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Laird: ingrained values

Laird has just had its best month in terms of numbers of instructions since its inception in 2000. Given that, little over a year ago, there were grave concerns surrounding the industry and we realised we had some tough times ahead, this has been no easy task.

We wanted to share our story to highlight the importance of quality service and excellence in all that a firm does, from its internal culture right through to the service it offers its customers.

We’ve sponsored numerous industry events over the past couple of years and have spent a considerable amount of time (and money!) with our suppliers, industry professionals and customers – listening and talking to them, in the hope that we could take nuggets of information that would help us build a solid wall against the imminent legislative changes.

We continued attending the events and listening to the speakers, but one thing became very clear: no one could predict what was going to happen. We came to the conclusion that we would just have to decide the ground we were going to fight on if we were to survive.

There is a value disciplines model by Treacy & Wiersema that suggests in business there are three generic value disciplines that a company must choose from and act upon consistently and vigorously in order to become a market leader. In order to be successful, you have to choose your value, stand by it and excel in that value. Everything within your firm should reflect that decision.

We chose to continue with ‘customer intimacy’, the value that Laird Assessors was founded upon. Customer intimacy is about excelling in customer attention and service – tailoring your products and services to individual customers, providing a seamless customer experience and providing reliability, real value and exceeding expectations.

Laird has never been the cheapest in the industry, but then neither has BMW, renowned for being the ultimate driving machine. We have always offered an outstanding service, an efficient process for our customers and above all, an excellent, accurate product.

We make it easy for our principals to instruct our experts, their customer journey is seamless through the use of sophisticated IT systems and we provide an unrivalled after-sales support service. We continually look at ways we can add value to our customers – which essentially means making their experience quicker and more efficient.

Not only that, but we have worked hard to make sure these values are ingrained in the internal culture of the business. We love helping charity and participating in events, because yes, we help the wider community, but we also believe that they help develop our internal culture of going above and beyond what is just expected of you.

I don’t know if anyone has read the book by James Kerr, Legacy, 15 lessons in Leadership, but I would recommend it as a great read. The book is ‘what the All Blacks can teach us about the business of life’.

The start of the book talks about the Hakka: “Often, by the time the Hakka reaches its crescendo, the opposition have already lost. For rugby, like business and like much of life, is played primarily in the mind.”

We believe in our mindset and culture that we are the best in the business with the best reports, best customer service and best team, and our current figures are reflecting that. Let’s all choose the ground we’re fighting on and win!

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Whiplash: latest step in government crackdown

The Ministry of Justice (MoJ) has failed to meet its own deadline to respond to the latest whiplash claims consultation, it emerged yesterday.

Earlier this month the MoJ said it had considered responses to proposals in the consultation and would publish its views before the Parliamentary recess. Yesterday the House of Lords began its summer break, joining the House of Commons, which rose last week.

The proposals, the latest stage of the government’s plans to crack down on whiplash claims, were made in a letter sent to stakeholders by justice minister, Lord Faulks, at the beginning of May. They included a 10% cut in fixed fees for medical reports and an end to law firms owning the agencies that commission them.

In an update on its website on 3 July, the MoJ said it had received more than 150 responses, pledging: “An MoJ response summarising the comments received and the effect they had on the draft rules will now be published before summer recess.”

It insisted that the time taken to respond to comments arising from the “consultative letter” amounted to only a “short delay” which “does not impact on the overall Autumn implementation timetable.”

An MoJ spokeswoman would only confirm yesterday that “we will respond in due course” and declined to comment on any impact on implementation that might be caused by the delay.

When the 26-day consultation was launched, amendments to the RTA Protocol and CPR were scheduled to be formulated and presented to the Civil Procedure Rule Committee in June, “with a view to their being approved by the committee at its July meeting for implementation in October”.

Fixed fees for medical reports proposed by Lord Faulks included £180 for a general practitioner and £420 for a consultant orthopaedic surgeon – cuts of £20 and £5 respectively compared to the Association of Medical Reporting Organisations agreement currently in force.


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Nott: Roadchef case inspired funding move

Nott: Roadchef case inspired funding move

Capital Law – the Cardiff-based practice that earlier this year became the first law firm to set up its own litigation fund – this week announced that the first case backed by the £50m pot settled on favourable terms.

The firm is backed by an unnamed hedge fund and they share profits.

It supported a claim brought by Fix Training against the Welsh government over non-payment of invoices.

In a statement, Fix directors Helen Jones and Jacqui Niven said: “Our contract with the government was the main focus of our business, and being starved of cash made it impossible for us to fight a costly battle through the courts. Luckily for us, Capital had faith in our claim…

“Without the litigation fund, we would not have been able to unlock our claim. Our opponent had deep pockets, but the backing of Capital’s fund gave us financial muscle and access to justice that we would not otherwise have had.”

Capital Law disputes partner Andrew Brown said the fund enabled the firm to cut out the “middle men” of third-party financiers and insurers. “We have the flexibility to fund cases quicker and cheaper than them. This enables us to finance smaller cases previously ignored by other litigation funders and to fund larger litigation more competitively than ever before.”

Capital Law said the inspiration for the fund came the Roadchef case that senior partner Chris Nott worked on for nearly 20 years.

In early 2015, the Roadchef Employee Benefits Trust settled its £100m claim against their former CEO, who had acquired shares held for the benefit of workers and subsequently sold them for £28m. The Roadchef employees were supported by Harbour Litigation Funding.

In that case, the original budget/funding requirement was £1.1m and the realistic damages recovery was over £26m, although eventually the claimant costs came it at £2.4m. Harbour admitted after the case settled that it should have spent more time working with the claimants and their lawyers in building contingency into the original budget.

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Grayling: more balance to the system

The government is to press ahead with the new RTA portal in April with basic fees
unchanged from the level it consulted on – £500.

There will be a 30-day delay, with the revised portal taking effect from the end of April, while extension to cases worth £25,000, and to employer’s and public liability cases will happen at the end of July at the fee levels previously proposed.

The new fixed recoverable costs (FRCs) regime for cases falling out of the extended protocols will also commence in tandem from the end of July.

In its long-awaited decision, the government said it is “reasonable and proportionate to consider referral fees as relevant to the costs and to propose adjustment to FRCs in the light of the forthcoming referral fee ban in April 2013”.

This is one of the arguments that will be tested in the Association of Personal Injury Lawyers and Motor Accident MB6-502Solicitors Society’s judicial review of the proposals, which is due to be heard on Friday.

The government rejected the view of claimants that the changes will “result in limiting access to justice and bring about other undesirable behavioural changes, since lawyers will still be willing to take cases on for these costs”.

There were some nuances, however. The government accepted that for cases above £10,000, the cost of obtaining an opinion on quantum from counsel or a specialist solicitor should be recoverable as a fixed cost where it can be justified. The “greater complexity” of EL/PL cases and the fact that it is a new regime “merits higher FRCs for these than for RTA cases”, it added.

The proposed FRC for fast-track cases were considered to be a “sound basis on which to proceed” given the absence of “solid evidence to the contrary”. The only exception is employment law disease claims, which should fall out into the current guideline hourly rate system pending further work by the Civil Procedure Rule Committee.

While acknowledging more broadly the difficulty in obtaining “comprehensive and representative data”, the government said it is prepared to “review and assess the effectiveness of the scheme should evidence be provided to demonstrate that this is necessary” – but would not commit to a formal review in a year’s time.

It continued: “For similar reasons the government is not convinced by the argument set out by some respondents, including the Civil Justice Council, that the government should wait to see how the range of civil justice reforms currently underway have bedded in, or until further analysis has been completed before proceeding with any reduction in FRCs or extension of the RTA scheme.

“The government is not clear what further data or evidence would be available in the near future which would make a sufficiently material difference to the current proposals to justify delaying their implementation.

Questions about how the new regime would interact with the separate proposals on reducing the number and cost of whiplash claims will be addressed in response to that consultation.

Justice secretary Chris Grayling said: “I want to see claims handled quickly and efficiently so accident victims with genuine cases can be compensated as soon as possible.

“That is why following consultation and careful consideration I have confirmed that changes to the digital system used for settling uncontested road accident claims will take place this year…

“These changes, along with our wider reforms, are intended to bring more balance to the system, make lawyers’ costs proportionate and in turn create an environment where insurers can pass on savings to their customers through lower premiums.”

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Millard: immense benefit for claimant

The High Court has settled what is claimed to be the first case following yesterday’s change to the discount rate, awarding a 10-year-old girl an increase of over £5.5m on her capitalised settlement of £3.8m.

On 16 March 2017, the High Court approved the agreed quantum settlement in the case of LMS v East Lancashire Hospitals NHS Trust, a cerebral palsy case, on the basis that the claimant was to recover 50% of the full value of her claim calculated at the new minus -0.75% discount rate.

According to the lawyers acting for the claimant, at a joint settlement meeting in January 2017, it was agreed that she would receive a lump sum of £1,320,575, periodical payments of £50,000 per annum to age 19 and thereafter for life £73,500 per annum, subject to court approval. The new discount rate increased the lump sum to £2,122,398.

The capitalised value of the joint settlement agreement was £3,772,500 under the old discount rate. The capitalised value of the approved award at the new rate was £9,296,673.

Michael Redfern QC of St John’s Buildings, counsel for the claimant, said: “The new discount rate is particularly important in cases where liability is apportioned. The large increase in lump sum awards is offset by lack of return on lump sum low-risk investment and the ability to keep pace with inflation.

“Periodical payments remain a paramount consideration in every case as they remain tax free, index linked, guaranteed and certain. They last for the claimant’s life, which is more than can be said for a lump sum award with little if any safe, low risk investment returns available.

“We welcome the new discount rate, the first change in 17 years, which addresses the actual lack of meaningful return on safe lump sum investment opportunities.”

The claimant’s solicitor, Leonie Millard of Forbes Solicitors in Accrington, added: “The benefit for the claimant, who was only entitled to recover 50% of her damages, from the new discount rate, is immense.

“It vastly improves the long-term future financial ability to meet her needs for the rest of her life, which is expected to be long. Her parents are comforted to know that there is funding to ensure that her needs are properly met when they are no longer around.”

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Kain: poll found delegates sceptical that judges will take hard line

Solicitors must warn clients that uncertainty over proportionality under the Jackson reforms means judges can pull numbers from thin air and defendants will therefore query costs routinely, according to a leading barrister.

Meanwhile, the judge in charge of implementing the reforms has stressed that flexibility around requests to courts for time extensions has already “gone out of the window” and the hard line being taken in an attempt to reduce wasted costs has surprised the profession.

Explaining the problems with the new primacy of proportionality in the assessment of costs at last week’s IBC Costs conference on the Jackson reforms in London, the chair, Nick Bacon QC of 4 New Square chambers, a member of the Civil Procedure Rule Committee, said the absence of guidance on proportionality left “huge uncertainty”.

In a year or 18 months from now, when post-1 April 2013 cases come up for assessment, paying parties will “be using this rule on every single occasion they possibly can because it provides them with a huge benefit”, he said. The potential for costs orders being reduced by a large amount meant defendants would as a matter of course seek to persuade judges to consider a proportionate figure, he predicted.

Mr Bacon continued: “The question that remains is how is the judge going to arrive at the figure that he decides is proportionate… On the face of it a judge who decides that the costs are disproportionate can pluck a figure from the air to provide a figure which is proportionate… So you are at complete mercy of the court and different judges are going to say different things about that proportionate figure.”

Solicitors should ensure their retainer letters make it clear to clients that old assumptions about the likelihood of costs recovered no longer apply, said Mr Bacon. “You have got to tell the client now that there is a lot greater chance of not recovering your costs.”

He also raised the question of the practicality of proportionality being applied at budgeting hearings, especially when the parties had a radically different view of the claim’s value. A case in which he was involved had defendants who argued a claim was worthless, while the claimants said the same claim was worth £100m. The judge had refused to approve a budget in those circumstances, he reported.

Also, Mr Bacon said he was concerned about cases that began at, for instance, £100,000, but settled for £10,000 or £20,000. There were “loads” of such cases, he said. When assessed for proportionality, the costs “would exceed the ultimate settlement, but they don’t exceed the original claim”. Lawyers needed to be “very careful about pleading [such cases] in the first place, because you could end up in a bit of a pickle on proportionality”, he advised.

Speaking earlier, Sir Vivian Ramsey, the judge in charge of implementing the reforms, told the conference that the new rigidity of the court on matters of time extensions had meant that, for example, when experts’ reports were not served on time, parties would have to proceed regardless.

He said: “If you want to come before the court either for relief of sanctions or anything else, you have to justify your position… It may be that you’ve got some excuse but you’ve broken a court rule, order, or practice direction. That is taking people by surprise because they say ‘oh come on, it’s only a couple of weeks’…

“You won’t get it now, generally – you have to comply with the rules… And that is having quite a major effect as people suddenly realise that there is actually a change in the way that the court deals with it.”

He also expressed personal support for hybrid damages-based agreements (DBAs).

Elsewhere at the conference, leading costs lawyer, Michael Kain, representing the Association of Costs Lawyers, polled the 40-strong audience’s attitudes to Jackson and associated issues. He found that 57% believed the judiciary would not “have the courage to implement” the strict regulations of the reforms, but 73% thought there would be a “third costs war”.

At a session on DBAs, commercial litigator Graham Huntley, founding partner of Signature Litigation, raised the spectre of the Senior Court Costs Office (SCCO) intervening to assess the fairness and reasonableness of DBAs.

Since they would be considered contentious business agreements they were open to review by the SCCO, and uncertainty about how the office would treat DBAs meant there was a risk it would “rewrite the amount the solicitor gets”. Mr Bacon agreed DBAs could be “unravelled” by the SCCO.

Hardeep Nahal, a litigation partner in the London office of US firm McGuireWoods and a member of the Civil Justice Council working party on the Jackson reforms, said solicitors should protect themselves as much as possible by explaining the implications of a DBA transparently to the client.

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Recent case law underlines the need for solicitors to comply with Court deadlines which include disclosure and, where appropriate, budgeting requirements. In the case of Earles v Barclays Bank the judge said that it was “gross incompetence” for those practising in the civil courts to not know the rules on disclosure.

Much of disclosure nowadays is of electronic documentation which is stored on and retrieved from electronic databases; the documentation is to be sifted, sorted and reviewed by solicitors on electronic review platforms in a variety of ways including using computer assisted review techniques. It is essential that solicitors put in place a system which ensures that it is carried out properly and with care.

MBL’s new half day seminar will show you how to plan and budget for electronic disclosure, how to choose the appropriate disclosure “menu option” for your client, and how to project manage the disclosure process from inception through to inspection.

For more information on dates and costs, or to make a booking, please give us a call on 0161 793 0984 or email quoting Litigation Futures.


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Singapore: predicted growth in arbitrations

Both Hong Kong and Singapore have moved to clarify the use of third-party funding in arbitration as the market continues to expand.

The Hong Kong Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016 has been published to clarify that third-party funding is not prohibited by the common law doctrines of maintenance and champerty.

Meanwhile, the first edition of the Singapore International Arbitration Centre’s investment arbitration rules, in force from 1 January, enables the tribunal to order the disclosure of third-party funding arrangements, and to take such arrangements into account when apportioning costs. The Hong Kong rules make disclosure part of the process, although do not link funding to costs.

Steven Friel, chief executive of London-based Woodsford Litigation Funding, said Woodsford was looking forward to expanding into the two jurisdictions. “We foresee huge growth in third party funding of Hong Kong and Singapore-seated international arbitrations.”

He continued: “It is clear that each of Hong Kong and Singapore is in a rush to embrace third-party funding. The risk for those jurisdictions of failing to do so is that they might lose their positions as leading centres for international arbitration. Their competitors in places like London, Sydney and New York are gaining ground through the use of third party funding as a valid access to justice tool.

“The case of Essar v Norscot, where the English High Court upheld an ICC tribunal’s decision to order a losing defendant to pay the winning defendant’s funding costs, shows that third-party funding is now an established part of the law and practice of international arbitration.”

In Essar last October, the High Court ruled that a defendant whose conduct forced the claimant to seek third-party funding – from Woodsford – to take its case to arbitration, had to pay the £2m owed to the funder following the claim’s success.

Mr Friel said he was relaxed about disclosure of a funder’s involvement because it sends “a strong message that the claimant has financial backing to bring the case to trial”.

However, from the claimant’s perspective, he said “we are concerned that rules providing for disclosure of third-party funding arrangements will lead to mischief-making from defendants, who might seek to cause satellite disputes relating to funding.

“In England, for example in the case of Wall v RBS [2016] EWHC 2460, we have already seen issues relating to disclosure of third-party funding become a distraction from the core issues in dispute. Such a development would be unfortunate in international arbitration.”

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Johnson: FOIL has a serious voice

The Mitchell ruling may have provided a “degree of certainty”, but practitioners still require “a lot more clarity” on costs budgeting and areas such as qualified one-way costs shifting (QOCS), the new president of the Forum of Insurance Lawyers (FOIL) has argued.

David Johnson, a large loss litigation partner at Weightmans, said nervousness around relief from sanctions had already driven a lot more compliance; the Mitchell ruling “represents the stick that people had feared was there and will continue to drive change”.

But there were plenty of outstanding questions around budgeting, such as how the courts are going to react to applications to amend budgets, and ultimately how rigidly the courts will enforce them at the end of the case.

On QOCS, he said, practitioners are still waiting to learn more about what constitutes ‘fundamental dishonesty’ such that the claimant loses their costs protection, and also the interaction between QOCS and part 36.

More generally, looking ahead to his year in office, he said: “FOIL will be forthright in presenting the defendant insurer lawyer perspective but I’m keen to make the most of opportunities to work with organisations such as APIL and MASS to collaborate where possible to achieve sensible and effective reform.”

He highlighted co-operation around fraud prevention and the new whiplash medical panels as recent examples of where this has worked.

Mr Johnson, who was previously at Vizards Wyeth, has been a lobby officer for FOIL and served on its national committee for four years. Though there is continuing consolidation among defendant insurance law firms – a process he predicted “will be replicated to some extent on the claimant side” – the solicitor was confident that FOIL would still have a role to play in providing a united voice.

“The organisation is much stronger than it has been, and over the course of the last five to six years it has changed itself into a much more professional and effective body.”

He said giving evidence in person to a parliamentary select committee for the first time – over whiplash reform – was a “good measure” of this.

“Generally the engagement we see with the Ministry of Justice, Civil Justice Council and organisations of that nature is demonstrative of us being seen as having a serious voice.”

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Steve Rowley

Steve Rowley, Business Development Manager, Allianz Legal Protection

Allianz Legal Protection (ALP) has launched a new partnership with leading South West law firm Tozers Solicitors LLP.  ALP will provide After the Event (ATE) insurance on a range of personal injury and clinical negligence case types to protect customers against the disbursement and adverse cost risks associated with litigation.ALP’s Equity ATE insurance product will provide Tozers’ clients with financial protection against defendant costs and for any unrecovered disbursements incurred during the claim. This will include expert reports, counsel fees and court issue charges in the event that the case loses or is discontinued.

A key feature of the ATE arrangement is the damages based pricing structure which will help ensure that premiums remain proportionate. Full delegated authority is also provided. This will allow Tozers to quote and provide cover for clinical negligence and personal injury claims regardless of the damages value being claimed.

Allianz Legal Protection’s business development manager, Steve Rowley, commented: “Tozers are recognised experts for handling clinical negligence cases with a strong regional presence in the South West. This expertise was evident when we were discussing their needs for ATE insurance, and I’m delighted that ALP has been chosen as their preferred ATE insurer”.

Stuart Bramley, co-head of clinical negligence at Tozers LLP added: “The Clinical Negligence and Injury team at Tozers are very pleased to be working in partnership with Allianz, giving our client base the option of complete protection against defendant costs. We look forward to this arrangement benefitting our injured clients as we work to secure justice and redress for those harmed by medical accidents.”

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Harman: app fills a void in the market

Leading firm Harmans Costs has launched a ‘Costs Expert’ app – available for free on both iPhone and Android – featuring what it says is the first ever interest calculator for the costs industry.

The calculator allows users to input various data, such as date of order, amount of offer, costs to date and any payments on account, to calculate totals inclusive and exclusive of interest.

The firm said that previously this calculation could only be done using a complex formula “and some well-educated guess work”, and so it was “very confident that this will prove to be an invaluable tool for users”.

Other features of Costs Expert include a court directory allowing users to find the nearest county court or civil justice centre to their location along with its contact details, map and directions. The directory also has a link to the latest court fees.

There is also a ‘book a collection’ section which interfaces with the Harmans’ office diary and allows the user to book a file collection using the firm’s free courier service.

Users can ask Harmans’ specialists a question via the app, which will keep a bank of previously answered questions.

Senior partner Matthew Harman said: “We are delighted to launch our app Costs Expert and I’m confident that the interest calculator will prove to be a very useful tool for all costs lawyers and solicitors. I think it fills a void in the market; in fact, I have been using the calculator myself on a daily basis while the app has been in development and it’s a real time saver.”

To download the iPhone version, click here, and here for the Android version.

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Clarke: Jackson reforms need to be implemented as a whole package

The delay in extending the RTA portal should not mean that the introduction of fixed fees should be held back, insurance lawyers told the government yesterday.

The Forum of Insurance Lawyers (FOIL) said it accepted that if the extended portal will not be ready to function properly by April 2013 then its implementation should be delayed. But it maintained that the government needs to keep to its commitment to fix and control cost by April 2013.

In announcing just before Christmas that it was reconsidering the implementation date for the portal, the Ministry of Justice said the consultation on the proposed levels of fixed recoverable costs – which closed on 4 January – was not affected. This led to speculation that the government intends to introduce such fixed costs as it can on 1 April irrespective of the portal extension not taking place then.

Don Clarke, immediate past-President of FOIL, said: “If the portal cannot be developed in time, then there is no reason why a protocol cannot be brought in with fixed fees at an early stage.

“It is important that the government keeps to its commitment to control costs by April 2013 and avoid measures being introduced in drips and drabs. The Jackson reforms contained in Legal Aid, Sentencing and Punishment of Offenders Act 2012 were intended to be implemented as a whole package at once and not doing this runs the risk of the reforms becoming distorted.”

Meanwhile, Professor Dominic Regan has reported that judicial training on the Jackson reforms began last week, even though the first 150 pages of changes to the Civil Procedure Rules have yet to be signed off – “although I am certain this will be a formality”, he said.

Writing on his blog, he continued: “More intriguing is news that a second tranche of measures will follow but not until after the Rule Committee meets on 8 February.”

On a related note, practitioners are eagerly awaiting the Court of Appeal’s ruling in Henry, which should indicate its approach to costs management and sanctions for non-compliance with updating budgets. The Senior Costs Judge had disallowed £300,000 in costs because there was no good reason for the claimant to depart from the court-approved budget. This was despite the fact that she would have a “very good case” to justify the extra costs in a detailed assessment.

The appeal was fast-tracked and heard late last year and the decision had been expected last week. However, the judiciary press office told Litigation Futures yesterday that there is no date for judgment yet.

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Stark: demoralised group of people

Claimant personal injury lawyers have painted a grim picture of what life will be like after the Jackson reforms, with less work, redundancies and firms looking to move away from this type of work.
Nobis Jackets Men

A snapshot survey conducted by the Association of Costs Lawyers also found strong opposition to government plans to extend the RTA claims process to higher-value and other PI cases.

Some 78% of the 50 respondents predicted that they would have less work after part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force next April, with 84% believing it will reduce their profitability too – most (90%) expect competition to drive down success fees once they are no longer recoverable from the losing side. More than two-thirds (70%) think the reforms will make their firms less willing to take on riskier cases.

There was uncertainty about who would pay for after-the-event insurance if it is needed – 28% said the client, 24% the solicitor and 38% reckoned it would be a mixture of the two.

Some 62% of firms expect to make staff redundant as a direct consequence of the Jackson reforms, while 28% did not know at this time – only 10% said for sure that they would not. Nearly six in ten firms (58%) are now looking to move away from personal injury and diversify into other areas of law.

On the RTA claims process, the majority (72%) said that it falls short in some areas (22% said it delivers what it is supposed to). Asked what improvements or changes they would like to see, 32% wanted it easier to use, 22% higher fixed costs, and 16% for fewer cases to fall out – the majority of respondents (54%) said that between a quarter and a half of cases they deal with fall out of the process, which is consistent with other findings.

Four in five solicitors opposed both vertical and horizontal extension of the process, citing the increased complexity of such cases as the main reason and the fact that one size cannot fit all; the lack of an insurer database was also highlighted in relation to employer’s liability claims specifically.

A third of respondents said they were likely to move to contingency fees/damages-based agreements for non-portal cases once allowed under the Act.

Iain Stark, chairman of the Association of Costs Lawyers, said: “It is easy for the public and policymakers to be indifferent to the impact of the Jackson reforms on claimant lawyers, but the responses to our survey indicate a demoralised group of people who will not be able to hold open the door so that injured people can access justice.

“It is often said that, like water, lawyers will find a way to continue, but at what cost? As one respondent said: ‘Lower fees means less-qualified fee-earners representing clients and less compensation recovered. The actual cost of providing the professional Rolls Royce standard service which clients expect will be out of proportion to the Mini costs recoverable.’”

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Morgan: precedent for a personal injury case

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

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

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

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

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

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

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

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

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

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

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

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

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

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One-fifth rule: debate over 'special circumstances'

One-fifth rule: debate over ‘special circumstances’

Costs judges have a broad discretion when considering what amount to “special circumstances” that allow them to depart from the ‘one-fifth’ rule on the costs of a Solicitors Act assessment, the Court of Appeal has decided.

Wilsons Solicitors LLP v Bentine & Anor [2015] EWCA Civ 1168 – which involved two conjoined cases – was the appeal court’s first decision on section 70(10) of the Solicitors Act 1974, which deals with the costs of solicitor/client costs assessments.

Section 70(9) provides that the client will pay the costs of an assessment unless the bill is reduced by at least a fifth, in which case the solicitor pays it. Section 70(10) says: “The costs officer may certify to the court any special circumstances relating to a bill or to the assessment of a bill, and the court may make such order as respects the costs of the assessment as it may think fit.”

In Wilsons v Bentine, Master O’Hare reduced Wilsons’ bill of £144,838 to £94,934 but found that the way the client’s case had been presented had had the effect of increasing the costs of the assessment. This constituted special circumstances and he ordered Wilsons to pay 60% of the client’s costs of the assessment.

On appeal, Mrs Justice Proudman found that elements of the bill should not have been included in the one-fifth calculation, meaning that the threshold was not passed. However, she considered that special circumstances existed, which meant she upheld Master O’Hare’s order.

The other case, Just Costs v Stone Rowe Brewer (SRB), involved an assessment of 15 bills from Just Costs totalling around £33,000. The south London law firm argued that it was not liable to pay five of the bills – amounting to £20,000 – because Just Costs was in repudiatory breach of the retainer. At the doors of the court, however, a settlement for all the bills of £23,700 was agreed, a 30% reduction.

Master O’Hare was again the judge and found that special circumstances existed because those five bills were the main cause of the costs of the assessment, and Just Costs had been the overall victor in the dispute over them. He ordered SRB to pay 70% of the costs of the assessment.

On appeal, Mrs Justice Andrews overturned this ruling, taking a narrower approach to special circumstances. She said the question was whether or not something had happened which, exceptionally, made it unfair to apply the one-fifth rule.

Giving the lead judgment, Lord Justice Sales said in relation to the Just Costs case: “The sort of value judgment which is called for in the context of section 70(10) is one which a costs judge as experienced as Master O’Hare is well-placed to make.

“When deciding whether ‘special circumstances’ existed, I can see no reason in principle why he should not have had regard to the way in which particular issues arose in the proceedings and the outcome achieved in relation to them… The High Court erred in criticising and displacing the evaluative judgment which he made.”

There was disagreement over the extent to which a costs judge, in exercising this discretion, should take account of the fact that the client had nonetheless achieved a one-fifth reduction.

Sir Bernard Rix said, again in relation to the Just Costs case: “I do not say that Master O’Hare had immediately forgotten that the client had won on the 20% test, but that he had considered himself entitled to put it out of his mind when once he had found special circumstances. It seems to me that that is an error of law and/or principle.”

While allowing the appeal, he said “I would not go further than to deprive the client of its costs and to say no order as to costs”.

Lady Justice Arden responded: “We all agree that a costs judge, determining costs under section 70(10) of the 1974 Act, should not lose sight of, or forget, who was the winner under the 20% rule in section 70(9). It follows that he should give such weight to that factor as he thinks fit having regard to all the circumstances of the case.

“In my judgment, Master O’Hare would not have forgotten that the claimants were the winners under section 70(9) when he made his order under section 70(10). Given the limitations of appellate review in relation to the exercise of discretion, I conclude that this court cannot set aside order of Master O’Hare. It would not be enough for the court to conclude that it would have made some other order.”

Agreeing with Sales J, she said: “My approach to section 70(10) is as follows. I accept that the statutory policy expressed in section 70(9) is not necessarily made irrelevant by a finding that there are special circumstances under section 70(10). It may be that, in deciding what order to make under section 70(10), the court will consider it appropriate to take into account the fact that Parliament intended that claimants under section 70 should have some protection.

“But, I do not consider that it has to be given weight in every case where there are special circumstances. The wide words used by Parliament in section 70(10) make it clear that the court may, dependent on the circumstances, decide to give the section 70(9) outcome no substantial weight. It is, as I see it, a factor to which the costs judge may give weight according to the circumstances of the case… The simple fact is that that provision is not a requirement under section 70(10).”

Nick McDonnell, a costs lawyer and director at Just Costs, said: “This decision constitutes a resounding success for Just Costs Solicitors in an area that is rapidly gathering momentum in the legal costs arena.”

Alexander Hutton QC represented Wilsons, Michael Kent QC and Simon J Brown acted for Serena Bentine and the Official Solicitor, while John Foy QC and Simon Butler (instructed by Berlad Graham) were for Stone Rowe Brewer, and PJ Kirby QC and Rupert Cohen for Just Costs.

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Parliament: MPs reject bid to increase compensation level

MPs have expressed hope that solicitors acting for mesothelioma sufferers under the new regime for those who cannot trace their insurers will not charge the full £7,000 being allowed for their fees.

The Mesothelioma Bill this week neared the end of its parliamentary passage after completing its third reading and report stage in the House of Commons on Tuesday.

Under the scheme – funded by a levy on current employer’s liability insurance providers – from July 2014 anyone in the UK diagnosed with mesothelioma after 25 July 2012 will be able to make a claim, but will only receive on average 75% of what they would have been awarded by a court.

Efforts to move the date back and increase the compensation levels were defeated on Tuesday, despite heavy criticism of the insurance industry, which MPs said had to be dragged to the negotiating table to agree this much. They praised the government for getting as far as it had, but said it needed to go further.

The legal fee was originally set at £2,000, but it was felt that this was too low and that people would not get the sort of legal advice they needed. Work and pensions minister Mike Penning told MPs during the report debate: “We desperately did not want the situation that had happened with other schemes whereby the legal teams got more money out of the compensation than that – that is why the figure is £7,000.”

If the claimant pays less than £7,000 in fees, they will keep the difference. “In the negotiations I have been having, the feeling has been that the actual amount will be less,” Mr Penning said.

However, Labour MP Nick Brown said: “I hope this does not sound unduly cynical, but once the legal profession knows that a maximum of £7,000 is available for the cost of administering this, the work done and the effort put in by the individual law firms is likely to rise up towards the £7,000 ceiling.

“The minister’s hope that simpler and more straightforward cases will confine themselves to a lower fee is correct, and I am with him on it, but I have the feeling that things will not work out that way.”

Shadow work and pensions minister Kate Green also expressed concern that the £7,000 will become a tariff. “I have since been advised by an asbestos victims support group that it has been asked to help to get mesothelioma victims to put pressure on their lawyers to keep the fees low. That is unacceptable.

“At a time when they are coping with an appalling illness and worrying about the future for their families, as they know they may not even survive to receive the compensation that they are due, the last thing they need is to get into an argument with their lawyers about fees.”

On the level of compensation, Mr Penning said that it was 75% of the average. “[This] means that some people will be worse off – I fully admit that – but that some people will get more than they would have done if they had been able to trace their insurer or employer and go through the scheme.”

Claimant lawyers described the 75% proposal as “watered-down justice”. Matthew Stockwell, president of the Association of Personal Injury Lawyers, said: “It is bad enough that victims are exposed to deadly asbestos just by turning up for work, then forced to use this scheme because insurance records are no longer around.

“Now they are to be penalised by losing a quarter of what the courts determine is fair redress. This is not the justice these people deserve.”

Mr Stockwell described the scheme as “at least a start”, but said there are “many other workers affected by the heartbreaking consequences of workplace safety mismanagement. We will push the government to keep going and work to ensure full justice is available to all those who need it”.

Paul Glanville, an asbestos lawyer at Slater & Gordon, which has lobbied hard over the bill, said: “The scheme is certainly a step in the right direction but there can be no moral justification for mesothelioma victims receiving only a percentage of the compensation they are entitled to…

“Further whilst this new law provides some compensation for mesothelioma victims diagnosed after July 2012 it ignores the thousands of victims who have died before this arbitrary cut-off date.

“It is regrettable that the government has not taken a firmer line with the insurance industry, who over the years have always done as much as they can to reduce the compensation paid out to mesothelioma sufferers.”

The bill has now gone back to the House of Lords to consider amendments made by the House of Commons. Once these are agreed, it will receive Royal Assent.

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With the new Jackson reforms altering the litigation landscape, there has been a total reversal of some rules and MBL are at hand to guide firms in the right direction.

‘The New Tactics of Litigation course’, held in London and Manchester in September, will be presented by leading trainer, Professor Dominic Regan, who will discuss the significant changes and reveal just how to avoid the traps.

Professor Regan is not only a legal speaker, Adviser to the Association of Cost Lawyers and visiting Professor at City University, but an advisor to Lord Justice Jackson on cost budgeting and management. He has also worked closely with HH Judge Simon Brown QC, who pioneered active case/cost management.

This course aims to cover several issues that firms are battling with. What will Part 3.9 mean in practice? How can you use the new Part 36 effectively? What measures must you take to avoid the new proportionality test? Is it the end of late amendments?

Delegates will be eligible for three CPD points.

To find out more, click here.

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Modern Law Awards

Burcher Jennings receive their award from Jimmy Carr

Burcher Jennings is delighted to have won the Award for ‘Supporting the Industry’ at the recent Modern Law Awards 2015.

This Award recognises businesses which have demonstrated significant support to the legal sector over the past year. The Awards ceremony was presented by celebrity Jimmy Carr in a glittering ‘Great Gatsby’ theme at The Hurlingham Club.

Amidst a background of continuous change in the legal industry, throughout the year, Burcher Jennings has continued to invest in its strategic development including in respect of costs, funding and pricing.

The firm’s pioneering work included the launch of a ground breaking new funding scheme – ‘Burcher Jennings Funding for Growth’, which is aimed at countering several long-standing structural challenges that law firms face.

Unlike traditional loans and overdraft facilities that need to be repaid relatively quickly, a ‘Burcher Jennings Funding for Growth’ scheme is available where firms are offered a revolving evergreen facility that should increase in size as the firm grows.

Unlike standard bank finance, Burcher Jennings’ finance is not offered as a product and is without a hefty interest rate. This innovative funding initiative is believed to be the first of its kind in the UK legal industry.

Amongst other developments, Bucher Jennings also opened further offices in Exeter and London complementing its existing offices in Bristol and Birmingham while making several new senior appointments, creating further ‘Centres of Excellence’ in strategic points across the country.

Martyn Jennings, chief executive at Burcher Jennings commented: “We are honoured to have won such a prestigious award. Our key objective is ensure law firms have continuous access to a comprehensive portfolio of specialist costs, pricing and funding services to enable them to boost efficiency, profitability and cash flow in a new and innovative way.”

Martyn added: “This Award is also clear recognition of the depth, quality and commitment which is inherent in all our teams across the UK who continuously strive to innovate and provide solutions which support the UK legal market. Business development and investment in high quality talent continues, and over the next period, we will be seeking to open further new offices and recruiting new talent to increase accessibility and depth of service for our valued clients.”

The Modern Law Awards took place in London on 19 November 2015, details of which can be found here. Burcher Jennings also wishes to congratulate all other winners at the Awards.

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RCJ: it’s all happening in court 1 today

Claimant lawyers’ hopes of derailing the government’s plan to cut RTA portal fees from £1,200 to £500 rest in court 1 of the Royal Courts of Justice today.

Defendant insurance lawyers have argued that Wednesday’s portal announcement by the Ministry of Justice was timed to defuse the arguments being put today in the judicial review brought by the Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS).

The hearing is listed for a day and a decision is expected this afternoon. The judges are Lord Justice Elias and Mr Justice Cranston, the latter of whom was one of Lord Justice Jackson’s assessors.

Tracy Head, a partner at Kennedys, said the timing of the announcement was “clearly a pre-emptive strike by the Ministry of Justice (MoJ)”.

She explained: “The publication of the impact assessment, demonstrating the lack of evidence arising out of the consultation, is designed to strengthen the MoJ’s position in advance of that hearing. The impact assessment is significant in that it signals the MoJ’s view that the new cost arrangements will not limit access to justice but will simply encourage what Chris Grayling refers to as ‘efficient and effective’ law firms.

“It will, therefore, be interesting to see the outcome of the judicial review hearing and whether there will be a further ripple effect of challenges to the now confirmed fixed costs regimes.”

Steve Thomas, director of market affairs at Keoghs, said justice secretary Chris Grayling had responded in part to the judicial review by asserting on Wednesday that a full evaluation of the existing scheme is not required to inform a decision about extending that scheme to £25,000.

“The uncompromising tone of the MoJ’s response indicates that they are intent on delivering these reforms for the summer,” he said.

More generally, Ms Head said that staggering the dates of the extended portal scheme will cause insurers some difficulties in the short term as they will be operating a number of separate regimes.

She added: “It is still disappointing that we do not know what the claim notification form for EL and PL claims looks like to assist with training of claims teams, who are going to need to be prepared to make quick decisions on liability.”

Mr Thomas said that Keoghs was still concerned about the level of costs for cases that fall out of the portal and “the ratcheting effect as those move towards litigation. We question how this will impact claimant lawyer behaviour and this will need to be closely monitored”.

With APIL and MASS not commenting on the MoJ announcement ahead of the judicial review, Nick Hanning, president of the Chartered Institute of Legal Executives, took up the gauntlet to express “profound disappointment” with the MoJ.

“The government has failed to listen to those who have experience and expertise in the area. The referral fee ban simply means that firms will have to pay for alternative forms of marketing and so to reduce fees by reference to a notional referral fee which many firms don’t even pay is completely unjustifiable,” he said.

“It is especially galling when, despite asserting there is difficulty in obtaining reliable evidence, the government has elected to ignore the very detailed evidence which was made available when the fixed recoverable costs were first introduced.”

Mr Hanning said the real losers would be clients: “The knock-on effect of these recommendations is that while some legal practices may be willing to take on cases, it will only be on the basis they are handled by very junior staff, who will have little or no training. Innocent victims of RTAs risk finding themselves either unrepresented or poorly represented and unable to access the expert legal advice they deserve and need.”

Law Society chief executive Des Hudson said: “It is disappointing to see that the views of those who disagree with the Association of British Insurers and the government are declared partial and biased by the Ministry of Justice. These changes will make it more difficult for those injured through the negligence of others to receive compensation.

“Will motor insurance premiums reduce or, more likely, will the profits of insurance companies increase?”

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Burcher JenningsPressure from the courts on parties in costs cases, in common with other matters, to use mediation to settle disputes – including a growing number of penalties for parties that decline mediation – lies behind today’s launch from leading costs, pricing and funding specialist Burcher Jennings of a new Costs Mediation Service. The service will help parties to resolve matters with reduced delay, expense and uncertainty – and to avoid the threat of penalties from the courts for declining to mediate.

Richard Allen, Senior Costs Lawyer and accredited mediator at Burcher Jennings, who will lead the new Costs Mediation Service, said:

“With growing pressure from the courts in the shape of penalties for not mediating, our Costs Mediation Service offers a speedy, cost effective solution for costs claims. A more efficient and effective approach to resolving costs matters is a key part of the changing legal landscape. Mediation is a proven way of settling cases earlier and minimising costs and risk.”

Martyn Jennings, Chief Executive of Burcher Jennings, said:

“Thanks to the exceptional costs and mediation experience and expertise at Burcher Jennings, we are able to offer the Costs Mediation Services with the confidence that cases will be settled in less time and with costs minimised. Lawyers are certain to see more and more pressure to mediate in costs cases – firms would be well-advised to act now to build experience of mediation and reap the rewards of this approach.”

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Clinical negligence: Call for pre-issue disclosure of reports

Parties should be required to engage in a form of alternative dispute resolution (ADR) before the issue of proceedings, NHS Resolution has argued.

It also “strongly” advocated the disclosure of liability and quantum reports prior to issue.

In its newly published submission to the Civil Justice Council’s ADR review, NHSR said that in order to make ADR of whatever kind culturally normal, “we suggest that there be a requirement to engage in the process prior to issuing proceedings”.

It continued: “By this we do not mean that there should be a mediation in every case, but rather attempts at ADR in whatever form is most appropriate for the case, including negotiation, to narrow the issues.

“Policing of such attempts would probably have to be undertaken by the procedural judge in the first hearing after commencement of proceedings, and the remedy could be by way of costs sanctions.”

It suggested that the sanctions in pre-action protocols should be strengthened in the event that a party does not engage in ADR.

“Additionally, there should be encouragement of as many relevant groups and bodies as possible to promote ADR. Such bodies could include consumer and patient groups, the Law Society, the Bar Council, the BMA and the medical defence organisations.”

Early disclosure of liability and quantum reports would “represent a true ‘cards on the table’ approach and accord with the spirit of the Woolf reforms in 1999”.

NHSR continued: “Some practicalities need to be ironed out. For example, there might perhaps be a compulsory suspension of limitation for a defined period pending the use of ADR. By ADR in this context we include settlement negotiations.

“Alternatively, rather than compulsorily extending limitation, it could be that the period between issue and service of proceedings is extended pending the undertaking of ADR (again, to include settlement negotiations).

If compulsion in particular sectors was seen as the way forward, NHSR said clinical negligence should be included, together perhaps with employers’ liability and public liability cases worth more than £25,000.

The organisation said it was “very keen to spread the message that mediation is an excellent way of resolving problematical cases, especially those which entail issues over and above money”.

But take-up from claimant lawyers was “patchy”. In NHSR’s recent mediation pilot, of the 91 offers of mediation made, 32 were either declined or the claimant’s lawyer did not respond.

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The Jackson Reforms took effect one year ago today. With nearly a year of lessons under their collective belt, Personal Injury (PI) solicitors need to shift their thinking from surviving the imminent threat to their businesses, to setting strategies for profitable growth going forward.

Insurance Services Office (ISO) has today released a new White Paper which highlights five key metrics firms can measure their performance against and look to gain advantage.

  1. Cuts to claim lifecycles by an average of 40 days
  2. Stage Two claim lifecycles halved – from 24 days to 12
  3. Settlements achieved within 5 minutes in 22 per cent of claims passing through the system
  4. Settlements achieved upon first counter-offer in 46 per cent of cases
  5. Reduced time elapsing from settlement pack to response by 70 per cent on average

The statistics are from ISO clients who have seen these five key benefits using PICAS Plus, and translate to lower costs per case and the ability to handle more clients with fewer resources – exactly the balance firms need in order to start reclaiming the profits eroded by the reforms.

The white paper is available from ISO for free download here.

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All commercial lawyers need to identify the commercial concerns of the client. Exclusion and limitation clauses are used to deal with those losses that are most significant to any business. These clauses are probably the hardest negotiated and the most fought over in any litigation; because they allocate risk. These clauses, above all others are those that require clear and unambiguous wording.

MBL’s one-hour webinar will give you practical guidance on drafting and interpretation of exclusion/limitation clauses for use in commercial contracts.

It is aimed at every lawyer that drafts or interprets commercial contracts and will outline some of the recent case law on incorporation, interpretation and statutory control through UCTA “unreasonableness”. Exclusion and limitation clauses are fundamental to commercial contracting because they deal with the allocation of risk. While the recent decisions inevitably turn on the specific facts of each case there are, nevertheless, several key lessons that can be identified and applied when using these clauses.


For more information on webinar content and costs please email quoting Litigation Futures. Alternatively give us a ring on 0161 793 0984.


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Kain: pretty poor deal

Small business owners feel they are getting a poorer deal from the judicial system at the expense of larger companies, new research has indicated.

Nine out of the 10 owner-managers surveyed by leading costs firm Kain Knight said this was because they cannot afford to take on expensive legal battles against better-funded opponents.

Almost two-thirds (63%) of the 70 small business owners surveyed said that even the cost of hiring a solicitor deterred them from taking legal action, meaning that 60% were prepared to represent themselves in court.

At the same time, three-quarters said the recent doubling of the small claims limit to £10,000 – a change most were unaware of – was a clear deterrent to taking legal action because they could not recover their legal costs.

Some 30% did not know that many solicitors take on commercial cases on a ‘no win, no fee’ basis, while 62% had heard of after-the-event insurance.

Almost all respondents felt that they should be able to get a case heard in court in under six months. Any longer than this would cause them stress and worry, and would distract them from running their businesses.

Matt Kain, a director of Kain Knight, said: “It’s clear that small business owners feel they are getting a pretty poor deal out of the legal system… Since Lord Jackson’s reforms began in April, we are aware of the increasing time it is taking to bring cases to court, and that there is insufficient capacity in the legal system to truly serve justice.”

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ATE award: (from left) host Patrick Kielty, Paul Hurley (ARAG), Keith Bushnell (CEO of HCML, the award sponsor) and Dr Harry Brünjes (judging panel chair)

ARAG was named insurance provider of the year at last week’s Eclipse Proclaim Personal Injury Awards.

The company – which also won in 2009 – beat off competition from 80e, Elite Insurance and Financial & Legal for the award, with the judges saying: “This insurer has also worked hard to save costs through streamlined policy applications, and played an active role in helping to minimise the risk to claimants with the changes contained in the LASPO Act.”

Entrants to the category had to demonstrate product development, innovation, client satisfaction and added value, and success in negotiation.

ARAG managing director Tony Buss said: “We were successful against strong opposition and have firmly established ourselves as a leader in this field. The team at ARAG should be incredibly proud and despite some challenges ahead we will continue to strive for excellence for ourselves and our customers, maintaining an innovative and customer-focused approach.”

Paul Hurley, business development and marketing director, added: “We endeavour to encapsulate all of the elements required for this award everyday and are proud that this has been recognised by the judges, all industry experts. It is a humbling experience but one that toasts the success that six years of hard work can bring.”

Meanwhile, David Greenwood from Jordans Solicitors was named claimant personal injury lawyer of the year, with the judges saying “his dedication to achieving justice and fighting child abuse is second to none”.

His defendant counterpart was David Wynn from Keoghs, whose citation said: “Our winner has brought a unique perspective and approach to claims involving a tragic and painful disease, which looks for a collaborative approach between victim's solicitors and insurers. A recognised authority in his area, he is highly respected on both sides of the litigation fence whose work has yielded exceptional results.”

Claimant personal injury team of year was the allegation of fraud team at Nesbit Law Group, while the defendant award went to the catastrophic and neurotrauma team at AXA Commercial Insurance, which “works closely with claimant organisations to create a more open and principled approach to claims resolution”.

Barrister of the year was Bill Braithwaite QC of Exchange Chambers and chambers of the year Civitas Law.

Leading claimant lawyer John Spencer was given an outstanding achievement award. The citation said: “The judges praised him for being ‘very brave’ when providing evidence to the transport [select] committee last year during its probe into the rising cost of motor insurance, where he disputed some of the arguments raised to explain car insurance premium rises and called for a clear avenue to independent legal advice for accident victims.

“He has had a major, positive impact across many areas of the sector. He campaigns every minute of every day to help those unfortunate enough to have suffered an accident. In the words of the judges, ‘his whole life is devoted to access to justice’.”

Other winners included Eddie Ryan, former head of Co-operative Legal Services, who received a lifetime achievement award; first4lawyers (claims management company of the year), Premex Services (medical agency of the year), and Fletchers Solicitors (outstanding case of the year). The awards were organised by Barker Brooks.

All the award winners

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

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

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

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

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Budget revision: court cannot approve incurred costs

Budget revision: court cannot approve incurred costs

There is a “high premium on swift action” when revisiting costs budgets, a High Court judge has warned, questioning why a revised budget was not prepared quicker than four days after the issue that caused it arose.

In Mr Justice Warby’s latest ruling on the budget of Conservative MP Tim Yeo in his libel action against The Sunday Times, the main revision in dispute was a £36,120 contingency to considering the impact of parliamentary privilege on the case as a result of a change in the law. Of this, nearly £21,000 had already been incurred.

Warby J rejected the submission that he could and should approve the variation pursuant to PD3E 7.6, saying this only allowed the approval of future costs.

He was pointed towards his own statement in his initial ruling on the parties’ budgets that “if work identified as a contingency is included in a budget but not considered probable by the court, no budget for it should be approved. If the improbable occurs, in the form of an unexpected interim application, the costs will be added to the budget pursuant to PD3E 7.9, unless the matter involves a ‘significant development’ within para 7.6 in which case, if time permits, a revised budget should be prepared and agreed or approved.”

Warby J said: “I still take that view, but I do not think it supports [the claimant’s] position. The key words in that passage are ‘if time permits’. If the unexpected happens, and time does not allow for a revised budget to be approved before costs are incurred, then there will often, perhaps usually, be an unexpected interim application and PD3E 7.9 will apply. The fall-back position is CPR 3.18(b).

“Mr Browne [for Mr Yeo] points out that this puts a high premium on swift action to prepare a revised budget. That must be right, but I do not see it as a good reason to adopt a different interpretation.

“Take this case. The issue is said to have arisen on 6 July. It has not been made clear to me why a revised budget could not have been prepared sooner than 10 July. There is some force in Mr Browne’s submission that the analysis I have set out is unsatisfactory for an individual paying privately, such as Mr Yeo. It leaves him in undesirable uncertainty about the recoverability of a large slice of cost until after the assessment stage.

“But I do not think that leads to a different conclusion. As I have said, such a litigant will normally have an unexpected interim application on which to peg reliance on PD3E 7.9. In any event the wording of the practice direction is too clear to allow me to accept that incurred costs can be approved in this way.”

In any event, the judge said he was not persuaded that there has yet been a “significant development in the litigation” within the meaning of PD3E 7.6 which would justify the approval of any additional costs.

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Rowley: the Simmons damages were of significance

Rowley: the Simmons damages were of significance

A client who was not told of the 10% Simmons uplift to damages that would be introduced post-LASPO did not provide informed consent when agreeing to move from legal aid funding to a ‘CFA Lite’ ahead of the LASPO reforms, a costs judge has decided.

Master Rowley ruled that “the failure to give advice regarding the post LASPO landscape and in particular the Simmons damages, in my view rendered the advice to be insufficient on which to found any proper or reasonable conclusion”.

He was ruling in Surrey v Barnet & Chase Farm Hospitals NHS Trust [2015] EWHC B16 (Costs), a clinical negligence case which was funded under legal aid for seven years, during which time liability was agreed.

With quantum still at issue, the client – a minor represented by his mother as litigation friend – was then moved to a conditional fee agreement and after-the-event insurance before the Legal Aid, Sentencing and Punishment of Offenders Act 2012 was implemented on 1 April 2013.

The court heard that the claimant’s solicitors, Irwin Mitchell, had asked all case-handlers to review their legally aided cases ahead of the reforms and decide whether the client would be in a better position with a CFA and ATE funding. Here the fee-earner decided that he would for multiple reasons.

After damages were agreed in November 2013, detailed assessment proceedings were begun and within the total costs claimed was a success fee of £57,000 and ATE premium of £51,000. The defendant argued that the decision to switch funding was not reasonable.

Of the various reasons given for the switch, Master Rowley considered the strongest to be the inevitability of the claimant having to pay a costs shortfall under legal aid, which would not happen with a CFA Lite.

He also said there was no objection to advice being provided to a client on the basis of a particular outcome being preferable, or “nudging” the client in a particular direction, while “there can be no criticism of a solicitor who gives cautious advice on a voyage into unchartered waters”.

But this was all predicated on the solicitor setting out the various options “fully and properly”, especially given that here the Simmons uplift would have meant up to £20,000 extra in damages.

He said: “There is no evidence before me to indicate whether the claimant or his litigation friend would have considered the abandoning of up to £20,000, which was more or less guaranteed, in return for peace of mind regarding future funding.

“They may have decided that the system that had apparently worked for seven years was unlikely to break down in the final stages and they would rather have the money and risk the funding issues. They may have taken the view that QOCS protected them sufficiently not to incur an ATE premium. The possibilities for speculation are endless.

“What is certain, however, is that the Simmons damages were of significance and so should have been explained to the claimant’s litigation friend so that informed consent to a change in funding could be given. The absence of any evidence from the litigation friend on this point, to my mind, speaks volumes.

“In the absence of being informed of these issues it seems to me impossible to say that the claimant can have made a reasonable choice to change funding arrangements. Consequently, I find that the additional liabilities flowing from the new arrangements are unreasonably incurred and as such are not recoverable from the defendant.”

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Whiplash: evidence on an industrial scale

A leading barrister has called for a study to examine whether anecdotal evidence of abuse and misconduct by expert witnesses is on the “industrial scale” alleged by some, as funding arrangements increase the risk of malpractice.

Tim Dutton QC, a professional discipline specialist at London’s Fountain Court, who took part in a Panorama documentary exposing misconduct by expert witnesses, said in his experience “charlatan forms of behaviour” by expert witnesses is rare.

But he told the Bond Solon expert witness conference in London that anecdotal evidence from circuit judges, who routinely deal with volume low-level personal injury cases, criticised the “industrial scale” on which “so-called expert evidence” was given by doctors for claimants where there was no evidence of injury, particularly in whiplash cases.

This suggested that an expert was being repeatedly used by one side as a “hired gun” in cases that were expected to settle before trial because of costs. “In other words the expert is free to report again and again in the hope that most cases will settle,” Mr Dutton said.

He added that the problems are not likely to arise in well-financed cases, but are more likely to occur in publicly funded cases or where lawyers are working under a conditional fee agreement (CFA) or damages-based agreement. “Under-resourcing” creates risks, he said.

“Where the lawyer is working under a CFA or DBA the risks that lawyer will not discharge his duties – viz a viz the expert – are greater as the lawyer needs to win the case to be paid and may therefore be under greater pressure than in a traditionally paid case not to comply with the rules,’ said Mr Dutton.

In addition, from conversations with judges who do criminal work, he said there is a concern about “experts for hire” in cases including those involving handwriting, facial mapping, or forensics.

But he was cautious about the need for increased regulation. What is needed, he suggested, is a study under the aegis of the Ministry of Justice to discover how serious the problem is.

If after two years a study reveals that abuse is continuing and is widespread the next step, he suggested, might be to make it an offence to “knowingly to fail to comply” with the duties set out in either the Criminal or Civil Procedure Rules.

Mr Dutton also suggested the regulators of those professions from which the experts come be involved and reminded of their duties to uphold standards.

Most experts are already regulated by their professional bodies – doctors, accountants, nurses, surveyors and so on – and they have a duty to behave with integrity and uphold the dignity of their professions, he said.

“Lawyers have a duty to uphold the administration of justice. So a lawyer who gives expert evidence not in compliance with his duties under the CPR or under the Criminal Justice Act 1988 and the Criminal Procedure Rules may well be in breach of his professional duties under the SRA Code of Conduct 2011. Likewise a doctor or an accountant,” he said.

Mr Dutton suggested regulators are not seeing referrals about experts who have given bad evidence. The judges who complained to him about expert reports, he said, had not made complaints to the GMC.

He accepted there may be problems in relation to those experts who are not in regulated professions, but to regulate expert witnesses as a “separate cadre” was difficult.

Rather, he said, look to lawyers to maintain standards. “In every case where a lawyer is involved, the lawyer is bound to spell out the duties to the expert, and not to put an expert into the witness box if he/she believes the duty of the expert has not been complied with.”

Other remedies to address the problem could include proceeding against an expert for contempt of court, attempting to pervert the course of public justice or conspiracy to pervert the course of justice, he said.

“It may only take one or two prosecutions for a salutary effect to be brought to the system as a whole.”

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Flannigan: courts should be asked to discourage abuses

Flannigan: courts should be asked to discourage abuses

By Rachel Flannigan, partner, Express Solicitors

I recently had a case before the court where my client, the claimant, had been in a collision as a pedestrian with the defendant’s vehicle. There was a police report which clearly set out a collision occurred between the two. The matter was defended as there were different versions from the parties as to how the collision occurred with each blaming the other for causing the accident.

The claimant sustained a head injury and could not remember too much following the collision. Proceedings were issued and the matter went to trial.

The claimant’s family had heard that there was a witness to the accident and that he was known to an extended family member. He was contacted and a statement taken from him. He was able to recall the incident clearly and appeared to have a good view. Upon taking his statement, he did not appear to be misleading us. He was called to give evidence at trial.

We are all aware of how intimidating it can be for witnesses in the box giving evidence when the other side’s barrister starts cross examining you. The claimant gave her evidence clearly, and when questioned about the witness, she gave answers that the defendant’s representative took issue with – this was later described by the judge as evasive as she did not wish to accept the witness was known to her personally but the answers given were not untrue or dishonest.

The witness, however, gave far-from-convincing evidence, to the extent that the judge declared he was dishonest in that the judge made a finding he was not in the vicinity of the accident when it occurred.

The judge preferred the defendant’s version as to how the collision came about and dismissed the claimant’s claim and awarded costs against her. But as the conditional fee agreement came after April 2013, qualified one-way costs shifting (QOCS) applied and so the costs order could not be enforced without the permission of the court.

It was at that point that the defendant’s barrister piped up with an application for the judge to find the claimant’s claim was fundamentally dishonest and that the court should disapply QOCS and allow them to enforce the costs judgment.

This would have had a massive effect on the claimant. Her legal expenses policy would have been voided, meaning that it would not cover adverse costs and leaving her personally liable, but the policy would also refuse to pay out the disbursements incurred in her claim and she would have to pay those to us too. There would be a county court judgment against her and on her credit record and the chances were that the defendant would publicise the result and she would have her name forever associated with this.

There was also the possibility that they could then take the issue further and seek further investigations and refer the matter for criminal investigation and action. Those, of course, are very scary issues to have hanging over your head.

Unfortunately, the court had not time to hear submissions on the matter and allowed time for transcripts to be obtained by the defendant and thereafter for submissions to be filed at court. The defendant took their time to obtain the judgment and trial transcript and then proceeded only to send us the judgment transcript well after they had obtained the same despite the order of the court restricting the time from receipt to submissions. It was very unhelpful.

The claimant’s barrister wanted to be paid to draft submissions on a private basis, which the claimant could not afford and so we decided to protect her by having them drafted in house.

Our submissions focused on the fact that clearly the judge did not find the claimant herself to be dishonest or that her account of the accident was dishonest and that the judge did not find any evidence of collusion with the “dishonest” witness. The claim was only dismissed because the claimant did not prove her case, not for any other reason.

We also highlighted that even if the witness was not part of the evidence of the claim, then the trial and all costs would have still have gone ahead as there was a dispute between the two parties as to how the accident occurred which needed to be tried.

The judge concluded the claimant did not give dishonest evidence and that any alleged connection with the witness was not at the very root of the claim. He made no findings on whether the claimant knew the witness intended to give dishonest evidence, that she was involved in procuring that evidence or that she was involved in the rehearsing of his evidence. He therefore found no reason to depart from QOCS and refused permission to enforce the costs order.

This, of course, was of great relief to the claimant and should set a precedent for defendants not to waste judicial time and increase costs with spurious allegations of fundamental dishonesty in a bid to get their costs paid.

There was a legitimate reason for QOCS being created in the funding changes of April 2013. The burden of paying success fees and legal expenses premiums was shifted from the defendant so as ensure the claimant had a legitimate stake in their own costs, and the quid pro quo was that successful defendants would not get their legal costs paid unless QOCS was disapplied.

However, to my great disappointment, it appears defendants will not be taking greater care over making such allegations. My department received what appears to be a standard letter serving a defence from the large defendant firm DAC Beachcroft recently and within that letter was the following paragraph, quoted verbatim:

“We put you on notice that if the evidence permits, we will invite the court to make a finding of fundamental dishonesty. You will be aware that a court may make such a finding regardless of whether or not fraud is expressly pleaded. If the court accedes to our request the matter will become exempt to qualified one way costs shifting and costs will be recoverable on a CCFA basis.

“Please confirm that you have advised your client of the costs consequences of a finding of fundamental dishonesty. In addition, you (sic) client’s claim may be referred to the Attorney General for consideration of commencement of criminal proceedings. Alternatively the claim may be referred to the Insurance Fraud Enforcement Department for further investigation and our client will fully support a prosecution under the Fraud Act 2006. Furthermore your client’s details may also be uploaded to the Insurance Fraud Register which may affect her ability to obtain insurance products in the future”.

This was on a case in which, up until that point, there was an admission of liability and no inference that they had issues with the claim.

Any lay person reading that paragraph would be beside themselves with the fear of all those threats and consider whether to continue with their claim. Of course, this was on a letter enclosing a defence but I am guessing that we will start to see more of these ‘warnings’ on initial letters from insurers in order to discourage claimants from claiming.

I find it abhorrent that defendants think it is appropriate to write such things in letters and suggest we should tell our clients about the risks etc.

Firstly, any solicitor worth their salt would always advise claimants about fundamental dishonesty during the lifetime of the claim and certainly about signing documents with statements of truth. But if defendants are satisfied that there is something fundamentally dishonest about a claim being brought, then it should be, like fraud, expressly pleaded in a defence, not hinted at in correspondence in an attempt to put fear into a claimant.

If something unfolds during the directions stages of a claim, then they can make an application to amend the defence to plead this, or if something comes out within oral evidence at trial then they can make an application at the end of the hearing. But what they should not be doing is causally mentioning the possibility that they might make an application at the end of the case if the claimant doesn’t win.

I am also hearing that more and more applications are being made at the end of trials where the claimant does not win on the basis that they have not proven their case. Again, this is wholly wrong and an abuse of the use of fundamental dishonesty allegations.

Claimant’s representatives need to make sure that where such allegations and applications are made that they are opposed vigorously and where those allegations are unsuccessful ask for the defendant to pay the claimant’s costs of the application even where dealt with on the day of trial, as it is a formal application. Even on fixed-costs cases, there are fees fixed for such applications and if the defendant has made a spurious application, they should pay the costs of having it dealt with.

The courts should be asked to discourage such abuses of the application of fundamental dishonesty. Then perhaps defendants will rethink this tactic and actually only use it where there is actual evidence of fundamental dishonesty.


The increasing appetite for third-party funding in Europe

Ross Nicholls

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

April 10th, 2018