Search Results for



Call
Website
Email us

About us:
whiplash examination

AXA: No decline in whiplash claims

The government needs to be clearer as to the intention of its new “fundamentally dishonest” rule for personal injury claims and change the wording accordingly, insurance company AXA has argued.

In a report on public perceptions of whiplash claims, AXA called for the term “fundamentally” to be removed, if the government’s intention was that “any claim found to be dishonest, in any aspect” should be thrown out.

The insurer said that if Parliament wanted to allow judicial discretion as to whether the dishonesty was intentional, allowing for some of the claim to be compensated, the word “fundamentally” should be replaced with something “clearer”, such as “deliberate” or “conscious”.

The “fundamentally dishonest” rule, set out in the Criminal Justice and Courts Bill, requires a court to dismiss a claim where it is satisfied that the claimant has been fundamentally dishonest, unless it would amount to “substantial injustice”.

Susan Brown, the new chairman of the Motor Accident Solicitors Society, warned earlier this month that the rule could result in a “potential windfall for insurers”.

Commenting on the report, Chris Voller, claims director of AXA UK, said that despite the government’s reform agenda and statistics from the Association of British Insurers showing that motor premiums had come down, “what we haven’t seen is a decline in the frequency and number of whiplash-related claims, so there is still more that needs to be done.”

However, figures obtained by the Association of Personal Injury Lawyers through a freedom of information request to the Compensation Recovery Unit, revealed earlier this month that whiplash claims had in fact gone down by 29% in past four years.

The AXA report, entitled Whiplash: consumer perspectives on a UK compensation culture pandemic, marked the industry’s latest attack on whiplash, involving a poll of 2,000 members of the public carried out by Populus.

It found that more than two-thirds of people believed the limitation period for whiplash claims should be cut from three years to six months.

The survey suggested that 10% of all consumers had either made a fraudulent or exaggerated whiplash claim themselves or knew someone who had done so.

Researchers said: “There appears to be a general feeling of scepticism around those who claim for whiplash injuries up to three years after the accident. That lack of sympathy can, perhaps, be attributed to the role that claims management companies play in bringing such claims to the fore.”

The report said the findings showed the need for “tighter rules around time limits”, although the UK government had “shown no appetite” to alter the status quo. “The fact that the current system allows for leaving medical examinations until nearly three years post-accident means that the process is highly subjective.”

AXA added the government should consider “as soon as possible” raising the small claims limit for personal injury claims resulting from RTAs from £1,000 to £5,000.




Call
Website
Email us

About us:

Kinsella: indefensible behaviour by insurers

Insurers, rather than claimant lawyers, are the main cause of rising personal injury claims, according to new research by alternative business structure RJW Slater & Gordon.

A survey of 900 claimants by Ipsos MORI reveals that 65% of claimants were initially contacted by an insurance company about making a claim.

The firm said it commissioned the poll to counter assertions by the Association of British Insurers that insurance premiums are being pushed up by an ‘explosion




Call
Website
Email us

About us:

Disclosure: rules have become impossibly burdensome

The cost of commercial litigation remains “exorbitant”, with abolition of general disclosure the first attack that should be made on it, a leading City solicitor has argued.

Nigel Boardman, a high-profile partner at magic circle firm Slaughter and May, said the legal profession has not given “an adequate response to the change in the economy since 2008”.

Writing in the Financial Times, he said: “We are still too keen to protect our own short-term interests when we should see that our and Britain’s long-term prosperity depends on a vibrant and fair legal marketplace, in which the law assists business rather than impeding it.”

On litigation, he acknowledged that there has been “some attempt at reform” since the excesses of BCCI’s case against the Bank of England in 2005. “But the price of justice remains exorbitant.”

He pointed to Boris Berezovsky’s recent suit against Roman Abramovich, after which Mr Berezovsky has had to pay, as the loser, £35m towards Mr Abramovich’s costs after a 12-week trial. The legal action by Kazakstan’s BTA Bank against former chairman Mukhtar Ablyazov involves 50 leading solicitors, including 22 partners, and 32 barristers, including eight QCs, he recounted.

“This is a return to the dark days of Jarndyce v Jarndyce – the Dickensian family dispute that runs for generations until the entire estate is consumed by costs. It is unacceptable that it should continue.

“At minimum, a reform of civil litigation should do away with the process of document disclosure, whereby each party has to produce any document that may be relevant to the case – a rule that has become impossibly burdensome with e-mails and electronic storage. Instead, each side should produce only those documents on which it relies, which would slash the cost of litigation.”

Mr Boardman also called for an end to a reliance on oral hearings, “which date from a time when most people could not read and are now merely an expensive and otiose theatre”. Instead, the judge should assess the merits of the case on the basis of written submissions, he said.

“This system already works in Germany, where nearly all commercial disputes are resolved with less than an hour of oral hearing and no document disclosure. I would not suggest Germany owes its economic success to an effective system for resolving commercial disputes – but it must help.”

Other issues included simplifying the tax code and “sensible deregulation” of corporate law, such as around the requirement for a prospectus when issuing shares.

Mr Boardman said the government would have to lead these reforms, but “the legal profession – which has undeniably benefited from the undue complexity of corporate regulation – must now do more to shape and promote a fundamental reform of business law”.

 




Call
Website
Email us

About us:

Eclipse200

Principal Global Investors is the institutional asset-management arm of the Principal Financial Group.

The in-house legal team covers a wide range of law including asset management, employment and corporate. The team also act as the company secretarial department and look after a number of boards.

Principal Global Investors was looking for a system that would centralise all information into one desktop application and provide easy to use workflows in order to streamline procedures and make efficient use of the legal team’s time.

A Proclaim Case Management Solution was implemented and is utilised across the department. Proclaim allows the legal team to open and commence work on cases as soon as instructions are received and allows staff to best manage the way in which cases are progressed, exceeding expectations in terms of efficiency.

Proclaim ensures the legal team is constantly connected. The system collates every piece of client information, which for stakeholders, means progress updates can be accurately provided by any member of the department. Data is sufficiently organised so every action taken can be seen and is available for recall within seconds, providing a seamless and efficient service.

Proclaim has enabled the legal team to provide stakeholders with more information, at a quicker rate and in a suitable format. Building the system in line with the organisation’s preferred way of working, means the team has been able to modify the way information is conveyed, whilst retaining the flexibility to make fast, reliable changes to workflows.

Additionally, Proclaim’s Task Server has proved invaluable in maintaining Principal Global Investor’s service. The Task Server automates regular tasks and now carries out administrative and time-consuming chores, whilst ensuring actions are never overlooked.

Overall, Proclaim has become an integral part of our business, enabling us to provide a seamless service to our stakeholders. Eclipse’s efficient approach to our needs and ability to provide a flexible and extremely robust solution convinced us that Proclaim is the definitive solution for legal services.”
Ruth Clapton, head of legal at Principal Global Investors




Call
Website
Email us

About us:

Members of Yorkshire-based Eclipse Legal Systems, the UK’s largest independently owned legal software developer, successfully organised and participated in a series of charity events throughout 2013 raising thousands of pounds for their three nominated charities.

  • Candlelighters, based in Yorkshire, provides essential services and support to children with cancer and their families.
  • Barth’s Syndrome Trust, which is dedicated to saving lives through education, advances in treatment and finding a cure for Barth’s Syndrome – a sometimes fatal, often debilitating genetic disease affecting boys.
  • Martin House, a hospice for children, young people and their families from throughout the Yorkshire region.

The Eclipse fundraising events included auctions of surplus IT equipment and a series of four physical sporting challenges which included the Leeds Half Marathon, Jayne Tomlinson’s ‘Blockbuster’ hike, the Leeds 10k and finally the 71 mile Otley Sportive Cycle.

Dolores Evelyn, Sales Director at Eclipse Legal Systems, comments:

“Congratulations to all those who took part in the events and a huge thank you to everyone who rewarded these efforts by donating and making this a record breaking fundraising year for Eclipse.   The £8,000 raised will help to make a huge difference to all who rely upon the valuable support our chosen charities provide.”




Call
Website
Email us

About us:

Newspapers: media not interested in the real story about the UK legal system, says MR

The courts are “very aware” of the dangers of feeding media perceptions of a compensation culture, the Master of the Rolls has said.

Lord Dyson argued that the Jackson reforms – together with a “continued robust approach to the appropriate use of ADR” – will go a “significant way” towards removing improper incentives on people to bring meritless claims and defendants to settle for fear of costs.

However, there needs to be a major public education push to “counter-act the media-created perception that we are in the grips of a compensation culture”, he suggested.

Delivering the annual lecture to the Holdsworth Club – Birmingham University’s student law society, of which he is president – Lord Dyson blamed inaccurate media reporting for creating “a false perception” of a compensation culture (which he defined as the idea that for every injury or loss, there is always someone else to blame and “to borrow the phrase, where there’s blame, there’s a claim”).

He contrasted the infamous McDonald’s hot coffee case in the US – while also explaining that the facts were quite different from the myth – with a similar case brought over here in 2002 which failed. “If, as was suggested in the media a year after this case was decided, we were in the grips of a compensation culture, the claim would surely have succeeded.”

Lord Dyson said: “Our courts are very aware of the dangers of contributing to a climate of encouraging the idea that anyone who suffers an injury must have a remedy in damages. The judges apply the law rigorously.”

The MR added: “In the US there is a rampant litigation culture (although as we have seen even there the media reports are not always accurate). Here there is no such culture. It is not difficult to imagine an entirely positive account being given of the robust nature of our legal system and our substantive law; a positive account, which rather than presenting the view that unmeritorious claims are likely to succeed here, would properly reinforce the view that litigation is not a route to automatic compensation in every case.

“But such a measured and accurate good news story would be unlikely to appeal to the media. Given the ease with which the [UK McDonald’s case] could have been used to exemplify why we are not heading towards a US-style compensation culture, the question arises why it was not.”

He listed familiar stories about bans on conker fights and school sports day sack races which are, he said, wrongly blamed on health and safety legislation: “In both types of case, rather than adopt a position of unthinking criticism, a more balanced, fair and accurate account would have stated that the true position is that we are not in the grip of a compensation culture. Perceptions could have been shaped differently to match the reality.

“Of course, stories written in this way would not have been as newsworthy as those which were written. Nor would they have fitted nicely with the notion that our society is being undermined by over-zealous regulation in the field of health and safety, the growth of the nanny state, EU regulation, a rights-culture and the depredations of fat cat ambulance-chasing lawyers. Indeed, I suggest that such good news stories would simply not be written.”

Lord Dyson predicted that a key impact of the Jackson reforms would be to reduce, if not eliminate, the pressure to settle because of the fear of costs.

“Defendants will be able to secure their right to fair trial, through ensuring that they can properly defend those claims that are properly defensible. As a consequence, I hope that we shall discourage any misguided sense that, simply by raising a claim no matter how hopeless, a claimant will received compensation and costs.”

He also championed the role of mediation, but said the Court of Appeal in Halsey (in which he sat) was right not to require mandatory mediation because otherwise the pressure of having to incur the cost of mediation could again persuade defendants to settle unmeritorious cases.

However, the judge said that with no let-up in media stories about the compensation culture likely, there may need to be “a substantive educative effort on the part of government, the courts and the legal profession to counter-act the media-created perception that we are in the grips of a compensation culture. It may also require greater public legal education.

“Given the possible benefits to society of reducing the perceived need for businesses, local and central government and so on to engage in unnecessarily defensive practices, it is to be hoped that this educative effort will pay for itself.”

In an interview with Litigation Futures, published today, former justice minister Jonathan Djanogly claimed that it is now “a rare lawyer who argues there’s not been a compensation culture”.




Call
Website
Email us

About us:

Euros: currency fluctuation not accounted for

The novel issue of recovering more in costs to reflect changes in the exchange rate between sterling and the euro since the referendum has come before the High Court again, but this time it was refused.

Mr Justice Coulson also made it clear that when calculating an interim payment on account of costs, the court’s starting point “will almost always be the payee’s approved costs budget”.

The defendant sought the extra costs following the recent decision of Mr Justice Arnold, in which he awarded a successful German claimant an extra £20,000 in costs to compensate for the impact of the falling value of sterling as it had to convert euros into pounds during the case to pay its solicitors.

In MacInnes v Gross [2017] EWHC 127 (QB), Coulson J said the circumstances here were different: Arnold J was dealing with a summary assessment where he had particular figures to consider, and evidence as to how those figures had arisen.

“I have neither: there is simply a claim that, to the extent that the first defendant has suffered such a loss, he is entitled to be compensated. I am instinctively reluctant to make such an open-ended order.”

He said he was also “uncomfortable” with the idea that an award of costs should be treated as an order for compensation, as if it were a claim for damages.

Coulson J continued: “I consider that there are inherent differences between the two regimes, and that orders for costs have never been regarded as compensating the payee for the actual costs that he has paid out. On the contrary, unless the payee has an order in his favour for indemnity costs, he will never recover the actual costs that he has incurred.”

Finally, he did not see the close analogy between ordering interest on costs, which was commonplace, and ordering exchange rate losses due to the particular time that the costs were paid, which was not.

“The paying party can work out in advance the additional risk created by the potential liability to pay interest on costs, but any potential liability to pay currency fluctuations is uncertain and wholly outside his control.

“Furthermore, it might be argued that the generous rate of interest on costs at 4% over base is designed to provide at least some protection to the payee against such events.”

He therefore refused the application to recover any further sums by way of currency fluctuations on costs.

On the interim payment on account of costs, Gavin Mansfield QC, for the claimant, argued that when the costs were assessed by the costs judge, that assessment would “start from scratch”.

He also said that in any event the defendant had incurred considerably more than £570,000 in his approved costs budget – its costs were said to have reached £956,279.

Coulson J rejected these submissions. “One of the main benefits to be gained from the increased work for the parties (and the court) in undertaking the detailed costs management exercise at the outset of the case is the fact that, at its conclusion, there will be a large amount of certainty as to what the likely costs recovery will be.

“One consequence is that, for the purposes of calculating the interim payment on account of costs, the starting point will almost always be the payee’s approved costs budget. Another consequence is that the court assessing the interim payment can ignore the fact that, as here, there may have been significant expenditure on costs by the payee above the budget figure: any increase is a matter for the costs judge and the relatively onerous burden of recovering more than the budget figure is on the payee.

“So when making an interim payment on account of costs in a case with an approved costs budget, the days of the educated guesswork identified by Jacob J in Mars UK Limited v TeKnowledge Limited [1999] 2 Costs LR 44 are now gone.

“Instead the court can be confident that there is a figure for costs which, because it has already been approved, is both reasonable and proportionate.”

In calculating the figure, the judge reduced the £570,000 by 10% – “which I regard as the maximum deduction that is appropriate in a case where there is an approved costs budget” – and then added back £15,000 to reflect the interest on costs he had awarded. That produced an interim payment on account of costs figure of £528,000.




Call
Website
Email us

About us:
Money is flying into third-party funding, report claims

Money is flying into third-party funding, report claims

The US Chamber of Commerce has stepped up its long-running campaign to have third-party litigation funding (TPLF) regulated in the UK, publishing research that purported to show strong public support for the move, along with a market analysis that said the industry has “ballooned”.

Launching a campaign called ‘Justice not Profit’, the chamber – whose concerns focus in particular around the new opt-out group actions allowed under the Consumer Rights Act 2015 – said that the expansion of TPLF “fundamentally changes the English civil justice system and has matured past self-regulation”.

It cited Lord Justice Jackson, who recommended in his civil costs review that “the question whether there should be statutory regulation of third party funders… ought to be re-visited if and when the third party funding market expands”.

The chamber has been active in the UK for several years and unsuccessfully lobbied Parliament to introduce regulation during the passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

The survey of 1,261 people, conducted by pollster BritainThinks, identified hostility among consumers to the so-called compensation culture and moved on to ask about TPLF.

This is how it was explained to them: “[TPLF] is where financial firms (for example, hedge funds and private investment firms) that have no direct connection to a legal dispute invest in the case. These firms identify cases where there is likely to be a large settlement and pay the associated legal and administrative fees on behalf of the claimants. The third party litigation industry in the UK is growing.

“If the case is successful, the financial firm funding the case claims a significant share of the financial settlement awarded to the claimants (generally 30%-40% of the settlement). If the case is unsuccessful, the funder and the claimants get nothing.”

From that definition, 14% of those surveyed felt positively about TPLF, 63% were negative, and 23% didn’t know.

Then asked about the arguments supporting TPLF, the only one that found marginal favour was that with legal aid drying up, TPLF would fund cases that might not otherwise make it to court. Respondents disagreed with the suggestion that it helped consumers stand up to big businesses.

As a result, they supported a mandatory code of conduct with “meaningful penalties”, a cap on fees and government licensing of all funders.

The market analysis said that, based on publicly available information, global assets under management by 16 funders operating in the UK are over £1.5bn, a 743% growth since 2009. “The actual growth is probably much higher [as] many funders do not publish their financial data.” It said average investments were now £3m-5m.

However, the figures did not say how much of that cash was backing litigation in the UK, rather than abroad.

The analysis noted that only seven of those funders have signed up to the voluntary Association of Litigation Funders and its code of conduct, and said the code had little teeth anyway. It was critical of the absence of any requirement to disclose the existence of funding to the court or opposing parties, and the lack of transparency in the market.

“The trend of litigation funding as a corporate or law firm finance instrument has resulted in the potential development of a class of financial instruments based on litigation investments,” it added.

“The possibility to mask the risk of less secure investments (ie, speculative cases) through bundling with higher-quality ones creates a new class of unregulated financial products and present certain public interest risks.”

The report concluded: “The industry has outgrown self-regulation and has already reached the critical point referenced by Jackson LJ: a point where regulation is necessary. If left ungoverned, litigation funding stands as a troubling risk to the market and to litigation in the UK.”

Arundel McDougall, executive director of the European Justice Forum, backed the findings. He said: “TPLF is a derivatives market and the underlying asset is litigation. Bundles of rights are speculated as a commodity for profit by those whose attachment to the issues at stake is limited to generating a sufficient return on their investment.

“Lawyers conducting such litigation may see it as a commercial proposition but are heavily regulated to ensure compliance with highest standards. Third party funders should not object to some common sense regulation if that helps to address public concern.”

Malgosia Fitzmaurice, professor of public international law at Queen Mary University of London, added: “Given the huge public concerns about casino justice and the US-style justice system, the government and other key decision-makers must act now before trust in the system is further eroded.”

Louis Young, MD of Augusta Ventures, which unlike most funders focuses on smaller cases, said: “Litigation funding, in our experience, is about enabling access to justice for both individuals and SMEs who would otherwise not have the means to enforce their rights – and 92% of our cases are successful.

“Like any financing business, of course, we look to make a profit out of it too, which is why it makes no sense to support spurious cases. All that would do is end up costing us money. For these individuals and business owners, 80% of something is a lot better than 100% of nothing.

“We believe that the ‘Justice not Profit’ agenda is being advanced by a select few large bodies and interest groups who find themselves as habitual defendants in cases across the globe, fronted by the US Chamber of Commerce. They are understandably alarmed that one of the key tactical weapons in their defence arsenal – delay and obfuscation until the other side runs out of funds – is now no longer effective.”




Call
Website
Email us

About us:
Offer was in sterling but award was in dollars

Offer was in sterling but award was in dollars

A claimant who only beat his part 36 offer because of the fall in the value of sterling since the Brexit vote has been denied the usual benefits of enhanced interest, indemnity costs and an additional payment that would have been the maximum £75,000 given the sums at stake.

The offer was in sterling but the judgment in US dollars, and in considering whether it would unjust to make the order under part 36, the High Court described the recent fall in sterling to be “a highly material circumstance”.

Ruling in Novus Aviation Ltd v Alubaf Arab International Bank BSC(c) [2016] EWHC 1937 (Comm), Mr Justice Leggatt said: “At the time when the part 36 offer was made, the sterling/dollar exchange rate stood at around £1=$1.68. Today it is around £1=$1.31. Ignoring the complicating factor that a judgment obtained at an earlier date would have included less interest, it was only when the value of sterling fell to around £1=$1.43 that the judgment sum of US$5,430,923 became as advantageous to Novus in money terms as the amount of its part 36 offer.

“That did not happen until February of this year. Thereafter the exchange rate fluctuated either side of that level. At the start of the trial the exchange rate was around £1=$1.46. It was only after the UK’s referendum on 23 June 2016 that sterling fell sharply thus significantly reducing the dollar value of the part 36 offer.

“If judgment had been entered at any time between the start of the trial on 26 April and 23 June 2016, Novus would not have beaten its part 36 offer and orders for interest at an enhanced rate and indemnity costs could not have been made. It is only through the happenstance that the judgment was not handed down until 30 June 2016 that the possibility of making such orders exists.”

As a result, Leggatt J said it would be unjust to make the order under part 36.

“The reality is that if at almost any time between the date when the offer was made and the end of the trial Alubaf had accepted the offer, the sum received by Novus would have been worth more than the judgment which it has ultimately obtained (even ignoring the time value of money).

“It would in these circumstances be adventitious and inconsistent with the principle of risk allocation which underlies part 36 to penalise Alubaf for not accepting the offer.”




Call
Website
Email us

About us:
RCJ

Judge Purle: “plain words” cannot be ignored

The High Court has rejected an appeal against a Master’s decision to hold that a liquidator was “personally responsible” to pay his solicitors and barristers’ fees under a conditional fee agreement (CFA).

Judge Purle QC, sitting as a High Court judge, held that Crawley law firm Stevensdrake had achieved a “success” in insolvency proceedings against two administrators, by securing Tomlin orders in settlement.

Judge Purle said the order against the first administrator, for £125,000, was paid, but the order against the second, for £1.9m was not. Under the terms of the CFA, Stevensdrake demanded just under £1m in costs and success fees from their client, liquidator Stephen Hunt.

Counsel for Mr Hunt argued that both the law firm and its counsel’s fees were, according to the retainer, “recoveries-based”.

However, giving judgment in Stevensdrake v Hunt [2015] EWHC 1527 (Ch), Judge Purle said that one of schedules to the CFA with Mr Hunt contained the following statement: “You are personally responsible for any payments that you may have to make under this agreement. Those payments are not limited by reference to the funds available in the liquidation.”

Judge Purle said that, on the evidence before him, Chief Master Marsh was entitled to enter summary judgment against Mr Hunt, and order him to make an interim payment to Stevensdrake of £75,000, in respect of counsel’s fees.

“Whatever the starting point, the plain words of the schedules to this CFA cannot be ignored. Correspondence from two years previously, or subsequently, cannot override those words.

“Mr Hunt’s responsibility under the CFA and its schedules was to pay the disbursements as well, as was conceded below.”

Judge Purle concluded that there was “no basis” on which he should set aside the order granting summary judgment. He went on to rule that on other issues regarding the fees, the action should proceed to trial.

He decided that the parts of the defence pleadings struck out by the Master should remain struck out.

“The Master, though he was plainly unimpressed by the defences advanced, allowed most of them to proceed upon condition of a payment into court of £100,000. It seems to me that he was plainly entitled, for the reasons I have given, to be unimpressed by the defences, and to proceed in that way.”

Judge Purle advised that “matters might look different” if a counterclaim for breach of fiduciary duty or undue influence was properly pleaded.

“Undue influence one thinks of as being there to protect the vulnerable and weak, but it is also there to protect those to whom fiduciary duties are owed, and the consequence may be, if the complaint is made good, that the CFA will be set aside, or compensation will be ordered.”

However, Judge Purle dismissed the defendant’s current appeal “in its entirety”. He said the “appropriate course” for defence counsel would be to reconsider his pleas in this light and for the revised pleading to be considered at a further hearing.




Call
Website
Email us

About us:

Pipkin: Peace of mind for clients

Posted by Laurence Pipkin, operations director at Litigation Futures Associate Temple Legal Protection

Four years ago, the government introduced fees of up to £1,200 for employment tribunal claimants under the premise of reducing the number of malicious and unmeritorious claims.

Until the Supreme Court struck them down earlier this year, there was much debate about them. In one corner, the objectors voiced their concern under the ‘access to justice’ banner; in the other corner, the supporters cited the cost to the taxpayer enfeebling the UK, post-recession.

Fast-forward four years and the results are now in: the tribunal system has seen a 70% fall in claims but little or no change in the division of outcomes.

Even the most ardent supporter of tribunal fees would be unwise to suggest that the dramatic fall was due to a 70% increase in employee satisfaction, or equitable improvement in employer behaviour.

The most recent report since the Supreme Court decision, produced by the National User Group of Employment Tribunals, indicates a significant increase in submission of ET1 forms since them, with some regions reporting a 100% rise.

This all supports the notion that the cost of tribunal fees negatively affected the majority of claimants, who have limited financial reserves and particularly in cases of dismissal. In short, they simply could not afford to make a claim with front-loaded fees.

For employers, their risk exposure has significantly increased since the ruling and they recognise this. A recent survey by the Confederation of British Industry found that 90% of businesses thought the Supreme Court decision would lead to a spike in “vexatious claims”.

For law firms, there is an opportunity to deliver a structured risk mitigation strategy. Forward-thinking firms appreciate the value of long-term successful partnerships with their business clients and this may no longer be achievable using the traditional case-by-case, retainer-based firefighting approach.

With Brexit looming, stability within the workplace will be increasingly important to ensure consistent growth and law firms must recognise that their business clients need to avoid unpredictable attacks on cash flow due to litigation.

A predetermined regular fee for a comprehensive package encompassing both protection and prevention is far more attractive. Employment lawyers can provide pre-emptive audit reviews of policy and practices, HR guidance, telephone and online support services as well as legal expenses insurance.

The benefits for the client are wide-ranging and centre on the peace of mind they get from knowing that, as the inevitable issues arise, the plans are already in place to provide a swift and cost-effective resolution by preventing protracted litigation, which has closed many otherwise strong businesses.

The benefits for the law firm are equally appealing: long-term relationships with business clients, a reduction in the need for fee-earners to lose valuable billing time chasing one-off cases, a predictable cash flow into the firm and regular work for trainees to focus on and develop knowledge.

The employment law market is changing again, how law firms respond to the changes may determine their success.




Call
Website
Email us

About us:
Dunn: demand is outstripping supply

Dunn: demand is outstripping supply

Harbour Litigation Funding has raised a new £230m investment fund adding to the £180m of predecessor funds it already advises.

Harbour Fund III will fund international arbitration, as well as litigation in common law jurisdictions.

Further, there are now no restrictions on the number of cases the company can fund internationally; it is already backing claimants in 12 jurisdictions, including eight class actions in Australia and two cases in New Zealand.

Harbour’s co-founder and head of litigation funding, Susan Dunn, said: “Demand for funding continues to outstrip supply of funding in the market. The fact remains there are still only a handful of funders in the world with access to meaningful sums available to fund disputes.”

In 2013 Harbour established its own after-the-event insurance syndicate and has recently launched a damages-based agreement product as well.

Meanwhile, Peter Rees QC of 39 Essex Chambers has joined Harbour’s investment committee. A solicitor for many years, he was previously legal director of Royal Dutch Shell, head of global dispute resolution at Norton Rose and a litigation and arbitration partner at US firm Debevoise & Plimpton.

The investment committee, which meets monthly to review and recommend Harbour’s cases for funding, is chaired by Sir Gavin Lightman and also comprises Blackstone Chambers’ Robert Howe QC, Hardwicke Chambers’ Nigel Jones QC and Harbour founder Martin Tonnby.




Call
Website
Email us

About us:

National leading legal costs specialist Just Costs Solicitors is delighted to announce a number of promotions across their three offices in Manchester, London and Chesterfield.

Those promoted to Senior Associate are: Adam Oldale, Regional Manager of the firms’ Chesterfield Office; Monique Passalaris, Regional Manager in London; Simon Wadlow, National Head of Business Development and Sam Hayman, Senior Costs Draftsman also in London.

In addition, Adam Quinn, Solicitor who undertook his training contact with Just Costs in Manchester has been promoted to Associate along with Solicitor/Senior Costs Negotiator, Charlotte Knight (Chesterfield).

Paul Shenton, Managing Director of Just Costs says “It is with great pleasure that we make these promotion announcements.  All reflect thoroughly justified reward for individual contribution that has played no small part in the continuing success of Just Costs Solicitors.”

Paul goes on to add “We are busier than ever and remain committed to the development of our staff  to ensure our business is well-placed to respond to the demand for expert legal costs advice and assistance from litigators across the UK.”




Call
Website
Email us

About us:

Tulk: CMCs left in the cold

A former Russell Jones & Walker partner is bidding to “reinvent” the medico-legal process in low-value personal injury claims with a new service that will “redress the imbalance which predisposes evidence to favour the instructing party”.

iSaaS Technology, co-founded by Adam Tulk, is working with the Association of Personal Injury Reporting Experts (ASPIREX), a new independent grouping of doctors working in the field.

The launch of ‘ePIsource Legal’ comes ahead of the Ministry of Justice consultation on whiplash, which will consider introducing independent medical panels to replace the current assessment of whiplash injuries either by GPs or by doctors employed by medical reporting organisations (MROs).

The new service uses web-based technology to support the administrative function carried out by MROs, separating the evidence procurement process from the expert analysis.

It effectively enables law firms to take on the administrative function of an MRO, using ePIsource Legal’s 4,000-strong medical expert panel, and make a profit from doing so if it is efficiently run.

This panel will be guided by ASPIREX, a non-profit independent association and the first of its kind for doctors doing this kind of work. It requires doctor members to submit to randomised peer review and continuous professional development through well-known expert witness training organisation Bond Solon.

iSaaS argues that MROs and the experts on their panels are too close to the instructing parties. “Current practices for obtaining whiplash medical reports can lead to allegations of biased, poor quality evidence, driven by the fact that medical experts have become reliant on MROs for their livelihood and MROs have a commercial relationship with the instructing party.

“These interdependencies can impact not only on the selection and training of experts, but also on the time available to the medical expert to produce high-quality forensic evidence. This combination significantly impacts the effectiveness of whiplash medical reports.”

iSaaS has worked with regulatory specialists from national law firm Weightmans to ensure ePISource Legal is compliant with both the upcoming ban on referral fees – which will cover the instruction of medical experts – and the Solicitors Regulation Authority’s Code of Conduct. Accountancy firm Baker Tilly has also assisted in its development.

Mr Tulk said that under outcomes-focused regulation, law firms are now responsible for the “entire customer experience”, and report that MROs are the “weak link”.

He acknowledged that MROs perform “an important role in administering and improving efficiency in the acquisition of medical evidence”, but said the link between the instructing party and the expert panel must be severed. “It is not the role of the MRO to be training, peer reviewing or selecting the medical expert panel. Any attempt to do so by MROs, or their trade body, will simply perpetuate the potential for bias because of the obvious commercial interests at play.”

The service leaves claims management companies that currently receive commissions for using particular MROs “in the cold”, Mr Tulk said; it is already processing 3,000 reports a month. Down the line he raised the possibility of the ‘blind’ instruction of experts to add to the sense of independence. iSaaS was co-founded by Dr David Pearce, a former chairman of the Association of Medical Reporting Organisations.

  • Leading MRO Premex Services has launched a dedicated brand to support professionals handling the most complex personal injury cases. Premex Plus delivers enhanced features such as specialist reports, pagination of medical records and tailored clinical assistance.

    In addition to personalised support delivered by a specially trained team of case handlers, Premex Plus customers have access to a variety of new benefits including in-house nursing support, recruitment of specialist medical experts and dedicated expert panels with specific knowledge in complex areas such as occupational disease and clinical negligence.

 




Call
Website
Email us

About us:

Heskins: MedCo promotion

A structural change at MedCo kicks off our round-up of a series of significant appointments in the world of litigation.

Martin Heskins has been named as MedCo’s executive chair with responsibility for leadership and strategic direction.

Mr Heskins, formerly general manager of MedCo and before that civil justice policy adviser at the Law Society – where he was the society’s MedCo director – replaces Lorraine Rogerson.

In a statement, MedCo said that in line with its articles of association, Ms Rogerson opted to step down as independent chair in December 2016, after a two-year tenure that saw the portal’s launch and implementation of the revised qualifying criteria published by the MoJ in October 2016 to stop the creation of ‘shell’ medical reporting organisations.

Further, Leigh Evans has been appointed to oversee MedCo operations with responsibility for system functionality and user experience. Mr Evans is employed by the Motor Insurers’ Bureau, which is the appointed service provider to MedCo.

Elsewhere, there has been a major shake-up at the Centre for Effective Dispute Resolution (CEDR), with Dr Karl Mackie – who has been chief executive since it was created in 1990 – becoming founder president. It will be recruiting a new chief executive.

In a statement, CEDR said: “This new role reflects the unique contribution that Karl has made to CEDR over many years. It will allow him to concentrate both on CEDR’s Foundation activities to innovate in dispute resolution and on his prestigious mediation practice.”

Further, deputy chief executive Eileen Carroll will take on a new role as principal mediator and co-founder, enabling her to work exclusively in her mediation practice.

Dr Elizabeth Vallance, CEDR’s chairman, said: “Karl has been synonymous with CEDR since its inception, making an unparalleled contribution not only to the organisation but to the professional development of mediation and alternative dispute resolution, both in the UK and internationally.

“His experience and knowledge of the area will give a real boost to CEDR’s strategic ambitions and we look forward to working with him in this important new role.”

Dr Mackie said, “It is rare that you get to change jobs whilst still doing what you love and working with colleagues that you respect and admire. So I am thrilled that this move to become CEDR’s founder president will allow me to expand my dispute resolution practice and also to focus more on thought-leading and ground-breaking initiatives.”

The NHS Litigation Authority (NHSLA) has appointed Mike Pinkerton as a non-executive director to its board. He steps down as chief executive of Doncaster and Bassetlaw Hospitals NHS Foundation Trust at the end of this month after nearly five years, and also completing 20 years as an NHS board director.

It follows the appointment of Dr Mike Durkin, NHS national director for patient safety at NHS Improvement, as an associate non-executive director to its board so as to provide expert knowledge of patient safety in general, and national patient safety initiatives undertaken by NHS Improvement in particular.

Ian Dilks, chairman of the NHSLA, said the appointments “reflect our commitment to working collaboratively with other parts of the NHS to improve patient safety”.

Finally, third-party litigation funder Vannin Capital has named Sir Andrew Smith QC, who retired from the High Court bench last October, as a new member of its investment committee.

A former judge in charge of the Commercial Court, he will continue to sit as a deputy High Court judge, is appointed as a judge to Abu Dhabi Global Market Courts and will sit as an arbitrator.




Call
Website
Email us

About us:

Bogart: range of innovative investment structures

Burford Capital has made an £6.6m profit on a £9m investment in an innovative arrangement that saw it provide a corporate debt facility linked to an arbitration claim.

The third-party funder said the deal “expands the potential of the litigation finance market” by showing it is not just about non-recourse financing to bring litigation.

The facility – agreed in 2012 – enabled Rurelec plc to monetise the value of its arbitration claim and obtain a conventional, fully recourse £9m senior loan from Burford at a 12% capitalised interest rate, lower than would otherwise have been available in the debt markets.

It also included a contingent value right to receive a portion of the ultimate arbitration award, expressed on a sliding scale based on time and amount.

Burford said the result was that Rurelec received the capital it needed at a reasonable price, and was able to monetise a contingent asset (its arbitration claim) for which its lenders and shareholders were not giving it financial credit. Meanwhile, Burford was able to earn “appealing returns in a transaction with lower risk of loss”.

Rurelec, an AIM-listed owner, operator and developer of power generation capacity internationally, did not need the money to pay its lawyers – it used the Burford facility to expand its business while awaiting the outcome of the arbitration.

This concerned the Bolivian government’s decision to nationalise Rurelec’s controlling stake in a Bolivian power company. Last month, the Bolivian government paid £19m in compensation.

Out of this the company repaid the £9m loan to Burford, as well as a further £6.6m.

Rurelec’s chairman, Colin Emson, said: “We were able to use the pending arbitration claim to obtain innovative corporate financing from Burford that lowered our cost of capital and helped our business expand. The ability to monetise a pending claim is something that we could only have achieved with Burford.”

Christopher Bogart, Burford’s CEO, said: “Litigation finance is too often thought of in its most basic form, which does not reflect the range of innovative investment structures we are able to utilise.”

Rurelec was represented by Freshfields Bruckhaus Deringer in the arbitration proceeding and by Skadden Arps Slate, Meagher & Flom in the financing transaction. Burford performed its own internal evaluation of the arbitration claim, and was represented by Latham & Watkins in the financing transaction.




Call
Website
Email us

About us:

Burcher Jennings200Law firm pricing, costs and funding specialist Burcher Jennings is expanding its Manchester team today with the addition of expert costs lawyer Mathew Bell and a move to new premises in Wilmslow.

Nationally, the firm now has the largest concentration of costs lawyers in the country. The announcement comes on the day new research from the legal sector regulator the Legal Services Board revealed a rise in “DIY justice” as concerns and a lack of clarity over law firm costs is increasingly driving clients away from high street law firms.

Burcher Jennings opened its Manchester operation in January 2016, and is already expanding to meet demand from North of England law firms for the kind of holistic approach to pricing, costs and funding that can both improve certainty over legal pricing and service for clients, and boost long-term profitability for law firms.

Experienced costs lawyer Mathew combines experience in commercial litigation, clinical negligence, catastrophic injury, Court of Protection and solicitor & own client disputes, together with costs management and negotiations.

The Manchester office has grown swiftly as a result of the head of the Manchester team Victoria Morrison-Hughes’ broad range of experience, having worked exclusively in a city centre legal practice, in addition to 18 years providing specialist support on legal costs to a wide range of law firms in the North West and across the country.

Mathew adds further to this unique combination of insight into the operational and technical demands of a legal business.

Victoria Morrison-Hughes, head of the Manchester office and winner of ‘Costs Lawyer of the Year’ in the 2016 Women in Law Awards, said:

“With an ever growing team there is a great deal we can contribute to the practice and potential of local law firms in the Manchester area. Burcher Jennings is an innovative force in helping firms transform costs, pricing and funding practices in order to boost profitability and achieve a competitive edge.”

Martyn Jennings, CEO of Burcher Jennings, added:

“We are proud to see this regional centre of excellence expand to meet demand and are looking forward to Mathew enhancing the team.

“As a national firm we are growing swiftly but the focus on consistently providing insightful and high quality advice and services on issues, such as maximising costs recovery and positive, profitable pricing, is fundamental to every new region we venture into.

“We look forward to continued growth over the next 12 months, in Manchester and beyond.”




Call
Website
Email us

About us:

Truss: we need a system that works for all

The government today launched its promised consultation on how the discount rate should be set in the future, and has given just six weeks for responses.

Among the issues on which it is canvassing views is whether the rate should be set on the basis that claimants who opt for a lump sum over a periodical payments order (PPO) should be assumed to be willing to take some risk – the rate is currently set on the basis of claimants with no risk appetite.

The consultation follows the outcry from insurers and some politicians about the new rate of -0.75% set by Lord Chancellor Liz Truss, which came into force last week – it has led to warnings of increased insurance premiums, while the government put an extra £6bn aside to cover the NHS’s extra costs over the next five years.

The consultation asks for views on whether the rate should in future be set by an independent body, whether there should be more frequent reviews, whether there should be more than one rate, and whether the methodology – which in effect assumes that claimants would invest only in virtually risk-free index-linked government stock (ILGS) – is appropriate for the future.

The consultation includes a call for evidence on how investors in the position of personal injury claimants are likely to invest, and explores what an appropriate investment risk profile could look like for such investors, along with what the effect would be of moving from the current virtually risk-free model, to a low-risk model.

In a statement to Parliament, Ms Truss said: “We must have a justice system that works for all. I fully recognise the impact that the discount rate has, not just on claimants (including some of the most vulnerable in society), but also on defendants in both the public and private sectors, and the further impact this has on consumers’ insurance premiums and taxpayers.”

On PPOs, the consultation suggests that “if the basis of the setting of the discount rate were to be changed so that the rate is to be set by reference to riskier investments than at present, the ability of a claimant who has a lower risk profile than that assumed for the purposes of setting the rate to take a periodical payment could be a way for claimants to avoid the additional risk…

“If PPOs are offered and claimants do reject them in favour of a lump sum, there would be a strong case for saying that the offer of the PPO should have an effect on the discount rate, but the very availability of a PPO in principle as a means of receiving risk free compensation might itself mean the discount rate should be affected.”

Huw Evans, director general of the Association of British Insurers, said: “This consultation document is an important step forward in helping get a fair, modern way to set the discount rate which works for claimants, consumers, businesses and taxpayers.

“Only a month after the setting of an absurdly low rate, the government has moved swiftly to consider reform and we need to see this urgency maintained with a firm commitment to legislate in the Prisons and Courts Bill currently before Parliament.

“As the only major economy in the world with a negative rate, the UK will face significantly increased insurance and taxpayer costs until the system is reformed and a new rate can be set.”

Stuart Henderson, managing partner of personal injury at Irwin Mitchell, said: “Whilst we regret the period of uncertainty that this further consultation will bring, we do recognise the desire to create a methodology that provides for regular review ensuring that market changes are properly reflected.

“We will consider the consultation document carefully and respond in due course, whilst reflecting on the fact that government has already consulted on the underlying principles behind the setting of the discount rate in 2012 and 2013 and took no steps to change the present approach as a result.

“It is worth reminding ourselves that the reason that the change in rate was so significant was because the revision was long overdue.”

Mr Henderson also called on the Ministry of Justice to create “a period of absolute certainty” about the application of the current rate until the review is completed.

He explained: “They should also publicly challenge those insurers who are using every possible tactic to delay the resolution of cases in the hope of a better outcome on the discount rate following the consultation. The judiciary need to be aware of what is happening and be prepared to intervene to push cases forward and apply the current law.

“Present delays and tactical moves by some insurers are damaging to seriously injured individuals, disruptive to the administration of justice and highly likely to add to costs in the legal process.”

Neil Sugarman, president of the Association of Personal Injury Lawyers, said: “It was very important that the rate was reduced because people with serious, life-changing injuries were not receiving the compensation they desperately need.

“Having said that, we are always prepared to be involved in constructive debate and so we will be responding to the consultation. Following the insurance industry’s hysterical response to the recent rate change, we are also very encouraged by the Lord Chancellor’s obvious commitment to the fact that injured people must receive 100 per cent compensation – no more, no less.”




Call
Website
Email us

About us:

Dalton: significant change to rate would be reckless and wrong

The Association of British Insurers (ABI) legal bid to stop the Lord Chancellor announcing any changes to the discount rate has come to an end, it confirmed yesterday.

However, the Ministry of Justice said this morning that the decision would not come down on 31 January, as had been promised.

Having last week been denied permission to apply for judicial review, it has now been refused permission to appeal that decision, as well as an interim injunction to stop the announcement.

But in a statement to the London Stock Exchange this morning, the Ministry of Justice said: “On 7 December, the Lord Chancellor informed the market that the result of her review of the discount rate for personal injury claims would be announced by 31 January, following consultation.

“This has taken longer than anticipated, so it is not yet possible to make an announcement. However, the Lord Chancellor remains committed to making an announcement in February.”

James Dalton, director of general insurance policy at the ABI, said yesterday, following the appeal decision: “We are disappointed to have lost our appeal today on the discount rate. We will, however, continue to make very strong representations to the government that a significant change in the discount rate now would be reckless and wrong, hurting consumers, business and the NHS.

“While it is vital that claimants get the compensation they are entitled to, this has to be done on the right basis.”

The insurers brought the judicial review in the wake of the Ministry of Justice revealing last month – in response to judicial review proceedings started by the Association of Personal Injury Lawyers (APIL) – that the outcome would be known by the end of January.

The ABI argued that the government has not completed the underlying work needed to reach a conclusion, and had not shared any of the findings of two public consultations conducted in 2012 and 2013, or of the expert panel it convened.

It said that without changing the methodology behind setting the rate, the Ministry of Justice review would take a flawed approach based on “a fundamental misunderstanding of how people invest their compensation”.

The discount rate is the rate of return to be expected from the investment of a lump sum award of personal injury damages for future loss, and applied to the lump sum to ensure a claimant is not over-compensated.

Insurers are clearly worried that the rate is going to be reduced next week, which would increase the payouts they have to make. It has been 2.5% since 2001, largely by reference to yields from index-linked government gilts. This is on the basis that claimants would seek low-risk investments.

However, the low rate of return prompted calls for it to be changed and APIL, which was an interested party in the ABI’s case, said its calculations put the correct rate at between -0.5% and -1% based on gilt markets on 31 October 2016.

Insurers argue that in reality claimants invest in mixed portfolios that generate higher yields than gilts.




Call
Website
Email us

About us:

Neuberger: litigants-in-person changing role of judges

If a career on the bench is not made more attractive financially, the rule of law could be undermined, and with it lucrative industries vital to post-Brexit economic prosperity, the departing president of the Supreme Court has warned.

He also reported that the rise of litigants-in-person (LiPs) in civil and family cases was pushing judges to adopt an ever-more “inquisitorial, civil law function”, leading to longer hearings and delays.

Lord Neuberger, who is due to retire from the bench in the autumn, sounded the alarm during a speech earlier this month reflecting on his two decades as a judge – the Neill Lecture 2017.

He said the number of barristers who shunned a career as a judge was growing. While appointment to the senior judiciary was still “immensely rewarding”, the heavy workload together with “the increasing gap between judicial pay and the reward of successful private practice means that appointment to the High Court is significantly less attractive than it was”.

Figures released recently by the Bar Council – first highlighted by Legal Futures – showed that more than 2,500 of the nearly 16,000 practising barristers earn more than £240,000 a year gross. High Court judges take home an annual salary of around £180,000.

Lord Neuberger continued: “The proportion of refuseniks is increasing, and while it is not yet, it could become a real problem if it continues.

“The concern is not only that it will undermine one of the two fundamental pillars of our society, the rule of law, if we do not have a first-class judiciary.

“It is also because a first-class judiciary underpins the whole financial and professional services industries which are so vital to the fortunes of this country, perhaps particularly in the post-Brexit world.”

He recommended the judiciary should look beyond the independent Bar and recruit from among “solicitors, employed lawyers, academics and any other group where one could realistically expect to find potential judges”.

However, while “the serving judiciary should be encouraging members of under-represented groups… to apply”, merit should remain the “ultimate standard” for selection as judges. He added: “To dilute the quality of our judiciary would be to erect a milestone on the road to perdition.”

Lord Neuberger warned that the rise in LiPs in civil and family cases, as a result of shrinking legal aid and high litigation costs, presented a “real risk of this reducing access to justice, the quality of justice, judicial well-being and court efficiency”.

He went on: “It remains to be seen what the long-term effect of the increase in [LiPs] will be, but it has already started drawing judges into assisting or at least focusing on [LiPs], but this involves getting off the umpire’s chair and stepping onto the court.

“This leads to longer hearings, which in turn leads to more delays in other hearings.

“Furthermore, with the Woolf and Jackson reforms and their equivalents in the Family Division, judges in this country may be developing an ever-increasing inquisitorial, civil law, function.”

He questioned the value of disclosure of documents and cross-examination of witnesses to the final result of cases, given how much they added to the cost of litigation. But he admitted his scepticism was founded on “impression and experience”, and expressed the hope that “statistically reliable analysis” might support the proposition if a “practically feasible experiment” could be devised.

In a wide-ranging speech beginning with recollections of his earliest days after elevation the bench, Lord Neuberger said that while he found the transition from “poacher to gamekeeper” straightforward, it was lonelier than being a barrister in chambers.

Running a trial required qualities such as “grip, authority, politeness, fairness, and an ability to simplify and an ability to express yourself”. He added: “In many ways, running a trial is like chairing a rather tense and rather formal meeting.”

He stressed that the Supreme Court had been careful to maintain “an appropriate balance between judicial intervention and judicial restraint”. In particular, in the recent Miller case on Brexit, among other cases, it had been “at pains to emphasise the fundamental importance of parliamentary sovereignty in the UK’s constitutional arrangements”.

He also highlighted the value to the Supreme Court of legal arguments between judges out of court, even suggesting that where all the judges appeared to agree on a case, it may be worth appointing a judge as devil’s advocate to produce a draft dissenting judgment – “for the purpose of maximising the quality of the ultimate judgment of the court.”




Call
Website
Email us

About us:
Bogart: lack of correlation between returns and business cycle

Bogart: lack of correlation between returns and business cycle

Burford Capital has announced that it is leaving the after-the-event (ATE) insurance market after announcing strong results for its litigation investment business – but it is looking to help create a secondary market in third-party funding.

In its interim report for the first six months of 2016, the AIM-listed company also predicted that it would benefit from litigation arising from Brexit and the weakening sterling exchange rate.

Burford entered the ATE market in 2012 and continued after the Jackson reforms, “although at levels far below our pre-Jackson volume”.

However, its underwriter, Munich Re, “has notified us that it is moving its insurance business to a new operating platform, and for us to continue to write new business would require a significant investment in technology and systems to be able to utilise that new platform”.

The report said: “We have concluded that the level of attractive demand for new UK after-the-event insurance is insufficient for us to make that investment, and we will thus cease writing new insurance business at the end of the year.

“We will, of course, continue to manage the insurance business we have already written, which as we discussed in our most recent annual report is expected to contribute many millions of dollars of future income to Burford, further augmenting the terrific return on investment the Firstassist acquisition has already delivered for us.”

ATE insurance accounted for $5.1m of Burford’s $76m income for the first half of 2016 – down from $6.5m in the same period last year.

The overall income figure was up 88%, driven by a 110% increase in income from litigation investment to $64m. Burford recorded a 117% increase in operating profit to $62m and a 123% increase in profit after tax to $53m. It generated $99m in cash proceeds in the period.

The company also made a record level of new commitments to investments – $193m – more than 90% of which was in portfolio and complex structures, rather than individual cases.

The report revealed that Burford has also started to lay off its risk by selling off portions of its investments to third parties.

It said: “We do think that some secondary market activity is likely to develop as more capital becomes aware of litigation finance and we intend to be in the vanguard of establishing such a market.

“We view the ability to originate transactions and then sell participations in them as a way of managing risk (especially in larger or riskier investments) and enhancing capital efficiency as well as potentially opening up additional avenues for us to earn income.

“Thus, in the current period, we closed one secondary market transaction, in which we sold a portion of our investment to a third-party investor at a gain and at a price that suggested the value of the majority of the investment that we retained was worth more than its carrying value, and we had an offer (which we did not accept) to sell a portion of another investment at a similarly enhanced value.

“That third party market activity resulted in valuation adjustments because it established arms-length values for the assets concerned.”

The report said Brexit has a “generally positive impact” on the company.

“Substantively, Brexit will give rise to significant uncertainty for businesses, and demand for legal services tends to flourish during periods of uncertainty, boosting our business collaterally. There is likely to be more litigation as a result of Brexit, and there is no catalyst for any reduction in the volume of litigation.

“There is also no negative impact on any pending or future litigation from the UK’s potential or actual exit from the EU except for some possible additional complexity around enforcing English court judgments in Europe, although we expect any such issues to be resolved through negotiation and if not to be a boon for our judgment enforcement business.

“A further substantive positive is that the decline in the value of sterling makes UK courts and arbitral institutions (and the UK lawyers who practise in them) somewhat more economically competitive globally, which we would expect to be good for our business. Burford is also generally a beneficiary of a weaker sterling rate of exchange with the United States dollar.

“Given the recent decline in the value of the GBP, especially against the USD, Burford’s USD-denominated income, assets and dividend payments will be worth more to shareholders given that our equity is quoted in GBP.”

Burford chief executive Christopher Bogart said: “During one of the most volatile financial market periods for many years, Burford has continued to grow strongly and profitably, significantly enhancing shareholder value. Together these results underscore our ability to generate cash from litigation finance investments without regard to economic or market conditions, underscoring the lack of correlation between Burford’s returns and the business cycle.”




Call
Website
Email us

About us:

Achieving a solution by mediation can work, says HMRC pilot

Alternative dispute resolution (ADR) in large or complex tax cases has helped resolve disputes worth £58m but works best when people with the seniority to make decisions are involved, an evaluation of an HMRC pilot has found.

Overall the assessment was positive. The pilot involved disputes covering the spectrum of tax regimes and actual cases involved issues such as qualification for relief, share awards, employee benefit trusts, and determination of profits.

The overall time taken for cases in which ADR achieved a resolution was 24 weeks, compared to 34 weeks for those where ADR failed. Where no ADR was attempted and an appeal was made to the Tribunal Service, the average time taken for the appeal to be heard was 70 weeks.

Cases otherwise destined for adjudication at tribunal were accepted for ADR by an internal HMRC panel – which included the agency’s general counsel and the head of its dispute resolution unit – in about two thirds of cases.

When applications were rejected, it was mainly either because a tribunal date was approaching or because the case involved a ‘red line’ issue for HMRC that needed to be adjudicated.

Of the 28 cases where ADR was used, all but two of them were by facilitated discussion and the remainder by external mediation.

The evaluation concluded that “ADR and structured, facilitated discussion is a useful tool in resolving entrenched disputes” and could be carried out either by external mediators or trained HMRC people. But it found that success in resolving a dispute by ADR was more likely if a tribunal hearing was some way off.

It continued: “To get the best out of a facilitation or mediation day, the right people have to be present with the seniority to make decisions for the customer and HMRC. They may be empowered to reach a binding decision on the day or to agree a proposal which they will recommend to their appropriate governance bodies.”

While it conceded there were difficulties in quantifying cost and time savings from the use of ADR, the evaluation concluded: “Qualitatively, HMRC are confident that they have made significant savings in both cost and time in resolving disputes through the ADR process for both HMRC and the customer.”




Call
Website
Email us

About us:

High Court: part 36 hurdle

A case in which £7m in legal costs were racked up over a dispute worth £904,000 is “an appalling state of affairs which brings no credit to modern commercial litigation”, a High Court judge declared yesterday.

Mr Justice Eder’s ruling also highlighted the “formidable obstacle” that a party has to climb to upset the usual consequences of failing to beat a part 36 offer.

He said the costs in Ted Baker Plc & Anor v AXA Insurance UK Plc & Ors [2014] EWHC 4178 (Comm) had “spiralled both in absolute terms and out of all proportion to the amount which was then in dispute”.

The trial had been in two parts, with part 1 establishing the defendants’ potential liability but part 2 then rejecting the claimants’ case. This ruling dealt mainly with the cost consequences of a series of part 36 offers made by the defendants and whether the fact that the claimants were successful in part 1 and on some elements of part 2 should change the usual order that would be made.

Adopting the observations of Briggs J in Smith v Trafford Housing Trust [2012] EWHC 3320, Eder J said that “where a claimant fails to beat a defendant’s part 36 offer, the court is, in effect, required to make the order specified with regard to costs and interest unless it considers it unjust to do so; and although there is no limit to the types of circumstances which may, in a particular case, make it unjust that the ordinary consequences set out in part 36.14 should follow, the burden of showing such injustice is a ‘formidable obstacle’”.

He continued: “It follows that the real question, in my view, is whether the claimants can show any relevant ‘injustice’ so as to displace the general rule, bearing fully in mind that the burden of doing so is a ‘formidable obstacle’.

“In this context and without seeking to lay down any hard and fast rules, it seems to me that where a claimant fails to ‘beat’ a part 36 offer made by a defendant, the mere fact that such defendant may fail on certain issues would not necessarily of itself make it ‘unjust’ to displace the general rule under part 36 and to require the claimant to pay the costs from the date on which the relevant period expired and interest on such costs under part 36.14(2).

“However, on the other hand… it seems to me that the fact that a defendant may make a part 36 offer does not give such defendant carte blanche to run any defence whatsoever so as to entitle such defendant necessarily to expect that the CPR part 36 consequences will automatically to apply to those issues on which such defendant lost.”

In this case he decided that it was unjust within the meaning of part 36 to require the claimants to pay the entirety of the costs of part 1. The central issue in part 1 concerned the proper construction of the successive insurance policies which could and should have been dealt with during a short trial of perhaps one or two days.

“Instead, the defendants pursued an approach which… left ‘no stone unturned’ and seemed to ignore all sense of proportionality.” As a result, the trial took an “inordinate” seven days.

Eder J ruled that the defendants should be entitled to only 25% of their costs of part 1. But the claimants did not overcome the “formidable obstacle” to reduce their liability in relation to part 2 of the case.




Call
Website
Email us

About us:

Grant: government does not wish to commit to a formal review

The government has no plans to assess the effect of next month’s changes to the RTA scheme before introducing further reform, justice minister Helen Grant has confirmed. examboom.com

Meanwhile, the Law Society yesterday published its new model conditional fee agreement (CFA), although it is not yet clear when a model damages-based agreement (DBA) will be completed. 640-822 exam

Labour MP Meg Munn asked in Parliament whether there are plans to make an assessment of the changes being made in April 2013 to the RTA portal before introducing further reforms.

Ms Grant replied that there are no current plans. “The government is prepared to review and assess the effectiveness of the scheme should evidence be provided to demonstrate that this is necessary,” she added. “However, the government does not wish to commit to a formal review at this stage.”

Ms Munn also queried what steps have been taken to improve insurers’ use of the portal. Ms Grant said: “As part of the forthcoming extension of the RTA scheme, incentives have been provided for both insurers and claimants to keep claims within the scheme through to settlement.

“These include provisions in the pre-action protocols which will support the extended scheme, and the introduction of a revised and expanded scheme of fixed recoverable costs.”

The Law Society’s model CFA, accompanied by “interim” advice, came with a warning that it is “not a precedent for use with all clients and that it will need to be adapted/modified depending on the individual clients’ circumstances and solicitors’ business models”.

Asked at yesterday’s Law Society council meeting about the timing of publication so close to the start of the new CFA regime, chief executive Des Hudson blamed the delays in finalising the rules, but he accepted that the society could have done more to keep solicitors up to date on progress with the model CFA.

He said the society would consider doing this in relation to the work on the model DBA.




Call
Website
Email us

About us:

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

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

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

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

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

Michael Walker, Founding Partner of JPS Walker, comments:

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

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




Call
Website
Email us

About us:
Rowles-Davies: minimal due diligence

Rowles-Davies: minimal due diligence

Third-party funder Burford Capital has turned its attention to the SME market by launching a funding option for claimants pursuing cases valued between £25,000 and £500,000.

Primarily aimed at disbursement funding, its ‘Sprint’ product will be marketed and administered exclusively by broker The Judge.

The “straightforward” criteria for the non-recourse funding are a damages to budget ratio of at least 4:1, approved after-the-event (ATE) insurance for the sums funded in place, and sufficient adverse costs cover in place.

Burford’s UK managing director, Nick Rowles-Davies, told Litigation Futures that Sprint is based on the company’s experience of ATE, rather than traditional third-party funding principles.

“The product came about because of issues raised in the market over how traditional funding is difficult and unwieldy when dealing with lower-value cases,” he explained.

In particular, the due diligence process took too long, the pricing process was too lengthy, the pricing was too high and “the experience from start to finish was unwieldy and painfully slow”.

Mr Rowles-Davies said: “We operate minimal due diligence. We simply check the costs to damages ratios and sense check the proposal to ensure it meets our criteria. We do not spend months on due diligence or seek extensive exclusivity periods. That does not work with these cases.

“A prerequisite for Sprint is an acceptable ATE policy. We rely primarily on the underwriting carried out by the ATE insurer. These underwriters have very good historic performance and we do not need to second guess them. Accordingly, with ATE in place, the process from application to receipt of funds can be only a few days.”

The pricing is from a rate card and is time based, so the quicker the case ends, the lower the cost, starting from around half of the money borrowed to 1.5x.

Mr Rowles-Davies described Sprint as “a simple product which fills a gap in the market where there is a significant need”. A short three-week trial had generated dozens of inquiries, he said, including a number of cases where clients need extra funds to cover experts or counsel trial costs.

He added that it would help with those cases that do not secure ATE because the insurer is unconvinced that the client will have the money to fund the disbursements.




Call
Website
Email us

About us:

Supreme Court: February hearing

Applications for adjournments of costs assessment until the Supreme Court’s decision in Coventry v Lawrence are rightly being given “short shrift”, the Senior Costs Judge has said.

Andrew Gordon-Saker also suggested that the future of guideline hourly rates could be in doubt if there is insufficient enthusiasm for a second ‘expense of time’ survey.

In February the Supreme Court in Coventry will consider whether the pre-Jackson regime of recoverable additional liabilities was incompatible with the Human Rights Act.

Speaking at the Association of Costs Lawyers’ conference in Manchester last week, Master Gordon-Saker said: “Inevitably in a considerable number of the detailed assessments that have taken place since the end of July [when the Supreme Court flagged up the issue], paying parties have been asking for an adjournment of the assessment of any additional liabilities claim until the Supreme Court’s decision is made. Similarly parties ordered to pay costs at the end of a hearing have been asking for the question of their liability to pay additional liabilities to be adjourned.

“These applications, I understand, have been given short shrift. Additional liabilities are recoverable under primary legislation. If that primary legislation is incompatible with the Human Rights Act, that should not affect recoverability as between the parties, although I know that there are arguments to the contrary.”

The judge said he suspected there would only be another survey of solicitors – to inform new guideline hourly rates – if a better response rate could be guaranteed this time around; it was the failure to gather sufficient evidence that meant the Master of the Rolls decided not to accept the Civil Justice Council’s costs committee’s recommendations to increase the rates.

Supporting the existence of the rates, Master Gordon-Saker said: “In the meantime, we carry on with the 2010 rates, with the important but limited changes approved by the MR. If we do not have another survey, then the future of guideline rates is questionable.”

In a wide-ranging speech, the Senior Costs Judge said fixed costs for all fast-track cases were “inevitable” but he felt it would be too hard to set fixed costs for the wide range of cases at the lower end of the multi-track.

He also revealed that the Senior Courts Costs Office is turning around provisional assessments in around 18 weeks, with little prospect of it being able to hit the six-week target because of court resources.

He said: “You will still get a bill provisionally assessed before you would get a detailed assessment, so you may think that’s something of an advance. Our experience is that there are few requests for an oral hearing, so generally provisional assessment is it.

“The vast majority of cases the parties are accepting the figure allowed on provisional assessment. So to that extent, despite the delays, it could be said that the system is working.”




Call
Website
Email us

About us:
Colin Griffin

Griffin: claims “plummeted” after hike in court fees

Kings Chambers has launched a new arbitration service, with its own website, in what is believed to be the first move of its kind.

Kings Arbitration Service (KAS) offers clients a range of fixed fees, starting at £3,000 for a paper arbitration of a dispute worth less than £1m.

Colin Griffin, chief clerk at Kings Chambers, said KAS, launched yesterday, was unique in covering “the whole of litigation” rather than particular sectors.

Mr Griffin said court cases had “plummeted” since issue fees hit £10,000 for claims worth £200,000 or more.

“This is cheaper, quicker and more efficient,” he said. “Many people will still want to go to court, but it’s an alternative.”

Mr Griffin said that at a time of “spiralling costs”, clients were increasingly looking at more cost effective ways to resolve their disputes, and there were “strong rumours” that court fees would double in the “foreseeable future”.

He went on: “There are also fees to be paid to the Court Service each time an application is made and again when the case is set down for trial.

“The culture adopted by the courts has the effect of increasing costs at every juncture. Requiring mediation to be undertaken even if the parties consider there is little point to avoid being penalised in costs is a perfect example.

“We feel we’re approaching the process of litigation in an entirely new way. We want to see litigants accessing justice in a cost-managed and efficient way allowing them to pursue claims without the hindrance of large potential costs or lengthy compliance procedures.

“A reduction in costs, bureaucracy and other factors is clearly in the interests of both claimants and defendants.”

Arbitrators in the scheme included former Court of Appeal judge Sir Maurice Kay, former senior circuit judge His Honour David Gilliland QC, and QCs Paul Chaisty, Lesley Anderson and David Casement.

The fixed-fee system organises arbitrators into bands, with a top fee of £8,500 for a two-day arbitration with a ‘category A’ arbitrator. Kings, which is based in Manchester, Leeds and Birmingham, will host arbitrations in chambers or at a venue chosen by the parties.

Mr Griffin added that if the new service took off, other arbitrators would be invited to join.




Call
Website
Email us

About us:

Dubai: expansion for the LCIA

Parties to international commercial arbitrations are pressurising providers to deliver greater cost efficiencies and exploring other forms of alternative dispute resolution, the head of the London Court of International Arbitration (LCIA) has reported.

However, the continued rise in popularity of international arbitration suggests that a boom in arbitrated disputes after the global economic downturn of 2008 was part of a general upward trend, said Adrian Winstanley, the court’s director general.

He made the observations in the wake of an announcement that he is to step down next year to pursue a career as an independent commercial arbitrator. The move will end a 17-year career with the LCIA, which he first joined as registrar in 1997 from practice as a solicitor at Clifford Chance.

Speaking to Litigation Futures, Mr Winstanley said that despite the upward trend, there was “no room for complacency in the field of arbitration”. But while litigation was an “attractive option” in competition with arbitration, the majority of cross-border transactions was likely to include a provision for commercial arbitration on the basis that “neither contracting party will want to find itself in the courts of the other”.

Parties were expecting more from arbitrators, he said. “Something I've noticed on the back of the economic downturn and the arbitration boom [is that] parties are looking to have ever more efficient, ever more cost-effective services from the arbitration providers. They are looking also at alternatives [such as] mediation, dispute resolution through dispute review boards, dispute avoidance, and so on.”

He said the number of arbitrations had been increasing slowly for many years, followed by a predictable surge as a result of the economic downturn – in which the number of disputes referred to the LCIA doubled between 2007 and 2009. “When we saw this bubble coming on the back of the collapse in 2008/2009, we thought there might have then been a falling away. But in fact our figures have held up extremely well after a plateauing, and that does suggest indeed that there is an underlying upward trend.”

In 2012 a total of 265 arbitrations were referred to the LCIA, 18% more than in 2011. An all-time high of 285 arbitrations were referred in 2009. The single largest area giving rise to referrals in 2012 was commodity transactions, at 16%, followed by loan or other financial agreements (11%) and joint ventures and shareholders’ agreements (9%).

Mr Winstanley, who will step down on 30 June 2014, said the LCIA’s recent overseas activities, involving joint ventures in Dubai, Mauritius and South Korea, and opening offices in India, were “a recognition, I think, of the growing sophistication in arbitration in other jurisdictions”.

He pointed out that around 85% of LCIA-arbitrated disputes involved no English party, adding that while London was an “attractive place to be arbitrating a dispute, you have to recognise the realities of the world in which we are operating”.

The move into other jurisdictions was “natural” and a reflection that parties based in Asia or Africa could not always come into London for their arbitrations.

He continued: “We are competing in a global market and you should be able to take the LCIA rules and apply them elsewhere with different governing laws, different procedural laws, different venues and so on.”

Mr Winstanley was awarded an OBE this year for services to international arbitration. Bill Rowley, QC, chairman of the LCIA’s board, said: “The fact that the LCIA has become one of the few truly global arbitral institutions is due in very large part to Adrian’s tremendous leadership, commitment to excellence, and the exercise of great judgement over the past 17 years.”




Call
Website
Email us

About us:
Coming inside the budget does not prevent further cuts, says judge

Coming inside the budget does not prevent further cuts, says judge

The budgeting regime does not fetter the powers and discretion of the judge at detailed assessment even if the receiving party comes in within the budgeted figures, a regional costs judge has ruled.

However, in a significant decision, District Judge Lumb in Birmingham urged greater co-operation between parties so that a far more accurate budget is prepared in the first place.

The judge, who is also a specialist clinical negligence district judge, said that though there was no direct authority on the relationship between the two, there were numerous examples in the CPR and case law to support the contention that cost budgeting was not intended to replace detailed assessment.

For example, there were no wholesale changes made to CPR parts 44 and 47 when budgeting came in.

DJ Lumb said: “The amendment that was made was to CPR 44 was to include an additional factor (h) in the ‘pillars of wisdom’ under CPR 44.4 (3).

“The receiving party’s last agreed or approved budget is just another factor that the court will have regard to. No special weight is attached to that budget. The rules were not amended to say that ‘first consideration’ would be given to the budget or that it would be ‘of paramount importance’ which are familiar terms in family law when weighing up the interests of children.”

In Merrix v Heart of England NHS Foundation Trust, the successful clinical negligence claimant argued that if her costs were claimed at or less than the figure approved or agreed for that phase of the budget, then they should be assessed as claimed without further consideration – unless the defendant put forward a good reason to depart from the budget.

The defendant’s position was that the costs judge’s powers and discretion were not fettered by the budgeting figure, but that the budget was just one factor to be considered in determining reasonable and proportionate costs on assessment.

While DJ Lumb ruled that the assessing judge was not fettered by the budgeting regime – save that budgeted figures should not be exceeded unless good reason could be shown – he said the full answer was “more nuanced than the defendant’s position of ‘open season’ and complete discretion to attack a bill on detailed assessment and the claimant’s opportunistic attempt to impose a straight-jacket on the costs judge and claim a fixed figure”.

He explained: “There is some merit in elements of both parties’ arguments in the present case. At the same time, their entrenched positions illustrate why some observers consider that costs budgeting has failed to be as successful in practice as it ought to have been.

“The analysis in this judgment demonstrates that the preliminary issue question itself as posed was based upon a misunderstanding of the objectives and function of costs budgeting which is a different costs management tool from costs assessment.

“If the claimants arguments were correct and that for large sections of a parties costs the only opportunity to challenge those costs, absent ‘good reason’, would be at the CCMC, those hearings would be at risk of being far lengthier than they already are. That cannot be consistent with the overriding objective of dealing with cases expeditiously at proportionate cost.

“It is the duty of the parties to help the court to further the overriding objective by narrowing the issues between them. By adopting an ADR-like philosophy in negotiation and the preparation of budget discussion reports it should then be possible, in the majority of cases, to produce a proportionate budget that is so accurate when compared to the actual, yet still proportionate costs, incurred at the conclusion of the case that the difference between the parties should be so negligible that it would not be worth the time, trouble or risk to pursue a detailed assessment.

“To get to that ideal position requires a realistic engagement by the parties and by the case managing judge who has not only the experience of effective case management but also of the proportionate sums involved in the efficient conduct of the case. The benefits to all, if this panacea can be achieved, are obvious.”

A spokesman for Irwin Mitchell, which acted for the claimant, said permission to appeal was granted by the regional costs judge and the firm was considering its position.

He added: “There is a tension in the court rules between CPR 3.18 and rule 44 which needs clarifying by the courts. Last week it was reported that Master Rowley in the Senior Court Costs Office in a costs claim against Peterbrorough and Stamford NHS Trust had allowed various phases of a claimant’s anticipated costs budget as claimed without undertaking a detailed assessment of these costs.

“It appears that there is different judicial thinking at the moment on this issue.”

A spokesman for the NHS Litigation Authority said: “We are pleased with the court’s decision in this case. If CPR 3.18 were used by costs judges to ‘rubberstamp’ payment of costs budgets at detailed assessment hearings, this would result in a massive increase in the costs of litigation. The burden of this would ultimately be paid by the taxpayer in NHS cases.

“It would also be contrary to the primary intention of the Jackson reforms, which were implemented to control costs and promote access to justice.”


Blog

The misleading claims behind the campaign to lower the discount rate

Matthew Best Temple Legal Protection

A coalition of organisations which represent the NHS and health professionals has made strong claims in a letter to justice secretary David Gauke that the legal costs of clinical negligence claims are crippling the NHS. Similar comments were made by the National Audit Office (NAO) in September last year and yet the case doesn’t hold water. The letter was signed by the NHS Confederation, Academy of Medical Royal Colleges, British Medical Association, Family Doctors Association, Medical Protection Society, Medical Defence Union and the Medical and Dental Defence Union of Scotland.

February 9th, 2018