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Asplin: new products well received

Legal expenses insurer DAS UK Group – which recently received its alternative business structure (ABS) licence – has announced strong 2012 results.

It reported a 10.5% increase in gross written premiums in 2012 to £178m, returning a profit of over £11m before reinsurance and tax.

This represents a 57% increase on 2011, when profits were £7m, following a small loss in 2010.

CEO Paul Asplin said: “[There was] a strong performance from all areas of the group. As well as continuing to develop our core UK legal protection business, significant contributions were also made through our insured assistance products and continued growth in the Republic of Ireland. DAS Canada also made good progress during the year.”

The results do not take into account the impact of the ABS licence in March which enabled DAS to acquire Bristol law firm CW Law. Now branded as DAS Law, all of the company’s legal services are now being delivered through it, employing 175 solicitors and support staff.

The company said its Law On The Web platforms continued to see a sharp increase in the number of unique visitors, exceeding three million for the first time. As well as the main Law On The Web site, there are a host of other sites such as the recently launched

Mr Asplin said: “The pre-LASPO after-the-event (ATE) insurance sales activity was incredible and we are very pleased that the introduction of our new post-LASPO products has been very well received. The response to our entry into the civil litigation ATE sector has significantly exceeded our expectations and whilst this will not fully replace all ATE business lost due to the LASPO changes in the short term, the longer term outlook is very positive.

“Although the legal landscape remains uncertain, at least in the litigation area, DAS is well placed to deliver innovative solutions to new problems and we have a high level of confidence regarding the future opportunities for legal protection insurance and related legal services.”

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Employers’ liability: debate over nature of injury

The Court of Appeal is set to investigate whether an injury exacerbated at work should be classified as an employers’ liability or disease claim and so attract either a 25% or 100% success fee.

HHJ Barrie, sitting in Nottingham County Court, has directed that Bird v Meggit Aerospace Ltd be transferred to the Court of Appeal using the ‘leapfrog’ procedure.

He had been asked to rule on an appeal to the decision of District Judge Hale, who sat as a regional costs judge in Nottingham and said that “an aggravation or worsening of symptoms” cannot be regarded as a disease “as usually understood and defined”.

As a result the claim was governed by CPR 45.20(1) for fixed success fees in employers’ liability claims, rather than CPR 45.23 (employers’ liability disease claims).

Two months after DJ Hale’s ruling, HHJ Mitchell – sitting at the Central London County Court with Senior Costs Judge Hurst as his assessor – came to a very similar conclusion in Fountain v Volker Rail Ltd.

Overturning the ruling of Master Haworth that the work-related injury suffered by the claimant was a disease, the judge said: “This was a claimant who had a degenerative spine whose condition was worsened as a result of a series of occurrences when he was carrying weights which were far too much for him. The fact that this was not just one occurrence but it was a series of occurrences does not make it a ‘disease’…

“By no stretch of the English language could it be said in this court’s judgement that this was a disease or that it had been contracted. The medical evidence in our view is conclusive to establish that this was a physical injury.”

According to a briefing by Andrew Hogan, a barrister at Ropewalk Chambers in Nottingham who acted for the paying party in both cases (instructed by Berrymans Lace Mawer in Bird and DLA Piper in Fountain), it is not known whether this case will proceed to the Court of Appeal as well.


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Elite Insurance has continued its strong march within the UK and European market with further senior hires to bolster its insurance offering.

Mark Thomson has joined recently as UK General Counsel to head up and manage Elite’s legal arm and the development of legal services. Formerly a commercial litigation partner at Freeths LLP, and more recently, litigation funding manager at Burford Capital, Mark has worked extensively with the insurance market. He is also an ADR Group accredited mediator.

Commenting on his arrival, he said: “I am delighted to be joining Elite’s dynamic and experienced team. They’ve made huge strides within a relatively short period, and I look forward to working closely with the whole team to deliver further growth and success.”

Elite’s CEO, Jason Smart said in a statement: “It makes absolute business sense to increase our legal department both from a cost saving perspective as well as in terms of improving our client services offering. Mark’s experience within the industry will be invaluable to us and we are thrilled to have him on board”.

In other staff news, Tim Moll will be taking on the responsibility of managing the newly relocated Elite London office in addition to his role as head of claims.

Stuart Lee also joins Elite as director of business development bolstering Elite’s sales force as the company takes on new markets and further widens its product portfolio.


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Commercial lawyers don’t want fixed costs

Litigation lawyers in London are fairly evenly split on whether Brexit will lead to a “significant flight of work” to other jurisdictions, a survey has found.

The survey also underlined the strength of opposition from commercial lawyers to fixed costs. Lord Justice Jackson is to publish his report on the issue this morning.

While 38% of litigators thought work would be lost because of Brexit, 35% disagreed and over a quarter were unsure, according to the poll of 286 lawyers, based mainly at the big City firms.

Of those that predicted a flight, a quarter thought Germany would profit most and a further quarter Singapore and South-East Asia. Other suggestions were New York, Paris, the Netherlands and “wherever the banks relocate to”.

One lawyer thought the “flight” was already happening, with clients heading for the “cheaper alternatives” of the Middle and Far East.

Another said that “if people are concerned about the enforcement of judgments, they won’t come to the UK”, and if the UK left the Unified Patent Court, the work would go to Germany or the Netherlands.

The survey, by the London Solicitors Litigation Association (LSLA) and New Law Journal, follows bullish comments earlier this year by the Lord Chief Justice, Lord Thomas, that Brexit would have a “beneficial effect” on arbitration.

The majority of lawyers (54%) thought the dispute resolution market in London would remain stable over the next year. A roughly equal number thought it would grow (20%), as opposed to decline (18%).

One litigator commented that “a combination of high cost and Brexit is likely to prevent any significant growth” while another thought Brexit was “likely to increase it”, though this “may take longer than one year”.

A further view was that “work has rallied since the initial drop following Brexit”. One lawyer said simply: “My experience is that litigation is usually stable.”

The unpopularity of a fixed-costs regime for commercial cases was underlined by the two-thirds of lawyers who were against one for claims worth under £250,000.

However, most litigators (59%) admitted that they expected the costs of litigation to increase over the next five years, compared to the 9% who thought it would decrease.

A large majority (72%) blamed the disclosure regime, which they did not believe was effective in controlling the burden and costs of disclosure.

One lawyer called for “greater judicial intervention and direction”, another for the appointment of “judicial assistants” to advise judges on the “most economic form” of disclosure.

Another wanted the courts to “abolish standard disclosure and move to request-based disclosure”, while one thought there should be a “concerted effort to focus only on what is necessary”.

Ed Crosse, president of the LSLA and partner at Simmons & Simmons, commented: “There is much cause for optimism for the London litigation market in the short term, though if it is to keep its crown in the future, neither the courts nor the profession should be complacent.

“The survey highlights that there is a demand for procedural reforms, notably in relation to disclosure.”

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LPG Dann Quinn

Dann Quinn appointed as ATE Underwriter for Legal Protection Group

Legal Protection Group is delighted to announce that Dan Quinn has been appointed as ATE Underwriter.   Dan is the latest addition to an already impressive team of experienced ATE professionals at Legal Protection Group and he will be based at our recently opened London office in Fenchurch Street.

Joining from Elite Insurance, where he was also an ATE Underwriter, Dan has extensive experience dealing with commercial litigation, in particular, insolvency, defamation and professional negligence and clinical negligence.  He was also specifically involved in producing diverse schemes ranging from Japanese Knotweed to Scottish clinical negligence cases.  Dan has worked for Elite Insurance since 2011, but previously, Dan held various ATE and BTE roles at First Assist and Abbey Legal.

Dan’s role at Legal Protection Group is to support the ever expanding broker accounts whilst helping to establish our London office.  This will entail risk assessing ATE cases with regards to their suitability, whilst at the same time providing the highest level of customer service to our clients.   Dan will report to Steve Ruffle, ATE Underwriting Manager, who manages the London branch of Legal Protection Group.

Dan is delighted to be joining Legal Protection Group as an established and ambitious legal expenses provider and to help continue the company’s successful growth within the ATE sector.  Commenting on his appointment, Dan said “It is an exciting time to be within the ATE market and, with Legal Protection Group’s reputation and expertise already in place, I believe that there are endless opportunities for us in the future.”

Commenting on the appointment, Phil said “I am delighted that Dan has decided to join Legal Protection Group. I always admired his knowledge, experience and professionalism when he worked for Elite and he will be another great asset for our team”.

Martin Rowan, MD of Legal Protection Group, said “Dan has a strong background in ATE insurance, making him a valuable addition to the team.  His appointment will ultimately help to support our growing London business.  We welcome him to the Legal Protection Group team.”

Dan takes up his role with immediate effect.

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Sugarman: records needed

Sugarman: records needed

The Association of Personal Injury Lawyers (APIL) have joined the campaign to stop Companies House from deleting the details of defunct businesses after six years rather than the current 20.

It said the move would “severely hamper” the efforts of ill workers and bereaved families to seek redress against negligent employers.

This week Labour deputy leader Tom Watson led calls for Prime Minister Theresa May to halt the change, saying it would damage the fight against corruption.

Companies House is considering the move in the light of complaints that retaining, and making publicly available, information relating to long-dissolved companies is inconsistent with data protection law.

APIL president Neil Sugarman said: “Sick and injured workers need Companies House records to identify their former employers and the relevant insurers so that they can pursue them for the full compensation they need and deserve.

“Victims of asbestos-related disease mesothelioma, for example, are dying because of exposure at work as far back as the 1980s. Some of those companies who exposed their employees to asbestos are now likely dissolved and the records would be deleted under the plans.

“Without a record of the original company entity, workers and their families may never see justice be served… There is no possible reason or motivation for deleting company records which should supersede the need to access information on behalf of vulnerable and ill individuals.”

The Guardian quoted Mr Watson saying: “This proposal from Companies House would only serve to protect criminals who seek to hide their past corporate misdeeds from public view. It would harm the global fight against corruption and tax avoidance. It would also be an attack on the right of the public, the police and journalists to scrutinise corporate wrongdoing.

“Perhaps more importantly, it would prohibit legitimate companies carrying out due diligence on people they are considering doing business with.”

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Etherton: re-alignment of jurisdiction is complex

Etherton: re-alignment of jurisdiction is complex

There needs to be investment in the county court to ensure that cases are allocated to the right level of judge and in turn free up time in the higher courts, the Chancellor of the High Court said this week, while also suggesting that the financial limits which determine where cases are heard will have to be adjusted.

In a speech on the challenges facing the judiciary in the next Parliament – delivered at the UCL Conference at the Institute for Government – Sir Terence Etherton said it was “wasteful, inefficient and costly” to deploy a higher level of judge than the case requires.

He explained: “So, for example, at the present time a significant proportion of the work of the Court of Appeal comprises permission to appeal applications, first on paper and then with an oral renewal. These include permission to appeal applications in family cases from circuit judges, and permission to appeal applications in part 7 multi-track county court cases. The High Court judges are also hearing some cases which do not warrant their level of expertise.

“The re-alignment of jurisdiction so that the level of judge is appropriate for the type of case (in terms of value, complexity, importance etc) is a complex task. Re-alignment can only take place if there are the capacity and administrative and judicial resources at the county court level to enable work to be devolved from the High Court so that the High Court can in turn take work from the CA. That will inevitably mean investment at the county court level.

“Apart from that critical practical consideration, there is also a tricky issue as to the appropriate increased financial limits for the county court in order to be able to take on work currently undertaken at the High Court level. There is no consensus as to the extent to which, if at all, the current £100,000 non-equity limit should be raised or the £30,000 limit for probate cases.”

The wide-ranging speech reviewed the work to improve IT in the courts, noting that the new IT system for the work in the Rolls Building is due to come into operation later this year. “It will enable all cases to be issued and filed on line anywhere in the world, seven days a week, 24 hours a day. Consideration will be given as to whether it can be rolled about across the rest of the High Court in due course.”

Sir Terence also identified ensuring that business, property and high-value work is dealt with locally and not all sent to London as one of several other challenges facing the courts.

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car crash

MoJ to consult on whether increase   limited to RTA/whiplash cases

An increase in the small claims limit for whiplash cases is “unlikely” before the end of next year, the Motor Accident Solicitors Society (MASS) has said.

Following a meeting with the Ministry of Justice (MoJ) last week, a spokesman for MASS said there would be a consultation on whether the increase should apply to all personal injury cases.

It was not clear from George Osborne’s autumn statement, which said simply that “more injuries” would go to the small claims court, how far the increase would go.

A spokesman for MASS said the MoJ was likely to launch a consultation in March 2016 on both the small claims increase and Mr Osborne’s plans to remove the right to general damages for minor soft tissue injuries.

He said the consultation would focus on how the changes were to be implemented, “not on the principle but the details”. The consultation is expected to run for between six and 12 weeks.

Removing the right to general damages in whiplash cases would need primary legislation and the spokesman said the measure would be inserted into an “available bill” before parliament.

“The timing of implementation will depend on how long the bill takes to go through the Commons and the Lords, but it is expected to be either April or October 2017.

“The small claims limit change could in theory be earlier, but given the timing of the consultation is unlikely to be before the end of 2016, and the MoJ consider it is likely that it will be introduced at the same time as the whiplash change.”

Huw Evans, director general of the Association of British Insurers, has hailed the changes as “a significant breakthrough in tackling the compensation culture” and “good news for motorists”.

He went on: “Insurers have long called for meaningful reform in reducing costs in the compensation system, including increasing the small claims track limit.

“Previous government reforms have already led to insurers passing on over £1 billion in savings to motorists through lower premiums, and in a highly competitive motor insurance market, insurers will continue to pass on savings to customers”.

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Fletcher: conduct of the defendant is likely to be integral to the court’s decision

The low level of the proposed new fast-track fixed fees could make it relatively easy to trigger the ‘escape clause’ built into the regime, it has been claimed.

Under every entry in the table of proposed fixed recoverable costs scheme (FRCS) for claims outside the road traffic, and employers’ and public liability protocols – which essentially replaces and expands on the current FRCS – a 20% ‘escape’ is mentioned.

Michael Fletcher, a costs lawyer at Manchester firm Glaisyers, explained that the rationale for this is set out in the Jackson report and essentially reflects and seeks to replicate the current rules under CPR 45.12 and 45.13.

These permit a claim to be made for more than FRCS fees, the caveat and disincentive being that if the solicitor does not persuade the court to award more than 20% over the FRCS, then he has failed and must pay the defendant’s part 8 costs.

“In the current predictable fee system CPR 45.12 is little used, as at £800 plus 20% of damages, costs normally reach a similar amount to the approximate work in progress (WIP) required to conclude the necessary work. However, if fixed costs are as low as £550, which they will be in a £2,000 pre-issue case, then you would only have to persuade the court that you have reasonably incurred more than £660 in WIP to exceed the fixed-fee amount.”

Mr Fletcher predicted that if liability has been disputed, a police report is obtained and witness statements are required, then getting more than fixed costs could well be achievable.

He added: “The conduct of the defendant is likely to be integral to the court’s decision making on whether a claim can ‘escape’. The defendant’s conduct is of course one of the features of the new Jackson proportionality test, which has the overall effect of reversing the decision of Lord Woolf in Home Office v Lownds.

“Will defendant insurers sufficiently resource themselves to ensure that they cannot be accused of procrastination or conduct that has the effect of breaching the letter and spirit of a low-value fixed-fee scheme?”

The Jackson report contemplated that the Senior Courts Costs Office would see a reduction of over 700 cases per year as a result of fast-track fixed fees, but Mr Fletcher questioned whether in fact the reverse will be true.

“Will we actually see more costs litigation instead of less? For those of us old enough to remember it, is this county court scale 1 all over again?”

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Commercial disputes: hearing costs in UK could rise substantially

Court fees for litigants in commercial money claims could rise from under £3,000 to more than £21,000 under plans by the Ministry of Justice (MoJ) for a percentage-based fee system.

Daily rates of £1,000 for hearings, trial of a preliminary issue, or substantive trial of the claim, would also be introduced, to offset the actual cost of court time.

In a consultation paper issued yesterday, the government said it was seeking a general power in the Anti-Social Behaviour, Crime and Policing Bill, currently before Parliament, to change public finance rules that say public bodies can only recover the cost of providing services but no more.

This will affect several different areas of litigation where the fee is now higher than the cost price, including divorce, and fast-track and multi-track hearings.

The MoJ argued that because of the benefit commercial litigants can obtain from litigating in the UK courts, they should pay more than in standard money claims: “We believe that it is reasonable and proportionate for those bringing these proceedings to make a greater contribution to the costs of maintaining the courts.”

It said its research showed that court fees were a secondary consideration in a decision to pursue commercial litigation. Amendments to the bill would include a duty to ensure that any enhanced fees do not damage the competitive position of the legal services market.

In relation to money claims in commercial proceedings at the Rolls Building in London, which the MoJ acknowledged was worth some £4bn a year in legal exports, it said the current regime of charging issue and hearing fees of £1,870 and £1,090 respectively in claims worth more than £300,000 was too generous.

Two proposals were made: Firstly, the fee for issuing proceedings for claims over £10,000 would be 5% of the value of the claim, subject to a maximum issue fee of £10,000.

In addition, £1,000 daily hearing fees would be payable, so to some extent costs would be based on the length of a trial. The MoJ estimated the cost of a day of court time in the Rolls Building at £1,067.

The second proposal was to apply a higher maximum fee. The ceiling on fees could be either £15,000 for a claim of £300,000, or £20,000 for a claim of £400,000.

Potentially, under option two, a one-day trial could cost £21,090 in fees, made up of an issue fee of £20,000 plus a hearing fee of £1,090. Under option one, the same trial would cost £11,000.

This compares with a combined total of fees for an equivalent trial under the current regime of £2,960.

The consultation paper stressed: “The government is keen to ensure that any steps we take to increase court fees do not discourage litigants from using our courts nor damage the competitive position of our legal services… The intention is to ensure that these cases make a fair, but not excessive, contribution to the efficient and effective system of justice in this country.

“We are confident that our proposals are unlikely to damage the international position of our legal services.”

Among the other changes proposed is an increase in the fees for cases involving money claims on a sliding scale, with a maximum fee of £1,870 – and considering moving in future to a system where the fee is calculated as a percentage of the amount under dispute in the court case. For non-money claims, the MoJ wants to introduce a standard fee of £270 instead of the current mixture of fees.

In addition to separate reforms to judicial review, the MoJ proposed more than doubling the current application fee for judicial review to £135, and more than trebling the fee for a hearing or an oral renewal to £680.

MoJ minister Shailesh Vara, who has responsibility for the courts, said: “We have the best court system in the world and we must make sure it is properly funded so we keep it that way.

“Hard-working taxpayers should not have to subsidise millionaires embroiled in long cases fighting over vast amounts of money, and we are redressing that balance.”

The consultation will run until 21 January 2014. The government expects to make changes to the fees, depending on the outcome of the consultation, in spring and summer 2014.

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Pascall: Offer clients a risk-free litigation service

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

As we move forward into 2018, I share some insights likely to affect litigators over the coming months. Some will be anecdotal, some technical and, hopefully for the reader, all of significance in some way.

Litigation costs are expected to be in the spotlight and we hope to get further clarity over how the LASPO changes are applied in practice with regard to proportionality. Demouilpied v Stockport NHS Foundation Trust and West v Stockport NHS Foundation Trust are due to be heard in the Court of Appeal before summer this year.

Last year saw a similar message delivered by all sides of the legal sector during the Legal Futures Innovation Conference: the marketplace is evolving with greater rapidity, technology is becoming increasingly relevant, and ambitious new firms are looking to offer added value in order to secure long-term client relationships.

It is likely that the majority of growth will come through merger and acquisitions which will naturally concentrate the number of firms. Niche/specialist practices should also see further opportunity in the marketplace.

Commercial litigation: Business clients are looking for clarity and consistency regarding litigation costs, how they can mitigate risk and also reduce the impact of litigation on cash flow.

The call by the Competition & Markets Authority and others for law firms to publish hourly rates will not satisfy this requirement and may only lead to further confusion, particularly when combined with the regulated/unregulated practice imbroglio.

Law firms that recognise their business clients need financial stability, through the proactive packaging of fully preventive and protective legal solutions, will be very attractive.

CFAs, ATE/BTE insurance schemes, disbursement funding and litigation management, all offered as a package, used to be the preserve of the personal injury and medical negligence market, but consider the reasoning behind this: the clientele targeted were those who had limited cash flow, low financial resilience and meritorious claims.

Any firm that can offer a risk-free litigation service with little or no upfront cost to businesses will win new clients.

Personal injury and medical negligence: Fixed recoverable costs and an increase in the small claims limit for personal injury is having a significant effect on the legal services sector.

Costs lawyers and PI departments have seen reduced work and this has led in some cases to PI firms taking up medical negligence work with varying success, compounded by a difficulty in obtaining insurance backing.

The two disciplines are distinct from each other and ultimately insurers are looking for positive indicators, such as: accreditation from Action against Medical Accidents (AvMA) or the Society of Clinical Injury Lawyers; at least two partners with significant experience; a dedicated support team; and a demonstrable risk assessment process.

Here at Temple Legal Protection, we have some exciting new developments rolling out during 2018, including Litigation Advantage Plus for clinical negligence claims; ATE insurance combined with disbursement funding in one package for commercial litigation; and our Employer Protection Scheme, which provides a comprehensive prevention and protection package for employers.

In addition to our upgraded online portal TOPS that went live at the end of last year, we are also launching our new website in the coming weeks which has been redesigned and fully mobile optimised, to ensure our clients can get hold of information and decisions when they’re needed.

This year will present challenges, just like last year and all those before. The litigation market remains strong and success will come through pragmatism, flexibility and proactive positive change.

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Dyson: arbitration focus

Dyson: arbitration focus

Lord Dyson, who formally retired as Master of the Rolls on Sunday, has rejoined 39 Essex Chambers, which he once headed.

He will work principally as an arbitrator in all areas of law but with a particular focus on commercial, public international law and sports law.

Lord Dyson, who is 73, said: “I am delighted to return to 39 Essex Chambers which has become hugely successful in so many diverse areas of law.”

David Barnes, chief executive and director of clerking, added: “It is a great pleasure to welcome Lord Dyson back to chambers, following his esteemed judicial career and his retirement this year as the Master of the Rolls. We very much look forward to working with him again as 39 Essex Chambers further expands its international and domestic arbitration services.”

Lord Dyson had four years as Master of the Rolls and head of civil justice, the culmination of 30-year judicial career which saw him appointed to the High Court bench in 1993, the Court of Appeal in 2001 and Supreme Court in 2010, only for him to return to the lower court when he became MR.
Prior to becoming a judge, Lord Dyson had a varied practice at the Bar. Called in 1968, he became a QC in 1982 and in 1986 joined 39 Essex Chambers as head of chambers.

He has been replaced as MR by 65-year-old Sir Terence Etherton, who was the Chancellor of the High Court (that is, head of the Chancery Division).

There has still been no announcement of his replacement as Chancellor. There are strong rumours that it will be either Lord Justice Vos or Lady Justice Gloster, with the latter supposedly favoured by justice secretary Liz Truss, who wants to see a woman in the role.

During her speech today to the Conservative Party conference, Ms Truss highlighted the need for greater diversity in the judiciary.

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The bar for challenging a costs order is high

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

Webb Resolutions Ltd v E-Surv Ltd [2014] EWHC 49 (QB)

Appeal against grant of an out-of-time application to appeal an order for costs.

Appeal allowed. Held: Although the power of the court to revisit a permission decision of a single judge made in the absence of one of the parties following a renewed application should be exercised sparingly (per Jolly v Jay [2002] EWCA Civ 277), under CPR 52.3(5) a defaulting party seeking an extension of time for a renewed application for permission to appeal must satisfy the same tests applied in Mitchell.

In the present case, the judge had granted permission on the mistaken impression that there was a causal connection between the delay in receiving notice that permission had been refused and the applicant’s default of CPR 52.3(5), when the default was in fact blatant and avoidable.

Full ruling here.

Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2014] EWHC 168 (QB)

Costs appeal raising the issue of whether supervening incapacity automatically terminates a solicitor’s contract of retainer.

Held: Although an agent’s authority terminates automatically upon the mental incapacity of their principal (subject to ostensible authority or liability for breach of warranty), loss of capacity does not, in itself, have the legal effect of frustrating or otherwise terminating an underlying contract of retainer. Findley v Barrington Jones [2009] EWHC 90130 (Costs) based on a misreading of Yonge v Toynbee [1909] 1 KB 215 and without regard to the doctrine of frustration.

Appeal allowed. The loss of capacity did not frustrate the conditional fee agreement. Defendant’s application to strike out the claimant’s bill of costs dismissed.

Full ruling here and Litigation Futures story here.

Taylor v Burton & Anor [2014] EWCA Civ 21

Appeal against, inter alia, an overall costs order, which included amendment costs where the successful party had been granted the amendment and costs of an interim injunction.

Held: The general rule is that those who obtain permission to amend are ordered to pay the other parties’ costs of and occasioned by the amendment.

An order providing that a party will recover the costs of an interim application only if they satisfy a costs condition, such as success on an issue relating to that order, must be drafted with precise care. Where the language of the order is imprecise, it must be interpreted against the context of the particular dispute. Where the condition is not satisfied, the parties should be left to bear their own costs.

The hurdle for challenging a costs order is high. An appellate court will only be justified in interfering if there has been a misdirection in principle, a failure to take into account or disregard a factor, or the judgment falls outside the range of reasonable disagreement.

In the present case, the judge was innocently in error by including the amendment and interim application costs.

Successful party to bear the amendment costs. Parties left to bear their own costs of the interim application on the basis that the costs condition was not satified. With hesitation and relucatance, the court could not re-consider the overall costs order. The trial judge’s decision was not irrational and he correctly addressed himself to the relevant matters.

Full ruling here.

Rehill v Rider Holdings Ltd [2014] EWCA Civ 42

Appeal against refusal to apply the costs consequence of failing to beat part 36 offers in a settled personal injury claim.

Appeal allowed. Held: When deciding whether the costs consequences of failing to beat a part 36 offer should apply, the court must assess whether it was reasonable to reject the offer, having regard to the information available to the parties at the time the offer was made (per CPR 36.14(4)(c)).

In the present case, the Recorder overlooked agreed medical evidence and failed to evaluate whether an uncertain prognosis justified the financial value of the claim. Respondent ordered to pay costs from his rejection of an earlier offer. Appellant ordered to pay costs of any detailed assessment of the appeal due to a failure to file its costs schedule.

Full ruling here.

The Bank of Ireland & Anor v Philip Pank Partnership [2014] EWHC 284 (TCC)

The issue was whether a failure to include a full statement of truth in a costs budget breached CPR 3.13.

Held: There is nothing in the rules or practice directions which requires any and every failure to comply with the formal requirements for budgets as rendering the budget a nullity. Although the absence of a statement of true is not trivial, it is a failure of form rather than substance.

In the present case, the claimant had filed and exchanged a costs budget on time, which was subject to an irregularity subsequently rectified.

Full ruling here and Litigation Futures story here.

Bocacina Ltd v Boca Cafes Ltd & Ors [2014] EWHC 26 (IPEC)

Costs judgment following a finding of passing off in the Intellectual Property Enterprise Court (IPEC).

Held: In the IPEC, litigation only over costs is not to be encouraged. The court must strike a balance between providing a fair level of recovery for meritorious claimants while encouraging early resolution of proceedings without a trial. As such, significant account will be taken of reasonable admissible offers to settle when determining costs.

Where an offer omits an aspect of relief or costs that is insignificant, a claimant who successfully takes that issue to trial should not expect to recover the full costs of doing so.

Equally, if an offer has been made which does not provide for costs, following an indication that the claim is likely to succeed, it is more incumbent on a defendant to make a sensible offer which includes costs if they are to avoid payment of a substantial sum.

In the present case, the majority of costs were incurred after an offer was made. Claimant awarded 100% of costs incurred prior to the offer, 50% thereafter. None of the defendants’ costs were recoverable.

Relevant factors included: that the claim was meritorious; the defendants made a reasonable offer covering substantially all of the relief realistically obtainable at a relatively early stage; following the offer, the case largely became about costs; despite the offer, the defendants continued to deny liability; and that the claimant abandoned a challenge that changes made by the defendants were insufficient to avoid liability.

Full ruling here.


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Just CostsJust Costs Solicitors are inviting practitioners to take part in The Costs Management Survey 2017 – a project which affords litigators the opportunity to express their views on the Costs Management process, 4 years on from the Jackson Reforms. The results of this survey will be compiled, and all participants will receive a complementary detailed report and analysis of the findings.

It will take no more than 2 minutes to complete the questions included. All responses will remain anonymous.

Please select the appropriate link below, to take part:

Personal Injury and Clinical Negligence practitioners:

Commercial Litigation practitioners:

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New ISO white paper available for download

From the start, the Jackson Reforms were expected to force claimant solicitors to explore new profitable growth strategies and implement new processes to support them. And indeed, some have – increasing efficiency to improve profits per case and enabling a volume-based approach to drive success in the new personal injury legal environment.

Eighteen months on from when the Jackson Reforms took effect, Insurance Services Office (ISO) has released a new case study, ‘post-Jackson success possible with PICAS Plus’, reporting some of the major benefits that Cogent Law and Lyons Davidson have achieved since implementing a digitalised personal injury settlement process.

The PICAS Plus solution helped these organisations reduce overall time from submission through to settlement by as much as 14 days by streamlining case handling, increasing efficiency and reducing claim life cycles. The case study shows how, in the wake of the Jackson Reforms, PICAS Plus is demonstrating an ability to preserve a firm’s bottom line while still generating fair outcomes for their clients.

Download the ‘post-Jackson success possible with PICAS Plus’ case study now to learn more about how PICAS Plus can help speed up the personal injury settlement process.


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Bellamy: lack of information and guidance from the government

Leading legal expenses insurer DAS has unveiled three new after-the-event (ATE) products for the post-Legal Aid, Sentencing and Punishment of Offenders Act market.

The policies, available from 1 April, will cover personal injury, clinical negligence and civil litigation respectively. They are named DAS LawAssist, bringing together the two brands.

They are dependent on 51% prospects of success and offer delegated authority in most cases, and fixed pricing from £75.

All the policies pay the policyholder’s solicitor’s disbursements and barrister’s fees – except if the barrister is acting under a conditional fee agreement – and indemnify against liability to pay the premium if the case is lost; or if the claim is withdrawn by agreement between DAS and the claimant’s solicitor; or after a part 36 offer, and it is won but a court awards damages that are less than the offer to settle.

The adverse costs cover extends to costs and disbursements arising from an interim order following a pre-action disclosure or interim application.

Phil Bellamy, group underwriting, ATE and special risks manager at DAS, said: “After April, many of the existing ATE products on the market will no longer be suitable and solicitors will have to reconsider how to protect their clients and run their business.

“The perception that the changes accompanying LASPO will alleviate the need for ATE insurance is altogether wrong. Not everyone takes out before-the-event insurance and the introduction of qualified one-way costs-shifting still means there are significant costs exposures for claimants and having the right ATE insurance will be as important as ever.”

Mr Bellamy said the main challenge in developing the new products has come from “a distinct lack of information and guidance from the Ministry of Justice… [They] have been designed and priced using all the knowledge and understanding we have gained as a leading provider of ATE insurance since 1999.”

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New rule will “send strong message” to claimants

The government believes its new ‘fundamental dishonesty” rule could lead not only to the number of personal injury claims being reduced but may “have some form of deterrent effect” against exaggeration, it has emerged.

The rule, contained in clause 45 of the Criminal Justice and Courts Act, would require courts to dismiss claims in their entirety where the claimant had been ‘fundamentally dishonest’, unless this would cause substantial injustice.

In a recently published impact assessment on the new rule, the Ministry of Justice (MoJ) said the change would “send a strong message to claimants that if they act in a fundamentally dishonest way there is a greater probability that they will lose all compensation”.

The MoJ went on: “The government anticipates that this will reduce the number of fundamentally dishonest PI claims, and the associated costs of paying compensation, which are met by insurers and by bodies such as the NHS which are not insured.

“In addition, as a behavioural response, the government expects that other PI claims may be exaggerated less, again leading to lower compensation paid by defendants.”

Clause 45 was added to the Act at a late stage and initially met some spirited opposition in the House of Lords, before peers relented and let it pass.

The assessment said the government does not record data on the number of claims involving ‘fundamental dishonesty’ and the MoJ accepted that only a “small number of claims” would be considered by the courts to fall into this category.

“In the absence of a firm body of evidence to the contrary, it has been assumed that, overall, the amount of legal work required to settle claims in future will remain broadly the same, both on the part of defendants and claimant lawyers.

“It could be that less work is required to resolve some claims in future if the claim appears to defendants to be less exaggerated and if defendants accept the claim with less discussion and negotiation. Conversely it could be that claimant lawyers devote more resource in future to demonstrating that a claim is honest.”

The MoJ said the government had made “no assumption” about the “aggregate reduction in compensation paid” as a result of some settlements being lower.

However, it added: “The government believes it is reasonable to consider that the increased prospect of a claim being dismissed with no compensation paid at all may have some form of a deterrent effect on other cases.”

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High Court: application refused

Leading international law firm Squire Sanders is facing a libel claim over the contents of a letter before action it sent after failing to have the action struck out.

The firm sent the letter on behalf of a client to one of that client’s former directors, copied to his current employer, with a range of allegations about his actions while in his previous role.

According to the recently published ruling in Hodgins v Squire Sanders [2013] EWHC 2404 (QB) – though actually handed down on 1 August – Squire Sanders sought to have the claim struck out on the basis that the letter was not reasonably capable of being understood to bear a meaning of guilt of the conduct described, as the claimant contended.

Squire Sanders said the letter simply indicated the allegation that its client would seek to establish; the position was analogous to a criminal charge, where it would be unreasonable to take that charge as meaning guilt.

The claimant’s counsel, Andrew Caldecott QC, argued that it was as clear an allegation of guilt as there could be.

Mrs Justice Sharp agreed that the words used in the letter were capable of bearing that meaning. She adopted the submissions of Mr Caldecott, which she boiled down into three key points.

First that, as a matter of plain language, the letter was phrased as an outright assertion that the conduct happened.

Second, “there could be no possible purpose in copying the letter to the claimant’s employer and [the employer’s] board unless it were to suggest that the claimant was guilty of the malpractice alleged, and was unfit to be employed”.

Third, added weight was given by the fact that the “grave charges are made by a partner in a well-established firm. The reasonable reader is bound the assume that the more serious the charge, the more care will have been taken before making it”.

Squire Sanders put forward a wider principle that there should be a certain class of publication which is not capable of bearing a particular meaning. Without needing to come to a conclusion, the judge said there was a difference between a “newsworthy report” of a claim or charge and “what might be regarded as a ‘targeted’ publication from the originator of the allegation, or someone speaking on his or her behalf who will have an inside view on the facts”.

Squire Sanders had no comment.

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The RCJ: your part-time workplace of the future?

The first part-time High Court judge could start sitting next year after the Judicial Appointments Commission (JAC) launched a competition that allows candidates to work under flexible arrangements.

Applications opened yesterday for nine opportunities to sit in the Queen’s Bench (QB) or Family Divisions, and one of the QB posts is available for part-time or flexible working.

It follows a change in the law in April 2013 that enables part-time working for the High Court bench, with a view to increasing diversity.

The JAC said it hoped this would encourage candidates who might not previously have considered applying.
Applicants do not need to be a QC or to have sat as a deputy High Court judge. However, they must be “a high-performing lawyer with significant experience and show leadership potential”.

The JAC said there are three potential flexible working patterns available for the position:

  • A commitment to a number of days per week and only suitable for someone wishing to apply for a generalist post (limited to employment or administrative law, or to sit in the Employment Appeal Tribunal); or
  • A minimum of 60% working full weeks with a commitment to a blocked period of working (eg, could sit in crime, defamation, planning or general QB work); or
  • Two people, each working 50% on a salaried part-time working basis, working blocked periods only.

Candidates have to indicate in their application forms any of the flexible working patterns they would wish to be considered for, but this will not form any part of the selection process, the JAC said.

Final working patterns will need to be discussed and agreed between the successful candidate, relevant head of division and HM Courts and Tribunals Service at the time of appointment.

Women made up a third of the last recommendations to the High Court and there is now a record number of women (19) on the bench there.

JAC chairman Christopher Stephens said: “Women have been making good progress at the entry and middle levels of the judiciary for some time and it is very positive to see this filtering through to the High Court. Women should be encouraged by this and apply in greater numbers – when they do apply, they are achieving high levels of success.”

Lady Hale, deputy president of the Supreme Court, said: “We know we need a more diverse judiciary, especially in the higher ranks. We know there are plenty of able women and other diverse lawyers out there who could be great judges. There are fewer barriers now than ever before. But if you don't apply they can't appoint you – you have to be ‘in it to win it’.”

The application window closes at noon on 4 November 2013. Click here for more details.

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Eclipse Legal Systems unveils a host of new software features at Manchester’s Lowry Hotel

Market leading legal software provider, Eclipse Legal Systems, recently unveiled a host of new software features – as well as its future vision – at its Eclipse 2014 event.  Eclipse 2014 took place on Wednesday 11 June and brought together over 300 delegates at Manchester’s exclusive Lowry Hotel.  Delegates – comprised of current Eclipse clients and practices currently migrating to the company’s Proclaim solution – benefited from a day of keynote presentations and detailed breakout sessions.

The core of the event focused on showcasing the raft of new functionality available in the latest version of Proclaim – v3.3.  This new version will be available to all existing Proclaim users free of charge.  Some of the features revealed included:

  • ‘Quick Document Builder’ for rapid document construction, directly within MS Word
  • Unlimited data population, using a new database structure, enabling rapid on-the-fly creation of any number of data fields
  • A complete costs drafting solution, including ‘red line bill’ creation
  • Further enhancements to Precedent H production
  • New billing and time management toolsets, allowing advanced configuration at fee earner, matter, and client level
  • Mobile time recording, with the new MyTime app
  • ‘CaseViewer’, allowing the export of Proclaim matters to mobile, non-Proclaim platforms

In addition to revealing new Proclaim features, the event was memorable for the unveiling of Eclipse’s product vision.  Chief Software Architect, Steve Ough, comments:

“Our product vision is focused on accessibility and the provision of multiple entry points.  Law firms are increasingly requiring different types and different levels of software access depending on the fee earner or client involved.  Providing access to core Proclaim tools in a database- and device- agnostic manner is the ultimate goal.”

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Neuberger: unpalatable choices for litigants

The president of the Supreme Court has urged the government to tread very carefully when considering whether to restrict the ability of people to bring judicial reviews.

Speaking at a press conference to mark the start of the legal year, Lord Neuberger also warned about the dangers of litigants in person clogging up the courts in the wake of legal aid cuts.

Though he acknowledged that there may be abuses which need to be addressed, the judge said that “any proposals which limit or cut down or risk limiting or cutting down the rights of the citizen to come to court to complain about infringement of his or her rights by the state or any attempts to reduce the ability, to kerb excesses, of the executive through the courts have be to be looked at with great care”.

On legal aid, Lord Neuberger said that if a potential litigant cannot get legal representation or even legal advice, “they are faced with two unpalatable choices” – to give up or to represent themselves and be at a disadvantage if the other side is legally represented.

“Court proceedings are often unfriendly to someone who has not been to court,” he said. “The consequence is that it is unfair to them and the consequence for the system is that the hearing will normally take much longer.

“Court staff time will be taken up because they will have to be given advice much more and actually the hearing time will be taken up, which means (a) our court systems become clogged up and (b) other people's cases do not get heard. All this is of concern.

“I think that legal aid cuts therefore do cause any person concerned with the rule of law worry. Having said that, it is totally unrealistic not to acknowledge that the government has economic problems, and that inevitably leads to cuts in all sorts of areas, and, secondly, to say that the duty not only lies with the government but there are concomitant duties on judges and on the legal profession to do its best to deal with these problems.”

Also at the briefing, Lady Hale, the deputy president of the Supreme Court, told the media that while she was proud to have become the first woman appointed as a Law Lord, she was disappointed that in the 10 years since, “not one among the 13 subsequent appointments to this court has been a woman”.

She suggested that one problem was the lack of diversity among those who are consulted during the selection process for new Supreme Court justice.

“I think of the people who have to be consulted, I am the only woman. I do not know whether the fact that the appointments process is dominated by men has anything to do with the choice of people. It would not be impossible to speculate that it is always much easier to perceive merit in people who are like you than it is to discern the merit of those who are a bit different.

“I am not only talking about gender diversity, I am talking about all kinds of diversity. There is ethic diversity, there is professional diversity, there are all sorts of measures on which, to my mind, diversity will be a good thing.”

Lady Hale also said “we could look much more broadly for top-calibre lawyers to be members of especially this court because we are not trial judges. We are deciding high points of principle. That is one of the reasons why diversity of values and experience is particularly important. We could look much more broadly”.

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inCase200Revolutionary award-winning mobile app inCase continues to impress with another shortlisting for the Technology Initiative of the Year Award.

This is the fifth time in 12 months that inCase has been shortlisted for an award and having already attained two winner trophies, the founder and developer, Sucheet Amin is hoping to walk away with a third at the Modern Claims Awards 2015 to be held on 30 April 2015.

Redefining the way in which law firms deliver legal services, inCase delivers a complete communications package for clients, measurable financial savings for law firms and drastically improving client service.

Sucheet said “being shortlisted for this award is recognition that inCase is benefiting law firms and bringing real value to those firms and the clients they serve. With our recent launch of an app specifically designed for conveyancing firms and a facility for clients to pay via inCase, we are really pushing the boundaries of this cutting edge technology”.

Sucheet, a personal injury solicitor with his own legal practice, Aequitas Legal in Manchester, first developed his own mobile app in 2012 for his clients. Learning what made clients engage with mobile apps and his knowledge of the PI industry, he was able to develop a unique solution as demand for information and regular updates from his clients grew.

Sucheet added “we are in a varied and tough group of finalists. However, the whole inCase team is proud to be amongst them and we just hope that the judges recognise the importance of mobile apps forming part of a firm’s digital strategy and how we help overcome that particular challenge.”

The mobile apps market has grown considerably with the strength of smartphones. inCase takes advantage of this communication tool, providing an all-encompassing experience for clients whilst delivering real cost savings to those firms recognising the importance of a mobile app service.


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Jackson: fund could flourish

Jackson: fund could flourish

The legal profession should create a not-for-profit third-party litigation funder to back both regular litigation and “deserving” cases which would otherwise not be attractive because of the level of damages sought, Lord Justice Jackson said today.

Seed funding could come from the government, the National Lottery or ‘quasi-debentures’ bought by individual lawyers and/or institutions.

Returning to a funding option he first looked on favourably during his review of civil litigation costs – but which has never gained traction in the 40 years since it was first proposed – Sir Rupert said a contingent legal aid fund (CLAF) could finally “flourish” in a market where for-profit third-party funders were now established.

Speaking at IBC’s Solicitors Costs Conference this morning, he called on the Law Society, Bar Council and Chartered Institute of Legal Executives to work together to promote the establishment of a CLAF.

“Unlike other funders, the CLAF would not have owners or shareholders creaming off the profits,” he said. “Instead it would plough all profits back into building up reserves and future litigation funding. The CLAF would be an independent body established by the legal profession in the public interest. Its function would be to promote access to justice.”

Seed funding has always been an issue for a CLAF, but Sir Rupert said that “if the governments and professions in other jurisdictions have managed to find seed-corn funding, surely England and Wales can do the same?”.

Possible sources included the National Lottery or charitable foundations, the government, or capital raised by means of ‘fixed interest coupons’ or quasi-debentures.

He explained: “Quasi-debentures would offer a more than average return on a bond but would expose the bond-holder to the risks of the CLAF being unprofitable, thereby sharing both risk and reward on the seed capital. I understand that such an arrangement would not prejudice the not-for-profit status of the fund.”

As to who would invest in a CLAF, the judge identified two possibilities. “Individual barristers, solicitors or other professionals may be willing to buy bonds of, say, £10,000 if they have confidence in the management of the scheme.

“They would note that investors in certain third-party funders have done well and the CLAF does not have any shareholders clamouring for dividends. In this way, the lawyers would be contributing to a much-needed scheme, while receiving a reasonable return for only a modest risk.”

Second, he said a bank or similar institution might assemble a ‘partnership’ of institutional type investors, such as pension funds.

“Each would put in money, buying a bond with a fixed lifetime and decent percentage annual return, in the expectation that after, say, 10 years the original capital would be returned because the fund would then be in a position to do so. Thus £50m could be raised by persuading 10 investors each to put up £5m.”

As to how the CLAF would work, cases could be chosen by experienced lawyers employed by the fund – or even by revived committees of solicitors and barristers who used to determine applications for legal aid – and importantly there would be no entitlement to support as of right.

Jackson LJ said whether the CLAF should be liable for adverse costs, or protected like the Legal Aid Agency, was a policy decision for others.

He noted that liability for adverse costs on normal principles would be an additional incentive “for the CLAF to choose cases wisely” – although there would have to be an agreement between the CLAF and the claimant as to what costs risk each was accepting – while giving it protection would require consultation and probably legislation, delaying the creation of the CLAF.

To protect itself from an adverse costs risk, he continued, the CLAF might take out block or case-by-case after-the-event insurance; alternatively it could self-insure “up to a point”.

Sir Rupert said costs management would make it “much easier” for the CLAF to assess the adverse costs risk, as would the adoption of his proposal last week for fixed costs for all civil cases up to £250,000.

He concluded: “The time for setting up a CLAF has come and I invite the Bar Council, Law Society and CILEx to consider taking forward this proposal.”

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Djanogly: objective is to reduce insurance premiums

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Hancock: Serious concerns

The government is to repeal “at the earliest opportunity” unimplemented legislation that would have exempted publishers that were members of a recognised press self-regulator from paying the claimant’s legal costs when sued, even if they lost.

Section 40 of the Crime and Courts Act 2013 also provided that newspapers outside a recognised self-regulator would have to pay the claimant’s costs, even if they won in court.

The announcement by culture secretary Matt Hancock came alongside his decision not to press ahead with part 2 of the Leveson inquiry, following a consultation that closed more than a year ago.

Mr Hancock told Parliament yesterday that the consultation exposed “serious concerns that section 40… would exacerbate the problems the press face rather than solve them. Respondents were worried that it would impose further financial burdens, especially on the local press.”

He said: “Only 7% of direct respondents [rather than those who signed petitions] favoured full commencement of section 40. By contrast, 79% favoured full repeal.”

The consultation response reported that a “significant number of lawyers specialising in media law were opposed to commencing section 40 based on the ‘chilling effect’ it would have on the concept of equality before the law”.

It explained: “They argued that it would put the claimant in a position of unparalleled strength, encouraging unmeritorious and vexatious claims without fear of financial retribution.

“Costs were a key aspect for lawyers. Several stated that, as IMPRESS pays £3,000 of successful claimants’ legal fees, despite costs on such issues running into the hundreds of thousands, this could lead to limited input from legal experts.

“It was also claimed that currently, even without section 40, the legal system heavily favours a claimant. Publishers, even when successful, rarely receive enough compensation to cover the costs fully. Several suggested it was untrue that genuine claimants have any difficulty accessing conditional fee agreements.”

The government said that as so few publishers have joined a recognised regulator (IMPRESS is the only one at the moment) and were adamant that they would never do so, “if section 40 were to be commenced they would be vulnerable to spurious legal cases where they would be forced to pay regardless of the merit of the claim – an aspect that a number of respondents to the consultation felt was counter to natural justice and provided enough justification for repeal.

“As such, a large number of consultation responses emphasised concern about the ‘chilling effect’ section 40 would have on investigative journalism… This is a major concern at a time when publishers are under growing financial pressure…

“Furthermore, there now exists a strengthened, independent, self-regulatory system. The majority of traditional publishers (including 95% of national newspapers by circulation) are members of IPSO… The new system is not what was envisaged when the Royal Charter was granted, yet it has led to a raising of standards across the industry, independently of government.”

Matt Tee, chief executive of IPSO (Independent Press Standards Organisation), said: “The decision to repeal section 40 is a hugely significant victory for press self-regulation and an endorsement for the role IPSO has played in helping to restore trust in the industry.

“We are delighted that culture secretary Matt Hancock has recognised the ‘significant steps’ taken by IPSO to demonstrate its independence as a regulator and will make every effort to meet the challenge he posed to us to continue to improve our work.

“Section 40 would have meant a newspaper might risk crippling costs even if it acted in the public interest to expose wrongdoing. This could have been fatal in the case of most local and some national newspapers which could not have survived spurious legal claims.”

However, Christopher Jefferies, patron of pressure group Hacked Off and the Bristol landlord who was libelled by the press after the murder of his tenant Joanna Yeates, said: “The failure to introduce section 40 means that many ordinary people who are victims of press abuse will continue to be denied access to justice, while only the wealthy will be able to take newspapers to court to obtain justice.

“This law was passed by an overwhelming majority of the House of Commons with support across all parties. This decision by the government to ignore that vote shows contempt for parliamentary democracy and puts the interests of press barons above the interests of ordinary people.”

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Wasted costs: no consequences at the moment

Judges making wasted costs orders (WCOs) are to be placed under a duty to report the lawyers involved to their regulator in a bid to make them “consider more carefully the decisions they make in handling a case”, the government has decided.

The move was announced in yesterday’s consultation response on judicial review reform, but the Ministry of Justice (MoJ) said it would apply to all civil cases.

Only around 50 WCOs were made in judicial review cases between March 2011 and June 2013, all arising from immigration and asylum claims. In the consultation, the government asked whether they should be modified to capture a wider range of behaviours, and/or whether the WCO process could be streamlined.

It also tested the proposition that a fee should be charged to cover the costs of any oral hearing of a WCO.

However, all but 13 of the 145 respondents who answered these questions opposed reform.

Many felt that the current test for WCOs was appropriate and that there was an insufficient case for change. Some were concerned that the suggestion of a broader test failed to recognise that it was ultimately the client’s decision whether or not to bring a case.

There were also concerns about the practicalities of deciding whether to award a WCO, in particular advice covered by legal professional privilege which the court would be unable to consider without the client’s consent.

The MoJ response concluded: “At present, the government is content that the best way to improve WCOs’ effectiveness is not to amend the existing test, but instead to strengthen the implications for the legal representative where one is made.

“In many situations where a WCO is awarded, professional negligence will be at issue and, as many respondents pointed out, independent regulatory bodies should have a role in these situations. This should help encourage legal representatives to consider more carefully the decisions they make in handling a case.

“Whilst a WCO is a serious matter, there are currently no formal regulatory or contractual consequences for the legal representative who has acted improperly, unreasonably or negligently. The government intends to place a duty on the courts in legislation to consider notifying the relevant regulator and, where appropriate, the Legal Aid Agency, when a WCO is made.”

The new duty is likely to be enshrined in the Criminal Justice and Courts Bill, which was laid before Parliament yesterday.

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Sam Mercer

Mercer: female and ethnic minority barristers hit harder by cuts

The senior judiciary “may not reflect the communities it seeks to serve” because of a lack of ethnic minority and female QCs, the Bar Council has warned.

In the latest round of QC appointments, announced on Monday, less than a third (28%) of ethnic minority barristers who applied for silk were successful, compared to 43% of men and 52% of women.

Although women were more likely to succeed than men, the proportion of female QCs remains at just over 20%.

Sam Mercer, head of equality and diversity at the Bar Council, said: “We must find out why it is that ethnic minority barristers are less likely to succeed, and we need to work harder to get more women to apply.

“For ethnic minority barristers it is vital that we keep every stage of the QC appointments process under close scrutiny to ensure that all potential for bias is eradicated and that we are doing everything we can to encourage under-represented groups to apply.”

Ms Mercer went on: “A very real concern is how these trends will impact the future of judicial appointments. As most of the higher-ranking judges are also Queen’s Counsel, these figures tell us that tomorrow’s senior judiciary may not reflect the communities it seeks to serve.

“We know that women and ethnic minority barristers have been hit relatively harder by cuts to publicly funded areas of law and that additional economic pressures faced by women and the challenges faced by ethnic minorities mean they are less well represented, particularly at the top end of the profession.”

Last year’s figures for ethnic minority barristers were much better, with a success rate of over 42%. A similar number of women were appointed QC, 25, though the number who applied was slightly lower.

Congratulating the new silks this week, Helen Pitcher, chairman of the QC selection panel, said: “We remain concerned that the number of female applicants remains stubbornly low, but I am pleased that of those women who did apply, 52% were successful. While I was pleased to note a rise in BAME applicants to 14% of applications, it is disappointing that the success rate for BAME applicants was lower than that for applicants as a whole.”

In a separate development, the Bar Standards Board (BSB) launched a survey this week to help it understand women’s experiences of the equality rules in the BSB Handbook, introduced in 2012.

Dr Vanessa Davies, director-general of the BSB, said: “I don’t think any of us should be prepared to tolerate a situation where half of those called to the Bar are female, but women then leave the profession to an extent that they become outnumbered two to one later on.

“It’s in the public interest that regulation encourages a diverse profession and contributes to the ongoing efforts to address gender inequality at the Bar.

“This matters, not least because our judges are recruited largely from the ranks of experienced barristers and we will not achieve the diversity in the judiciary that a fair society demands if we don’t deal with gender inequality at the Bar.

“We took important steps when we introduced our equality rules, but we now need to understand more about how those rules and the associated polices are working.”

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Kaye: early misgivings confirmed

Seven months into the Jackson reforms and litigators see rising costs and no greater access to justice as the main results so far, according to a new poll.

The 117 members of the London Solicitors Litigation Association (LSLA) who responded to the survey also confirmed the lack of appetite for damages-based agreements, while highlighting declining use of conditional fee agreements.

A resounding 93% of respondents said the reforms had done nothing to increase access to justice, one of the principal underlying aims, but 59% felt they would increase costs (28% said costs would fall).

Asked specifically about the costs budgeting process, nearly seven in 10 said it would increase costs.

Most had responded to the costs management regime with internal training (55%), while 13% had invested in software and 12% had hired costs specialists, either internally or externally.

A third of respondents said they had stopped or restricted the use of CFAs, and 71% said they would not use damages-based agreements – the continuing uncertainty over the legality of hybrid DBAs clearly remains a huge problem for their widespread adoption.

Surprisingly, only 63% of LSLA members said they had reviewed their litigation strategy post-April.

Francesca Kaye, president of LSLA and a partner at Russell-Cooke, said: “More than six months on from the implementation of LASPO, we’re beginning to see how the reforms are working in practice. The next six months will provide even more interesting intelligence as cases work their way through the system under the new rules and we see the first Court of Appeal decisions.

“This survey confirms some of our early misgivings about how well the changes would serve access to justice. We were concerned in April that some of the rules and regulations had been rushed through and poorly drafted. A clear example is the concern surrounding the lack of clarity in the DBA regulations.

“Despite the indication that the regulations would be reviewed it is little wonder that litigators have stayed well clear in the meantime. This has definitely been a case of more haste, less speed.”

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Eclipse200Established in 1889, Merseyside-based Lees Solicitors is a full-service practice committed to delivering excellent customer service.  The firm employs over 100 staff across its three offices in Birkenhead, Heswall and West Kirby.

In preparation for competitive and legislative changes to the legal markets, Lees Solicitors embarked upon a new business strategy focusing on direct client acquisition – reducing a reliance on third party introducers.  To achieve this new goal, investment in technology was required to ensure operational processes were optimised and service delivery became the prime focus of the practice’s activities.

A Proclaim Practice Management Solution was implemented firm-wide to provide an efficient and consistent approach to multiple practice areas.  Proclaim’s integrated financial platform enabled a complete reporting base and a seamless approach to billing and practice management.

Proclaim impressed with its ability to be accessed from anywhere at any time – a vital requirement for Lees as it would enhance the firm’s flexibility and service proactiveness.

Lees set out its stall to be the go-to law firm in the region for a broad range of legal services.  Critical to this was fast, transparent service delivery.

Using Proclaim’s process management capabilities, Lees has been able to build a complete client journey – from initial inception right through to cross-selling and upselling opportunities at file conclusion.  The management board at Lees has access to real-time information courtesy of Proclaim’s integrated reporting suite – providing both broad and granular data analysis.

In terms of marketing and business development, Proclaim provides a core platform from which to service clients and ensure that loyalty and recommendation levels are at an all-time high.

“Proclaim enables us to optimise our processes and gives us the agility to implement a superb client experience – driving customer loyalty and improving margins”, says Joanna Kingston-Davies, CEO, Lees Solicitors.

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Court of Appeal: hearing next month

Court of Appeal: hearing next month

The Court of Appeal is to decide on whether a party who beats a part 36 offer in a case where fixed fees apply is eligible for indemnity costs as well.

The news comes in the wake of conflicting circuit judge rulings on the issue.

According to Ben Williams QC of 4 New Square, who acted for the claimant in Smith v Taylor (see below), the appeal judges will consider it on 8 February in an expedited appeal called Butler v Palmer.

The most recent case on the point was Dixon v Bennett, in which HHJ McKenna in Birmingham ruled just before Christmas that had it been the intention to allow the court to depart from applying part 45 fixed costs, “I would have expected clear guidance to that effect”.

He said the problem for the claimant was that the wording of CPR 45.29A was clear in stating that fixed costs applied where a claim was commenced under the portal but then exited.

HHJ McKenna added: “There is no express limitation to the effect that the fixed costs regime only applies where costs were awarded on the standard basis, still less any suggestion that the fixed costs regime should or could be departed from where indemnity costs were awarded.

“By way of example, an award of costs on the indemnity basis at the conclusion of a fast-track trial would not entitle the successful party to seek trial fees higher than the fixed costs provided for in the rules.”

There was a similar outcome last autumn in Broadhurst v Tan in Sheffield, where HHJ Robinson decided that there was no distinction to be drawn between fixed costs specified in table 6B and costs assessed on the indemnity basis. He also said there would have been specific guidance had the contrary been the intention.

However, in Smith v Taylor last November, HHJ Freedman in Newcastle disagreed – albeit “not without some hesitation” – saying that costs under the fixed costs regime and indemnity costs “cannot and should not be construed as being one and the same: they are separate and distinct and require a completely different approach when costs are being assessed”.

He gave several reasons for this conclusion, including that “if the intention was that the claimant should only recover fixed costs from the defendant in the event of a successful part 36 offer, such would have been spelt out in the amendment to the rules made by virtue of CPR 36.21 [in 2013]”.

The judge also took comfort from the explanatory memorandum attached to the statutory instrument that changed the part 36 rules in 2013.

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

“It could not be clearer in its terms,” HHJ Freedman said. “I ask rhetorically what is the point of preserving the part 36 benefits of indemnity costs if, in reality, the claimant’s solicitor receives no more by way of costs.”

HHJ Robinson had found that the explanatory memorandum did not appear to reflect the statutory instrument as enacted.

Meanwhile, in a ruling on a separate aspect of part 36, the Court of Appeal found that Mr Recorder Catford in Slough County Court was wrong to conclude that a claimant had failed to beat a defendant’s offer which was made “net of CRU”.

Crooks v Hendricks Lovell Ltd [2016] EWCA Civ 8 turned on the effect of an initial certificate from the Compensation Recovery Unit applied at the point of judgment for the claimant. The recorder postponed the decision on costs pending an appeal of the CRU decision, which eventually led to far lower deductible benefits.

Lord Justice Lindblom said: “The real measure of whether, after the CRU’s revised certificate had been issued, Mr Crooks had bettered the part 36 offer was whether the total payment he would actually receive as a result of the recorder’s judgment on the claim was more or less than the amount on offer.”

He ruled also that the words “upon judgment being entered” in CPR 36.14 should not be narrowly interpreted to mean simply the actual day.

“The regime in CPR 36.14 must be understood as applying to the relevant circumstances as they are once judgment has been given, but not necessarily only at the moment at which it is given,” Lindblom LJ said.

“There will be cases in which a judge is entitled not to proceed straight away to make his decision on costs. These will include cases where a judge has to compare a pre-trial offer to settle proceedings and the award of damages he has made in the trial.”


The increasing appetite for third-party funding in Europe

Ross Nicholls

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

April 10th, 2018