about the importance of compliance after 1 April (and let us not forget that the Jackson reforms sprang from the judiciary in the first place). He had to walk his own talk, so to speak.

Indeed, he went so far as to expressly agree with himself in the ruling. Having quoted from that speech, Lord Dyson said: “We endorse this approach.”

The fact is that, had the courts been more robust in applying the pre-April 2013 Civil Procedure Rules, and had lawyers not got so lax in complying with them, we wouldn’t have needed Jackson in the first place. There was never a ruling like this one to set the tone, however. The message could not have been much clearer, which in one way is a good thing (although it does run the risk of parties looking to play games so as to put the other side in jeopardy of a sanction).

But much of the reaction has been angry, arguing that the court has put procedural justice ahead of justice between the parties. As Francesca Kaye, president of London Solicitors Litigation Association, put it, does the decision sacrifice merits and flexibility on the bonfire of compliance and efficiency? Or more pithily on Twitter from Jon Lord of Costs Advocates: “Certainty over sanity and punishment over parity.”

Certainly the emphasis on the courts taking a broader view of the impact of delay on the system as a whole shifts the dynamics. In this regard, it did not help the claimants in Mitchell that in order to find time in her diary to list the application for relief within a reasonable time, Master McCloud needed to vacate a half-day appointment which had been allocated to deal with claims by asbestos victims. Not hard to see where the sympathy would lie between the two.

Rules are rules, and are there to be complied with – nobody would disagree with the principle; it is the brutality of the sanction in this case that is the difficulty. Many more decisions like this and, come the review of Jackson in a couple of years’ time, that will be where calls for change will focus.

And what of the impact on lawyers, aside from the not insignificant matter of losing their costs? Sympathy for the profession’s travails was in short supply in the appeal court. “We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason,” Lord Dyson said.

“Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all.

“This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner.”

Could an unplanned consequence of this ruling be to push out the small or niche firm? While, again, one cannot disagree with the principle that law firms should have the appropriate resources in place to conduct litigation in an efficient and compliant manner, running a legal practice is not as black and white as the court makes out.

It will also be interesting to see what professional indemnity insurers make of it all.

We will be talking about this ruling for a long time to come. Perhaps in 10 years’ time Andrew Mitchell will be remembered less for what he achieved in the political world, and more for his impact on the litigation world.


A golden opportunity for the ATE market to innovate

Enrique Gomez Head of ATE DAS UK Group

With the key judgement in the BNM v MGN case not expected until the end of the year, and decisions in the fixed recoverable costs arena not due until 2019, the after-the-event (ATE) insurance sector – already burdened by ever-changing regulation – is playing something of a waiting game. But this could be a golden opportunity for the ATE sector – the chance to take advantage of what might otherwise be a relative lull in activity period to set in motion a time of self-analysis and transformation, to develop plans for what the future of ATE insurance will look like.

July 16th, 2018