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John Spencer

Spencer: “Pre-medical offers should be banned”

The Ministry of Justice (MoJ) has promised to roll out “a robust accreditation process” for medical experts in whiplash cases by the end of the year.

Justice minister Lord Faulks said that banning law firms from owning medical reporting agencies would also be included in this “second tranche” of reforms.

In a letter attached to this week’s announcement by justice secretary Chris Grayling on new court rules for whiplash cases from 1 October, Lord Faulks said: “The MoJ will work with industry experts to support the development of a new system through which medical reports will be obtained using a system of random allocation.

“Linked to this will be a new accreditation (and re-accreditation) scheme for experts, which will include a peer review and auditing element to identify sub-standard reporting.

“Accredited experts who do not meet appropriate standards will face sanctions such as the removal of, or restrictions applied to, their accreditation.”

Lord Faulks said it was the ministry’s “strong view” that the accreditation scheme should be “owned and established” by the industry.

He said that “those operating in the personal injury sector” should provide “a suitable initial funding solution” until the scheme became self-financing through accreditation fees.

At the same time, the justice minister said the ministry would “consider the best way” to ensure that neither party in the litigation “had a financial interest in an intermediary through which a medical report is obtained”.

He said these plans would be developed “in tandem” with the accreditation scheme.

The letter emphasised that a secondary medical report, if justified, should only be commissioned on the recommendation of the expert completing the initial report. Fixed costs will apply where secondary reports are provided by orthopaedic consultants (£420), accident and emergency consultants (£360) and GPs/physiotherapists (£180).

The Association of Personal Injury Lawyers (APIL) expressed its disappointment that both the justice secretary and the justice minister shied away from a ban on ‘pre-med’ offers.

Lord Faulks said only that the rules were being amended to “strongly discourage this practice” and the MoJ intended to “continue to work with the industry on further ways to tackle this issue effectively”.

John Spencer, president of APIL, said pre-med offers only ever provided a “short-term cost benefit”, while opening the door to “longer term problems of fraud”.

Mr Spencer went on: “Thorough medical evidence should identify fraudulent and exaggerated claims and ensure that genuine people are given the correct amount of compensation for their injuries.

“Pre-medical offers should be banned and the government has missed an opportunity to ensure all fraudulent claims are challenged.”

 




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Morgan: precedent for a personal injury case

Welsh firm Hugh James has struck a blow for claimants with a High Court ruling that backed its “somewhat novel” credit agreement to fund clients’ disbursements of £787,500.

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

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

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

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

The defendants sought to argue that by Hugh James paying the disbursements, it was simply an overhead of the firm – usually payable by an uplift or an additional percentage success fee – and so the burden was on the claimant to pay any interest.

However, for the claimants, Benjamin Williams argued that the terms of the conditional fee arrangement was a recoverable cost in the same way as if they had secured a bank loan or used a credit card to fund the disbursements – and that the credit agreement was at a more beneficial rate.

Mrs Justice Swift found that the claimants’ case for interest was not effectively a claim by the firm and said: “Hugh James fulfilled the role of a bank, but on terms more advantageous to the claimants than those which would have been offered by any bank”.

She set the recoverable rate of interest on the pre-judgment disbursements at 4% above base rate, saying it was not “excessive or unreasonable”.

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

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

He added: “It is a small movement in favour of the claimant, because up to now the tide has been going very strongly against the claimant.

“Up to now they’ve had the possibility of losing up to 25% of the damages. But at least that’s all they are going to have to fund, because the cost of disbursements – an essential part of a large case – can be transferred to the defendant.”




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Jackson: momentum is heavily for reform

Jackson: momentum is heavily for reform

Lord Justice Jackson has been drafted in by the senior judiciary to work on extending fixed recoverable costs – even though earlier this year he said he would rather not do it.

The move by Lord Thomas, the Lord Chief Justice, and Sir Terence Etherton, the Master of the Rolls, comes in the wake of the commitment in September’s joint government and judiciary vision statement, Transforming our Courts and Tribunals, to look at options to extend fixed recoverable costs much more widely.

Jackson LJ, who has until 31 July 2017 to complete the review, has been chosen because the work is “a logical extension” of his 2010 report, in which he first recommended greater use of fixed recoverable costs.

Describing the current system as “exorbitantly expensive” in a speech earlier this year, he said the profession was now “more willing” to accept fixed costs, partly because it would “dispense with the need for costs budgeting, which not everyone enjoys”.

He called on the government to take a decision on whether to have fixed costs for cases worth up to £250,000, as he recommended, or for all cases.

Jackson LJ said that if the government did not “wish to pursue this reform as a priority”, it should “suggest that a senior judge who doesn’t mind being pilloried (preferably not me again)” actually draws up the scheme.

A statement put out today by the judiciary said the review has been agreed with the government “and will inform its public consultation on proposed reforms, which will follow the review after consideration of its recommendations”.

Lord Justice Jackson will formally commence his review in January 2017, but will be inviting written submissions on this topic immediately (see details below).

The terms of reference are “to develop proposals for extending the present civil fixed recoverable costs regime in England and Wales so as to make the costs of going to court more certain, transparent and proportionate for litigants”; and “to consider the types and areas of litigation in which such costs should be extended, and the value of claims to which such a regime should apply”.

Jackson LJ said: “I have set out my present views on the principles of fixed recoverable costs in the final report of my review and in recent lectures and publications.

“I have been commissioned to undertake this review because it is integral to the overall package of reforms which I originally proposed. Chapter 16 of my final report recommended that serious consideration should be given to extending fixed recoverable costs to the lower reaches of the multi-track after the other reforms had bedded in.

“Although the momentum is heavily for reform, the review will provide ample opportunity for comments and submissions on the form and scope that reform should take. I am inviting the views of practitioners, users of the civil courts and any other interested parties on these points. Seminars will be held in London and elsewhere to discuss the issues.

“There is a great deal to be done on the detail of the review, which will inform the government as it prepares proposals for formal consultation in due course.”

Law Society president Robert Bourns said: “We do not oppose the principle of fixed costs for straightforward, low-value claims as they can provide some certainty for both sides in litigation and avoid protracted disputes about the level of costs.

“But we have previously expressed concern at suggestions that costs should be fixed for all claims up to £250,000 – a tenfold increase on the current limit for many claims subject to a fixed-cost regime.

“Cases at this level of compensation include situations where people have been very seriously harmed and where the application of fixed costs would be totally inappropriate. It would also raise significant questions about people’s ability to access justice.

“Such a one-size-fits-all approach for all cases, regardless of complexity, will simply make many cases economically unviable, undermining the principle of justice delivering fairness for all.”

Association of Costs Lawyers chairman Iain Stark, a partner at Weightmans, said: “Whilst recognising the desire for wholesale reform, thereby providing certainty in the legal costs arena, this must be tempered by accepting that access to justice must be the bedrock of any consultation. We welcome the opportunity to respond.”

Nigel Teasdale, the new president of the Forum of Insurance Lawyers and a partner at DWF, said: “FOIL welcomes long-anticipated progress in the widening of fixed costs, with the launch of the review a first important step towards a positive outcome for the industry.

“It is very encouraging to see the determination for an extension, not only for clinical negligence and personal injury claims but across the civil justice system, and Lord Justice Jackson is absolutely the best-placed person to lead this review.”

Making submissions

Written submissions should be sent by 16 January 2017 to: fixed.costs@judiciary.gsi.gov.uk.

If evidence is being submitted of actual recoverable costs, this should identify the type of case (eg, clinical negligence, property, judicial review etc), and the source of evidence (eg, detailed assessments under the post-April 2013 rules, approved budgets, agreed budgets etc).

Material submitted should take account of the Civil Procedure Rules on proportionality, in particular the factors set out in rule 44.3(5).

Views are also sought on the level of claim at which fixed recoverable costs should stop and costs budgeting should apply instead.

Other issues that the review will need to consider, and on which views are welcomed, are how to accommodate counsel’s fees, experts’ fees and other disbursements within a fixed recoverable costs regime. Another issue for consideration is the difference which frequently arises between claimant and defendant costs.




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Retainer: draft was never formalised

A struck-off solicitor has seen his £4,500 costs claim against a client he represented in an employment tribunal disallowed because he failed to correct her belief that he was acting as a practising solicitor.

Robin Oliver has his own small regulated claims management business, Robin Oliver Legal, in Colchester and acted for a Mrs Gooding in her unsuccessful employment tribunal claim.

He was struck off as a solicitor “many years ago”, according to the ruling by Employment Judge JM Wade, sitting in Middlesbrough.

In his draft retainer – which was never finalised – Mr Oliver said he had two alternative payment regimes: one saw him charge £65 an hour, plus £10 an hour for travelling time and £0.45 per mile for using his own car; the other saw him take 35% of the amount recovered, plus reasonable expenses.

“I have the option to choose which of these limbs is the more beneficial for me,” he told her.

Crucially, at a later stage in the claim, Mrs Gooding wrote to Mr Oliver saying that she had not received meeting notes from her three disciplinary hearing and asked: “In your capacity as my solicitor are you able to request them?”

Mr Oliver did not correct her impression that he was a solicitor – an omission the judge specifically criticised – and she only became aware of it during the hearing, some months later, when the judge identified his capacity “as part of the general housekeeping”.

The claim was dismissed and Mr Oliver sought the balance of fees and disbursements said to be due from Mrs Gooding after payments on account, some £4,459. Mrs Gooding then applied for a wasted costs order against Mr Oliver.

Judge Wade said: “[Mr Oliver] told me that he always identifies himself as a consultant on attendance sheets at the tribunal, which is entirely proper: in doing so he informs both the tribunal and the ushers that he attends and represents not in the capacity of either counsel or solicitor.

“The subtlety of that information is not navigable to a lay client unless it is explicitly communicated. The use of the trade name ‘Robin Oliver Legal’ and the use of e-mail and text communication with a letterhead that repeats simply that trade name and regulation by the Claims Management Regulator, is not such as to convey to a lay client that there is a difference between the individual advisor’s capacity and that of a solicitor.”

This was “made worse” by the absence of any information about his capacity in the draft retainer letter and related e-mails.

The judge said: “Mrs Gooding confirmed her willingness to proceed on the terms as she had understood them. Implicit in those terms as she understood them, and as a result of the failure to make it clear that Mr Oliver did not act as a solicitor, was his capacity as her solicitor…

“I also take into account that the claimant’s circumstances included the wish to assert constructive dismissal, which often involves complex facts, and it is not a matter which lay people undertake with potential considerable cost, lightly.

“It was an unreasonable omission in my judgment for Mr Oliver not to make Mrs Gooding aware that he acted and practiced not in the capacity as a solicitor, nor regulated by the Solicitors Regulations Authority in these circumstances. I am satisfied that the omission… was a cause of the claimant incurring costs going forward.”

The “just order” was to disallow the balance of fees and disbursements due, he concluded.




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Jackson: rule not concerned with one-way costs shifting

The Jackson reforms were not intended to give appeal courts the ad hoc power to introduce one-way costs shifting, their architect has ruled.

Lord Justice Jackson said he wanted to clarify the purpose of rule 52.9A – introduced on 1 April 2013 – so as to prevent further applications along the same lines.

His lead judgment in JE v Secretary of State for the Home Department [2014] EWCA Civ 192 – an appeal from the Asylum and Immigration Tribunal – was handed down in February but has only just been published on Bailii.

The rule at 52.9A(1) provides that “in any proceedings in which costs recovery is normally limited or excluded at first instance, an appeal court may make an order that the recoverable costs of an appeal will be limited to the extent which the court specifies”.

Counsel for the applicant argued that this rule empowered the court to make a one-way costs shifting order, placing particular reliance on the last seven words.

Jackson LJ said it was based “upon a misconception which needs to be exposed before any similar applications are made to this court”.

He explained: “Rule 52.9A (1) refers to ‘the recoverable costs of an appeal’. That phrase means the costs recoverable by the winning party, whoever the winner may turn out to be. The rule deals with appeals coming up from a ‘no costs’ or a ‘low costs’ jurisdiction.

“It enables the appeal court to put in place a similar regime to that which applied in the court or tribunal below. The rule does not contemplate an order in favour of just one party, win or lose.”

He cited three factors that supported this interpretation. First, Jackson LJ noted that “the rule is specifically concerned with appeals from jurisdictions in which all parties are subject to the same restrictions upon recoverable costs”.

Secondly, the three considerations set out in paragraph (2) of the rule – which provides that in making such an order the court will have regard to the parties’ means, the circumstances of the case and the need to facilitate access to justice – were relevant to considering whether or not to maintain a ‘no costs’ or ‘low costs’ regime upon appeal.

“Thirdly, there are separate rules which provide for qualified one-way costs shifting in specified cases. In my view rule 52.9A is not concerned with one-way costs shifting.”

Jackson LJ emphasised that applications under the rule need to be made “as soon as practicable”. This need not be immediately, and the judge saw force in a suggestion that it should be made no more than two weeks after the grant of permission has been notified to the respondent.

He concluded: “In the present case the applicant has applied far too late for an order which the court has no power to make. I express the hope that no such application will ever be made again on the eve of an appeal.

“It would be helpful if the literature provided by HMCTS to appellants and respondents drew attention to the court’s power under rule 52.9A and the need to make any application under that rule as soon as practicable. In the meantime I hope that appellants and respondents will take note of this judgment.”




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Henderson: BTE will play crucial role

The role which before-the-event (BTE) legal expenses insurance might play in improving access to justice is to be examined by a working group set up by the Civil Justice Council.

BTE is set to become more prominent in the wake of the government’s proposed personal injury reforms, with one leading insurer this week predicting an increase in both demand and premiums as a result.

The CJC working group is the product of a wider civil litigation review committee created by the CJC last year to consider a series of discrete topics relating to civil litigation and, in particular, issues relating to the funding of claims and of furthering the CPR’s overriding objective of enabling the court to deal with cases justly and at proportionate cost.

The chair of the BTE working group is Professor Rachael Mulheron of Queen Mary University of London, with Maura McIntosh, commercial litigation specialist at City giant Herbert Smith Freehills the vice-chair – they hold the same roles in the main committee.

Members of the BTE group are:

  • Lesley Attu, product development manager, ARAG;
  • Steven Beahan, commercial litigation partner, Irwin Mitchell;
  • Michael Hall, Aviva, ABI;
  • Peter Holland, head of legal expenses, DWF Law
  • Richard Miller, head of justice, Law Society
  • Rocco Pirozzolo, underwriting director, Harbour Legal Costs Cover;
  • Rebecca Scott, Citizen’s Advice, and a CJC member;
  • Dr John Sorabji, principal legal adviser to the Master of the Rolls, and member of the UCL Judicial Institute; and
  • Matthew Williams, head of AmTrust Law, AmTrust Europe.

Robert Wright, the Ministry of Justice’s head of policy for civil litigation funding and costs, and access to justice, will be an observer to the group.

Meanwhile, James Henderson, managing director for insurance in both the UK and Ireland at DAS, said he was concerned that the government’s plan to raise the small claims limit for road traffic cases to £5,000 “may pass too great a burden onto legitimately injured claimants”.

He said: Almost no detail has been given as to whether there will be reforms to how victims access compensation.”

Pointing out how difficult it could be for claimants to pursue a case, and establish liability, causation and quantum, without legal representation, he continued: “I have no doubt that legal expenses insurance will play a crucial role in mitigating any negative effects of these reforms.

“Legal fees are likely to deter many legitimate claimants; knowing that they have access to expert help and that their legal fees are covered by their motor legal expenses insurance policy will be of considerable comfort.”

But he warned that for insurers to offer the current level of service to customers, “they may have to increase premiums of the legal expenses cover as the cost of legal action for lower value claims will no longer be recoverable from the at fault party”.




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Dyson: doing nothing is not an option

The Civil Procedure Rule Committee (CPRC) looks set to introduce an exemption from costs management for all civil cases that are worth in excess of £10m – even though Sir Rupert Jackson himself is opposed to any exceptions.

Newly released papers from the 6 December meeting of the CPRC reveal that it fell into line with the joint recommendation of the Master of the Rolls, Lord Dyson, and the deputy head of civil justice, Lord Justice Richards.

In a note put to the committee, the pair said the current £2m threshold was a temporary fix. “Although it has helped to reduce the problem of forum shopping, it does not provide a uniform regime and in our view it sets too low a threshold for any general exclusion to costs management”.

The options of doing nothing – “notwithstanding the support for it among consultees” – or allowing the parties to opt out, were “unacceptable”, they said.

Allowing no exception accorded best with Jackson principles “and it now has the support of Sir Rupert Jackson himself”, the judges said. “We would have no hesitation in favouring it, were it not for the concerns expressed so strongly by so many consultees that a requirement for costs budgeting would risk deflecting high-value cases away from London and the UK.

“We share the doubts that members of the committee have voiced about these concerns, but we do not feel in a position to dismiss them out of hand.”

That left the “pragmatic” fall-back position of applying costs management to all cases across all courts, except those where the amount in dispute exceeds £10m, unless the court ordered otherwise. There would be a discretion to apply costs management to cases above that level and there may be a ‘certification of value’ that would cover the likes of intellectual property claims where there may be no monetary claim but the amount at stake may be very large.

The existing exception for proceedings subject to fixed or scale costs would continue, while part 8 claims would also be excluded.

“If the threshold is set sufficiently high, it can reasonably be said that the risk of litigation being conducted at disproportionate cost diminishes to an acceptable level,” the note said. “In our view, however, a threshold of £10m, rather than the figure of £5m suggested by some, is needed for that purpose.”

The position was supported by Mr Justice Coulson, who chairs the CPRC sub-committee charged with looking at the exemption. The minutes of the December meeting said he thought it important to note that judges in the Rolls Building responsible for costs budgeting would welcome this option, particularly in light of judicial resources available.

The minutes said solicitor member Qasim Nawaz maintained that budgeting “should be applied across all jurisdictions, that lack of resources was not a compelling argument for limiting it, and that any monetary value set would be of an artificial nature.

Nonetheless, the committee was largely in favour of Lord Dyson and Lord Justice Richards’ solution – although a number of members were in favour of a £15m threshold. “It was agreed that £10m should be the starting point, subject to review of that figure.”

Issues then discussed by the CPRC centred on how the threshold should be expressed to ensure that it was clear to the profession how the limit would be applied, without the necessity of coming to court for direction; framing the rules to deter forum shopping; setting out explicitly the case management power of the court to order costs budgeting on a discretionary basis by way of a practice direction; identifying types of claims, such as intellectual property cases which may require particular rules; clarification of the trigger points for filing a costs budget; and bringing more flexibility to Precedent H to deal with under- and over-spend in separate categories.

The sub-committee was charged with drafting rules and a practice direction to guide the exercise of discretion and to accommodate concerns expressed about those cases that fall into the £10m-£15m range.

Mr Justice Ramsey, the judge in charge of Jackson implementation, was added to the sub-committee for this task, and a first draft was due to be presented at this month’s CPRC meeting.




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London: higher fees could affect international appeal

The government’s proposals to increase court fees for commercial cases could lead to claimants facing a fee demand greater than their legal costs, litigators have warned.

This will probably deter small and medium-sized enterprises from issuing proceedings to recover debts worth hundreds of thousands of pounds, according to the London Solicitors Litigation Association (LSLA).

Among a raft of proposals, the Ministry of Justice has put forward a fee of 5% of the value of the claim for issuing a specified money claim, possibly subject to a cap of £10,000, and also ‘enhanced’ fees for commercial cases to recover more than the actual cost of the service provided by the courts.

In its response to the consultation, the LSLA said that a £20,000 fee for a claim valued at £400,000 could be greater than the legal fees for preparing the proceedings “and will add to the already onerous pre-action costs which claimants are obliged to incur”.

It continued: “In circumstances where the ability of the defendant to pay may be in doubt, such high fees will make litigation at this level considerably more risky. In cases where the lawyers are acting under a CFA type arrangement, the court fees may be the entirety of the costs incurred, and claimants would very probably struggle to afford the entirety of the proposed 5% issue fee up-front.”

The LSLA raised similar concerns in relation to enhanced fees: “There should be proper research into how the proposed fee levels will affect [small and medium-sized] enterprises, and discussion had on how the impact of the increase in fees on those entities will be mitigated.”

More generally the LSLA maintained its long-standing opposition to the principle of full cost recovery, saying access to first instance courts was integral to a civilised society, rather than being a commercially traded commodity – but that parties should have to pay in full for appeals.

It noted that most of the £110m deficit in the civil and family courts arises from the family courts. “It therefore seems inconsistent to increase fees in the civil courts but to standardise, or even reduce, fees in the family courts: users of the civil courts are effectively being asked to subsidise the family courts.”

In its response to the consultation, the City of London Law Society (CLLS) made the same point, arguing that in any case, “not all business in the family courts justifies a subsidy”.

It said: “A dispute over the financial aspects of a divorce is a dispute about money in the same way that a dispute over the assets in a trust, over sums due on a building contract or over damages for breach of contract is a dispute about money.”

Time-related hearing fees were also a bad idea, the LSLA said, : “The LSLA has concerns about the mechanics of estimating the length of trials for the purposes of time-related hearing fees, and considers that the process could well be open to manipulation and result in satellite litigation.”

Both the LSLA and CLLS expressed concern about the impact of fee increases on the attractiveness of London as an international litigation hub.

“Court fees might, in themselves, be a relatively small part of the cost to a foreign party of litigating in England, but overtly increasing fees to a level far in excess of the costs involved in order to subsidise unrelated parts of the justice system does not send a message that the courts of England and Wales welcome international business,” said the CLLS response.

“The more than sixfold increase in court fees proposed for higher value cases potentially makes court fees an issue that litigants must consider and will not promote the competitiveness of the English legal services sector.”

The CLLS’s litigation committee said the consultation paper did not make “any case” for increasing fees, arguing that “it is inappropriate for the government to seek to exploit the courts’ near monopoly position by using them as a means to raise money, especially in an area as vital to the functioning of civil society as a whole as the justice system”.

More generally it complained that the “lack of information and explanation” in the consultation paper.

Also opposing daily fees, the CLLS said that if it were necessary to impose extra fees on cases that make greater use of court resources, these fees should not be confined to litigation in particular courts, but should be general in application.

“In that scenario, the committee would favour additional graduated fees at later stages of proceedings (eg the first case management conference, listing and the pre-trial review) calculated on the same basis as issue fees.”




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Richard Harris, Chief Claims Officer, DAS UK Group

The DAS UK Group is pleased to confirm that Richard Harris has been appointed as Chief Claims Officer (CCO), reporting directly to the UK Group CEO, Paul Asplin.  Richard has responsibility for all claims functions along with supporting colleagues and business partners in the wider business strategy.

With over 25 years’ insurance experience, Richard joined DAS as Head of Claims & Assistance in 2011 from Ageas where he was Head of Operations (Motor Claims).  Prior to Ageas Richard has worked in reinsurance and broking and was previously Director of the RTA Portal Company and a member of the insurer GTA committee as well being an industry expert at many conferences.

Paul Asplin, CEO, comments; “Richard’s appointment as Chief Claims Officer recognises the contribution he has made to customer service at DAS and his ability to think differently about delivering value to the company and as such his promotion is justly deserved.”

Richard Harris, Chief Claims Officer, comments; “I am naturally very pleased to be promoted, especially as I am excited about the continuing and increased importance of legal expenses insurance to consumers. Providing products, which help protect people in situations many of us will hopefully never have to experience is a great source of inspiration.”

 




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In the current economic climate it is not enough simply to obtain a judgment – the real skill is in the enforcement process. This area should be at the forefront of all lawyers’ minds when they undertake any case involving money for a client.

April 2014 has seen the first significant overhaul for many years in the law of execution and it is very important for all those in the money recovery arena to be aware of the changes.

MBL’s brand new one hour webinar will look at these changes and how they affect the client who is seeking to make a successful enforcement. It will give very practical advice on the positive and negative parts of the changes and guide you through the new process.

For more information on this webinar, including costs, or to make a booking please email lucy@mblseminars.com quoting Litigation Futures.




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SONY DSCLaw Society Endorsed legal software provider, Eclipse Legal Systems, has announced enhanced integration with the County Court Bulk Centre (CCBC) using the Secure Data Transfer (SDT) portal.

The integration is available for the benefit of Eclipse clients, within Proclaim’s Debt Recovery Case Management Software system.  A wide new range of services is available, encompassing the submission of a request for a claim, request for judgement, automated retrieval of defendant responses, warrant requests, and notification of paid cases.

The development utilises Proclaim’s Task Server ‘robot’ tool to minimise manual processes and automate as much of the workflow and data transmission as possible.  Claims are submitted to the SDT via the Proclaim desktop environment, at the click of a button.  Data verification is included to ensure that, pre-submission, all relevant information is included – and users are alerted to any missing elements in real-time.  Once the claims have been processed and issued, feedback on case progress is managed by Proclaim’s Task Server and fed into the respective originating cases, updating users by way of Proclaim’s integrated task management system.  All data submitted to, and retrieved from, CCBC is encrypted to ensure security in transit.

The integration has proved to be a success, with Eclipse reporting one newly-implemented commercial client already processing upwards of 1,000 files per week.

Tracy Blencowe, business solutions director at Eclipse, comments:

“This integration allows for quicker upload of volume claims in comparison to the previous CCBC data extract service.  Proclaim’s workflow can now further simplify claim production, ensuring a truly streamlined process, higher levels of accuracy, and a reduced administrative overhead.”

 




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We have been asked to take down this story due to confusion over the current status of the judgment reported. Once this has been cleared up, we will repost it.




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costs

Claimant to pay costs of trial and application

Insurer Admiral has claimed victory in a whiplash case where its customer claimed there was no contact between the two vehicles.

District Judge Dudley said there was “absolutely no doubt whatever in my mind” that the claimant had been “fundamentally dishonest” in the evidence he gave during the trial at Southend County Court.

This meant that the claimant lost the protection of qualified one-way costs shifting (QOCS) and was ordered to pay the costs of the trial, which Admiral said were £6,000.

He was also ordered to pay an additional £1,000 to cover the costs of the application DJ Dudley required before he was prepared to make the “fundamental dishonesty” ruling.

A spokesman for Admiral said its customer was accused of driving into the back of the claimant’s car after he performed an emergency stop to avoid a collision with a motorbike.

The spokesman said the claimant “alleged he had suffered neck and back whiplash injuries which persisted for months and even went so far as to get GP reports for himself and his passenger”.

At the trial DJ Dudley dismissed the application, but asked for a separate application to be made to determine the issue of fundamental dishonesty.

Under QOCS, successful defendants can only recover costs against claimants in limited circumstances, including fundamental dishonesty.

Lorna Connelly, head of claims at Admiral, said: “We are understandably delighted with this significant ruling. The third party involved brazenly lied about the circumstances, putting our customer through undue stress and inconvenience so we were determined to prove they were fundamentally dishonest.

“We hope it sends a warning that a dishonest individual could have a very significant cost liability should they pursue a case against us, as the judiciary are willing to make findings of fundamental dishonesty.

“It will also hopefully make solicitors think twice before bringing these cases to court in the first place.”

Admiral was represented by Horwich Farelly.




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The Jackson reforms have introduced an entirely new step in costs recovery for nearly all Multi Track cases, namely the Costs Budget. Failure to get the costs budget right (or on time, as seen in the well-publicised Mitchell v NGN case) can mean little or no costs can be recovered from the other side. The client needs to know at a very early stage what the case is likely to cost them.

Clients need to be fully informed about recoverable costs, and other firms are setting up specific departments to sue you if you make a mistake following the Jackson Reforms.

MBL’s one hour webinar is aimed at all solicitors, Legal Executives and other lawyers conducting litigation. It will cover points including: how to create a valid costs budget; explaining the costs position to the client so as to comply with professional codes of conduct; challenging the other side’s costs budget – and on what basis?; what effect does the budget have on what I can claim from my client?

Presented by Gary Barker, this webinar will be streamed on Tuesday 1 April. For more information including price details please give us a ring on 0161 793 0984 or email lucy@mblseminars.com quoting Litigation Futures.




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Gilbert: Walker Morris cannot distinguish itself in market

The LASPO reforms claimed a high-profile victim yesterday with Leeds firm Walker Morris announcing that it is to close its personal injury division, which operates under the brand Distinctly Legal.

Some 48 staff are now at risk of redundancy, with the firm blaming “the LASPO changes and the continuing turmoil in the personal injury market place”.

The division was formerly known as WM Claims and in a statement the firm said: “Over the last 12 months the firm has sought to refocus its personal injury business by investing in a rebrand and a ‘direct to market’ approach.

“The refocus has not achieved the results that we anticipated. This combined with continuing uncertainty in the market and the inevitable shift towards a more process, volume-driven approach, has led the firm to conclude that continued involvement in the PI market does not fit with its long-term strategy.”

Managing partner Ian Gilbert added: “Despite having a very capable and committed team within Distinctly Legal, unfortunately the significant structural changes which have occurred in the PI market recently and those changes which we believe will occur in the future, have led us regrettably, to conclude that this is not a market in which Walker Morris can differentiate itself as well as building a strong recognisable brand.

“We have therefore decided to withdraw from the PI market and focus on our successful core business.”

Co-operative Legal Services has also announced that it is to make redundancies in its 140-strong personal injury division as a result of a “restructuring”.




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Court fee: claimant acted promptly

The Court of Appeal has refused to consider a circuit judge ruling which held that failure by a solicitor to correctly value a personal injury claim and pay the right court fee did not amount to an abuse of process.

His Honour Judge Robinson said the solicitor originally valued the claim at £50,000 or less, and paid a fee £2,500, but later sought to increase the damages claimed to over £500,000, requiring a fee of £10,000.

However, the judge said that in this case, he could not “think of anything further away from abusive conduct”.

HHJ Robinson said the “competent, well respected” solicitor involved was “bang up against the limitation period” and knew he had to issue.

“Counsel’s advice is awaited, but will not be received until after the limitation period has expired. He knows he has an open admission of liability.

“It appears that he does not engage his mind as to the value of the claim, but he knows it is substantial. He fixes on £50,000 as the appropriate fee to state on the claim form, resulting in an obligation to pay the substantial fee of £2,500, being 5% of the sum claimed.

“Once counsel’s advice is obtained and he has the particulars of claim, he takes immediate steps to serve what he has.

“Rather than delay until mid-April, which is four months after issue, he also applies promptly for permission to amend the claim form, so the proper value is shown and the proper fee paid.”

Judge Robinson said that “even if the original act of issue was abusive – and I am firmly of the view that it is not – the actions of the claimant by her solicitor thereafter the cured the abuse”.

He described the actions as “prompt service of the pleadings and a prompt application to amend”.

The court heard in Wiseman v Marstons plc, heard at Sheffield Combined Court Centre, that damages were claimed following a workplace accident and the defendant admitted liability.

A claim form was issued in December 2015, but in February 2016 the claimant sought to amend the form by increasing the amount of damages to over £500,000.

The defendant sought an order striking out the claim as an abuse of process under rule 3.4. The defendant also sought summary judgment under the Limitation Act 1980, on the grounds that the “stated value on the claim form was false, the fee paid was incorrect and thus the limitation clock did not stop”.

Judge Robinson said there was something “deeply unattractive” in the defendant’s claim for abuse of process.

“There is no prejudice to the defendant other than that the defendant must now compensate the claimant in full rather than only partially and will probably have to pay by way of costs, subject to any relevant and valid part 36 offer, an additional £7,500, being the extra fee that the claimant has to pay in order to bring the claim before the court.

“On the other hand, the injustice to the claimant would be immense and, in any event – and, whether it is relevant or not, it is nevertheless a fact – would further occupy the time of the court with the inevitable claim by the claimant against her own solicitor, thus litigation would be multiplied.”

HHJ Robinson said it emerged during the hearing that the claimant’s lawyer had already paid the additional £7,500 in court fees.

He allowed the claimant’s appeal against the decision of a district judge, who refused her application to amend the statement of value.

The defendant’s applications for summary judgment and to strike out the claim as an abuse of process were dismissed.

The Court of Appeal rejected last month an application from the defendant for leave to appeal.

In the order refusing permission, Lord Justice Jackson said the proposed appeal had no real prospect of success and did not raise “any important point of principle or practice”.

Jackson LJ said the error made by the claimant solicitor in this case was “quite unlike” the leading case of Lewis v Ward Hadaway, “where there was deliberate conduct designed to avoid paying the correct fee”.

He went on: “The claimant applied promptly to amend, and tendered the correct court fee. Whilst the court nowadays quite properly adopts a more restrictive approach towards allowing amendments, it was obviously appropriate to grant this particular application, essentially for the reasons given by HHJ Robinson.”

The original ruling, though dating back to late last year, has only just been published by barrister Gordon Exall, who acted for the claimant.




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Warby J: extra votes weighed against “certainty of additional costs”

The High Court has made a third-party costs order against UKIP, after the party took a “political” decision to block the settlement of a libel claim against one of its MEPs.

Mr Justice Warby said that, by the beginning of March 2015, “a decision had been taken at a high level within UKIP” that the claim should be settled, but not until after the general election in May.

“The decision-makers knew that [Jane Collins’] cause was hopeless, and that settlement was the only realistic option, but decided to delay that step,” Warby J said.

“They did so knowing this would in all probability make settlement more difficult and more expensive, having reckoned that this risk was outweighed by the prospects of political gain (or avoiding political damage).

“This was a process of calculation in which extra votes were expressly weighed in the balance against the certainty of additional costs, and the risk that these might be unaffordable.”

The court heard in Barron and others v Collins and UKIP [2018] EWHC 253 (QB) that three Labour MPs representing the Rotherham area – Sir Kevin Barron, John Healey and Sarah Champion – successfully sued Ms Collins for libel following a speech she gave to the UKIP party conference in September 2014.

Warby J ordered Ms Collins, in February 2017, to pay each claimant £54,000 and the costs of the action, and to make an interim payment on account of £120,000.

The judge said “none of this has been paid” and the claimants did not anticipate “significant recovery”. They notified UKIP that they would seek a third-party costs order in July 2017.

The claimants argued that this was became of “UKIP’s control/funding in this litigation due to political interest/benefit”. Counsel for UKIP responded that it provided “some assistance” to Ms Collins but “did not seek control of the litigation” and its “primary concern” was to help her settle the claims against her.

Warby J said the total costs served on Ms Collins and UKIP by the claimants were just under £670,000, but he was being asked to “rule on the principles of recoverability, not the amount”.

He said it was agreed that any order he made “would be in addition to, and not in substitution for, the existing costs order against Ms Collins, who would remain jointly and severally liable”.

Warby J said there was also no dispute over the period over which UKIP’s financial support lasted, from early December 2014 to early or mid-June 2015.

He found that from 2 March 2015 “at the latest”, RMPI, the London law firm acting for Ms Collins, “was in receipt of instructions from UKIP, endorsed by Ms Collins, to avoid the case coming to a conclusion by settlement or otherwise before the election”.

Warby J said Andrew Reid, the law firm’s senior partner, was treasurer of UKIP and “it appears, UKIP’s landlord”, with the firm’s offices in the same building.

The judge said the party “took a deliberate, informed and calculated decision, for reasons of party political advantage, to ensure that the case was not settled before the general election”.

He went on: “In my judgment, it very probably did thereby prevent a settlement that it had been advised should be made and which would otherwise have occurred quite swiftly.

“The likelihood is that, but for its role, the case would have settled. At any rate it had a causative role. The consequence was that the action continued until the acceptance of the offer of amends.

“The decision to delay meant that by this time the costs had escalated to a point that made settlement unaffordable for the party (or so it decided).”

Mr Justice Warby said that although Ms Collins’ decision to continue the case as a litigant in person between June 2015 and January 2017 was not caused by UKIP, there was “every likelihood” that a settlement in spring 2015 could have obviated the need for an assessment hearing.

Warny J concluded that it was “just and reasonable to make UKIP jointly and severally liable with Ms Collins in respect of the claimants’ reasonable costs incurred between 20 March and 24 June 2015, and the claimants’ reasonable costs of and caused by the assessment hearing in January 2017”.

He added that, “in principle, the party should also be liable for the claimants’ reasonable costs of enforcement proceedings following the decision on quantum”.

He said a “limited” third-party costs order should be made against UKIP to reflect the impact of the party’s decisions to “ensure for party political and specifically electoral reasons that the claimants’ action should not be settled before the general election”.




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car crash

Registration for new database to open on 5 May

Claimant personal injury lawyers using the RTA portal will be required to check clients’ claims records on a new database before submitting a new case from 1 June this year, it has been announced.

The askCUE service is a joint initiative to help reduce fraud by the Association of British Insurers, Motor Insurers’ Bureau, Motor Accident Solicitors Society, Association of Personal Injury Lawyers and the Law Society.

Lawyers can register for the service from 5 May, at a cost of £110 plus VAT per year.

To make a search, solicitors will have to submit the client’s name, address, date of birth and National Insurance number – with the client’s consent. In return they will receive details of any personal injury/industrial illness incidents reported to insurance companies in the previous five years, whether or not they gave rise to a claim.

James Dalton, director of general insurance policy at the Association of British Insurers, said: “This represents a significant step forward as the insurance industry and claimant communities join forces in the fight against fraud. The development and delivery of the service is a tangible demonstration of what can be achieved when our sectors work together.

“There’s plenty that we disagree on, but getting the fraudsters and cheats out of the personal injury claims system is something we all agree on which is why the delivery of askCUE is an important milestone in the on-going fight against fraud.”

Susan Brown, chair of the Motor Accident Solicitors Society, said that after four years of work, she was delighted that insurers and claimant solicitors would be able to “share information, at an early stage in a claim, that might indicate potential fraud”.

She went on: “This is an important first step in greater collaboration across the industry and we look forward to actively exploring how further data sharing might contribute to the fight against fraudulent claims.”

Solicitors who submit a small number of personal injury claims a year can register for a set enquiry package which provides up to 10 searches per annum, for which there is no charge. The service is available from www.askCUE.co.uk.

Solicitors can register by either having one account covering all office locations or having a separate account for each office.




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Trood: “Proclaim will be fundamental to our success, providing a flexible single solution embraced by everyone at our 3 offices”

Bird & Lovibond Solicitors is implementing the Proclaim Practice Management Software Solution from Eclipse Legal Systems.

Based in Middlesex with branches in Uxbridge, Ruislip and Greenford, Bird & Lovibond Solicitors is a growing multidisciplinary law firm with a proud tradition of providing excellent service to both private clients and commercial organisations.

The Proclaim Practice Management solution will be rolled out to all staff, ensuring a secure and consistent approach across all matters. Eclipse will conduct a full data migration from the incumbent system, allowing integrated firm-wide financial management toolsets to be utilised including the Proclaim Credit Control Centre module – boosting efficiency and providing detailed analysis of the firm’s operations.

Bird & Lovibond will also take advantage of the Proclaim Compliance solution, ensuring effective risk management throughout the lifecycle of each matter. To streamline non-prescriptive work areas such as Employment and Matrimonial, the firm will adopt Proclaim’s Matter Management platform. Bird & Lovibond will further benefit from seamless digital dictation courtesy of Proclaim’s integration with BigHand.

David Trood, Partner at Bird & Lovibond, comments:

“It is crucial that we achieve our goal of staying ahead of the competition and strengthening our enviable reputation for outstanding client service. Proclaim will be fundamental to our success, providing a flexible single solution embraced by everyone at our 3 offices, guaranteeing a consistent approach for all our work areas. Efficiency will be transferred allowing us to take on more cases and spend less time on non-value adding tasks, freeing up more quality time for each client.”

 




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Sir Ernest Ryder (l) and Lord Thomas: dedicated work

The senior judiciary is “very concerned” about the slow recruitment of judges from a black, Asian or minority ethnic (BAME) background, and the downward trend of new judges who are not barristers, new figures have shown.

In his introduction to the judicial diversity figures for the courts and tribunals at 1 April 2017, Lord Chief Justice Lord Thomas said: “Despite the leadership that has been demonstrated over the last year, progress is not as fast as we would wish.”

The report showed that in the three years to April 2017, the percentage of female judges increased from 18% to 24% (nine out of 38) in the Court of Appeal; 18% to 22% in the High Court (21 out of 97) and 24% to 28% in the courts judiciary.

The percentage of BAME judges increased from 6% to 7%, but for non-barristers, it has decreased from 37% to 34%.

Non-barristers made up nearly three-quarters of district judges, but hardly any higher court judges, except for posts like masters and registrars. As of 1 April 2017, there were no non-barrister High Court judges.

Non-barristers were in the majority in every category of tribunal judge except Upper Tribunal judge.

In the last four years the proportion of female judges in the tribunals has increased from 43% to 45%, and the percentage of BAME judges has increased from 9% to 10%.

The figures indicated, however, that the demographic changes in the legal profession were starting to have an effect on the make-up of the judiciary: 49% of court judges and 62% of tribunal judges aged under 40 were female.

Similarly, BAME representation was highest among those aged under 40, at 10% for courts and 14% for tribunal judges.

There were also regional variations – while 36% of court judges were women in the South East, it was just 21% in the South West.

Women were best represented in the lower courts, making up 38% of district judges in the county court.

Speaking also for Sir Ernest Ryder, Senior President of Tribunals, Lord Thomas wrote: “We remain very concerned about the slow recruitment of BAME judges and the downward trend of new non-barrister (solicitors and legal executives) judges, despite the dedicated work undertaken by the judicial diversity committee.

“The committee, formed in 2013 and chaired by Lady Justice Hallett, has each year pursued more initiatives to explore what might be done to accelerate progress. It has been strongly supported by judges from all backgrounds across the courts and tribunals in England and Wales.”

These include outreach events and application workshops; to attract more solicitors and legal academics to the senior judiciary, eligibility for the High Court application programme was extended this year to those without litigation experience.

There has been a continuing reduction in the number of magistrates, falling 36% from 25,104 to 16,129 over the five years to April 2017. Some 54% of magistrates were female, and 11% declared themselves as BAME.




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Warby: no jurisdiction after order was sealed

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

He indicated that he would not have granted permission anyway.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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




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Our latest seminar is quickly getting booked up, if you haven’t already reserved your space then do it now!

The seminar will focus on costs in a post-Jackson landscape.  We will be holding two sessions: 9.15am-10.30am (please note: this sessions is nearly full) and 10.45am-midday.  Each session carries 1 CPD point.

Our seminar is free and open to all but is limited to 30 attendees per session.  As places are limited and going fast they will be allocated on a first come first served basis, email vikki.knight@harmanscosts.com for latest availability.




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Transitional provisions: pre-April 2013 CFA

Qualified one-way costs shifting (QOCS) does not apply on appeal if it did not apply at first instance, Master Haworth has ruled in the Senior Court Costs Office.

Under transitional provisions, QOCS is retrospective save where CPR 44.17 applies. This reads: “This section does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement (as defined in rule 48.2).”

In Landau v The Big Bus Company and another, the claimant signed a conditional fee agreement (CFA) in August 2011 to bring a personal injury claim against the defendants over an accident in 2009. This was rejected by the High Court in October 2013. Permission to appeal was granted and a second CFA entered into in November 2013, but in August this year, the Court of Appeal dismissed the appeal.

The appeal court referred to the SCCO the question of whether the costs orders made against the claimant in respect of each defendant were subject to QOCS. Master Haworth ruled that they were not.

He examined the wording of rule 48.2(1)(i)(aa), which applies to “[an] agreement… entered into before 1 April 2013 specifically for the purposes of the provision… of advocacy or litigation services in relation to the matter that is the subject of the proceedings in which the costs order is to be made”.

Favouring the submissions by the second defendant’s barrister, Jamie Carpenter of Hailsham Chambers, the master said: “It was clearly Parliament’s intention that a pre-commencement CFA entered into in respect of the ‘matter’ would disapply QOCS in any ‘proceedings’ arising out of that matter.” The rule could easily have been formulated in a different way if this was not the intention, he said.

In case he was wrong on that, Master Haworth went on to rule that an appeal does not constitute separate ‘proceedings’ in the context of section 2 of part 44.

The master expressed sympathy with the claimant’s predicament, as he did not have ATE insurance for the appeal, but said that “whilst it may be unreasonable, unfair and inconvenient to deny the claimant the benefit of QOCS in this case, for the reasons given on a true construction of the relevant provisions of CPR in this case, QOCS does not apply”.

Robert Marven of 4 New Square acted for the other defendant.




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Ramsey: ministry should be persuaded to look at DBAs

The April update of the Civil Procedure Rules will contain the outcome of the review of the exemption from mandatory costs management for the specialist civil courts, Mr Justice Ramsey confirmed last week – but he would not say whether or not it will be maintained.

It has also emerged that there is no imminent prospect of changes to the damages-based agreement (DBA) regulations to explicitly allow hybrid DBAs.

The Jackson report recommended that mandatory costs management should not apply to the Commercial and Admiralty Courts. Shortly before this came into force on 1 April, it was controversially extended to cases in the Technology and Construction Court, Chancery Division and Mercantile Courts worth more than £2m so as to reduce the risk of forum shopping.

A review of this by a sub-committee of the Civil Procedure Rule Committee was launched last June.

Speaking at last week’s IBC Solicitors Costs Conference in London, Mr Justice Ramsey – the judge in charge of Jackson implementation – confirmed that rules are now being drafted, and told Litigation Futures that they would be included in the April update. But it is too early to say what they will actually say as discussions are ongoing, he said.

The concern with DBAs is that the regulations only permit a lawyer to work on a full ‘no win, no fee’ basis, rather than, for example, a reduced hourly rate as the case proceeds which is payable win or lose, plus a contingency fee in the event of success.

The Ministry of Justice confirmed last April – less than a month after implementation of the Jackson reforms – that it was “considering suggestions which have been put to us for ways to further improve” the DBA system, but a spokesman told Litigation Futures on Friday that this position had not changed

In his speech, Ramsey J – who supports such a change – said: “Within the next year it is likely that the ministry will be persuaded that DBAs need looking at.”

The judge also suggested that as qualified one-way costs shifting takes hold in injury and defamation actions, it will be “hard to say that you can’t have it” for other personal claims.




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Supreme Court

Lord Neuberger: No “good policy reason” to deprive the father

After-the-event (ATE) insurance premiums are not part of the “costs of an appeal” to the Supreme Court, Lord Neuberger has ruled.

The president of the Supreme Court said that, however reasonable it was to have taken out the cover, in the absence of “agreement or specific statutory sanction”, a successful party could not recover it.

Lord Neuberger was ruling on the costs of a Scottish property dispute between a father, who took out ATE insurance to protect him against liability for the other side’s costs if he lost at the Supreme Court, and his son, who was funded by legal aid.

Having won the case at the Supreme Court in 2013, the father sought to recover his costs, but Lord Neuberger said the arguments raised an issue which caused the court “some concern”.

Delivering judgment in McGraddie v McGraddie (Scotland) (Costs) [2015] UKSC 1, Lord Neuberger said the Scottish Legal Aid Board (SLAB) argued that, as a matter of principle, the father’s £40,000 premium was not recoverable.

Under rule 46(1) of the Supreme Court Rules, the court can make “such orders as it considers just in respect of the costs of any appeal” as long as, under rule 51, they were “reasonably incurred and reasonable in amount”.

Lord Neuberger said that, on the facts of the case, he could not see a “good policy reason” for depriving the father of “reimbursement of the ATE premium” if he would otherwise be entitled to it.

“He was not an especially rich person, and it was perfectly reasonable and sensible to protect himself in this way before embarking on an appeal to this court to establish his ownership of a property and to vindicate his rights, even though it involved a substantial premium.”

However, Lord Neuberger said there was “obvious force” in the SLAB’s argument that the ATE premium was not recoverable as it was “simply not part of the costs of the appeal, as a matter of ordinary language”.

He concluded that, as a matter of principle, in the light of the relevant court rules and “on the basis of consistent judicial authority on both sides of the border”, the law was clear.

“In the absence of agreement or a specific statutory sanction (either expressly or through valid delegated legislation) to the contrary, a successful party to litigation cannot recover an ATE premium, however reasonable it was to have incurred it, as part of his costs or expenses of legal proceedings.”

Lord Neuberger awarded the father his expenses of the appeals both in the Inner House and Supreme Court against the Scottish Legal Aid Board, but “with regret” directed that this should not include his £40,000 ATE premium. Lady Hale and Lord Reed agreed.




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Steel: Workers bring claims

The High Court has rejected a Watford law firm’s attempt to join Irwin Mitchell (IM) and Hugh James (HJ) as lead solicitors in a piece of group litigation, saying it would likely lead to “a long-running forensic Punch and Judy show” between them all.

Mr Justice Turner said the risk of Collins Solicitors’ involvement increasing costs, duplicating effort and leading to delays, misunderstandings and disagreements was “not merely theoretical”.

The firm was seeking to add itself as one of the lead solicitors to group litigation brought on behalf of British Steel workers who claim their exposure to harmful fumes and dust resulted in various industrial diseases.

The judge said Collins’ application was “strongly resisted” by IM and HJ.

He observed that “even with the most conscientious re-distribution of duties between an expanded cohort of lead solicitors, there is likely in most cases to be an increase in the aggregate claimants’ costs bill.

“This may not present much of a disincentive for any firm making such an application but enhancing the costs revenue of solicitors is not, of itself, a free-standing component of the overriding objective.”

Turner J also found that having a considerable number of eligible claimants “may well give rise to an enhanced claim to the role of lead solicitor but it is a factor which falls far short of amounting to an entitlement. In this regard, each case must be judged on its own merits”.

He said: “The selection of lead solicitors is not an exercise in proportional representation.”

The risk of complicating the litigation with Collins’ involvement was already apparent, said Turner J. “For example, it so happens that Collins have been applying a significantly different and less stringent test of eligibility than IM and HJ in respect of those whom they consider to have sufficient prospects of success to be entered on the register.

“In his witness statement of 12 October 2017, Mr Collins has sought to contend that ‘this and a number of directly related issues should be disposed of at an adjourned hearing before a separate High Court Judge with the defendants being excluded’.

“Furthermore, Collins have instructed two experts to provide reports or commentaries on the expert evidence already collated by the existing lead solicitors the substance of which they claim should be relied upon by the claimants.

“IM and HJ are implacably opposed to the suggestion that the evidence of one of these experts should be deployed and there is thus a serious and ongoing disagreement as to that expert’s future role, if any.”

Further, the judge found, the disagreement between the firms “has already begun to deteriorate from a mere divergence of objective professional opinion to the stage of personal recrimination”.

He stressed that the group litigation order framework required “firm and consistent organisation”.

“Internal clashes between lead solicitors on significant matters of case management and control and flavoured by personal animosity are antipathetic to the orderly progress of the litigation as a whole.

“Judging by the areas of dispute so emphatically ventilated by the existing lead solicitors and Collins before me, the granting of this application would be more likely to produce a long-running forensic Punch and Judy show than a focused and coherent pathway to a just resolution of the claims to be achieved at proportionate cost.”

Turner J also took into account the “long and successful history” of IM and HJ working together efficiently in the very similar British Coal coke oven workers litigation.

He also said “it might be thought brave of Mr Collins” to rely on his firm’s work as lead solicitors in the Corby group litigation, which lasted 12 weeks, given that “the managing judge in that case had ruled that, but for shortcomings in the presentation of the claimants’ case and the organisation of their witnesses, it would have been distinctly shorter”.

Turner J concluded: “I am entirely satisfied that it would be wrong to permit Collins to be appointed as lead solicitors in this GLO.

“The GLO structure, combined with the involvement of the existing lead solicitors, ensures that the parties are on an equal footing. Expense will be increased rather than saved by expanding the number of lead solicitors.

“Matters are likely to proceed with greater expedition without impairing the demands of fairness by maintaining the status quo. An increase in the number of lead solicitors would also be likely to increase the demands on the court’s own resources.

“I am of the view that the concerns raised on behalf of Collins as to the future direction of the litigation can adequately be dealt with on an issue by issue basis by the exercise of the court’s broad case management powers.”

This is the second dispute of its type to be before the courts in recent weeks. We revealed last month that two law firms were battling it out to be named the lead solicitors in the group action being taken over the Volkswagen emissions scandal.




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Braithwaite: time for radical change

Braithwaite: time for radical change

A leading personal injury QC has held “board-level discussions” with claimant and defendant law firms and major insurers about his idea to replace the courts’ involvement in catastrophic personal injury claims with that of a neutral facilitator.

Bill Braithwaite QC said there was a better way than non-specialist judges trying complex personal injury cases.

“It is time for radical change,” he said. “When a major claim is notified, it would be possible for both sides to agree to appoint a neutral facilitator. That person could be a personal injury litigator, who has sufficient experience to understand and deal with all the usual issues which arise in a claim.

“The parties would therefore take charge of selecting the facilitator, unlike the position at present where the court imposes its selection, and where only the minority of High Court judges are from a personal injury background.

“In addition to selecting the neutral facilitator, the parties would want to agree what powers they would give to that person. The possibilities are endless; he or she could be limited to only one of the many forms of ADR, or they could be given a free hand to decide which method of ADR would work best for any individual issue.”

Mr Braithwaite argued that this was more than simply mediation or another version of settlement meetings. “It is a suggestion that we could and should use the whole range of ADR systems as and when we need them, in order to make the entire case run smoothly, not just to settle it at the end.”

He has garnered support from David Fisher, catastrophic & injury claims technical manager at AXA Insurance.

Mr Fisher said: “I fully support the process of neutral facilitation. No matter how well claimant and defendant teams may or may not be adopting a collaborative approach, sometimes issues or hurdles arise that have the potential to throw a claim off course and lead to unnecessary litigation.

“Neutral facilitation offers the potential to overcome such obstacles to the benefit of all parties, including the claimant.”

Last year, another leading personal injury silk, Andrew Ritchie QC, launched PIcARBS – the Personal Injury claims Arbitration Service – as an alternative to court-based adjudication of larger disputes.




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John McCormick, Director at Morton Young

Eclipse Legal Systems, the Law Society’s sole endorsed legal software provider, is implementing its Proclaim Practice Management Software solution at Morton Young Solicitors, a claims litigation specialist.

Based in Ashton-under-Lyne, Greater Manchester, the new start-up handles all aspects of Personal Injury law – from road traffic accidents (RTA), accidents at work and accidents in public and private places, through to product liability claims. The practice boasts an exceptional and personalised service, providing clients with direct access to a team of experienced, senior lawyers.

Key requirements for the new start-up were full lifecycle management for a broad range of claim types, rapid process automation and streamlined volume throughput.

In order to accommodate these necessities, Morton Young Solicitors is implementing a full Proclaim Practice Management Software solution, incorporating a comprehensive accounting and financial toolset with an out-of-the-box Personal Injury Case Management solution.

Fee earners at Morton Young Solicitors will benefit from a completely centralised desktop application, ensuring consistency and security throughout the practice, whilst streamlining case progression and ultimately enhancing client service – a vital offering for a new start-up in the competitive injury claims arena.

John McCormick, director at Morton Young Solicitors, comments:

“As a new start-up business, we know how important it is for us to be able to underpin our operations with the best legal software on the market. Having previously worked with Proclaim, my partner and I knew straight away it would be the solution of choice for our practice.

“For us, Proclaim is the ultimate solution, providing us with unlimited flexibility and scalability, as well as being ‘ready-to-go’ to ensure we hit the ground running.”




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Fixed costs: risk sharing is a price worth paying, says firm

A Yorkshire firm of solicitors has launched a menu pricing litigation product under which it will shoulder the risk of costs overruns, giving clients budgeting certainty as an alternative to conditional fee agreements (CFA).

The move is an early example of litigation specialists positioning themselves for a post-Jackson, post-recoverability of costs landscape, in which CFAs are no longer viable in many cases.

Paul Clarke, a commercial litigation partner at 17-partner Taylor&Emmet in Sheffield, claimed the product, known as T&E Resolve, was “revolutionary” and a model for future litigation, which will give clients flexibility and enable them to control their costs.

When clients opt to use the product, litigation will be assessed and categorised according to a scale of anticipated difficulty, with menu tariffs corresponding to the likely risk. The litigation process will be divided into defined stages that can be treated as a standalone instruction.

Mr Clarke admitted the scheme is an attempt to differentiate Taylor&Emmet from rivals offering CFA-based products – which it also offers – amid a tightening market for commercial litigation work. But risk-sharing is a price worth paying, he added, asking: “Why should the client always be the one to take the risk in litigation and to fork out more for it? We want their work and so we should bear that risk.”

He continued: “It enables us to give clients a cashflow prediction; to say that ‘we know you’re going to spend this much for each stage and roughly when it is going to fall’… We think in a few years’ time all litigation will be done on a fixed fee of some description and this is our way of trying to get ahead of the market.”

Taylor&Emmet has run a trial, involving two cases, which it said was successful in helping it pitch its pricing accurately.

Mr Clarke, a commercial contract dispute specialist who also sits as a deputy district judge, said: “The prices are fixed, no matter how difficult the case is. It’s about balancing out the risk and there is no question we will lose some and we will win some, in terms of profit.”

“We are aiming this at the savvy litigator, the in-house lawyer or the company director who has been through the mill and knows how expensive traditional litigation is to run,” he added.

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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.


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A golden opportunity for the ATE market to innovate

Enrique Gomez Head of ATE DAS UK Group

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

July 16th, 2018