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Private conversation: Judge made several errors, says CA

A circuit judge was wrong to have a private conversation with one party’s counsel during the trial, but his actions did not amount of apparent bias, the Court of Appeal has ruled.

Deputy District Judge Wallis asked to speak to Rahul Varma to thank him and his then chambers – Lamb Chambers – for giving his daughter a mini-pupillage the previous summer, but then briefly discussed the case too.

He asked Mr Varma, who acted for the claimant, to pass on comments to opposing counsel, Niraj Modha, insofar as it might help both counsel to compile a list of issues. Mr Varma did so later that evening.

The judge said the defendant’s counterclaim seemed weak and the claimant’s case had several evidential gaps.

DDJ Wallis refused a request by the defendant to recuse himself as a result of the exchange, and in the substantive case rejected the defendant’s appeal against an order to pay the claimant £24,000 in unpaid invoices for building work.

After His Honour Judge Freeland QC dismissed an appeal, the defendant appealed to the Court of Appeal solely on the issue of apparent bias.

It argued that, in circumstances where the trial judge had expressed his views on the case to the claimant’s counsel during an unrecorded private conversation without its counsel being present, a fair-minded and informed observer would conclude that there was a real possibility that the judge was not impartial.

Giving the judgment of the court, Lord Justice Leggatt said DDJ Wallis’s first mistake was to request a private conversation with counsel for one of the parties in the absence of the other while the case was continuing.

“It is difficult to think of circumstances in which this would be an appropriate thing to do. It risks fostering an impression of favouritism towards one party’s advocate. It also encourages suspicion in the other party (even if the suspicion is in fact unfounded)…

“For the trial judge to go out of his way, during the trial, ‘personally to thank Mr Varma for his hospitality towards [his] daughter’ was capable of suggesting that he felt a sense of obligation towards Mr Varma.”

The “second and worse error” was to talk about the case “and, more than that, to express views about the merits of the parties’ respective cases”.

Leggatt LJ said he was “distinctly unimpressed” with the judge’s explanation that “I was concerned that Mr Modha should be made aware, as quickly as possible given his professional commitments, of my concern about the evidential weaknesses”.

Leggatt LJ said: “When the conversation took place, the trial had been adjourned for closing submissions and no timetable for these had yet been set. It had further been agreed that, before preparing their submissions, the two counsel would liaise with each other to compile a list of issues.

“It is very difficult to see how in these circumstances the judge’s concern about the perceived evidential weakness of the counterclaim was a matter of which Mr Modha needed to be made aware ‘as quickly as possible’ (whatever Mr Modha’s forthcoming professional commitments).

“Furthermore, the suggestion that the matter was of such urgency that it needed to be passed on immediately and could not wait until the judge was able to communicate with Mr Modha himself late that night or the following morning is – to put it bluntly – absurd.”

There were further errors – DDJ Wallis sent Mr Modha an email the following day recounting his comments, but leaving out those concerning his opponent’s case.

Another email a few days later seemed to suggest that he would recuse himself if the defendant asked him to, but he declined when it did.

However, despite these errors, the Court of Appeal found that there was no real possibility that a fair-minded and informed observer would consider the judge biased.

Leggatt LJ said the mini-pupillage “could not sensibly have been thought to give rise to any risk of bias”, and the defendant had “quite properly” made no objection to the judge hearing the case when Mr Varma disclosed that fact to his opponent before the hearing.

The judge’s comments would have been perfectly proper if made in open court and the defendant had considered them innocuous.

“It is, however, of critical importance that the judge, in making the comments that he did (i) made it clear that his purpose was to assist both parties in preparing their closing submissions, and (ii) specifically asked Mr Varma to pass on the comments to his opponent (which Mr Varma did).

“This demonstrates that the trial judge was not giving or seeking to give one party a privileged insight into his thinking which was not being afforded to the other.”

NOTE: The original version of this story named HHJ Freeland as the judge whose conduct was under fire, rather than DDJ Wallis. We apologise for the error. 




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Will Ellerton Head of Property Contract DAS Law

Will Ellerton, Head of Litigation and Dispute Management, DAS Law

Bristol-based law firm DAS Law has launched a new Graduate Academy that comprises a fully funded three-year apprenticeship scheme for law graduates and post graduates.

The academy, which begins in September, is aimed at students wishing to pursue a career in the law without the uncertainties of securing a formal training contract.

On completion of the course, graduates will become qualified Chartered Legal Executives with the opportunity to join one of DAS Law’s core legal departments – Litigation, Employment, Legal Advice or Personal Injury (PI).

The academy will utilise funding from the Government’s Apprenticeship scheme and supersedes DAS Law’s previous Graduate Academy which was launched in 2016 and comprised a two-year course focussing solely on PI.

DAS Law’s Graduate Academy focuses on learning and development through practical experience.  Graduates will be given early responsibility and will work towards taking on their own cases and clients within the first year, under the supervision of senior team members.

Alongside learning about the law and how to apply it, the academy also covers all of the additional skills that graduates will need to build a successful legal career, including a focus on communication, drafting, negotiation, legal research, advocacy and client care.

Formed in 2013, DAS Law employs over 200 people and provides legal advice and support across a wide spectrum of issues, ranging from employment matters and personal injury litigation to commercial disputes. The company is part of the DAS UK Group, the UK’s leading provider of legal expenses insurance, which in turn is part of the ERGO Group, one of Europe’s largest insurance groups (the majority shareholder in ERGO is Munich Re, one of the world’s largest reinsurers).

As well as working on behalf of DAS Group on legal expenses insurance funded claims the firm also undertakes a range of work on behalf of its parent companies and in the wider legal market, providing the academy’s graduates with a broad and varied training scheme.

Will Ellerton, Head of Litigation and Dispute Management at DAS Law, said: “I am very excited about our Graduate Academy.  There is a huge gap in the market for talented law graduates who wish to pursue a structured training course outside the usual solicitor training contract.  This scheme is aimed squarely at them and makes use of the government’s apprenticeship levy which is an excellent but under-used scheme within the legal industry.”

To apply for a place at the DAS Law Graduate Academy, please visit the company’s website here Note that applications close on Monday 9 July.




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Brookes: keep in touch

Posted by Sian Brookes, solicitor liaison officer at Litigation Futures Associate Allianz Legal Protection

I view getting out and meeting people as one of the most important aspects of my solicitor liaison role. Recently, following a very productive meeting, I started thinking about successful relationship building and, if asked for a top tip, what professional advice I would give to a law firm.

I’ve been visiting, on average, six different solicitors’ practices each month for almost 14 years now but surprisingly it didn’t take me long to settle on what I would say. Namely, “talk to your ATE provider, stay in touch”.

Now I’m well aware that most firms operate under a delegated authority scheme and perhaps more importantly these days, the time you spend in dialogue with us does not form part of your recoverable costs. So, why should you do it?

Firstly, it keeps the relationship on a good footing and will give your ATE insurer an enormous amount of comfort. After all, if you are with a reputable insurer, it’s likely your firm will have been carefully vetted at the outset when the scheme was established.

After that, there will be minimal contact on a day-to-day basis, so hearing from you allows us to be sure that we are truly in a partnership with you.

It’s our equivalent of ‘that client’ who is difficult to get instructions from – chances are that everything is fine but the not knowing makes you nervous!

It’s the same for us, magnified by potentially hundreds of thousands of pounds of indemnity we are on risk for. So my message to law firms would be to respond to any requests for information your ATE provider asks you for and feel free to ask why they need to know if it seems cumbersome or curious to you.

Secondly, if we know how you work and who to contact, it speeds up the time it takes us to make decisions or to process payments.

For instance, if we know your finance department deals with costs issues or that it takes 21 days to sign off claims, then we can adapt to fit your processes. We want to pay valid claims and make sure that you receive the best possible level of service from us, so the better we know your law firm, the better we can help you.

Finally, regular dialogue has the potential to lead to bigger and better things. We’ve picked up a thing or two after more than 30 years of experience in the market. We are more than happy to share our extensive knowledge and there’s a good chance we’ll have come across a similar scenario in the past so can point you in the right direction.

You may even be pleasantly surprised that these discussions can lead to the development of bespoke products, marketing support or simply a better way of dealing with reporting requirements.

So please do keep in touch, as now more than ever collaboration will be vital to keeping the market thriving.




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DBAs: Call for changes to percentages allowed

The Association of Personal Injury Lawyers (APIL) has called for qualified one-way costs shifting (QOCS) to be extended beyond personal injury and the cap on damages-based agreements (DBAs) to be doubled to 50% for fast-track cases with fixed costs.

Meanwhile the Law Society, in its response to the Ministry of Justice’s (MoJ) review of part 2 of LASPO, said the Act had shifted the balance “too far” in favour of defendants “at the expense of injured victims”.

APIL told the MoJ that it believed QOCs was “working well” and should be extended to cases where there was “an imbalance of power between the parties”, including professional negligence, actions against the police and judicial reviews.

The Law Society said it too supported the extension of QOCS, particularly to actions against the police, housing disrepair cases and private nuisance proceedings.

“The absence of QOCS is also an issue in non-clinical professional negligence,” the society said. “In these cases, legal expenses insurance premiums and IPT [insurance premium tax] can be so high as to make the claim almost not worth bringing at all despite success in its pursuit.”

However, the society said that it did not consider that QOCS was an “adequate replacement” for after-the-event insurance.

“QOCS has not materially altered the way cases are conducted. We do not see any evidence that it has increased the likelihood of defendants agreeing to out-of-court settlements, particularly in higher-value claims.

“Rather, there has been a rise in the number of defended claims, according to national statistics on civil justice.”

APIL called for root-and-branch reform of DBAs, and an increase in the cap on fees as a percentage of damages from 25% to 50% in fast-track cases where fixed costs applied.

It explained: “Because fixed costs apply, even if there is a success fee model, the recoverable costs are often not commensurate to the amount or complexity of work that is carried out.

“DBAs are designed to assist with access to justice where otherwise a case would not be brought. If DBAs are to be a workable alternative model, they must be viable in cases where CFAs are not, to provide a solution where a case would otherwise not be taken on.

“This may mean that a higher percentage of the damages will need to be taken by the solicitor to make it attractive to run the case.”

For cases worth more than £25,000, APIL said there should be a ‘tapered approach’, with a cap of 20% for the first £100,000, 10% for the next £400,000 and 2.5% for the rest.

A 50% cap should also be applied to cases in the small claims track, where there is no costs shifting – this presages the planned increase in the small claims limit for personal injury cases. Such a change could make DBAs “viable” in such cases.

However, APIL said it was “doubtful” whether hybrid DBAs would be attractive as a funding mechanism, apart from in fixed costs cases.

The Law Society said the draft regulations on DBAs had caused “uncertainty” leading to low take-up and agreed with APIL that “fundamental reform” was needed.

In general, the society said part 2 of LASPO had made it harder for claimants with higher-value claims and “more difficult issues” to obtain legal representation.

“In introducing the reforms in LASPO part 2, government felt that the balance between claimants (and their lawyers) and defendants (and their insurers) had shifted too far in favour of claimants.

“However, the reforms have tilted the balance too far in the other direction at the expense of injured victims and their ability to enforce their rights.

“We call for the imbalance between claimants and defendants created by LASPO to be addressed and would welcome further discussions with government to explore measures to achieve this.”

APIL called for a review of fixed costs: “The costs of running cases has increased, but the amount of costs paid to the claimant solicitors in successful cases has remained the same since they were first introduced in July 2013.

“If fixed costs are not regularly reviewed and increased, the ability of solicitors to take on more complex and borderline cases will be further impeded. When fixed costs were introduced as part of the original RTA protocol in 2010, it was agreed there would be such reviews.”




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Foreign Office: Fair trial could not take place

The future of litigation being brought on behalf of more than 40,000 claimants in the so-called Mau Mau case is in doubt after the Court of Appeal refused permission to hear an appeal against a decision to dismiss the first test case.

The group litigation is being brought against the Foreign Office by Kenyan nationals who claim they were subjected to torture and rape by British soldiers and members of the Colonial Administration in Kenya.

In August, Mr Justice Stewart declined to disapply the Limitation Act in the first test case – brought by ‘TC34’ – on the basis that the prejudice to the Foreign Office was such that there could not be a fair trial and that this prejudice outweighed the prejudice to the claimant.

Yesterday, Lord Justice Longmore, sitting in the Court of Appeal with the recently retired Sir Rupert Jackson, refused permission to appeal following a hearing last week.

He said: “The applicant cannot get away from the fact that the judge had a discretion to exercise and that this court will not interfere with that exercise of discretion unless the judge has misdirected himself in law, taken into account irrelevant matters, failed to take account of relevant matters or has made a decision which has exceeded the generous ambit within which reasonable disagreement is possible.

“That cannot be said of the exercise of discretion in this case by Stewart J who has been trying the issues in this case since 23 May 2016.

“His judgment is a masterly synthesis of the complex web of facts, and absence of fact, and is a judgment with which this court would not interfere. In the event, the application for permission to appeal must be dismissed.

“The court is aware that this will be a great disappointment to TC 34 and, no doubt, other claimants also. But if a judge, after a thorough and careful examination of the position, decides in his discretion that a fair trial cannot take place and if that decision cannot realistically be the subject of a full appeal, that decision must be accepted by all concerned.

“An unfair trial would be the worst of all possible worlds.”

Tandem Law – part of Manchester firm Antony Hodari – is acting for the group and in a statement today said it was “extremely disappointed” by the decision.

“The legal team involved has worked tirelessly to bring some degree of justice for our client, but this is secondary. Our chief concern is for our client who will not receive compensation for his experiences as a British subject which has had a major impact on the remainder of his life, having been detained without trial for several years and subjected to unjustifiable violence and abuse.

“The British government has admitted torture and ill-treatment at the hands of the Colonial Administration. It is sad our sophisticated justice system has been unable to reconcile this admission with compensation paid to the victims of our colonial past.”

The statement said the ruling would have “a clear impact” on the remaining test claimants, and the near 41,000 on the group litigation order.

“We are considering the prospects of the litigation in light of the Court of Appeal’s refusal to allow permission to appeal.

“While his case has failed, we would like to commend TC34 for his fortitude and courage shown within the legal process, to relive his highly disturbing experiences of the past and reflect on the injustice this decision brings.”

This is the second piece of Mau Mau group litigation. The government settled over 5,000 claims for £19.9m in 2013. Leigh Day acted in that case, which followed a decision rejecting the government’s argument that the claims were time-barred.




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Law Society: controversial campaign

Posted by Martyn Gilbert of Litigation Futures sponsor Spencers Solicitors

Throughout July and August 2013 the Law Society wanted to send a clear message to the public – that they should always seek legal advice following an accident, especially before agreeing to any kind of settlement.

However, in delivering this message, the society took a controversial approach, and the insurance industry remains upset about the campaign’s tagline – ‘Don’t get mugged by an insurer’.

We see this tongue-in-cheek marketing technique employed all the time. I remember the clever comparative ads run by Microsoft, which suggested that Google’s (competing) products were invading the privacy of internet users and warned people not to get ‘Scroogled’.

For me ‘Don’t get mugged…’ fell into this tried-and-tested ad category that highlights an issue in a blunt and comparative manner. But still the insurance sector has taken offence and holds some strong opinions against it, which we’ll get into.

The message

First let’s take a look at the purpose behind the Law Society’s campaign, which is to raise awareness about the dangers of third-party capture.

A simple example of how third-party capture works in a road accident…

  • An innocent driver is crashed into;
  • The guilty driver contacts their insurance company to inform them that they’ve had an accident;
  • The insurer receives information about the accident, including that their driver was probably at fault and the details of the innocent (and potentially injured) driver;
  • The insurer then tries to contact the innocent driver to offer an amount in full settlement for any injuries they may have sustained.

The consensus of the legal industry is that by accepting this offer, the innocent driver will probably receive much less in compensation than their injuries actually warrant. Compensation typically needs to cover pain and suffering, medical treatment, time off work, alternative travel and much more – which an offer straight after the accident won’t ever be able to account for.

The Law Society believes more people ought to know about this practice, as the convenience behind an insurer’s early-settlement offer is often far outweighed by the amounts gained in a comprehensive legal claim.

Conveying all this information in an eye-catching ad is a challenge, so it’s unsurprising that a short sharp campaign message was opted for. But it’s this message that has really caused the controversy.

The insurer’s view

Speaking on the campaign’s message, Nick Starling, director of general insurance at the Association of British Insurers (ABI), said: “It is the legal community that are doing the mugging, not insurers. And it is the insurance-paying public that is paying the price through higher premiums as a result of excessive legal fees and frivolous and dishonest personal injury claims.”

James Dalton, the ABI’s head of motor and liability, added: “With excessive legal fees a key factor in pushing up motor insurance costs, and ambulance-chasing lawyers and some claims management firms encouraging a ‘have a go’ compensation culture, it is not insurers who are guilty here.”

Then, in case there was any doubt on the ABI’s position, director-general Otto Thoresen described the campaign as “little more than public name-calling” in a letter to the Law Society calling for the campaign to be withdrawn.

All this, along with six complaints to the Advertising Standards Agency (ASA), led the advertising watchdog to look into the campaign, which it ultimately found did not breach its code.

The Law Society’s view

Throughout the unrelenting calls from the ABI to pull the campaign, the Law Society has stood firm in its support of the message and in its delivery.

Law Society president Nick Fluck responded the ABI’s letter, reminding that they themselves have even queried if their code of practice around third-party capture was “robust enough for the industry”.

He said: “If even the ABI is acknowledging that the code is not fit for purpose, I cannot see how consumers can have any confidence that the ‘third party assistance’ process will be to their, rather than the insurer’s advantage – again justifying the need for our public information campaign”

Then following the ASA complaints, the society came out again defending its approach: “We are not Coca-Cola or Direct Line. Our marketing budgets are much more limited. In order to maximise their effectiveness, our adverts need to be eye-catching and memorable.”

Your view?

Was the campaign ‘little more than public name-calling’ from the ‘ambulance-chasing lawyers’, or should the Law Society have gotten a slap on the wrist for ‘misleading’ and ‘defamatory’ ads?

Leave a comment and let me know

Martyn Gilbert is the chief information officer at Spencers Solicitors and has worked in the legal industry for over 16 years, delivering various public awareness campaigns




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Bogart: integrated into Burford Capital

Leading third-party funder Burford Capital has announced a restructuring for tax reasons that will bring Burford Group – its investment adviser – in-house in a cashless acquisition.

In future Burford Group will no longer be free to advise the AIM-listed company’s competitors.

Meanwhile, a survey commissioned by Burford Group has found that more than half of US litigators have cases suitable for third-party funding but fewer than one in ten of top-200 US law firms have themselves used it.

In a performance update, Guernsey-based Burford Capital also reported it had received a $6.5m (£4m) settlement in one case and a further $4m, to date, of the total $20m proceeds of an investment in another case. That case gave the company an internal rate of return (IRR) of 75%. A further three cases are expected to produce an IRR or at least 50%.

The company boasted that, since becoming publicly listed on the AIM market three years ago, it has generated more than $50m in revenue, committed over $300m in investment capital and up to June 2012 had achieved net returns on litigation investments averaging 70%.

Explaining its restructuring plans, Burford Capital said the company has grown faster than expected and innovative practices – such as investing in portfolios of litigation in order to spread risk – were being constrained by US tax rules.

“As a general proposition, it is difficult to effect many of these newer innovative transactions within the company’s existing US tax structures, and indeed the company has closed certain attractive investments this year outside the US that it simply would not have been able to do in the US for tax reasons…

“Burford Capital will proceed to implement a group structure using various wholly-owned subsidiaries that will enable it to expand the investment structures it can use in the [US] and benefit from the greater flexibility achievable by structuring its operations in a way that can benefit from income tax treaties that reduce levels of taxation (and tax risk).”

As part of the restructuring, Burford Group will be acquired in a “cashless merger”. Chief executive Christopher Bogart and his colleagues will be integrated into the company, resulting in a considerable saving in performance fees. “The entire cash leakage of performance fees is extinguished,” said the statement.

Another benefit of the restructure is that Burford Group “is currently not exclusive to Burford Capital and is free to raise funds and enter into business ventures that could compete with or lessen the market force of Burford”. As a subsidiary, this freedom would end.

Burford Group’s 2012 Litigation financing survey contacted 462 AmLaw 200 litigation partners, non-AmLaw commercial litigators, and general counsel and chief financial officers (CFOs) of large and mid-sized companies. It found that among the first three groups, awareness of external litigation financing was over 90%, but for CFOs it was 62%.

Generally, views of litigation financing among litigators were favourable, with non-AmLaw 200 lawyers particularly enthusiastic. More than three-quarters said they believe it will lead to good cases being brought that otherwise will not and 85% said it usefully levels the playing field between unequal parties.

More than two-thirds of all the people surveyed expected third-party funding to increase over the next 18 months, with 51% of AmLaw 200 litigators and 69% of other litigators saying they have had a suitable case in the past. Further, around one in five said they currently had an active case that could benefit from external finance.

 




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Euros: currency fluctuation not accounted for

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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




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Kaye: Mitchell fall-out “depressing”

The rigidity introduced by the Mitchell judgment has fractured co-operation between solicitors, while costs budgeting has driven up law firms’ costs, according to a survey of civil litigators.

The poll of the London Solicitors Litigation Association’s (LSLA) 1,500 members found Mitchell had profoundly affected behaviour.

The LSLA quoted one litigator as saying: “There is a lack of co-operation amongst solicitors to sensibly extending deadlines, as it is seen as a chance to get your opponent possibly struck out. Hence, there is more game playing than sensible co-operation.”

Almost three-quarters said costs budgeting had increased costs to their firms overall and just under two-thirds said the same about new rules on disclosure.

One litigator said: “There are now difficult tactical considerations around the costs budgeting process and different applications by different judges. It is increasing antagonism between parties over perceived attempts to take tactical advantage and appears to be being inconsistently applied.”

In other findings, more than half of those surveyed said they had stopped offering conditional fee agreements since recoverability ended. Six months ago, only about a third gave the same answer.

Damages-based agreements were shunned by 74% of respondents because of lack of clarity around the rules. In the last survey, 71% said they did not offer them.

Some 60% said that although the non-recoverability of after-the-event premiums had had an impact, they were still able to find reasonably-priced cover for clients.

Francesca Kaye, immediate past president of the LSLA, said: “We used to have a level of co-operation between parties and the court, well-run cases progressed by agreement, and a case only went to court if there was something you really couldn’t agree on. The system was flexible [and] worked to everyone’s advantage – it paid to talk.

“The very robust Mitchell judgment has introduced a demoralising rigidity; now everyone is covering their own back and what’s best for the client is being sidelined by a slavish obsession with deadlines. It’s depressing.”

She continued: “Consideration of costs was always part of the case planning process for most litigators. What’s changed, as in Mitchell, is that we are now faced with a rigid process, with forms that don’t work and uncertainty around court decisions…

“It’s a shame for Jackson LJ that the way in which the [Ministry of Justice] introduced his reforms has unleashed a backlash of negative sentiment. This is probably being exaggerated by a sense that the MoJ isn’t finished yet and that litigators face further changes meaning the litigation practice environment will continue getting tougher.”

The poll was undertaken in association with the New Law Journal.




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Electronic bill: only way it could be viewed

Electronic bill: only way it could be viewed

Posted by Bradley Meads, senior associate at Litigation Futures sponsor Kain Knight, and Virginia Rylatt, partner at Rylatt Chubb

In the first case dealt with under the new pilot scheme – Practice Direction 51L – J-­Codes were retrospectively applied to the new Precedent AA bill of costs. We dealt with the issues within the Senior Courts Costs Office (SCCO) on behalf of the paying party/defendant.

The first thing which the parties appreciated, and no doubt the SCCO now appreciates as well, is the sheer complication and difficulties of dealing with the pilot scheme. It was exposed at the hearing that the SCCO (and the claimants) had previously relied upon members of the Hutton committee behind the scenes and were left short when significant technical questions arose.

Without the pilot scheme, the matter would have been dealt with on a far simpler basis. There had been a budget. As the matter had settled before trial, some phases of work envisaged under the budget had not been carried out and there were some phases within the bill where the costs exceeded the budget.

Moreover, there were certain tasks, within phases that were not exceeded, which were not completed. It should therefore have been a straight forward case of the claimants explaining why, in certain respects, costs exceeded the budget and trying to persuade the court that they should be allowed additional costs.

As became evident, the pilot scheme allowed a receiving party in effect to go back to the drawing board – ignoring all the work that was previously done when the case was budgeted.

Last month the Law Society launched a survey to ascertain “more about how members record their time and discover which members are already using J-Codes to time record”. What is clear at present is that very few firms record their costs in J-Codes.

When the time came to prepare the bill, the claimants’ solicitors certainly did not record their time in J-Codes. In this case (as in any case that will use the pilot scheme where all of the costs are not already recorded in J-Codes), a need for a retrospective application of time to J-Codes was required should one wish to engage in the pilot scheme. As the claimants discovered, without retrospectively applying J-Codes to time entries, the format of the new pilot scheme could not be populated correctly and would not work.

In order to demonstrate these difficulties for the defendant at a hearing for directions in February 2016, Kain Knight produced a number of screen shots to explain the situation to the court.

The bill of costs that was provided was immensely extensive and, in reality, could only be viewed properly in court electronically. Despite the fact that the claimants’ costs lawyer had spent some 96 hours and 30 minutes on preparing the detailed bill, totalling £375,000, in Precedent AA, there were still a number of areas where drilling down into various schedules electronically left gaps to be filled in or explanations which were missing.

One reality that follows from this is that not only the court but also all the parties in the SCCO using a Precedent AA form would need to have an electronic version of it in the courtroom. This would be essential for any final assessment hearing, where bills of costs can be so long and so wide that they could not be printed out in any sensible or manageable format.

From the court’s point of view, the meat within the item descriptions was missing. The J-Codes do not differentiate communications between personal attendances, telephone attendances and correspondence.

In this case, as no doubt in many others, the key issue at detailed assessment was why the costs were higher than those in the approved budget. The new format gave no assistance to the court. It was necessary for the court to deal with that by way of additional directions and to make appropriate orders for further and additional schedules to be served on behalf of the claimants.

Following on from such directions the parties settled and the court must have been left considering that as soon as it got to grips with the issue as to why the costs claimed exceeded the approved budget, the parties were able to resolves matters.

The question must be why one needs to have such a complicated system for achieving this and whether Precedent AA is in fact going to be a useful tool for the SCCO and other courts in assessing costs.

Technically there are less rigid and humane ways for costs to be presented which resolve some of the issues dealt with here. The Association of Costs Lawyers has produced a more manageable version which deals with some of the issues which arose during this case and a subsequent meeting with the Senior Costs Judge.

From the courts’ point of view, if the pilot scheme was meant to be a system which allowed the court to quickly come to a determination as to the costs to award a party, it failed. Had the cost issues not settled, then the matter was due to occupy the court’s time for a three-day hearing, despite the fact that this was a case in which cost issues had been dealt with at a full case and costs management conference and a budget imposed by the court on the parties.

The experience showed that the new J-Codes are too complicated, that dealing with such costs is too labour-intensive and that the time spent dealing with costs under the new scheme is at least 100% increased on what they would have been otherwise.

The claimants’ costs of the detailed assessment without an assessment hearing, (and which excluded the hearings for directions and the costs of preparing the bill itself) were assessed at £22,224!




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RCJ: no obligation on government to seek opposite views

The High Court today dismissed the judicial review brought against the government’s decision to cut RTA portal fees.

Lord Justice Elias said the government made the decision to cut the fees in 2011, and not – as contended by the Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS) – as a result of the Prime Minister’s insurance summit held on 14 February 2012 to which no claimant representatives were invited.

APIL and MASS said this amounted to an unfair consultation. They were supported by interventions from the Law Society, Unite the Union, and trade union law firm Thompsons. The Association of British Insurers (ABI) intervened on the government’s side.

Sitting with Mr Justice Cranston, Elias LJ told a packed court 1 at the Royal Courts of Justice that the summit was about securing agreement from insurers to reduce premiums as a result of the fee cut. It was “wholly unrealistic” to say the decision was taken as a result of the meeting with the insurance industry, the judge said – the government knew insurers’ views without having to meet them.

He also emphasised that government had to be free to seek information from whichever parties it wanted without having to speak to those with an opposite view. Otherwise, “the process of government would grind to a halt”.

This was, he added, not unfair; instead it was “practical governance” and if the government was deaf to a particular group, that was “a matter for the ballot box, not the court”.

Although he had already rejected the case on the merits, Elias LJ went on to say that, in any event, the judicial review was brought too late. To the suggestion from the ABI that the timing was a deliberate ploy to delay the introduction of the new fees, he said: “I wouldn’t be willing to draw that serious inference.”

Further, even if the case had succeeded, in the “very unusual circumstances” where there had been the subsequent consultation on the level of portal fees, it would be “unreal” to say that having a new consultation would change the secretary of state’s mind, he said.

If the Law Society had failed to persuade the Ministry of Justice that the proposed fee levels were wrong, it would be “fanciful” to suggest it could then persuade the government that the decision to cut fees was wrong in principle.

Mr Justice Cranston agreed, saying that neither the summit nor various e-mails exchanged between government and insurers beforehand – in particular one from the Cabinet Office to Zurich – amounted to consultation. He said APIL and MASS were essentially arguing that as a matter of law they should have been at the summit, which he described as a “bold and startling submission”.

It must be a matter for the government to decide what information it needs, to whom it talks and with whom it bargains, he insisted.

The government was granted its costs but despite arguing for its costs, the ABI was not given them.

  • The original version of this story reported that the High Court had granted leave to appeal. This was incorrect. We apologise for the error.



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Ramsey: positive effect of mediation

The High Court has cancelled out a successful defendant’s unreasonable refusal to mediate with the claimant’s failure to accept an offer it failed to better when making the costs order.

As a result, Mr Justice Ramsey, the judge in charge of Jackson implementation, decided not to take either into account to modify what would otherwise be the general rule that the claimant – BAE Systems – should have its costs.

The dispute between Northrop Grumman Mission Systems Europe (NGM) and BAE was over the latter’s termination of a licence agreement, and Mr Justice Ramsey found that BAE was entitled to act as it did.

NGM argued that BAE’s costs should be cut by half due to its unreasonable refusal to mediate. The judge ruled that it was a case where the nature of the dispute was susceptible to mediation and where mediation had reasonable prospects of success.

However, he also accepted that BAE – which was advised by Herbert Smith Freehills – reasonably considered that it had a strong case, noting that in the key ‘refusal to mediate’ case of Halsey, the Court of Appeal accepted that a party which reasonably believes it has a watertight case may well have sufficient justification for refusing to mediate.

But he also pointed to the Jackson ADR Handbook, which “properly, in my view, drew attention… to the fact that this seems to ignore the positive effect that mediation can have in resolving disputes even if the claims have no merit”.

Ramsey J said: “Was it unreasonable for BAE to reject NGM’s offer to mediate? I have come to the conclusion that it was. Whilst BAE’s view of the claim provided some justification for not mediating, I consider that the other factors show that it was unreasonable for BAE not to mediate the dispute.”

However, he said he also had to take account of a settlement offer BAE made that NGM did not better.

“The issue is how those two aspects of conduct should be taken into account where BAE has been, overall, the successful party. A refusal to mediate means that the parties have lost the opportunity of resolving the case without there being a hearing.

“A failure to accept the offer has equally meant that the parties have lost the opportunity of resolving the case without a hearing. Whilst mediation at an earlier stage might have avoided costs, if BAE had mediated even at a later stage, its conduct would not have been unreasonable.

“Overall, in the case, I have come to the conclusion that the fair and just outcome should be that neither party’s conduct should be taken into account to modify what would otherwise be the general rule on costs.”

Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4I) Ltd (No2) [2014] EWHC 3148 (TCC)

 




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Discount rate: announcement in 11 days

The Association of British Insurers (ABI) has today lost its High Court bid to halt the Lord Chancellor announcing the outcome of the consultation on the discount rate.

The ABI said it intended to appeal the decision to refuse permission and to grant interim relief, but subject to that, the Ministry of Justice (MoJ) confirmed in court that the decision on the rate would be announced on 31 January.

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

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

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

James Dalton, ABI director of general insurance policy, said: “We are disappointed with today’s ruling and will appeal. It is vital that claimants get the compensation they are entitled to.

“Insurers are open to a proper dialogue on how to reform the system, but caving in to legal threats from personal injury lawyers is not the way for the Ministry of Justice to do it.

“Despite consulting over three years ago and not letting anyone know the outcome of that process, the Lord Chancellor seems to want to rush out a new discount rate at a time of significant global financial uncertainty.

“While we welcome today’s commitment not to make an announcement before 31 January, we call on the Lord Chancellor to provide a considered timeline which gives all stakeholders the opportunity to engage in a constructive dialogue on the way forward.”

APIL president Neil Sugarman said: “This desperate attempt to stall the review shows that the insurance industry would rather see seriously injured people face hardship than honour its responsibility to pay full and fair compensation.

“The Administrative Court’s decision today, to allow the Lord Chancellor to continue with her already long-overdue discount rate review, is the correct one.

“We hope that the Lord Chancellor makes the correct decision and reduces the discount rate substantially. In fact this is the only acceptable option. An increase in the rate is unthinkable.”

A report of yesterday’s proceedings by Alistair Kinley, director of policy and government affairs at leading insurance law firm BLM, explained that the first element of ABI’s challenge was to argue that there was a breach of its legitimate expectation that the earlier consultations would be concluded – neither had been followed up by a response from the MoJ – and that stakeholders’ views would be taken into account before any decision about the discount rate was made.

He said its second argument was that the Lord Chancellor should make transitional arrangements when setting any new rate so as to avoid the otherwise unlawful retrospective effect of any decision about the rate.

Mr Kinley reported that Mr Justice Baker dispensed with hearing from the Lord Chancellor and APIL on the first ground and heard their submissions on retrospectivity only.

“The argument for the Lord Chancellor was that the subject matter was all about the principle of full compensation and this principle would not be changed in the current exercise, whether retrospectively or otherwise. APIL’s concerns included difficulties about resolving current cases (whether at joint settlement meetings or trials) if there was delay much beyond the 31 January date set by the Lord Chancellor.”

Tweeting from court 22 of the Royal Courts of Justice throughout yesterday, Peter Todd, the partner at London firm Hodge Jones & Allen acting for APIL on the discount rate, said “I think the whole insurance industry has turned up!”

Jonathan Swift QC appeared for the ABI, Tim Ottey QC for the MoJ and Philip Havers QC for APIL.




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Files: Fear of satellite litigation

The Senior Courts Costs Office has refused separate attempts to obtain copies of law firms’ client files by another firm that describes itself as the country’s “leading experts in fighting unfair compensation deductions”.

Both costs judges observed the large and increasing number of these types of claims over the past year as a result of law firms now deducting costs from clients’ damages.

In Green & Ors v SGI Legal LLP [2017] EWHC B27 (Costs), before Master Leonard, and Hanley v JC & A Solicitors Ltd [2017] EWHC B28 (Costs), before Master James, the claims were made by Leeds firm JG Solicitors, whose website says: “If you’ve already received compensation for an accident but didn’t get paid the full amount, we can help you get your money back.”

The status quo, said Master James, was that such applications almost invariably led to an order for the production of the documents that belonged to the former client upon payment of a fee, but not an order for documents that did not belong to them.

There was no binding decided case in which solicitors have been ordered to hand over papers over which they have proprietorial rights, she continued.

Dismissing the application, Master James said: “I am concerned… by the floodgates that would likely be opened by a ruling that solicitors can be ordered to hand over their complete file in circumstances such as these; such a move would foreseeably instil considerable satellite litigation and I am not persuaded that this would be a positive step.”

Master Leonard addressed the issues “in some detail in the hope that doing so may help to reduce the scope of future disputes”.

He said it was for the claimants to show that they were entitled, as of right, “to receive copies of another person’s property, even on agreeing to pay the proper cost of supplying it”.

He continued: “If one person writes a letter to another, keeping a copy, it is not self-evident that the recipient can require another copy on demand, even on agreeing to pay for it.

“The mere fact that the defendants were formerly the claimants’ solicitors does not seem to me to change that. Nor does the fact that such letters are, by definition, not confidential as between the parties…

“The question is to my mind not whether there is authority to the effect that the claimants are not entitled to receive copies of the defendant’s property, but whether there is authority to the effect that they are.”

While the claimants said they limited their application to three categories of documents which they said were created for their benefit – funding documents, all correspondence sent to the claimants, and all invoices – Master Leonard said the purpose of creating documents for the client’s benefit was fulfilled when those documents are given to the client.

Supplying extra copies was another matter. “A client who wishes to challenge a solicitor’s charges, but who has nonetheless lost or destroyed the key documents upon which that challenge is based, will obviously be at a disadvantage. It does not follow that the solicitor has any obligation to compensate for that.

“Nor will a client’s inability to supply the required documents with an application for detailed assessment in itself invalidate the application.”

The master also suggested that the claimants’ claim to a freestanding right to obtain copies of the defendant’s property attempted to bypass the pre-action disclosure provisions at CPR 31.16.

“Finally, bearing in mind that the application has been narrowed down to incorporate only copies of documents which in the normal course of dealings will already have been supplied to the claimants, I do have concerns about the fact that I have seen no evidence that any consideration has been given as to the extent to which those documents are already in the claimants’ possession…

“It does not seem to me to be appropriate that the parties should incur substantial costs on a demand for documents where that need has not been properly considered and clearly established.”




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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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Rowley: taking away cost uncertainty

Irwin Mitchell has teamed up with Allianz Legal Protection to launch ‘Support4Dispute’, a bespoke funding solution to support insolvency practitioners (IPs) manage the costs and risks of litigation.

Under the terms of the conditional fee agreement that forms part of the package, Irwin Mitchell’s legal costs and success fee is only payable by IPs once a cash recovery is made from the opponent.

The after-the-event (ATE) insurance provided by Allianz is a staged premium facility linked to the amount of damages recovered, and capped to enable IPs to retain a greater share of any recovery made. In addition, the premium is deferred until the case is settled, and only payable on successful cases.

John Vickery, restructuring and insolvency partner in Irwin Mitchell’s Manchester office, said: “This product has been developed specifically for the IP sector and addresses all of the financial issues relating to why they may be reluctant to pursue litigation claims.

“Quite simply, the Support4Dispute service that we provide takes the gamble out of insolvency litigation and enables IPs to launch legal actions far more easily following an insolvency, without having the risk of having to pay their own legal fees or a hefty ATE insurance premium where no actual recovery is made or the opponent’s legal fees if the litigation is unsuccessful.”

Steve Rowley, business development manager at Allianz Legal Protection, said: “We worked with Irwin Mitchell over several months to jointly develop a product specifically aimed at addressing the risks and issues faced by insolvency practitioners.

“Using our combined knowledge and expertise we have created a solution that meets the needs of insolvency practitioners, and takes away the cost uncertainty faced when bringing legal action against creditors.”




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Just Costs Solicitors now based in Edwardian Baroque Grade II listed building

Just Costs Solicitors has moved to new city centre offices at 53 King Street, Manchester in order to facilitate its ongoing expansion.

The award-winning firm – which provides expertise in costs solutions for other solicitors including a specialism in costs management and budgeting – recently announced it is to create a further 30 new jobs nationally.

The firm is relocating its Manchester head office from Pall Mall Court which currently accommodates over 60 staff split across 2 floors.  On moving to 53 King Street, the firm has taken up 4,320 sq ft across just 1 floor to ensure consistent and effective communications across all departments.  Staff will also benefit from free gym membership.

Built in 1913, 53 King Street is an impressive Edwardian Baroque Grade II listed building. It stands on the site of the old Manchester Town Hall and more recently housed Lloyds TSB for a number of years.

Commenting on the firm’s relocation, Client Services Director Mark Hartigan said:

“Having considered a number of options, 53 King Street was very much our preferred choice.

The refurbishment of the building has created a first rate working environment while the location, in close proximity to so many of our clients, is ideal.”

Just Costs is currently enjoying the most progressive period in its history with rising turnover and a sharp increase in new instructions.  The firm has over 120 people nationally and recently opened a new office in Leeds.

Concluded Managing Director, Paul Shenton:

“The costs market is buoyant at present and every aspect of the business is performing well.”




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Djanogly: legal aid can aggravate disputes

The government as expected overturned all of the House of Lords amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill last night, with justice minister Jonathan Djanogly saying the Jackson reforms would put an end to the “racket” that has allowed “inflated profits” for law firms.

Before the debate began, the government won a vote to limit MPs’ consideration of the amendments to just five hours. Though there were isolated rebellions by coalition MPs, the votes to strike down the changes were generally passed by 40-60 votes.

The government only offered one extra concession to make it easier for the victims of domestic violence to claim legal aid, having already in effect accepted three of the Lords amendments by coming forward with its own versions of them, on the independence of the new director of legal aid casework, legal aid for welfare benefit appeals to the upper courts, and the definition of domestic violence.

Mr Djanogly began the debate by declaring that the government had already made “significant concessions”, adding: “Access to justice is of fundamental importance to our legal system and to this government, but our legal aid system is by any measure extremely expensive and sometimes prone to aggravating disputes unnecessarily by pushing them into the courtroom.”

On the bid to introduce a mandatory telephone gateway to legal aid, he said: “That is not only much more efficient, enabling calls to be properly triaged, but simpler to access and generally of higher quality.”

He added that initially the gateway will apply to debt, discrimination and special educational needs cases, but not community care. There will also be an exemption for emergency cases, those in detention and under-18s, while advisers will always have the option of referring the caller to face-to-face advice if deemed appropriate.

Justice secretary Ken Clarke urged MPs to take care “before the very powerful and quite legitimate lobbies that have descended on the House since we proposed the changes just sweep everybody into believing that ever-wider provision of legal aid is necessary”.

Refusing to give further way on legal aid for children beyond the concession on clinical negligence claims involving brain injury around birth, he said many of the remaining clinical negligence cases involving children are “relatively simple, do not involve lengthy and detailed investigations… and are suitable for funding through a conditional fee agreement (CFA) in exactly the same way as for adults”.

Mr Clarke said the amendment for legal aid to cover the costs of expert reports in all the cases that currently are funded by CFAs “would allow lawyers to apply for legal aid to cover the expert report in any case where a client, of any age, was financially eligible, and to still get their success fee in respect of their other legal costs. That would transfer all the risk in a ‘no win, no fee’ case from the solicitors and insurers to the legal aid fund and the taxpayer. That would be unfair to the taxpayer and would result in a significant expansion of the legal aid scheme”.

Turning to the Jackson reforms, Mr Djanogly said that to accept the Lords amendment introducing an exception for mesothelioma cases would “create inconsistency and damage the wider goal of our reforms – to restore sense to the costs of litigation, which have been substantially increased by the way in which ‘no win, no fee’ cases operate, largely to the detriment of defendants”.

They are not sufficiently different from other personal injury cases to justify it, he added.

Mr Djanogly insisted that while the CFA system was meant to promote access to justice, “it has frequently ended up as something of a racket allowing risk-free litigation for claimants, inflated profits for legal firms, and punitive additional costs for defendants…

“I do not believe we should accept the view that critics sometimes advance that our reforms will leave victims of this terrible disease out of pocket. It is true that under our plans individuals will pay legal costs out of their general damages. Crucially, though, damages for future care and losses are protected, and general damages are being increased by 10% to offset a success fee capped at 25%. It is, of course, entirely up to the lawyer whether any success fee is taken from a claimant’s damages at all…

“The aim of our reforms is to end the current situation whereby legal firms can get away with charging what they want because the claimants do not have a stake in keeping an eye on the bill. At a time when the cases in question are becoming easier to bring, we should not accept amendments that would reduce pressure on legal firms to cut their fees. Instead, our focus should be on cutting inflated margins, not making exemptions for one type of disease.”

Labour justice spokesman Andy Slaughter said the “obvious way to stop inflated costs” would have been to reduce lawyers’ base costs than take money from damages. “The beneficiaries of all this will be the defendants and their insurers. They will have significantly reduced liabilities if they lose. Insurance companies will also benefit, because the government are promoting a new market in legal expenses insurance – a tax on all citizens worth billions to the industry – although how they expect people to insure against industrial disease I do not know.”

The House of Commons' votes on the amendments will now go back to the House of Lords next week, although the government is seeking to invoke 'financial privilege' to overrule further Lords objections.

Shampoo hair is they used b/c why does, viagra definition across the in the worked anything. This smell.




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Email: failure to comply with CPR

A High Court master has allowed a party’s bid to withdraw a part 36 offer ahead of the new discount rate coming into force on Monday, even though they used a defective method to deliver it.

In Thompson v Reeve & Ors, the claimant – who suffered a road traffic crash and then negligent treatment of her injuries – valued her case at £347,000 and last August made a part 36 offer of £340,000.

On 28 February 2017, her solicitors emailed the defendants to withdraw it and Master Yoxall said it was “no secret” that this was because of the announcement of the new discount rate the day before, as a result of which the claim would be worth about £602,500.

On 2 March, the defendants tried to accept the part 36 offer, again because of the new discount rate.

CPR 6.20 only permits service by email where the receiving party has indicated in writing that it is willing to accept service by email, which was not the case here. The claimant submitted that rule 3.10 – which gives the court a general power to rectify matters where there has been an error of procedure – could be used to validate service.

Master Yoxall said the case law showed that rule 3.10 has a “wide effect” and could be applied in this case.

He said: “I accept that it has no application in certain circumstances, eg rule 7.6(3) which specifically describes the only circumstances in which the time for service of the claim form can be extended. Likewise I accept that rule 3.10 cannot be invoked to extend a statutory time limit or to avoid service of a document required by statute.

“In the present case, the claimant gave notice in writing of the withdrawal. It is not disputed that the notice was actually received. The notice provides the defendants with all the information necessary… It is the method of service which is defective. In my judgement, rule 3.10 can be invoked to cure the defect.”

While accepting that part 36 was a self-contained code, the master said it was “not completely freestanding”.

The final question was whether to exercise the discretion to make an order under rule 3.10. Saying it would be just to do so, Master Yoxall concluded: “In my view, it would not be consistent with the overriding objective that a technical breach of the rules should impede the proper assessment of damages in this case.”




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Rising cost

Rising costs: The “opposite” of what the reformers hoped for

Budgeting has “forced costs up and will continue to do so”, John Bramhall, president of the London Solicitors Litigation Association (LSLA), has said.

His comments came as 85% of litigators predicted that post-Jackson budgeting would increase costs, in a survey by the LSLA and New Law Journal.

Only 37% said they found costs budgeting a helpful part of the litigation process and 65% believed the Jackson reforms in general, including the new rules on disclosure, had increased costs.

Mr Bramhall said it was “hard to escape the continuing concerns that litigators have”, particularly those with larger teams who made up two-thirds of the 128 survey respondents, that budgeting had “forced costs up and will continue to do so”.

He said this was “the opposite” of what reformers hoped to achieve.

“It suggests that after a suitable bedding-in period, we should take stock to see if further adjustments can be made that bring us closer to achieving the end goal of a more efficient, cost-effective process which we all wish to work towards.”

Mr Bramhall said the Denton ruling had “helped to restore sensible collaboration among litigators which had been in danger of being irreparably undermined” by Mitchell and other rulings on relief from sanctions.

“When common sense is allowed to prevail we have a much better chance of containing costs and achieving decent outcomes for our clients.”

However, most of the litigators who took part in the survey were cautious about the impact of Denton, with 68% believing it was “too early to say” whether the ruling had achieved the “right balance” in control of litigation by the courts.

Of the remaining 32%, most (19%) thought Denton had not achieved the right balance.

Elsewhere in the survey, 59% of litigators said they had stopped offering or restricted their use of conditional fee agreements. Only a third said they used, or intended to use, damages-based agreements.

While almost half of the lawyers in the survey said there had been no change in the affordability of ATE insurance since April 2013, 34% said they were able to secure “economic” cover.

Litigators were evenly split on whether the amount of litigation would decrease (36%) or stay the same (38%) over the next five years, with only a quarter predicting it would increase.




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Pickering: task was a difficult one

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

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

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

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

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

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

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

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

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

Other key recommendations included:

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

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

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

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

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




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Bank litigation: on the rise

The number of major claims against the UK’s biggest companies continues to rise, with the growth of third-party litigation funders one of the reasons, it has been claimed.

It comes amidst a flurry of activity around the world that is seeing litigation funding becoming more accepted.

According to research by Thomson Reuters, the number of High Court cases involving FTSE100-listed companies last year hit a five-year high of 279, up 6% on the previous year and nearly 150% up on the 114 cases of five years ago.

The legal disputes the big UK-listed banks are still facing almost decade after the banking crisis was a key reason cited by Thomson Reuters – 179 of those 279 cases involved FTSE100 banks, and in three-quarters of them, they were the defendant.

They are claimants in several cases against professional services firms such as accountants or surveyors, “suggesting that the banks retain an appetite to pursue professional negligence claims against advisers”, the company said.

Other factors included “the increasing number of litigation funders helping fund cases that might not otherwise have been pursued”, and more generally “the increased legal risks that UK-listed businesses face” as they operate across a growing number of jurisdictions.

“Banks appear to be taking a robust view about their prospects of defending themselves in court, indicating a willingness to fight claims all the way to trial, rather than settle early,” said Raichel Hopkinson, head of the Practical Law dispute resolution service at Thomson Reuters.

“Increasingly it seems that banks involved in litigation are less concerned about the sort of adverse publicity that can be associated with the public disclosures and cross-examination that come with court hearings.

“Whether this is because the claims are perceived as unmeritorious or because banks no longer feel quite as sensitive to exposure, having been in the spotlight for so long, it is difficult to say.”

Meanwhile, the Paris Bar has confirmed that third-party litigation funding does not contravene French law, and the Dubai International Financial Centre Courts has introduced a new practice direction that requires any party entering into an agreement with a litigation funder must notify every other party of this.

They must disclose of the funder’s identity but not the detail of the agreement.

Steven Friel, chief executive of Woodsford Litigation Funding, said the Dubai move was “yet further recognition that third-party funding is viewed as crucial to the development of international dispute resolution centres around the world”.

He continued: “Singapore and Hong Kong are in a race to accommodate third-party funding for international arbitration, and the DIFC refuses to be left behind.”

Separately, Woodsford has announced a tie-up with Leste Global Investments, a Brazilian company that manages financial products related to arbitration and litigation. They sim to serve “the growing market for third party funding of international arbitration and litigation related to Brazil and Latin America”.

Finally, the wind-down of AIM-listed funder Juridica continues. Its annual results, published last month, showed that it paid 40p per share in dividends during 2016 – amounting to $60m (£46m) – bringing total dividends over the life of the company to £1.036 per share.

During 2016, there were final settlements in the last two cases in Juridica’s large antitrust and competition investment; the net proceeds of $46.5m funded part of the dividends. Three investments, with a net asset value of $1.1m, were written off due to either adverse judicial decisions or “adverse market conditions”.

It has 11 investments still live, worth $20m. The company is looking to resolve and monetise them by the end of this year.




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Cancelled flights

Thomson’s application “did not raise arguable point of law”

The Supreme Court has kept the door open to what claimants’ lawyers have predicted will be “millions” of delayed flight compensation claims by rejecting permission to appeal applications from airlines Jet2.com and Thomson.

Cheshire firm Bott & Co, which has pioneered a compensation service for passengers hit by delayed flights, said after the first of its two Court of Appeal victories this summer that it had put more than 2,000 similar cases on hold.

In the Thomson Airways case, appeal judges ruled that the normal limitation period of six years applies to passengers wanting to bring compensation claims for delayed flights. The airline argued that the Montreal Convention should apply, which has a limitation period of only two years.

Giving reasons for rejecting Thomson’s application for permission to appeal this morning, the Supreme Court said the application “does not raise an arguable point of law”.

In the Jet2.com case, the Court of Appeal ruled that Ronald Huzar had suffered “no little inconvenience” when his flight from Malaga to Manchester was delayed by 27 hours.

Mr Huzar sought compensation under regulation (EC) No.261/2004. However, low-cost airline Jet2.com argued that the delay was the result of “extraordinary circumstances”, an exception under the regulation to the rule that compensation was payable.

The Supreme Court decided that permission to appeal should be refused “because the application does not raise a point of law of general public importance and, in relation to the point of European Union law said to be raised by or in response to the application, it is not necessary to request the Court of Justice to give any ruling, because the Court’s existing jurisprudence already provides sufficient answer.”

The Supreme Court decisions were made by a panel of three justices following a review of written submissions.

 




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House of Lords: bill to enter ‘ping pong’

Opponents to the government’s reform of judicial review had a triple success in the House of Lords yesterday, with peers supporting amendments to the Criminal Courts and Justice Bill that restored judicial discretion where the plan was to straightjacket decision-making.

Led by crossbench peer and top administrative lawyer Lord Pannick QC, a cross-party coalition voted 247 to 181 to amend clause 70, which as drafted mandated judges to reject a case if the defendant showed that it was highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred.

Clauses 71 and 72 required applicants to provide details of how the case was being financed before the judge could grant permission. Peers voted 228-195 to allow judges the discretion to grant leave to pursue a JR without this information where “appropriate”.

Finally they voted 219-186 to amend clause 73, which had stated that interveners who were not invited to intervene by the court may not receive their costs and must pay any costs that have been incurred by a party as a result of that intervention, other than in exceptional circumstances. The amendment simply gave the court discretion over whether to order such payments.

But peers heavily rejected a fourth amendment pressed to a vote by Lord Pannick, this time to clause 74(3), which provided that costs-capping orders should be made only where permission to proceed to judicial review has been granted.

Only two Conservative peers – Lords Horam and Tebbit – spoke against the amendments, while a host of legal luminaries – including former Lord Chancellors Lord Irvine and Lord Mackay, and former Lord Chief Justice Lord Woolf – were strongly in favour.

The amendments also supported in the lobbies by former Conservative cabinet ministers John Selwyn-Gummer, who sits as Lord Deben, and Lord Howe, and 17 Liberal Democrat peers.

The government will now seek to overturn the amendments in the House of Commons, which had already approved the bill as drafted, in the so-called ‘ping pong’ phase where differences between the two Houses are ironed out. The Guardian said yesterday that the closer the election comes, the less likely it is that this will be “a foregone conclusion”.

Lord Pannick said clause 70 would prevent a judge from considering whether, in the particular circumstances of the individual case, there was good reason to allow the claim to proceed or to grant a remedy such as a declaration.

It ignored “the fact that one of the central purposes of judicial review is to identify unlawful conduct by the government or other public bodies. If ministers have applied the wrong rule, or they decided a matter without giving a person a fair hearing, the court will say so and it will give a declaration, even if, on the particular facts, the error made no difference.

“This surely serves the public interest because the risk of a public hearing before independent judges encourages high standards of administration, and once the court has given its judgment, ministers and civil servants know that they must change their conduct for the future. That is precisely what they do”.

He said it would also be “time consuming, expensive and an extremely difficult exercise for the judge. It would promote satellite litigation”.

Lord Irvine told the House: “Ministers, who are politicians, often will be frustrated if their decisions are challenged or quashed, but that is an intrinsic aspect of government subject to the rule of law, as is the need for ministers to be aware of their duty to comply with the law.

“A government who are confident that their decisions cannot be readily challenged risk becoming a government who no longer have to respect the rule of law. That is a risk that no Secretary of State for Justice, who also bears the title of Lord Chancellor and is under a duty to uphold the rule of law, should be prepared to countenance.”

On clauses 71 and 72, Lord Pannick observed that the government was seeking to impose duties on applicants that did not apply in other forms of civil litigation.

“If a claimant is able to demonstrate that they have a properly arguable case on the merits and they satisfy other requirements such as standing and time limits, they should not be further obstructed and deterred by complex requirements to disclose financial information,” he said.

On interveners, Lord Pannick added: “I cannot understand why such a provision is necessary or appropriate. The current legal position is clear and fair: the court has discretion over whether to order a party to the judicial review to pay the intervener’s costs or whether to order the intervener to pay costs to a party.

“Clause 73 is manifestly unfair. It will create a strong presumption that the intervener must pay costs, even if the intervention is helpful to the court in raising points that assist it in arriving at its substantive judgment.”

Defending the reforms, justice minister Lord Faulks said the government’s proposals “represent a sensible and considered package that will improve the process of judicial review for those with a proper case, put well and founded on flaws that would have made a difference to the applicant. These are common-sense reforms and represent neither the death knell for the rule of law nor a single, double or even triple heresy, as those who listened to earlier debates might perhaps have concluded”.




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QCs: Good news for wig makers

Only 18% of applicants for silk this year were women, but they were far more likely to be appointed than men, it has emerged as 119 new QCs were named today.

QC Appointments (QCA), the body that oversees the process, expressed concern at the continuing low number of both female and solicitor applicants.

In all, there were 272 applications in 2017, of which just 50 came from women.

However, 32 (64%) of them were successful – the second-highest figure for over 20 years – compared to 39% of the men.

That meant that 27% of the new QCs are women. The most recent figures for the profession show that women make up 36% of the practising Bar and 14% of QCs.

Some 33 applicants declared an ethnic origin other than white. This was around 12% of all applicants, the same as the latest available figures for the percentage of BAME practitioners at the Bar.

More than half of them (18) were appointed, compared to 43% of applicants whose declared ethnic origin was white.

Most of the new QCs are aged between 40 and 50, although 12 of them are 40 or under and 21 51 or older. The younger applicants were more likely to be appointed than the older ones.

None of the three applicants with a declared disability made it through to interview.

As usual, the number of solicitor applicants was low – just 10, of whom five were appointed, most notably high-profile criminal law specialist Imran Khan, best known for his work acting for the family of Stephen Lawrence.

The others are all arbitration specialists at big City law firms: Philip Clifford and Sophie Lamb of Latham & Watkins, Louis Flannery of Stephenson Harwood and Reza Mohtashami of Freshfields Bruckhaus Deringer.

QCA said: “We remain concerned that the level of applications from solicitor-advocates remains comparatively low. For whatever reason, there appears to be some hesitancy on the part of solicitor advocates to apply for silk, even where they may be well qualified to do so.

“We will continue to liaise with the Solicitors Association of Higher Courts Advocates and with the Law Society to explore what can be done to overcome this problem.”

Litigator Janet Legrand, the interim global co-chairman of DLA Piper, was among those granted honorary QC status.

Most applicants declared their sexual orientation and nine said they were gay. Four of them were appointed.

Sir Alex Allan, chair of the selection panel, said: “The selection process is a rigorous and demanding one. We collect confidential assessments from judges, fellow advocates and professional clients, who give freely of their time to provide evidence about an applicant’s demonstration of the competencies.

“Those applicants who are not filtered out following consideration of the assessments are then interviewed by two members of the selection panel, following which the whole panel discuss all the evidence on each interviewed applicant.

“We remain concerned that the number of female applicants remains comparatively low, but I am pleased that of those women who did apply, over 60% were successful. I was also pleased to note that 18 BAME applicants were appointed, a record number.

“Each year, the panel has the difficult task of identifying the truly excellent advocates. I am confident that those appointed today truly deserve to be Queen’s Counsel.”

The full list of new QCs can be found here.




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RBS: Signature represents large number of claimants

The law firm acting for shareholders in the RBS rights issue litigation has secured a substantial correction from the Sunday Express to a story that implied it was in dispute with its clients, after making a complaint to the Independent Press Standards Organisation (IPSO).

Signature Litigation said the newspaper had breached clause 1 of the IPSO code – on accuracy – in an article in the newspaper headlined “RBS shareholders tackle own lawyers”, published last November. The online version’s headline was “RBS to lock horns with former lawyers in legal battle over £200m payout”.

The firm acts for a large number of claimants in the case and was retained in that capacity by the RBoS Shareholders Action Group, which acts as agent for the claimants. Last March, the role performed by the group was delegated to Manx Capital Partners on a sole exclusive basis.

According to a resolution statement issued by IPSO – which ultimately did not need to adjudicate on the complaint – a dispute arose between the action group and Manx as to the terms and effect of that delegation, which resulted in litigation. Signature was not a party to it.

It was settled with the action group agreeing not to appoint or instruct any other solicitors.

The Sunday Express article referred both to settlement damages paid to the claimants represented by Signature and also to the Manx dispute.

The firm said the newspaper was operating “on a fundamental misunderstanding of the matter upon which it was reporting” by conflating the two, which it argued resulted in a number of inaccuracies being published by the newspaper, including in the headlines.

The newspaper disagreed but offered Signature the opportunity to submit a letter for publication.

As a result, IPSO began an investigation, after which the newspaper offered to remove the original online article and replace it with an amended article, “the content of which had been agreed between the parties and which removed the inaccuracies that the complainant had complained of”.

The paper also removed the original online article from the other online platforms over which it had control, including its apps.

Signature said these steps resolved the matter to its satisfaction, meaning IPSO did not make a determination as to whether there had been any breach of the code.

A firm spokesman said: “The RBS rights issue litigation has in the past suffered from misreporting, which it has been important to correct in order that claimants and the public are not misinformed. We took action in this case to correct a number of inaccuracies and we were pleased to resolve the complaint having all of those removed.

“Signature Litigation has only ever acted for claimants, and not for the RBoS Shareholders Action Group Limited, which was the former agent in that case. The new agent is Manx Capital Partners Limited, by whom we are instructed on behalf of the claimants.

“The action group company recently challenged Manx’s authority to manage the litigation, but this was resolved by the court in Manx’s favour.

“We are delighted with the result we achieved for the claimants in the RBS rights issue litigation, which was more than double that achieved for any other claimant group. We are currently verifying all the shares and costs incurred in this case, in order to distribute funds to the claimants as soon as possible.”




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Petyt: cost-effective source of funding


Costs firm Kain Knight has formed a strategic alliance with funder VFS Legal that enables law firms to raise finance against their drafted bills.

Under the arrangement, Kain Knight’s clients will be able to apply for funding from VFS Legal against bills that have been drafted and served.

VFS will loan up to 80% of the net value of the bill, with monthly interest-only payments until settlement.

Kain Knight said this allows firms “to move forward while improving the settlement negotiating position”.

Peter Petyt, chief executive officer of Kain Knight, said: “VFS Legal is playing a vital role in providing a cost-effective source of funding to our clients. VFS understands the needs of our market extremely well and knows that law firms often wait many months, even years, for their bills to be settled.

“This is why it has created an innovative product that helps bridge the funding gap without the need for a firm to renegotiate its existing banking facilities.”

Norman Kenvyn, managing director of VFS Legal, added: “Interventions by the Solicitors Regulation Authority are on the rise and no matter how profitable a law firm may be, it is the actual cash flow that is critical to enable the practice to move forward.

“It is well known how the financial climate is changing, with many banks reducing the funding options that are being made available; alternative solutions are required to bridge the cash flow gap.”

The deal is the latest sign of a re-emergence of funding since the departure of Hampshire Trust from the market four years ago. Just Costs has put in place a similar arrangement, which paid out £1m in its first three months.




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McClure: Publicly funded civil cases remain exempt from fixed costs

Posted by Chris McClure, regional manager at Litigation Futures Associate John M Hayes

At a time when fixed costs reforms are moving with the same disregard and intent as a North Korean missile (and, it would appear, with the potential to do as much damage to the world of legal costs as we know it), solicitors in small and even, perhaps, medium-sized outfits must ask themselves this question: “Is there a safe place to hide?”

Where, to continue the metaphor, is the shelter of refuge?

For some, the sad reality is that there simply isn’t one. Those who are unable (or unwilling, as the case may be) to fundamentally consider and reconsider the way their practice operates will no longer be able to practise as profitably – or even profitably per se.

As the Court of Appeal in Broadhurst v Tan recently reminded us, fixed costs are conceptually different from assessed costs. Whereas the latter are awarded by reference to the work actually undertaken on behalf of the client, fixed costs are granted essentially without regard to the amount of work undertaken by the solicitor.

Profitability therefore becomes synonymous with economy and efficiency. The current fixed costs regimes can and, for many, do work. But as the fixed costs net widens and increasing numbers of solicitors are thereby subject to working under a given system, it will become increasingly important for fee-earners to make the system work for them as the stream of hourly rates billable work, essential to supplementing – or even creating – profit margins, becomes increasingly narrow.

Perhaps, however, in a strange but rewarding way, those solicitors who have traditionally worked at something of a regular undervalue may yet find themselves in the proverbial bunker. Whilst some legal aid work has, at least since 2007, been subject to fixed costs, publicly funded civil cases remain exempt and, as far as we are aware, there are no plans to change that.

But the point goes further than this. Courts have discretion to award a publicly funded party their inter partes costs on either the standard or indemnity basis. In such situations, the indemnity principle is disapplied and the publicly funded receiving party, who thereby enjoys costs protection, is now entitled, via their solicitor, to recover costs from their opponent at inter partes rates.

Thus civil legal aid practitioners who are adept at securing costs awards for their clients may yet glean the best of both worlds (or whatever is left of them post-Jackson) in the sense that, firstly, publicly funded civil work is unlikely to become subject to fixed costs; and secondly, there is always the potential to secure hourly rate costs at the higher inter partes rate.




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Augusta 200 x 200Augusta Ventures, the specialist litigation funder, is further streamlining its application process to provide potential claimants with quicker access to funding for legal cases.

With costs budgeting now an integral part of the litigation process, the company is offering solicitors budgeting advice from a qualified cost lawyer to help inform everyone about the costs risk.

Further, Augusta is giving litigants and the lawyers the opportunity to meet or discuss their case with case analysts earlier in the application process than has been the case until now.

This will help solicitors to demonstrate the merits of the case, answer case review questions and provide a realistic budget for the process.

Jeunesse Edwards, Augusta’s strategic engagement director, says: “Moving away from requirements of the solicitor to complete forms to a process where we discuss the case in a collegiate manner will expedite the due diligence process and strengthen our relationships due to increased transparency.”

The new process builds on the successful launch of Augusta’s new financing product for early stage claims, which offers claimants funds towards the costs for an opinion from a solicitor and, where the case has merits, from counsel too.

Since launching the new product, Augusta has seen most interest in funding counsel and expert opinions, and has also successfully turned around an application through to investment in just three days.

Jeunesse says: “We’ve already funded more applications than we expected. We believe we’ve identified a dormant market and that we’re providing more certainty to potential claimants for whom cost may have been a barrier to accessing justice. Our new funding product, combined with our improved service, is enabling potential claimants to check their chances of success without the prospect of losing valuable funds in the process.”

Since launching at the end of 2014, Augusta has funded 68 cases, totalling over £15.5 million.




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Tom Blackburn

Blackburn: “still not one mediation” with NHSLA

The NHS Litigation Authority (NHSLA) has once more been ordered to pay indemnity costs on detailed assessment proceedings after rejecting an offer to mediate.

Late last year Irwin Mitchell claimed have won the first-ever ruling punishing a losing defendant, the NHSLA again, for rejecting an offer to mediate the costs of a dispute.

Unlike the first ruling, Reid v Buckinghamshire Healthcare NHS Trust, where indemnity costs were imposed on the period after the offer to mediate was accepted, in the latest case – again involving Irwin Mitchell – they were imposed for the entire proceedings.

Master Simons said in Bristow v The Princess Alexander Hospital NHS Trust (case no. HQ 12X02176) that the parties “should be encouraged to enter into mediation, and if they fail to do so unreasonably then there should be a sanction”.

He said it took three months for the NHSLA to reject Irwin Mitchell’s offer to mediate, made on 1 April 2015, and “they gave no good reason other than the fact that the case had already been set down for a detailed assessment”.

Master Simons said he was not satisfied that the sanction should be increasing the interest they paid because 8% interest was already a “penal rate” and the defendant “has to bear this very high rate of interest and they are being punished already by their actions because this case could have been settled by mediation”.

He concluded that the “correct sanction” on the NHSLA was that the claimant should receive costs on an indemnity basis on the 80% awarded to it.

Irwin Mitchell had only received 80% of the detailed assessment costs because its original bill had been reduced by 43% to £135,000, with Master Simons finding it was “not accurate”, and included “significant amounts which should not have been included” because they related specifically to claims against general practitioners which were later discontinued.

The NHSLA said it did not enter into the mediation “because the parties were so far apart”, the master recorded.

Irwin Mitchell partner Tom Blackburn said that despite the rulings in Reid and Bristow, the NHSLA had not changed its tactics. “We had this ruling at the beginning of November, and we’ve still not had one mediation.

“Insurers have been slow on the uptake, but have accepted mediations in some cases. They care about their bottom line.”

Mr Blackburn added that neither Reid nor Bristow had been appealed by the NHSLA.


Blog

Are the days of the Arkin cap numbered?

Stephen Innes

The Arkin cap has come to be seen as increasingly unfashionable, and a forthcoming hearing may provide some indication of the prospects of it being consigned to the back of the wardrobe of history. As a reminder, where a claim backed by litigation funding fails, the funder may be susceptible to a non-party costs order in favour of the successful party.

October 5th, 2018