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Dyson: legal representatives will become more efficient

The Court of Appeal today issued a “clear message” to litigators by dismissing the appeal by MP Andrew Mitchell against the ruling that his failure to meet the rules in his Plebgate libel action meant his budget was limited to the court fees and no more.

In a much-anticipated ruling, the court – made up of the Master of the Rolls Lord Dyson, Lord Justice Richards and Lord Justice Elias – said that although the decision may seem “harsh” in the individual case of Mr Mitchell’s claim, “if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback”.

The Master of the Rolls, Lord Dyson, said: “We hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders.

“If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.”

In August Master McCloud refused relief from sanctions in the case brought by the former Cabinet minister against News Group Newspapers for The Sun’s coverage of the ‘Plebgate’ affair.

The case was begun under the pre-1 April defamation costs management pilot, and in June the master issued the sanction for two breaches of practice direction 51D: a failure to engage in discussion with the defendant as to budgets and budgetary assumptions, and a failure to file a budget seven days before the case management conference.

The case was leapfrogged to the Court of Appeal, which today gave guidance on the new rule 3.9 (relief from sanctions), which obliges a court to consider the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and court orders.

The court said that these two factors should be of “paramount importance and be given great weight” by judges when considering applications for relief, over any other circumstances of the case.

It also highlighted the importance of considering the needs and interest of all court users when managing an individual case; here Master McCloud had had to vacate a half-day that had been allocated to deal with asbestos claims to list the application for relief.

The court said the starting point is that the sanction was properly imposed. There will usually be relief for trivial breaches – where there has been “a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order but has otherwise fully complied with its terms”.

If the breach is not trivial, then it will be for the defaulting party to persuade the court to grant relief. This will be if there is a “good excuse” – which will generally be one beyond the control of the party – but “mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason”.

The court said: “Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines…

“We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event.”

This “more robust approach” will mean that from now on, relief from sanctions should be granted “more sparingly than previously”, the court said, warning those lawyers who had hoped that Jackson would not change the litigation culture that they were wrong.

“We accept that changes in litigation culture will not occur overnight. But we believe that the wide publicity that is likely to be given to this judgment should ensure that the necessary changes will take place before long.”

While accepting that there was force in some of the claimant’s criticisms of Master McCloud’s judgment, the Court of Appeal said “they do not go to the heart of the master’s reasoning”.

The court said: “The defaults by the claimant’s solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants.”




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Langdon: barristers are value for money

Langdon: barristers are value for money

The incoming chairman of the Bar has called on Lord Justice Jackson to protect the junior Bar from the impact of his review of fixed recoverable costs.

In his inaugural speech last night, Andrew Langdon QC outlined his concern about the junior Bar – which has been contracting in recent years – and identified Sir Rupert’s review as one of the specific pressures at the moment.

“I fear that suggestions that solicitors will share the resultant (very much lower) fixed fees with the Bar are optimistic,” he said.

“We join with solicitors in doubting the wisdom of promoting ‘a one size fits all’ policy. But if I am right that the Bar risks being squeezed out of the process, what does that mean? Now is not a time to be diffident in asserting our value. Let me assert it: litigation without specialist barristers will be to deny the parties and the court the best advocacy.

“And who doubts that we, compared to other litigation costs, are value for money? Less of the Bar means less specialist legal analysis; less evidential focus; more satellite litigation and expense; more false starts; longer, less focused trials; more missed opportunities to settle claims at appropriate stages and for the right amount, and last but not least, less efficient use of court time.”

He described the changes that may come out of the review as “piecemeal in the sense that Lord Justice Jackson’s brief is not so wide as to consider how the reforms, when taken together with other pressures on the junior Bar, will affect the long term viability of our profession”.

But even viewed in isolation, Mr Langdon said, “I believe the case for accommodating within the scheme some mechanism or criteria for allowing the recoverability of costs reasonably incurred in the instruction of counsel at each critical stage of litigation would be a compromise in the public interest.

“An overview, in terms of the impact of this changes on the future of the Bar, is critical.”

The speech also saw Mr Langdon express opposition to the scale of the court modernisation programme.




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ARAG200ARAG UK is forecasting another tough year for employers as complex new legislation kicks in. For 2015 a major stumbling block is likely to be shared parental leave and other new parenting rights which were created by the Children and Families Act 2014 and come into effect for births from 5 April this year.

The legislation will allow either parent to take responsibility for their child’s care by co-ordinating up to 50 weeks’ shared leave-taking between employers if necessary. Mothers must still take 2 weeks compulsory maternity leave after the birth and fathers are still entitled to two weeks’ paternity leave. After that leave can be shared in single or multiple blocks of leave but employers will be able to refuse discontinuous leave patterns subject to entering into a two week discussion period. There are a number of notices to be completed which must be provided at least 8 weeks before the proposed Shared Parental Leave (SPL).

All leave must be taken during the first year of the child’s life. There will be 20 additional ‘keep-in-touch’ days to be shared between the parents.

David Haynes, head of underwriting and marketing said, “We know that experienced professionals are sometimes wilting under the pressure of accurately interpreting new rules” adding “but we are here to help get it right. Policyholders can get advice directly from qualified legal advisors and are insured against legal defence costs if disputes arise.”

All ARAG commercial legal protection policies include online and telephone assistance backed up by comprehensive legal defence if an employment dispute arises. In addition, for those customers who want additional peace of mind, the Employment Practices Protection policy focuses on complete cover without the requirement for claims to satisfy “reasonable prospects of success” test following a health check of the policyholder’s employment practices and procedures.

In summary

  • SPL allows an eligible mother or primary adopter to share up to 50 weeks of leave and 37 weeks of statutory shared parental pay (SSPP) with their co-parent.
  • There are a number of eligibility tests that need to be satisfied

In addition

  • Employees can return to work during SPL for up to 20 SPLIT (Shared Parental Leave in Touch) days.
  • Existing terms and conditions continue to apply save in respect of remuneration.
  • Employees are entitled to return to work to the same role or a similar role, depending on the amount of leave taken.
  • Employees are protected from detriment and dismissal in connection with exercising their rights to take SPL.



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Cameron: kill off the health and safety culture for good

The government is to extend the upper limit of the road traffic accident (RTA) portal to £25,000, while similar fixed-fee schemes are to be introduced into  70-410 exam other, as yet unspecified, areas of personal injury, Prime Minister David Cameron has announced.

In a speech on health and safety to small businesses and entrepreneurs in Maidenhead yesterday, Mr Cameron said the moves would tackle the compensation  CompTIA sy0-301 dumps culture and address businesses’ fear of being sued for trivial or excessive claims.

“This coalition has a clear New Year’s resolution: to kill off the health and safety culture for good,” he said.

However, there is little flesh on the announcement, which is the first sign of the government’s response to the Solving disputes in the county court consultation that closed last June.

All that is definite right now is the extension of the RTA portal limit from the current £10,000 and that the model will be used for other areas of personal injury work.

Litigation Futures understands that this is very likely to include both employer’s and public liability, but more work is still needed before deciding whether industrial disease and clinical negligence cases will be caught too.

It is unknown at the moment whether the new regimes will be for cases worth up to £10,000 or £25,000. Extending the portal to £25,000 also brings the Jackson reforms into play as the judge wanted to see fixed fees across the fast-track.

The detail will be revealed when the consultation response is finally published. Ori

ginally slated for October, the Ministry of Justice said yesterday that it will be made public “soon”. Minister Jonathan Djanogly told Parliament last month that it was postponed “due to ongoing discussions within government”.

Other reforms to health and safety more broadly include changing the law on strict liability for civil claims so that businesses are no longer automatically at fault if something goes wrong, rationalisation of the law in the area, while from 6 April businesses will no longer have to report accidents in the workplace unless an employee is off work for seven days or more.

David Bott, president of the Association of Personal Injury Lawyers, said: “We have grave concerns that the government is pushing through too many swathing changes to the system at once without proper consideration as to the implications for injured people.

“The danger is that workers could be exposed to an unnecessary risk of injury and then be left with a civil justice system which cuts them off from their right to full and fair redress.”

He added that “it is far too early” to consider extending the portal “as it still has teething problems and remains far from being the finished article”.

Andrew Dismore, who co-ordinates the Access to Justice Action Group (AJAG), said it would oppose the changes as its own research showed that 48% of people suffering accidents at work do not make a claim even when they know someone else is to blame. “Cutting ‘red tape’ will only endanger workers,” he argued.

Mr Dismore predicted that people with claims under £25,000 will struggle to find a solicitor under a fixed-fee scheme.

“It is suggested the fixed fee for running an employer’s liability case or public liability case could be as low as £400. This very low fee makes running these types of cases completely unviable. There is an irreducible minimum of work which must be done which must be reflected in the fee,” he said.

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Motorcyle claim: circuit judge should have exercised discretion

A claimant law firm that allowed a straightforward and relatively low-value road traffic accident claim to descend into “procedural chaos” has seen it struck out by the High Court.

Mr Justice Turner said that the firm, Armstrongs Solicitors, had, “through a combination of complacency and procrastination, proceeded as if compliance with the Civil Procedure Rules and the orders of this court were of scant importance”.

He overturned a decision by His Honour Judge Gregory in Liverpool, who – “trying valiantly to rescue what he could from the procedural wreckage” – granted the claimant relief from sanctions.

Gladwin v Bogescu [2017] EWHC 1287 (QB) involved the defendant’s car colliding with the claimant’s motorcycle. Liability was never in issue, but quantum was in significant dispute, in relation to both potential exaggeration of the injury and hire charges of £17,151 to replace a six-year-old motorcycle which ultimately cost only £910 to repair.

In August 2016, the parties were given what were, at the time, common directions in Liverpool County Court in respect of credit hire cases, ordering service of all witness statements by 3 November.

They said: “Oral evidence will not be permitted at trial from a witness whose statement has not been served in accordance with this order or has been served late, except with permission from the court.”

On 3 November, the claimant’s solicitors asked the defendant’s solicitors for a two-week extension of time, which was granted.

Turner J noted: “The evidence suggests that the solicitor with conduct of the claim had done nothing whatsoever between August and November to set about the routine task of obtaining a witness statement from her client.”

The extended date for compliance came and went, and a witness statement was not obtained from the claimant until 5 January 2017.

A month later, less than a week before trial, the claimant’s solicitors applied for relief from sanctions and permission for the claimant to give oral evidence, recognising that the trial date would have to be vacated as a result.

The breach was clearly significant and no good reason was provided for it. On the third limb of Denton, however, HHJ Gregory concluded that if he were to refuse the application for relief, the defendant would suffer greater prejudice than the claimant because the claimant would potentially remain entitled as of right merely to rely on his witness statement and thereby evade cross-examination.

But Turner J said the circuit judge “fell into error by assuming that he could not act more robustly to preclude the claimant from relying on his witness statement. He further fell into error by failing to have proper regard to his powers to strike out the claim altogether in response to the claimant’s breaches”.

HHJ Gregory “too readily followed the path of adjournment. Indeed, the adjournment application should have been refused”.

Turner J continued: “Applying the overriding objective, the arguments in favour of granting an adjournment were weak. In the context of a relatively modest claim, the additional expenses generated by an adjournment would have been significant.

“The claim would not have been expeditiously disposed of and the court’s resources would have been wasted. Serious failures to comply with rules and orders had been perpetrated.”

That it was the claimant’s advisers who had defaulted and not the claimant itself was not a strong enough reason to decide differently.

“Since the introduction of the Jackson reforms, the general approach of the courts is likely to be less rather than more indulgent of the defaults of legal advisers as a justification for granting forbearance to the litigants themselves…

“Of course, I fully recognise the prejudice which would be occasioned to the claimant in having to look to his advisers for redress and the potential disadvantages, including the loss of privilege, which this entails.

“I accept that this is a factor to be borne in mind but, in the circumstances of this case, it does not attract sufficient weight, when taken in combination with all the other relevant factors to be taken into account when seeking to apply the overriding objective, to prevail.

Turner J concluded that having decided that the case could not proceed on the day listed for trial without causing significant prejudice to the defendant, HHJ Gregory should have exercised his power to strike out the case due to a failure to comply with the order.

A spokeswoman for Armstrongs said: “This was a regrettable incident and the matter has been dealt with internally with the staff member involved.”

As a postscript, Turner J recorded that the template now generally adopted by district judges in Liverpool in respect of credit hire claims has been revised to read: “No party shall be entitled to rely upon the evidence of a witness whose statement has not been served in accordance with this order, or has been served late, except with permission of the court.”

He said: “For my own part, I consider this to be an improvement on its predecessor.”




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Dyson: straightforward matter of interpretation

Dyson: straightforward matter of interpretation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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




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Document dIsclosure: extension sought

It would be “unfortunate” if the stricter post-Jackson approach to compliance with orders should encourage parties to refuse reasonable requests for time extensions in the hope that the court might refuse any extension at all, the High Court has said.

Mr Justice Henderson said there are some orders relating to the completion of specified stages in preparation for trial where the date for compliance cannot sensibly be regarded as “written in stone”.

He gave examples such as disclosure, the exchange of witness statements and a timetable for expert evidence.

He was ruling on an application to extend the time for a complicated disclosure exercise in In the matter of Atrium Training Services [2013] EWHC 1562 (Ch), and decided that on the facts the party seeking the extension should be granted it.

The judge had been referred to the new overriding objective, the speech of the Master of the Rolls on courts taking a stricter approach to compliance after 1 April, and the recent cases of Fons and Venulum, in which other High Court judges indicated a tougher stance.

Henderson J ruled that in this case, because the application for extension had been made before the expiration of the existing deadline, it was not an application for relief from sanctions under CPR 3.9.

He said: “It is no doubt the case that the court will scrutinise an application for an extension more rigorously than it might have done before 1 April, and that it must firmly discourage any easy assumption that an extension of time will be granted if it would not involve any obvious prejudice to the other side.

“On the other hand, I think it is important not to go to the other extreme, and not to encourage unreasonable opposition to extensions which are applied for in time and which involve no significant fresh prejudice to the other parties.”

He said that in such cases, considerations of cost and proportionality are highly relevant, and the wider interests of justice are likely to be served by a sensible agreement, or a short unopposed hearing, than by the parties adopting entrenched positions and spending a lot of money and court time over an application that could have been avoided.

Henderson J continued: “I would also observe that, although all court orders mean what they say, and must be complied with even if made by consent, there are some orders relating to the completion of specified stages in preparation for trial… where they may still be so many imponderables when the order is made that the date for compliance cannot sensibly be regarded as written in stone.

“Everything will always depend on the circumstances of the particular case, and the stage in the proceedings when the order is made, but in many cases it should be understood that there may be a case for reasonable extensions of time or other adjustments as the matter develops.

“It would, I think, be unfortunate if the new and salutary emphasis on compliance with orders were to lead to a situation where, in cases of the general type I have described, a reasonable request for an extension were to be rejected in the hope that the court might be persuaded to refuse any extension at all.”




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Due to continued expansion Kain Knight have opened a satellite office directly opposite the Royal Courts of Justice.

We have found that our in-house team has experienced a dramatic increase in instructions since costs budgeting began to take hold necessitating an increase in that particular division.

Our commercial clients, with larger budgets that require in-house drafting has also necessitated an expansion of the London team of Costs Lawyers.

Conveniently the new office is situated at 218 Strand, which is ideally suited to servicing the traditional local legal community.  This now includes the Bar, with whom we are further extending our working relationship, particularly with regard to Precedent H.  This new office combined with our long-term City presence enables us to fulfil all client service expectations in Central London.’

Nicholas Clark, Business Development Director commented,  ‘As a result of our extensive work with our clients on Precedent H it has been identified that further expansion in the London market was essential” 

 




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Spencer: employers will believe they can avoid the law

Government hype about its Bill to protect ‘everyday heroes’ will put vulnerable people at risk, the Association of Personal Injury Lawyers (APIL) has claimed on the eve of its second reading in the House of Commons.

Justice secretary Chris Grayling told Saturday’s Daily Telegraph that the Social Action, Responsibility and Heroism Bill – the so-called SARAH Bill – is “out to try and slay the health and safety culture”.

But APIL insisted that it is “a license for have-a-go heroes to cause needless injury, for volunteers who work with children and elderly people to escape proper vetting, and for rogue bosses to dodge their responsibilities to look after their employees”.

The Bill is just five clauses long and applies when the court, in considering a claim that a person was negligent or in breach of statutory duty, determines the steps the person was required to take to meet the standard of care.

Under the Bill, the judge will need to have regard to whether the negligence or breach occurred when the person: was acting for the benefit of society or any of its members; demonstrated a generally responsible approach towards protecting the safety or other interests of others; or was acting heroically by intervening in an emergency to assist an individual in danger and without regard to their own safety or other interest.

APIL president John Spencer argued that the Bill adds nothing to the current law. “But the real danger is that populist government rhetoric about the Bill will lead people to believe they are impervious to the law if they injure someone through their own recklessness while being ‘heroic’.

“Those responsible for vetting volunteers to work with children will feel they can cut corners in the process, leaving youngsters vulnerable to predatory adults, because the law is said to protect volunteers.

“Employers will believe they can avoid the law if they injure workers, provided they are ‘doing their best’. But what if their best is not good enough?”

Speaking in Parliament last week, shadow leader of the House Angela Eagle said the “pleasing sounding but completely vacuous” Bill just replicated Labour’s 2006 Compensation Act. The government was wasting time with a “PR exercise”, she claimed.

Mr Grayling told the Telegraph: “It is about trying to restore common sense to the kind of situations which happen all too often and very seldom get to court – where somebody has an accident at work, it’s entirely their own fault, they have got a perfectly responsible employer who has the normal health and safety procedures in place but that person does something dumb, hurts themselves and sues the employer anyway.”

Acknowledging it as a “populist piece of legislation”, a briefing last week from Steve Thomas, director of market and public affairs at defendant insurance firm Keoghs, said that once SARAH becomes law, “it will be about correct case selection and using the Act to test the new boundaries with the courts”.

Mr Thomas noted that the 2006 Act, which had similar ambitions and introduced the phrase ‘desirable activity’, had proven a damp squib and rarely been used by defendants to defend or mitigate claims.




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Clinical negligence: recoverable reports will be for liability and causation only

Nobis canada

The government has just completed a mini-consultation on the recovery of after-the-event (ATE) insurance premiums for expert reports in clinical negligence claims, Litigation Futures has learned.

This is the only exception to the end of recoverability of ATE premiums contained in section 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. In a letter sent to a select group of stakeholders four weeks ago, Robert Wright, head of civil litigation funding and costs at the Ministry of Justice (MoJ), sought views on the current thinking on how it will be implemented. Nobis

The letter, seen by this website, said the MoJ plans to only allow premiums to be recoverable for expert reports necessary to establish liability and causation but not quantum. Further, recovery should be limited to the premium necessary to cover the reasonable cost of two expert reports. It asks whether the court should be able to allow the recovery of premiums for additional reports if satisfied about the necessity and reasonableness of obtaining them.

There are then questions over wh

ether there should be a limit on the maximum recoverable premium and if there should be any rules around costs of the expert reports themselves, such as a cap.

The MoJ’s current position is that the insurance policy should be explicit about the part of the premium that relates to the expert reports for which recovery is sought, and that recoverability will not extend to other expert fees, such as attendance at trial.

Mr Wright also asks how transparency of premiums be improved to enable the courts to assess their reasonableness.

The plan is that the premium will not be recoverable unless the claimant has given requisite notice (such as 42 days, as is currently the case with defamation cases) to the defendant, and the defendant has not responded with an offer that obviates the need for ATE insurance, on the basis that (i) the defendant is prepared to settle; (ii) the defendant is prepared to pay for an appropriate expert report, or come to an appropriate agreement with the claimant on the provision of expert reports (such as offering joint instructions or funding).

“This should incentivise both claimants and defendants to discuss the merits of the claim and work together to keep costs down, and where possible, avoid the need to purchase ATE insurance cover,” Mr Wright said.

The consultation closed last Friday and the MoJ told Litigation Futures that there is currently no date for when it will set out the final policy details for the regulatory framework.




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Solon: lawyers need reminding of the rules

Solon: lawyers need reminding of the rules

Nearly half of experts have come across a counterpart they consider to be a ‘hired gun’, willing to give an opinion that helps the side paying them, according to a survey.

The poll of 779 experts also found that half of those who had considered giving up as an expert in the last year cited the pay they received.

Carried out by expert witness training company Bond Solon and The Times newspaper, the survey said 46% of experts had come across ‘hired guns’, while 31% felt pressured by lawyers to change their report in a way that damaged impartiality.

Bond Solon founder Mark Solon said: “They gave examples, some of which were overt but others that suggested they would not get further work or would not be paid. Clearly lawyers need reminding of the rules and judges need to keep a careful eye out for bias.”

Just over a quarter (27%) of those surveyed said they had considered giving up expert work, with pay levels the main concern (51%), followed by time constraints, the risk of being sued in contract or for negligence, and the risk of disciplinary proceedings by their professional body – the last a concern that has grown in the light of the problems faced by experts in emerging fields of science, such as shaken baby syndrome.

Mr Solon said: “There have been many cuts to legal aid over the past few years and since the Jackson reforms have introduced proportionality for costs, expert’s fees have been reduced. One must remember that expert work is for most experts a secondary source of income as they have the day job working in their professional field.

“If fees are two low, the best experts will not bother to get out of bed and will refuse to take on the work. Only those who are willing to work for the lower rates will take it on. Jackson also introduced much tighter court controlled time limits that can be difficult for professionals to comply with.”

In other results, a quarter of experts doubted that judges were able to understand technical expert evidence, a figure that rose to 59% for juries.

A separate survey of experts released last week by the Expert Witness Institute found that experts giving evidence concurrently – known as ‘hot tubbing’ – was assisting the courts and reducing costs.




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Eclipse2014 200x200Curtis Law was founded in 2008, employing five staff to deal with personal injury claims. Since that time the firm has extended its reach into family law, conveyancing, probate and commercial areas and now employs 200 staff across the group.

Set up initially as a PI claims specialist, Curtis Law had strong ambitions to grow both in headcount and in the range of legal work managed.

Curtis Law initially needed a case management solution that would provide a flexible and future-proof environment – one that could be scaled out to multiple work areas, not just PI.

Following a detailed analysis of available solutions, Eclipse’s Proclaim Case Management system was selected. A solid track record in helping new start-up businesses to grow was a strong pull, as was the ability to add Practice Accounts at a later stage. Curtis Law took the opportunity to do just this – replacing the incumbent ‘bureau’ accounts system to create a fully integrated Proclaim Practice Management solution.

Proclaim is used across all work areas, providing a complete desktop productivity solution. Client care is top of the firm’s agenda; the ability to rapidly see where any file is up to – and provide feedback for clients – is a huge benefit. As a growing practice, managing finances is vital. Curtis Law has been able to monitor and analyse ongoing performance, using Proclaim’s integrated reporting toolset. This means that trends can be spotted, empowering the management team to quickly make informed operational and growth decisions.

Tasleem Riaz, principal, Curtis Law LLP said: “Proclaim provides a robust, scalable and flexible solution that is perfectly in tune with our commercial aims.”




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Emily-Thomas

Emily Thomas, Senior In House Solicitor, Acasta Europe Limited

With court fees rising and litigation becoming increasingly expensive, third party litigation funding continues to grow. There are various reasons clients may want to consider litigation funding, such as the need for a cash injection to enable them to get their case off the ground or the desire to take the litigation risk off their balance sheet and avoid having funds tied up in lengthy legal battles. Litigation funding can also be a useful tool for solicitors as it can provide payment of their fees where a client does not have the funds to continue with the litigation.

Where once third party litigation funding was banned under English Law, it is now a growing and constantly evolving industry with more and more options for clients to consider.

Unfortunately obtaining litigation funding can still be a complex and lengthy process but at Acasta Europe Limited the process has been designed to be as straightforward as possible. Whilst many clients also require After the Event insurance in conjunction with litigation funding, if this has been obtained elsewhere we can still assist with the funding element of the claim and are happy to look at providing assistance at all stages of the litigation process.

Acasta is able to offer funding for a variety of commercial disputes in conjunction with Sparkle Capital. Our in house legal team is actively involved in assessing and considering the merits of any funding proposal. We also offer a funding facility that has been specially designed to provide assistance for lower value claims as we understand that such claims cannot often be pursued due to lack of finance.

For more information click here, call 0800 668 1350 or email Emily at emily.thomas@acastaeurope.co.uk




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Bogart: ATE has never really been recoverable or free in commercial litigation

The scale of the pre-Jackson panic came into sharp focus yesterday after litigation financier Burford Capital revealed that it sold more after-the-event (ATE) insurance in the first quarter of 2013 than it did in the whole of the previous two years combined.

The company has also developed a “synthetic hybrid DBA” that gets around continuing concerns over the efficacy of hybrid damages-based agreements.

Publishing its half-year results Burford said it wrote more than $150m (£96m) in new business exposure in the first three months of 2013.

“Because of the conditional and deferred nature of our litigation expenses insurance products, it is too soon to tell how much that potential exposure will convert into actual premiums, which will turn into income for the group over the next few years as cases settle, but it seems clear that the former Firstassist will exceed our expectations and that we have a valuable annuity in hand.”

Of the ATE that matured during the first half of 2013, Burford raked in $10m in income and

$6m in profit before tax. It also reported $10m in income from its third-party funding, and profits of $5.4m, with an overall profit after tax of $8.3m, up 74% on the same period last year.

Burford chief executive Chris Bogart said that unlike some other ATE insurers, Burford had not turned away any customers in the run-up to implementation of the Jackson reforms,

During that period Burford “de-emphasised” litigation funding, but its report to shareholders said it is now “proceeding nicely” in the UK, “with strong demand for capital and some early success”, with the first resolution of a UK funding matter recently achieving a return of more than 100% in less than a year.

However, Mr Bogart declined to specify how many of the 29 live investments it currently has (with a commitment of $266m) relate to UK litigation.

Burford also completed a “law firm financing transaction”, which it described as a “market innovation”. This involves providing a law firm with financing across its litigation practice or a specific pool of cases so that it can afford to take the cases on. It is looking to do this with both ATE insurance and litigation funding, although Mr Bogart said the company will still look at individual cases as well.

The report said: “It is too early to tell what the real impact of the Jackson reforms will be on UK litigation generally, let alone litigation finance and insurance. The court system is still dealing with the enormous bulge of pre-Jackson filings while the Jackson era remains uncertain.

“Our very early experience is consistent with our prior assessment – that there remains demand for insurance coverage in larger commercial matters and that the demand for various financing products has increased. However, more time is needed for the new reality to come into sharper focus.”

Burford has stopped writing lower-value ATE since April – leading to some job losses – and Mr Bogart said the end of recoverability would make little difference in commercial cases. With most settling for a global amount, rather than including a specific amount for the ATE premium, he argued that “ATE has never really been recoverable or free except in the rare cases that go to trial”.

There is longstanding concern over whether the DBA rules allow ‘hybrid’ agreements where the solicitor is paid partly by the hour and partly on a percentage of damages, leading to no take-up of the new arrangements.

Mr Bogart explained that Burford is enabling lawyers to work under full DBAs but lay off some of the risk to Burford, which he described as a “synthetic hybrid DBA”. This means, for example, that the law firm works purely on a percentage of the damages, but then agrees with Burford that it will pay the firm half of its fees, in return for half of the fee the firm receives under the DBA.




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After the event (ATE) insurer Keystone Legal is pleased to announce the launch of Protect 36, an ATE insurance policy designed to be taken out at the Part 36 stage of a personal injury (PI) claim.

Since the LASPO / Jackson changes on the 1st April, it is clear that many PI Solicitors and Firms are unsure as to the best way to approach the mediation and the ‘selling’ of ATE insurance with their Clients. This is especially the case now that ATE insurance is like any other ‘consumer’ insurance product and issues such as a policies features, benefits & value for money must be properly considered and a one size fits all solution may in many scenarios not represent best advice.

Andy Parker, Managing Director of Keystone Legal says “Protect 36 is aimed at Firms who don’t  need ‘day-1’ cover for all Clients but who do recognise that the bulk of the costs risk in the post-LASPO regime – i.e. adverse costs should a Part 36 offer not be beaten – means that cover certainly should be in place at this point”.

“Protect 36 allows Firms to take out a policy after a defendant Part 36 offer is made, and cover includes adverse costs, litigation disbursements and our unique damages indemnity / shortfall cover. As premiums are only payable should there be an increase in the Part 36 offer, we feel that Protect 36 offers excellent value for money for Clients and could well be the only cover you need for many PI case types.

Protect 36 can be used to cover all PI claim types (RTA, EL, PL, OL) and for Industrial Disease & Clinical Negligence cases. Cover is simple to explain, quick & easy to apply for online and the Part 36 damages indemnity / shortfall cover provides real peace of mind for Clients & Firms alike.

For more information about Protect 36 and our current ATE and LEI products and services, please contact info@keystonelegal.co.uk




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Steve Rowley Allianz

Steve Rowley, Business Development Manager, Allianz Legal Protection

Allianz Legal Protection (ALP) and JLT Specialty Limited (JLT) have created Omnium, a specialist After the Event (ATE) insurance solution for Insolvency Practitioners (IP’s).

Omnium is an exclusive scheme which:

  • provides relevant adverse costs and disbursement coverage across 5 key stages of insolvency action
  • protects IP’s when bringing legal action to secure assets owed on behalf of creditors
  • £100k limit of indemnity provided as standard, with additional indemnity available as required.

Once IP’s have been appointed as office holder for a business or individual as part of an insolvency procedure, Omnium will provide access to ATE insurance to cover potential litigation risk and financial protection against adverse costs and disbursements.

The Omnium scheme will be distributed and managed by JLT’s Restructuring & Recovery team.

Allianz Legal Protection’s business development manager, Steve Rowley, commented: “In the provision of insurance solutions for insolvency practitioners the expertise of JLT’s Restructuring & Recovery team is renowned throughout the market. I’m delighted that we have been able to work with JLT to deliver a unique legal expenses solution for this sector. This provides a competitive and innovative solution to protect an insolvency practitioner’s personal liability against defendant costs and disbursements when legal action is necessary.

“In a legal market experiencing uncertainty and change, ALP continues to focus on its core business model of delivering appropriate, valued and timely legal expenses solutions to meet the needs of clients.”

Ed Brittain, head of Restructuring & Recovery at JLT commented: “Omnium is an innovative risk transfer solution for Insolvency Practitioner firms that will assist firms to pursue litigation on a new basis. We are delighted to be working with Allianz Legal Protection to both develop and launch Omnium.”




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Neuberger: "obviously beneficial" to be paperless

Neuberger: “obviously beneficial” to be paperless

Lord Kerr, the Supreme Court justice, is leading an initiative to improve the use of technology at the court and cut down on paper, it has emerged.

The president of the Supreme Court, Lord Neuberger, said it would “obviously be beneficial if we could go paperless”, but Lord Kerr, the only justice from Northern Ireland, was also the only one who “gets close in that connection”.

Lord Neuberger went on: “Lord Kerr is also helping to make sure that we do not sit on our laurels. He is chairing a committee of three justices to try and see whether we can cut down the amount of paper in most cases and do more on screen.

“We are also examining the possibility of greater use of video links, which would save parties time and money.”

Lord Neuberger also said that “courts should not balk at the idea of changing their procedures to enable maximum efficiency for new IT systems”.

In a speech to the Northern Ireland Assembly committee for justice, he said the Supreme Court had installed a “very effective IT system” two years ago, and had learnt “a number of lessons” from the experience.

“First, if at all possible, get an off-the-shelf system, as we did second time round. Seductive though they may be, bespoke systems, such as we had first time round, are expensive, time consuming and much more likely to fail.

“Off-the shelf systems have been rigorously stress-tested, whereas the same cannot be true of bespoke systems. Secondly, and connected with the first point, as we discovered from our successive experiences, even courts should not balk at the idea of changing their procedures to enable maximum efficacy for new IT systems.

“Of course this does not mean that courts should be prepared to sacrifice any practice which supports or facilitates the rule of law. But the notion that IT always has to be designed to fit working practices, and working practices should never be adjusted to fit with IT is wrong.”

Lord Neuberger said careful attention to working practices was “absolutely necessary” when acquiring or designing an IT system, and it was “important to encourage everyone, especially judges” to use the systems once they were installed.

On the “vexed question of access to justice in an age of austerity”, Lord Neuberger said lawyers had to “face the fact that we are in something of a perfect storm”.

Echoing the words of the Lord Chief Justice, Lord Thomas, he said: “Legal services are increasingly very expensive and increasingly unaffordable to ordinary people. At the same time, government money to support the courts and legal aid is in very short supply.”

He said the government was “proposing to make available a large sum of money to overhaul both the physical and the electronic infrastructure of the courts”, which would result in “fewer, but larger and more modern” court buildings across the UK.




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

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

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

Presented by Gary Barker, this webinar will be streamed on Tuesday 1 April and is available to book here. Alternatively email us at lucy@mblseminars.com for more information.

 




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Bogart: strong response

Bogart: strong response

Burford Capital has raised a further £100m in its two-week issue of bonds, the AIM-listed litigation finance company announced today.

The sum raised exceeded Burford’s first bond issue in 2014, which brought in around £90m.

The bonds will pay interest at an annual rate of 6.125% and mature on 26 October 2024.

The money is ready to invest and Burford said that when combined with Burford’s existing investment commitments, it would take the company’s cumulative litigation finance investment commitments to approximately $1bn.

There are more than 500 individual litigation matters underlying Burford’s current investments

Burford’s recent annual report – which recorded a 26% rise in income to £73m, along with a 27% jump in operating profit to £54m – explained how it was evolving in line with the legal market’s changing attitude towards outside capital. From having originally just funded individual cases, only 13% of its new investments in 2015 were single matters, with the rest “a variety of other forms of capital provision to the legal market”.

This included providing £71m in capital for an unnamed global law firm, in its largest transaction ever.

Burford CEO Christopher Bogart said: “We are very pleased with the strong response to our second bond issue, which at £100m has well exceeded our first issue and continues to provide us with an unmatched capital base.

“The legal sector is rapidly evolving alternative economic models and demand is increasing globally for Burford’s services. The use of external capital by law firms to support their growth is accelerating, even as corporate clients seek new ways to manage ongoing costs and monetize litigation assets.

“We are grateful for the continuing support of our investors in both our bonds, which has permitted this further expansion of our business, and our shares. We look forward to demonstrating Burford’s further potential.”




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One of the north-west's largest law firms – Asons Solicitors – has revealed record growth figures, in a challenging environment for legal services providers.

Founded just 5 years ago, Asons recently employed its 250th staff member; all based at its central Bolton premises.  The firm implemented Eclipse's Proclaim Practice Management software solution at its inception in 2008, when headcount numbered 3 employees (equating to a staff growth to date of over 8,200%).

Proclaim is utilised by all Asons staff, the system providing a core centralised solution for the full range of injury claim types – from complex high-value cases (Asons recently won a 6-figure settlement for a client, after a significantly lower initial insurer offer) through to minor RTA (Road Traffic Accident) claims.

Proclaim has enabled the firm to structure its business so that 88% of staff are revenue generating (fee earning), with only 12% dedicated to 'support' functions.  Future strategic aims include the expansion of its Industrial Disease team to be the UK's largest (it currently numbers 110 staff), and the implementation of a dedicated Clinical Negligence department.

Imran Akram, CEO at Asons, comments:

“Our aim right from day one was to build a sustainable and solid business.  The personal injury sector is fluid and challenging – the right legal software solution, one that is flexible and adaptable, is utterly vital.  Proclaim has provided us with the power to continually enhance our processes, drive out waste and increase margins.

“Proclaim is our 'blank canvas' and has enabled us to create a van Gogh.”




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David Kearns

Kearns: court fee hikes have “added to the strain” on resources

Fred Done, co-founder of betting giant Betfred, has moved into lower-value litigation funding with the launch of a new service specifically designed to help cover enhanced court fees.

Sparkle Capital Lite (SCL) is aimed at cases where the funding required is from £10,000 to £200,000, and does not take a percentage of the damages. Instead it relies on a fee based on the amount required, plus interest.

SCL is provided by specialist ATE insurer Acasta Europe, which has offered litigation funding for larger cases, where damages are likely to exceed £3m, since last autumn.

Acasta Europe is majority owned by Fred Done, who founded Betfred with his brother Peter. Sparkle Capital Limited is part of the Done business group, which includes Betfred and Peninsular Business Services among a number of companies.

David Kearns, solicitor and legal director of Acasta, said he knew from practical experience that a “large number of valid cases from smaller businesses or with lower levels of damages are not pursued because of lack of funds and worries over legal costs”.

Mr Kearns went on: “This concern has been exacerbated by the recent rise in court fees that have simply added to the strain on both solicitor and client resources. Because Sparkle Lite can be applied retrospectively, we believe that these issues become much less of a concern.”

Chris Kelly, sales director of Sparkle Capital, said Acasta already had arrangements with Claim Finance to fund medical negligence claims and Novitas to fund employment tribunals.

He said Acasta, based in Cheshire, was formerly known as Focus Insurance Services, but had recently changed its name after expanding into other insurance products in a number of European countries.

“Sparkle Lite is partly a response to changes in court fees, which have gone up by a horrendous amount. Claims can go begging when the issue fee is £10,000.”

Mr Kelly added that the rise in court fees had made things particularly difficult for smaller law firms and businesses, and the funding could be used both for disbursements and solicitors’ fees.




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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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Adrian Jaggard

Jaggard: Decision “came as a shock”

The costs committee of the Civil Justice Council (CJC) has been attacked by litigation solicitors and the Law Society after the surprise rejection of its plans for new guideline hourly rates (GHR) by the Master of the Rolls.

John Bramhall, president of the London Solicitors Litigation Association (LSLA), said that instead of the “normal market-driven or inflationary increase” the committee’s report would have paved the way for a “fundamentally different approach” leading to a significant cut in rates.

“The LSLA has consistently believed the market should determine rates and that the CJC committee’s model – expense of time plus a seemingly arbitrary pre-determined profit level – was not going to reflect market rates fairly,” he said.

Mr Bramhall said Lord Dyson had emphasised “the original intention of the guidelines, as reiterated by Jackson” that the aim of the GHR should be to reflect market rates.

“We will urge the committee to revisit its criteria better to reflect the MR’s view that reliable market evidence is needed so that GHRs are a broad approximation of actual rates in the market.”

Des Hudson, chief executive of the Law Society, described Lord Dyson’s rejection of the costs committee’s proposals as “a victory for common sense and for the Law Society”.

He went on: “We co-operated throughout this review by providing some of our publicly available research data, and the committee included representatives from the society.

“However, we were clear from the start that our data was not obtained for the specific purpose of a review of the guideline hourly rates. We expressed our concerns about both the relevance of the Law Society data being used in this way and the need for robust and relevant evidence.”

Adrian Jaggard, chief executive of Jaggards and the Association of British Insurers representative on the costs committee, said the decision of the Master of the Rolls “came as a shock”.

He defended the approach taken by the committee.

“A robust evidence base was established as the key requirement upon which to make GHR recommendations.

“Several sources of data and evidence were called on in the review, including the Law Society, Solicitors Regulation Authority and Chartered Institute of Legal Executives. Data was supplied also by Price Waterhouse Coopers and Jaggards.

“In addition, the committee undertook its own survey to fill in the evidential gaps and benchmark on the pre-existing data. To complement that survey, oral evidence was invited from a number of representative organisations.”

However, on further reflection, Mr Jaggard said he appreciated Lord Dyson’s reasoning for “doubting the adequacy” of the evidence.

Meanwhile Sue Nash, chair of the Association of Costs Lawyers (ACL), said she was delighted that “the professionalism and expertise of costs lawyers” had been recognised in the report and accepted by the Master of the Rolls.

Lord Dyson agreed with the committee that qualified and regulated costs lawyers should be paid at GHR rates B or C, depending on the complexity of the work.

Ms Nash said this reflected “the effort put in by the ACL to enhance the skills of our members and the work that we have done jointly with our regulator, the Costs Lawyer Standards Board, to ensure robust regulation of our professional standards.”

 




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30 further jobs being created for Just Costs Solicitors

Just Costs Solicitors, the largest Solicitor’s practice in England specialising in costs, is to create a further 30 new jobs in Manchester, Chesterfield, London and Leeds.

The award winning firm – which provides expertise in costs solutions for other solicitors including a specialism in costs management and budgeting – is growing its 100 plus strong workforce with immediate effect, having already added 29 new members of staff over the last twelve months.

“We are driving the business forward through growth and creating job opportunities at every level,” said Managing Director, Paul Shenton.

“The costs market is buoyant at present and now is the time to kick on and explore the opportunities available to us.  Every aspect of the business is performing well.”

Just Costs Solicitors is currently enjoying the most progressive period in its history and has just agreed a £1.1 million funding package with NatWest.

Due to the nature of its business, Just Costs employs a number of non lawyers in the form of costs draftsmen – and having been granted an ABS licence last year, the firm is able to appoint non lawyers as directors of the business.

Concluded Paul Shenton:

“Our expansion drive will recognise and reward people right across the board – solicitors, costs draftsmen and non fee earning staff.”




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Grant: meritorious claims will continue to be made

The new regulations governing conditional fee agreements (CFAs) cleared their final hurdle yesterday after the government defeated a last-ditch Labour challenge to them.

MPs scrutinising the draft CFA Order 2013 and draft Damages-Based Agreements (DBAs) Regulations 2013 voted 10 to five to approve the former, while the latter went through on the nod.

It follows similar approval in the House of Lords at the end of last month.

Labour justice spokesman Andy Slaughter mounted a strong attack on the CFA Order, arguing that it sets up a “false and pernicious choice” between restricting access to justice – by making it hard for lawyers to take on risky cases – and taking a “substantial” part of claimants’ damages in legal fees.

Though he said he did not agree with those who have called for the 25% cap on success fees to apply to future as well as past losses, Mr Slaughter said: “Many people who look at this proposal will say that it is set up to fail, because there will no longer be a success pool of sufficient size to allow litigation, save for in the most clear-cut and cast-iron cases.”

The “additional difficulty is that the proposal will encourage bad behaviour by defendant insurers”, he said. “They have the utmost incentive. Currently, the longer a defendant delays in settling or taking reasonable steps to resolve litigation, the more they stand to be punished, with the success fee that they need to pay being increased.

“That will no longer be any disincentive – indeed, as far as defendant insurers are concerned, there will be an incentive to continue to string out the litigation on the basis that the claimant’s lawyers, facing a reasonably small prospective pot of money, will not be able to continue.

“The government have never looked at poor behaviour by defendants, even though they were encouraged to by many of the responses to the consultation. They seem to think that insurers can do no wrong.”

Noting that insurers have been talking down the prospect of insurance premiums falling as a result of the reforms, he said “the only reason for [their] introduction that I can conclude is that the insurance industry has the ear of the government, as well as substantially funding the Conservative party”.

Mr Slaughter also complained about the failure to extend qualified one-way costs-shifting to other areas of litigation, such as professional negligence.

Justice minister Helen Grant told MPs that the government would not be moved on the 25% cap only applying to past losses, which she said was in line with Lord Justice Jackson’s recommendation. “We considered all his recommendations carefully and consulted widely. The 25% cap, as drafted, strikes the right balance between protecting claimants’ damages and allowing access to justice.”

She added: “If changes need to be made in future, we have the option of conducting a formal review in three to five years. If there were serious concerns, of course we would look at the matter again.”

Ms Grant argued that the reforms “restore balance, benefit business, protect claimants and tackle the compensation culture. Although he seemed to question this, they should ultimately reduce insurance premiums for all of us, which has to be a good thing”.

She added: “Meritorious claims will continue to be made, but we seek to deter unnecessary claims and avoid them where possible. I do not accept what he said about defendants not being dealt with. We are increasing the sanctions on defendants who fail to accept offers from claimants whom they do not subsequently beat at trial, which will encourage defendants to accept good offers from claimants.

“Finally, on reducing insurance premiums, the government are essentially following the recommendations of an independent Court of Appeal judge. It is neither right nor appropriate to say that it is only at the behest of the insurance industry.”

  • Amendments to the amended Civil Procedure Rules were published today. As flagged up last month, they insert a transitional provision within rule 44.3 so that costs incurred in respect of work done before 1 April 2013 will not be subject to the new proportionality test, and also provide for the exclusion of Chancery, Mercantile Court and Technology and Construction Court cases from automatic costs management subject to the direction of the Chancellor of the High Court and President of the Queen’s Bench Division. This direction will say that cases worth more than £2m will be excluded.



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Bacon: landmark ruling

Bacon: landmark ruling

The High Court has today upheld the decision of an arbitrator to allow the recovery of the costs of securing third party funding as costs, in what is being hailed as a landmark decision.

In Essar Oilfield Services Ltd v Norscot Rig Management Pvt Ltd, Norscot was the claimant in an ICC arbitration – the arbitrator was former Court of Appeal judge Sir Philip Otton.

According to Nick Bacon QC of 4 New Square, who acted for Norscot, having succeed in the arbitration, Norscot sought its costs and its claim included the costs of the litigation funding which it had been forced to incur in order to pursue the claim.

The third-party funding consisted of an advance of £647,086, which was repayable either at 300% of the sum advanced from the damages recovered, or 35% of the damages, whichever was the greater.

Essar disputed the tribunal’s jurisdiction to make an award in respect of third-party funding. Having lost before the tribunal, it secured permission to appeal from the High Court. But giving the substantive judgment last week, HHJ Waksman QC, sitting as a High Court judge, dismissed the appeal, holding that the third-party costs were recoverable in principle pursuant to section 59(1)(c) of the Arbitration Act 1996 and article 31(1) of the ICC Rules.

The court accepted the submission that the terms of section 59(1)(c) and the reference to “legal and other costs” was wide enough to permit the recovery of third-party funding costs.

Chirag Karia QC of Quadrant Chambers also acted for Norscot, while Andrew Hogan of Ropewalk Chambers in Nottingham represented Essar.




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

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

It also raises some interesting points regarding indemnity costs

The background

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

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

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

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

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

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

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

The costs

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

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

14

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

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

The appeal

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

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

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

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

Indemnity costs

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

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

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

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

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

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

And there we have it

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

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

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

One has to wonder if it’s worth it

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

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




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PrintHarmans Costs are pleased to announce that Costs Lawyer, Suzanna Popplewell, has joined the team at their Chelmsford office.

Suzanna, who is also a qualified solicitor, joins Harmans from McMillan Williams Solicitors Ltd where she was partner and head of costs and brings with her more than 24 years of experience. She is used to dealing with all aspects of costs including Clinical Negligence, Civil Litigation, Family and Criminal matters.

Working out of Harmans’ Chelmsford office Suzanna will be working alongside partners Gary Knight, Mat Knight, Jim Knight and James Scott with their growing Essex client base.

Matthew Harman, partner, said, “We are delighted to welcome Suzanna to the Harmans team in Chelmsford. Harmans are very much focused on strengthening our already significant costs experience this year and Suzanna’s expertise will certainly help us achieve our targets in 2016.”




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Foskett: strict confidentiality

The Civil Justice Council’s costs committee has extended the deadlines for submissions to its review of the guideline hourly rates (GHR).

It will now accept responses to both the costs survey – which officially closed on Friday – and the call for written evidence, whose deadline was 6 December, until 4pm on Thursday 12 December.

Mr Justice Foskett, chairman of the committee, said the expert advisers who will be collating the survey results said they could accommodate a 10-day extension.

“We have received a few requests for an extension of last Friday’s deadline and, accordingly, feel that in order to maximise the return we should try to meet these requests if we can,” he said.

“We have also already received some responses to the call for evidence that was issued on Friday 8 November, for which we are grateful. Simply to bring the deadline for responding to that call into line with the final date for completing the survey, I can also confirm that any response received by the same time will be considered by the committee.”

The judge emphasised the strict confidentiality that is being observed by the research time. “Nothing will be published that discloses the identities of the respondents and indeed their identities will not be revealed to the committee members, its economic advisers or anyone else without the express consent of the particular respondent.

“A handful of members of the CJC secretariat will be able to access each full survey just for the purpose of checking its authenticity and of ensuring that all the data is properly transferred to the experts and then to the committee.”

Only the chairman or the vice-chairman, Senior Costs Judge Peter Hurst, will be informed of the identity of a respondent if there is some query that needs following up – but Foskett J said this had not yet been necessary.

The survey can be found here, and the link to the call for evidence here.

The committee expects to hold a small number of oral evidence sessions in early 2014, with its report, making recommendations to the Master of the Rolls, Lord Dyson, on GHR for 2014, planned for completion at the end of March 2014. It will then be for the Master of the Rolls to take the decision on setting rates for 2014. This will then become an annual exercise.

Read Mr Justice Foskett’s blog on the committee’s work here.




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Deadman: giving clients a good night’s sleep is the aim

Posted by Chris Deadman, director of operations at Litigation Futures Associate Invicta Capital Funding

A few years ago, I attended a workshop for entrepreneurs in the legal sector. Apart from my long-held view that anyone who uses the word ‘workshop’ outside of a light engineering context needs to give their head a serious wobble, it got me thinking about what people really expect from their legal teams.

The event itself was populated almost entirely by individuals who, were they fashioned from chocolate, would have no further need of sustenance. Young and perfectly coiffured professionals, primped, preened and thrusted their way through various networking sessions (another term for ‘meeting people’) and break-out groups (I have no idea what this means).

At the end of the event, they all roundly declared that they and only they had found the key to what their clients really want and left to create websites bearing such legends as ‘We at Smug & Vain really understand the needs of YOUR business’.

Like some maiden aunt playing a version of dead relative bingo, over the years I have kept pace with the fortunes of these proto-entrepreneurs. Most, if not all of these businesses, have risen without trace. It would seem that they did not understand the needs of business quite as well as they had predicted.

My knowledge of what clients are after does not extend beyond litigation. I do, however, recall a conversation several years ago with a very experienced litigator who told me that, more than anything, clients involved in litigation (particularly owner-managed businesses) wanted simple piece of mind.

He said that we often forget that the months preceding the client walking through the door of the lawyer’s office were filled with uncertainty, fear, sleepless nights and marital stress, all of which were a direct result of this nameless thing hanging over them.

It does not matter whether they were a claimant or a defendant – both sides were worried about the outcome and the effect that failure would have on their finances and employees.

Up to that point, they had probably exhausted themselves stemming the tide of correspondence, telephone calls and the ever-increasing volume threats. By the time the lawyer is instructed, the client invariably just wants someone to share the burden and make the problem go away. Or to put it another way, a good night’s sleep.

And at its very essence, that’s what litigation finance provides.

Forget about its ability to ‘unlock the value of a claim’ or the manner in which it can turn a ‘contingent liability into a contingent asset’. Whilst both of those statements are true, the biggest benefit is that it removes the worry associated with the cost of litigation and delivers genuine peace of mind for the claimant.

Not the most shattering of conclusions, I agree, but one which is likely to last longer than ‘Smug & Vain’.


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The misleading claims behind the campaign to lower the discount rate

Matthew Best Temple Legal Protection

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

February 9th, 2018