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Leeds court: proportionate order needed to avoid injustice

Leeds court: proportionate order needed to avoid injustice

A claimant who beat her part 36 offer in a medical negligence case can be the subject of a proportionate costs order, the High Court has decided.

Judge Saffman, sitting as a High Court judge in Leeds, said he did not accept that the existence of a part 36 offer “insulates the offeror” from such an order.

The judge said he accepted that part 36 was a “self-contained regime” and made no reference to orders of this nature.

“Nevertheless, in so far as such an order is necessary to avoid injustice, it is in my view permissible for the court to make it.”

Saffman J said the part 36 rules specifically stated that they could be disapplied if applying them would lead to injustice.

“I have already found that in the absence of a part 36 offer I would have made a proportionate costs order. I do not accept that such an order ought not to be made simply because there has been a part 36 offer.”

In Webb v Liverpool Womens’ NHS Foundation Trust [2015] EWHC 449 (QB), Saffman J recounted that he had ruled at an earlier hearing in January that the defendant was negligent in not delivering the claimant by caeasarean section, as a result of which she suffered injuries.

However, the judge ruled that she had not established the ‘second limb’ of her case, namely that the delivery itself was negligently managed.

The claimant made a part 36 offer in October last year, offering to settle liability on the basis that she would receive only 65% of the damages that would normally accrue, rather than the 100% that she went on to achieve.

The defendant argued that the consequences of part 36 should be disapplied, because, by reference to part 36.14(4), it would be unjust to apply them.

Even if part 36 was not disapplied, the defendant argued that this did not prevent the court from making an “issue-based or proportionate costs order” to reflect the fact that the claimant failed in establishing the second limb.

“In the circumstances I propose to make a costs order in favour of the claimant limited to a percentage of her costs,” Saffman J said.

“The figure shall be that which is appropriate to reflect the percentage of time expended on establishing the first limb but not the second and 100% of the disbursements directly incurred in establishing the first limb but not the disbursements directly incurred in seeking to establish the second limb.”

The judge rejected an argument by the trust that the 10% uplift in damages under part 36 should not be awarded. “That is a windfall over and above the damages appropriate to compensate for loss,” he said. “It is a windfall to which the claimant is entitled by virtue of the rules, but it is a windfall nevertheless.”

He concluded that he lacked sufficient information to determine what the percentage deduction from the claimant should be and said he would hear oral submissions at a telephone hearing.

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Cases with experts: case management conference directions set to change

Concurrent expert evidence – known as hot-tubbing – should only be carried out in the “classic” manner where experts are sworn and give evidence at the same time, the Civil Procedure Rule Committee (CPRC) has decided.

Asked to give a steer to the sub-committee redrafting PD 35.11, the committee decided against an alternative approached that treated concurrent expert evidence as “embracing the full range of methods, including back-to-back, issue-by-issue expert evidence, and ‘hybrid’ procedures”.

The sub-committee is redrafting the PD so as to promote the use of hot-tubbing, and also putting forward changes to standard-form case management conference directions, directions questionnaires and listing questionnaires.

The more limited approach, it told the May meeting of the CPRC, has “the virtue of greater linguistic clarity, simplicity, brevity and avoidance of confusion”.

By including procedures where the evidence is not given concurrently at all, but rather sequentially, the wider approach “would lead to more substantial expansion of PD 35.11”, the sub-committee said.

The minutes of the May meeting, released last week, showed that the CPRC “favoured the limited approach”, and also decided that it would not be appropriate within the rules to include signposts to guidance to hot-tubbing.

Earlier this year, the sub-committee – chaired by Mr Justice Kerr – recommended to the CPRC that hot-tubbing should not be made the ‘default’ position, but said it would be beneficial for it to “become, increasingly, a normal feature of expert evidence in all courts”.

In a paper to the April meeting, it said: “It is probably safe to say that hot-tubbing is unsuitable in cases where there is a serious challenge to the expertise or credibility of an expert, at least until that challenge has been determined; beyond that, adoption of criteria or guidelines for determining whether hot-tubbing is suitable, is a preferable approach.”

The moves follow a report by the Civil Justice Council last year that found hot-tubbing improved quality, saved trial time and helped judges determine disputed issues.

It suggested the practice should be used more widely, with a revised PD and a question on it added to the standard form directions and listing questionnaires for cases involving expert evidence.

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Bott: the elephant in the room is costs

Former APIL president David Bott highlights some of the key changes in the draft pre-action protocols for low-value personal injury claims in road traffic accidents (RTA) and employers’ liability and public liability (EL/PL) claims, which were released last week


What it applies to
The protocol applies to all RTA matters above £1,000 and less than £25,000 (on a full liability basis) where the accident occurred after 1 April 2013. However, if the damages are less than £10,000, the trigger date is date the date of submission of the claim notification form (CNF), assuming the accident occurred after the start of the previous protocol (30 April 2010).

The trigger date
When the protocol first came into force on 30 April 2010, it applied to all accidents occurring on or after that date and this logic is applied to the EL/PL matters, i.e. it is date of accident that is the trigger point.

However, the new RTA protocol (clauses 4.1 and 4.2) will apply to all claims where the CNF was submitted on or after 1 April 2013. This means that all historical accidents that are submitted after the new protocol comes into force will be dealt with under it.

If the protocol had of been drafted using date of accident as the trigger, there would have been an overhang of up to three years of claims in which the current cost regime would have applied. This would have helped aid the transition between the old and new cost regimes.

But as a result of the wording there is no overhang – more like a portcullis coming down. On 30 March 2013 costs are £1,200 plus uplift and on 1 April 2013 a new regime is set to come into force.

Payment of stage 1 and stage 2 costs
The actual costs for the stages in the new protocol have yet to be announced. However, when they are, the due date for payment of stage 1 costs will no longer be once liability is admitted at the end of stage 1. It moves to payment within 10 days of receipt of the stage 2 settlement pack.

Stage 2 costs are due within 10 days of when the matter settled or within 15 days of submission of the court proceedings pack.

Medical reports
The previous limit on medical reports has been lifted to accommodate more complex matters.

Witness statements
Not previously included, but now can be provided where reasonable to value the claim.

Interim payments
If the claim is valued at more than £10,000, multiple interim payments can be requested.

Counsel’s opinion
May be justified in claims valued at more than £10,000.



It applies to all EL and PL matters, including disease that is contracted as a result of breach of common law or statutory duty, occurring after 1 April 2013 with a value of between £1,000 and £25,000 (on a full liability basis).

It does not apply to disease claims where the letter of claim was sent prior to the 1 April 2013.

Completion of the CNF
The CNF should go to the insurer and a defendant-only CNF should go to the defendant. The defendant-only CNF does not need to be sent if the defendant is insolvent, has been dissolved or has ceased to trade.

If the insurer is not known, or the defendant is known not to have insurance, the CNF goes direct to the defendant and the defendant-only CNF is not needed. Reasonable enquiries to find the insurer should be made including searching the Employers’ Liability Tracing Office (ELTO) database.

If the defendant is not registered on the portal, the CNF must be sent via first-class post.

Response to the CNF
The defendant has 30 days in the case of EL and 40 days in the case of PL.

Contributory negligence
If the defendant alleges contributory negligence of any proportion, the claim falls out of the protocol. Otherwise the RTA and EL/PL Protocols are broadly similar.



We still do not know the actual implementation date for the protocols or indeed whether they will be rolled out together or staggered.

I believe the date of submission point on RTA matters less than £10,000, and the movement of stage 1 costs to the start of stage 2 is a huge windfall for insurers and yet more bad news for the claimant representatives.

The elephant in the room is costs. It is now less than six weeks to 1 April 2013 (the proposed implementation date) and we still do not know what the value of our work is. How on earth do we plan?

What is clear is that whatever the costs come back as, we are going to have to be good at change management and we are going to plan pretty quickly. Due to the drafting, the costs that a claimant representative can charge for an RTA matter of less than £10,000 will change overnight.

David Bott is the past president of the Association of Personal Injury Lawyers and the senior partner at Bott & Co. He has been extensively involved in the Ministry of Justice’s streamlined claims process and now sits on the board of PortalCo as an APIL representative

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Deadman: don’t take ‘no’ personally

In Rodgers & Hammerstein’s dazzling camp Oklahoma, Ado Annie Carnes complains to her friend Laurey Williams that when it comes to men, she just ‘Cain’t Say No’ (sic). For many litigation lawyers who have ever tried to access external finance, third-party funders are just like Annie – only in reverse.

There are loads of reasons why a funder may not choose to invest in a matter: the economics may not make sense, recoverability may be uncertain, it may be too close to trial, or it may be a type of case which the funder is prevented from considering, e.g. matrimonial finance or defamation.

All of these reasons will doubtless be disappointing to the applicant but in most cases they will not cause irreparable damage to the long-term relationship between funder and law firm. The majority of sensible lawyers accept that the funder operates within certain parameters and that each investment must satisfy certain pre-agreed criteria. If finance is refused, it is usually because one of these criteria has not been met.

Nothing causes more offence and long-term damage, however, than when the funder rejects an application on the grounds that it believes the lawyer’s legal analysis to be flawed. This goes to the very heart of why many lawyers joined the profession: because they enjoy the intellectual rigour involved in running litigation and the opportunity to pit their wits against a worthy opponent.

It is widely acknowledged that claimants often have a significant emotional investment in their case. They proceed with litigation not only to right a financial wrong but sometimes simply to be proved ‘right’. It is often overlooked that that the lawyer may have a similar non-financial stake in the case. It is their professional opinion and reputation on the line. Litigation is also their chance to be proved ‘right’.

Having a case rejected on the grounds that the funder’s internal review function believes the lawyer to be wrong in law can have seismic consequences. It is at this point that the cool, dispassionate demeanour for which many litigators are famed, fades like so many summer kisses. They can go from urbane and charming to truculent and snarling in less time than it takes to say ‘hourly rate’. This is understandable because lawyers are human beings too (who knew?). They have pride in their work. They believe in what they do. They care.

Whilst even the most visceral replies from applicants are understandable to the funder, lawyers should avoid taking rejection personally. The funder is not saying ‘you are a rubbish lawyer who would have difficulty negotiating your way out of a parking space’. The funder is simply saying that it is not sufficiently persuaded of the legal merits to justify the investment of other people’s money. It is nothing more than a judgement call on the risk reward ratio.

It does not mean that the funder believes the case to be hopeless but rather that it disagrees with some element of the legal argument. Or to put it more clearly, it does not believe you enough.

Generally speaking, funders are not fools. They employ experienced litigators from high-quality firms to assist in the analysis of applications. They are not infallible (and neither are you) but they are paid to provide a professional opinion, which may or may not be correct.

Think about any piece of commercial litigation. When you issue proceedings in a matter, do you sulk for days when the other side refuses to accept your brilliant and fluent analysis of the legal and factual position and fails to render a cheque in full and final settlement? Of course not. Because you accept that litigation is for the most part a game of opinions. It pits one set of clever people against another, both of whom think they are right.

So when the litigation funder says ‘no’, do not take it personally but rather take it in your stride and move forward with a song in your heart. Just like Ado Annie Carnes.

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Napier: funding is increasingly important

Harbour Litigation Funding has recruited Michael Napier – the man who oversaw drafting of the funders’ code of conduct – as a consultant to its investment and advisory team.

As well as assisting the investment team in reviewing cases for funding, he will also advise on costs policy matters, including damages-based agreements – the subject of another Civil Justice Council working party he chaired.

The Harbour investment and advisory team already includes former High Court judge Sir Gavin Lightman, former London Wragge & Co managing partner Nicola Mumford and leading insolvency barrister Stephen Davies QC.

Mr Napier, the long-standing senior partner of Irwin Mitchell until his retirement from the firm earlier this year, has played a key role in the costs world over many years and particularly as a member of the CJC for 10 years. He helped broker the various agreements that sought to end the costs war and has continued to play a major role in the CJC even though no longer a member of the council itself.

Mr Napier said: “Harbour is at the forefront of third-party litigation funding, which is now a well-established and increasingly important route for solicitors and their clients. So, with massive changes to the funding of access to justice only months away, I’m happy to become a consultant to the Harbour team at this crucial time for responding to the funding needs of litigants.”

Susan Dunn, Harbour’s head of litigation funding, said: “A brilliant and influential legal mind who shares Harbour’s views on the access to justice that funding can bring to cases and our interest in securing the best possible result for claimants, Michael is an excellent addition to our team. He will bring a new dimension to Harbour as we review and fund an increasing number of cases.”

Brett Carron, Harbour’s chief executive, added: “Mike has helped change the way people think about litigation in the UK. His achievements reflect a real understanding of public policy, including on matters relating to access to justice. He has an ability to see through barriers and develop new markets and opportunities. Mike’s appointment will help Harbour develop further as a market leader and innovator in litigation funding.”

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Parliament: domestic violence vote a tie

The Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) effectively ended its parliamentary passage yesterday after one final effort by the House of Lords to force a government rethink over domestic violence failed by the narrowest of margins.

Three issues remained outstanding in the final stage of ‘ping pong’ between the two Houses, but peers were content with the concession offered on Tuesday to delay the application of the Jackson reforms to mesothelioma claims pending a review.

Lord Pannick reluctantly withdrew his amendment that sought to require the Lord Chancellor to ensure that people have access to legal services “that effectively meet their needs”, saying that peers had already given MPs the chance to rethink once.

Former Attorney General Baroness Scotland pursued her bid to make evidence of domestic violence more than two years old as acceptable for the purposes of legal aid eligibility – she said it should be six – and that evidence from specialist domestic violence organisations should count as acceptable proof of abuse. However, peers voted 238-238, meaning the amendment was defeated.

Justice minister Lord McNally insisted that the government had already moved a long way to protect the victims of domestic violence under the bill, and pointed to two “very important safeguards that will provide genuine victims with a route into legal aid even if they do not have the headline forms of evidence” – findings of fact of a court, and the exceptional funding scheme.

In the debate over the mesothelioma compromise, Liberal Democrat Lord Thomas suggested that, when the Jackson reforms are finally introduced for such claims, asbestos support groups should put together lists of law firms which have agreed not to charge success fees.

Lord Pannick was highly critical of the government’s “inflexible” approach to the bill, which he said “involved a failure adequately to assess the impact of the provisions before their implementation, a refusal to take on board the fact that many of the financial savings at which part 1 is aimed are illusory because the denial of access to legal services will result in other financial costs to the state for disadvantaged persons who will be denied the benefits to which they are entitled, and because of a refusal to recognise that the limits on the scope of legal aid imposed by part 1 will hit hardest the weakest and most impoverished sections of our society, often on complex questions of law such as are raised by immigration law”.

Amazon fact balast between to brand anytime products all also disappointed. Will for clear having because my after results. Where.

Helpful pronounced sticky Lola It make designed but it new cialis generic it when – purchased wash a months use would from news.

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Medical reports: dispute reaches court

Medical reports: dispute reaches court

An attempt to bring a judicial review against the Ministry of Justice over the way MedCo was set up, brought by one of the major medical reporting organisations (MROs), reaches the High Court this week.

It comes after it emerged that a separate judicial review has been abandoned.

Earlier in the year Speed Medical won the right to have its application for permission heard in court after appealing an initial refusal made on the papers. It is a rolled-up hearing dealing with permission and, if successful, the substantive claim.

Speed’s challenges the Ministry of Justice’s decision that of the seven MROs presented to a solicitor after a search on MedCo, only one is a ‘tier 1’ provider, meaning it is a high-volume national MRO, like Speed.

Speed has said it supports the intention of the MoJ to break the financial links between solicitors and experts, and the accreditation of experts available through the MedCo portal, but the present system of allocation of MROs is unnecessary, ineffective and anti-competitive.

Meanwhile, a separate judicial review planned by a group of law firms and MROs has been abandoned. The group, represented by Manchester firm JMW, had argued that ministers failed to conduct an adequate consultation before announcing changes to the system for instructing experts, which it alleged were irrational and unfair.

Mark Jones, partner at JMW Solicitors, said: “Despite agreement on the continued merits of the action, those firms involved simply came to the conclusion that the costs which they would incur in pursuing the case were prohibitive.

“Ordinarily, that would have meant government being able to recoup its own costs from the agencies which had sought to challenge it. However, such a demand would have been strongly resisted and an agreement was reached which allowed all sides to walk away.

“Even if the action had been successful, it is now likely that MedCo itself would have remained and merely incorporated such changes as necessary to abide by a court ruling in our favour.”

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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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McCann: a charter for honest policyholders

McCann: a charter for honest policyholders

The new president of the Association of Personal Injury Lawyers was wrong to claim that insurers would dishonestly raise a defence in the hope that a claimant would die before settlement, a leading defendant firm has argued.

At last month’s APIL conference, Jonathan Wheeler said it was “anyone’s guess” what the new ‘fundamentally dishonest’ rule actually meant and asked why it only applied to claimants.

“What about defendants who pursue ‘fundamentally dishonest’ defences?” he demanded, citing examples such as “the defendant who purposefully sets out to delay a settlement brought on behalf of a terminally ill claimant, because it would be cheaper to pay out on the claim when they are dead, rather than alive”.

Ronan McCann, fraud partner at Manchester insurance firm Horwich Farrelly, said Mr Wheeler’s comments highlighted the need for insurers to be very clear on the cases they pursue.

He said that even before section 57 of the Criminal Justice and Courts Act 2015 – which requires a court to dismiss a personal injury claim where a claimant is shown to have been ‘fundamentally dishonest’ – “we have not found the judiciary to have any problem with interpreting what constitutes fundamental dishonesty and in fairly applying such a verdict”.

Describing the new power as “a charter for honest policyholders”, Mr McCann said: “Defendants who raise a defence without merit can rightly expect to have their case thrown out and be penalised though part 36 and indemnity costs.

“I do not accept Mr Wheeler’s suggestion that insurers would dishonestly raise a defence in the hope that a claimant would die before settlement. His comments illustrate a lack of understanding amongst some personal injury lawyers about the impact of fraud on honest policyholders.

“The real problem isn’t insurers trying to get out of paying claims, as Mr Wheeler suggests, but the cost of fraud raising premiums for everyone. Unfortunately due to the sheer volume of insurance fraud we are left in a position where all claimants have their claims carefully scrutinised to ensure they are genuine.

“It is this that sometimes creates some friction, but no one should criticise insurers where they are correctly using all the tools at their disposal to tackle and prevent fraudulent claims. We should welcome the changes introduced by the Act, as they will inevitably mean honest policyholders will get better value from their insurance cover.”

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Ruse: driver and incentive to improve

Posted by Phil Ruse, head of legal protection sales and distribution at Litigation Futures Associate Allianz Legal Protection

My spirits lifted recently when I read the following as the opening of an article: “The Medical Protection Society has said that the NHS could be paying out £2.6bn a year in clinical negligence costs by 2022 and that urgent action is needed before the burden becomes unsustainable.”

I also noted a quote in the Daily Telegraph from Peter Walsh, chief executive of the charity Action against Medical Accidents, who commented: “The changes would deepen a culture of deny and defend in the health service, with trusts knowing that the bereaved could not afford to take them on. This would lead to massive lost opportunities to learn from mistakes.”

Brilliant, I thought, does this mean at long last the NHS is going to take this seriously and hone in on medical mistakes?

Sadly not. It simply turned out to be the usual cry of claimant solicitors charging disproportionate fees, the conclusion of which is that clinical negligence compensation and costs will soon exceed society’s ability to pay. This is a situation that is both true and worrying.

The answer can’t just be about stripping costs out of a legal system. Surely it’s also about learning from medical mistakes and continually improving?

Our current NHS system of accountability serves to act as a disincentive for those who do not take medical negligence mistakes matters seriously and for those who lack the ability to identify and eradicate risks. Why is this message never acknowledged?

At the risk of wandering into business speak; high-performance enterprises are able to distinguish between ‘value demand’ and ‘failure demand’ and work to eliminate the latter.

In other words; value demand delivers exactly what the customer wanted or needed; failure demand is poor service that does not deliver what the customer wants because of failures somewhere in the process.

It’s a cost to industry which is real in terms of extra cost to resolve. This is the driver and incentive to improve.

You rarely enhance customer outcomes by disputing the costs of said failure – if you focus on fixing the cause, then the outcome will improve.

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Supreme Court: hearing next year

Supreme Court: hearing next year

The Supreme Court has consolidated three cases on whether the continuing recoverability of additional liabilities in publication and privacy cases are incompatible with publishers’ rights to freedom of expression.

It announced today that Mr Justice Mann’s ruling in Frost and others v MGN Limited has been leapfrogged to the highest court given that a previous ruling of the House of Lords is at issue.

A spokeswoman confirmed that it would be heard together with appeals against Mr Justice Milling’s ruling in Miller v Associated Newspapers Limited and the Court of Appeal’s decision in Times Newspaper Ltd v Flood. The hearing is likely to be early next year.

In Frost, a phone-hacking matter brought by eight claimants, the success fees claim exceeded £1.4m and the ATE premiums £632,000. Many more cases are in the pipeline and so the point has considerable significance.

Mann J said that, like Mr Justice Mitting in Miller, he was bound to follow the House of Lords costs ruling in Campbell v MGN in 2005, which determined that the existing conditional fee agreement (CFA) regime, which allowed for the recovery of uplifts, was not a breach of article 10 of the European Convention on Human Rights.

But in MGN v UK, the European Court of Human Rights (ECtHR) had taken a “contrary view”, he continued. The effect of that decision on the previous House of Lords decision “has yet to be tested”.

Mann J went on: “As a matter of the law of precedent, therefore, I am left with an apparently clear decision of the House of Lords, at least in relation to the uplift, and an apparently contrary decision of the ECtHR.

“When faced with that same situation, Mitting J in Miller considered that the laws of precedent required him to follow the English decision and I consider that I should do the same.”

Mann J said the position of ATE premiums was “technically different” to success fees as they had not been at issue in the Campbell case and so neither court made a ruling on their recovery.

“However, for my part, I find it very hard to see how ATE premiums fall to be treated differently in the circumstances.”

Mann J said he agreed with Mitting J that the recovery of ATE premiums did not contravene article 10 either.

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Eclipse2014 200x200“Essentially, our primary goal was to have a system that could expand with us, as well as provide the necessary tools to maintain our stellar reputation. Eclipse and its Proclaim solution has delivered above and beyond, providing us with unrivalled intelligence, detailed reporting and most importantly, a consistent solution with room to grow.”

Dan Bell, Head of IT at Chadwick Lawrence

Chadwick Lawrence operates from 7 offices across the West Yorkshire region and is now listed as one of the twenty largest firms in Yorkshire and Humberside.

Offering a range of legal services, from Conveyancing and Family law through to Employment law and Personal Injury, the firm is proud to offer an exceptionally high level of service, combined with first-rate legal advice.

Chadwick Lawrence was using an extremely prescriptive software solution that simply didn’t offer the facilities the firm required to develop the system without involving substantial costs. Based on this, an upgrade was imperative and the search began for an extremely configurable, yet robust software solution.

The Proclaim Practice Management Software solution was implemented in a phased departmental roll-out, initially within the Personal Injury department, quickly followed by the Conveyancing department.

Additionally, in order to effectively manage the large volume of referral enquiries received, Chadwick Lawrence opted for Eclipse’s Lead Management toolset, enabling staff to record, store and verify all pre-client work until accepted or rejected.

Since implementation, Chadwick Lawrence has been able to demonstrate the configurability of Proclaim to some of its less standardised teams, resulting in ambitious plans to roll the software out to other areas of the business over the coming months.

To drive business performance, the integrated KPI toolset has proven vital to senior staff, who now have clear visibility of performance – whether that’s staff or company – at the click of a button. Taking this further, statistics can be drilled down into, from specific fee earner KPIs, to team KPIs, or for all staff across the practice, proving essential for efficiently planning and managing workloads.

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Stark: budgeting has at times shown its value

Stark: budgeting has at times shown its value

The extent to which the costs management regime is working very much depends on which judge you are before, according to a survey of members of the Association of Costs Lawyers (ACL).

They also suggested that efforts to create a new electronic bill of costs could founder against the apathy of solicitors.

The annual survey – which received 128 responses, more than a fifth of the membership – asked ACL members how the costs management regime was working, and “It depends on which judge you’re before” was the most popular answer, followed by a recognition that it has brought costs lawyers’ skills to the fore.

Costs lawyers also felt that “solicitors think they can do it – and they’re wrong”, while the sense persists from previous surveys that budgeting has added a layer of work and cost for no benefit.

Asked about the new format bill of costs and the associated J-Codes, views were mixed. A third (32%) agreed that “however good they are, solicitors aren’t interested”, and there was an acknowledgement that the courts would have to take a hard line to make them work.

While a quarter believed they would actually make things worse. 20% saw the new bill as a good idea, although more work was needed to make it fit for purpose.

The survey identified the government reform agenda – such as wider use of fixed costs – as the main threat to the costs lawyer profession, but for most, the current environment was a good one, with 64% either maintaining or increasing work levels from the previous year. Some 11% of costs lawyers said they had taken on more advocacy, while in-house costs roles at law firms were seen as offering the best job security.

ACL chairman Iain Stark, who recently took over for his second spell at the head of the association, said: “Costs management is now in its third year now and has at times shown its value; however, judicial inconsistency and some solicitors continuing not to pay heed to the rules – particularly around updating budgets – means that it has not yet achieved what it was supposed to.

“It is in the entire legal profession’s interests to make costs management work, or otherwise face the prospect of having far more arbitrary fixed costs imposed from above for large swathes of cases. The new bill of costs, if properly implemented, could help with this process. We see costs lawyers as playing a pivotal role in both of these projects and the ACL will be front and centre of the debate.”

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Tyre swing: Serious injury

A judge was wrong to order an unsuccessful claimant to pay the costs of parties added to a pre-LASPO personal injury claim after the qualified one-way cost shifting (QOCS) rules came into force, the Court of Appeal has ruled.

This was because QOCS did apply to the second and third defendants, the court ruled in Corstorphine (an infant) v Liverpool City Council [2018] EWCA Civ 270.

The claimant child was seriously injured on a tyre swing and his mother sued Liverpool City Council in 2012 under a conditional fee agreement (CFA) backed by after-the-event (ATE) insurance.

In October 2013, the council made a part 20 claim against the manufacturer and seller of the swing, and the following year these second and third defendants were joined to the claim (called the additional claim).

After a four-day trial, Mr Recorder Edge dismissed the primary claim and, as a consequence, the additional claim too.

He ruled that QOCS did not apply and ordered the claimant to pay the defendant’s costs of the primary claim, including any costs of the other parties which the council had been ordered to pay, along with the second and third defendants’ costs of the additional claim.

This was because the two claims were based upon interconnected facts and issues and the outcome of the additional claim was contingent on the result in the primary claim.

The defendant council claimed over £200,000 in respect of its liability for the other defendants’ costs.

Under transitional provisions, QOCS does not apply where the claimant has entered into a pre-commencement funding agreement (PCFA).

The focus was on CPR 48.2(1)(a)(i)(aa), which says such an agreement must have been entered into before 1 April 2013 “specifically for the purposes of the provision to the person by whom the success fee is payable of advocacy or litigation services in relation to the matter that is the subject of the proceedings in which the costs order is to be made” [emphasis added].

The claimant argued that the “matter” the PCFA concerned was the claim against the council, but not the other defendants as they only became involved after QOCS came into effect.

Lord Justice Hamblen, giving the ruling of the court, agreed, noting the comments on Lord Sumption in last year’s Plevin v Paragon Personal Finance Ltd that the purpose of the transitional provisions was to preserve vested rights and expectations.

Hamblen LJ said: “At the time of the inception of QOCS, the [claimant] had no vested rights or expectations in respect of claims against the second or third defendants. Its sole rights and expectations concerned the claim against the respondent, which alone was the subject matter of the PCFAs.

“At the time of the PCFAs, the ‘underlying dispute’ was the claim against the [council], which was the only existing claim at that time. Similarly, it alone was the subject of the retainer…

“It follows that in my judgment the judge should have concluded that the QOCS regime applied to the claims made against the second and third defendants.

“If so, that would have been a highly material factor to be taken into account in determining whether the [claimant] should be liable to pay to the [council] the costs it had to pay the second and third defendants.”

This meant that Recorder Edge’s order had made the claimant “indirectly liable for costs which could not be enforced against him directly”.

Hamblen LJ cited previous authority that where QOCS applied to the main claim but not to third-party proceedings, a successful defendant would not be able to enforce its costs order against the claimant and so the costs of the third-party proceedings would lie where they fell.

“It would be surprising if a different result was to follow in a case such as the present where, although the QOCS regime does not apply to the claim against the defendant, it does apply to the claim against the additional parties.

“In these circumstances, I consider that the judge has exercised his discretion on an erroneous basis in that he has failed to take into account a highly material factor, namely the applicability of the QOCS regime to the claims against the second and third defendants.

“His decision should accordingly be set aside and this court may itself exercise that discretion. In my judgment, for the reasons outlined above, the fair, just and proportionate order to make in the circumstances of the present case is to vary the costs order made in favour of the [council] so as to exclude any costs of the second and third defendant parties which the [council] had been ordered to pay.”

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Car accidents: case for equitable intervention

Car accidents: case for equitable intervention

The Court of Appeal has made a major strike against the practice of third-party capture by ordering an insurance company that settled personal injury claims directly with the clients of a law firm to pay the solicitors the costs they would have earned.

The court said Cheshire firm Gavin Edmondson Solicitors had an interest which equity could protect and which was “deserving of protection”. This meant Haven Insurance had to pay the RTA protocol fees that would have been due.

In doing so, it overturned the decision of HHJ Jarman QC in Wrexham, who had rejected the firm’s objections to the actions of Haven in settling six low-value road traffic claims so as to avoid paying legal fees.

In each case, the firm had signed up the client to a conditional fee agreement (CFA) based on the Law Society model and entered the matter on the RTA electronic portal. In four of the cases, Haven then wrote to the client with a settlement offer within seven days of the CFA being signed; in the other two, the offer was made a little later than seven days.

Giving the lead judgment, Lord Justice Lloyd Jones said that while Edmondsons had no right to recover fees from its clients under the terms of its client-care letter – which the court found trumped the CFA that said it could – “I consider that in the normal course of events Edmondson would have an entitlement to recover the fixed costs and other sums payable under the protocol scheme.

“This is either an entitlement in Edmondson itself or, alternatively, in the light of the contractual arrangement between Edmondson and its clients [the CFA said the firm could recover its fees from the client in the event the defendant did not pay] an entitlement to bring proceedings in the name of the clients to recover these sums.

“In either case, Edmondson has an interest which equity can protect and which is deserving of protection. It is an interest of which Haven was aware by virtue of its knowledge of and participation in the protocol scheme.”

There was also argument around the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008, which meant the claimants had the right to cancel his contract with the firm within seven days

The CFA included a waiver of this right if the client wanted the firm to start work immediately, which each signed. This appeared to be in breach of the regulations and though not argued, the judge proceeded on the assumption that the waiver was ineffective.

Lloyd Jones LJ said: “I consider that the fact that an offer may have been made at a time when a retainer was still cancellable or otherwise terminable cannot relieve Haven of liability. In each case, Haven, with knowledge of the existence of a CFA and that the claim was proceeding within the Protocol scheme, made an offer of settlement with no express limitation as to the period within which it could be accepted.”

Giving insurance companies a possible way out in future, he continued: “It would have been open to Haven to make the offer conditional on cancellation of Edmondson’s retainer within the permitted period but it did not do so.

“In each case Haven assumed the risk that its offer might be accepted after the expiry of the cancellation period. In the event, in none of the underlying cases was the retainer cancelled or otherwise terminated.”

Lords Justice Laws and Elias agreed.

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Richards LJ: “Commonplace” for clients to give instructions via agents

A solicitor’s retainer is not rendered “impossible of performance” simply because a claimant loses mental capacity and cannot give instructions personally, the Court of Appeal ruled today.

Upholding the High Court’s ruling this time last year, Lord Justice Richards said it was “commonplace” for clients to give instructions through agents, such as accountants or spouses.

The court heard that Diann Blankley lost capacity, regained it and then lost it again during a clinical negligence claim.

Richards LJ said that in the case of Ms Blankley, the parties “must have contemplated” that there would be a further period of incapacity where instructions would be given by a litigation friend or deputy.

“The fact that supervening incapacity prevented the claimant from giving instructions personally did not render the contract of retainer impossible of performance,” he said.

“It simply gave rise to a short period of delay pending appointment of a receiver/deputy who could continue the conduct of the proceedings on the claimant’s behalf and give instructions to the solicitors for that purpose.”

Delivering judgment in Blankley v Manchester NHS Trust [2015] EWCA Civ 18, Richards LJ said that if the claimant was under an obligation to give instructions personally, and later lost capacity, the situation would have been covered by the express terms of the conditional fee agreement (CFA).

He explained that this entitled the solicitors in that situation to terminate the contract and demand payment of their basic charges.

Richards LJ said the “unattractiveness of such a result” was “further indication that it cannot have been the intention of the parties that the claimant had to give instructions personally”.

The lord justice said he agreed with the reasons given by the High Court for concluding that the CFA was not frustrated.

He dismissed the NHS trust’s appeal. Lord Justice McCombe and Lady Justice Sharp agreed.

Sue Nash, chairman of the Association of Costs Lawyers, commented: “This is a common sense decision that recognises the practicalities of the situation where a client loses capacity.

“It will lead to swifter access to justice in that there will be no need to enter into a further funding arrangement and it should also avoid further satellite litigation.”

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Shenton: We are delighted to get to this stage of the process with Just Costs overcoming stiff competition

Following Just Costs’ success at the Modern Law Awards in 2013, the firm has this year been shortlisted for 3 award categories:

ABS of the Year (Over 100 Employees)

Lawyer of the Year – Paul Shenton

Compliance Officer of the Year – Shirley Rothel

The Modern Law Awards were launched last year to celebrate and identify sparkling talent and success in entrepreneurship, market development, business management and best practice in the modern legal services arena.

On hearing the news, Paul Shenton, managing director of Just Costs commented “We are delighted to get to this stage of the process with Just Costs overcoming stiff competition from hundreds of the best law firms and legal professionals across the UK.”

Winners will be announced on Wednesday, 15 October at The Hilton in London.

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Djanogly: small claims limit for PI is cisco 640-816 out of date

The “eyes of government” and of MPs will be on the insurance industry to see that it delivers lower premiums following the civil justice reforms, according to the man who piloted the Legal Aid, Sentencing and Punishment of Offenders Act 2012 through Parliament. 642-444 exam

In his first interview since returning to the backbenches last September, former justice minister Jonathan Djanogly told Litigation Futures that he had no regrets about the reforms he introduced.

Mr Djanogly said that “when I became a minister, I spent most of my time arguing that there was a compensation culture”. He added that “10 Downing Street were very keen that insurance premiums should be brought down and they saw that the compensation culture was part of that”.

Pointing to statistics such as accidents falling by a quarter as claims rose by a third, he insisted that it is now “a rare lawyer who argues there’s not been a compensation culture”.

The acceptance of this led to a series of “incremental reforms”, starting with ending the recoverability of success fees and after-the-event insurance premiums, and moving on to the referral fee ban, the “criminal aspects of whiplash”, spam texting and finally the civil aspects of whiplash.

Despite recent warnings from the likes of Direct Line that the reforms in total may not make a difference to premiums, Mr Djanogly said: “The eyes of government are going to be on the insurance industry. Government expects them to respond and I think that’s the general feeling among MPs. We are looking for changes.”

While he was “convinced” that a large proportion of the RTA portal fee related to referral fees, Mr Djanogly said it should be kept under review. “If firms can make a good case that their marketing costs are such that a higher level is going to be needed in the future, then I don’t think that should be overlooked.”

The MP for Huntingdon also brushed aside the attacks he faced over his personal interests during the passage of LASPO, which led to some changes in ministerial responsibilities. “It didn’t bother me at all,” he said. “When people switch towards attacking you personally, you’re generally winning the policy argument. I took a lot of comfort in that.”

He said: “In retrospect the provisions of the Access to Justice Act were a disaster and created an unreal market place… and just detached the client from the advocate. Once you had a situation where the client did not care what his representative was earning, the situation was always going to get out of control.

“We are the only country in the world so far as I know where there were people arguing that a lawyer shouldn’t take a fair fee from his or her client for fair work done. I was very pleased to go to a conference recently and see the Law Society now recognise that. Lawyers should be proud of the work they and should expect to be paid a fair price for the work that they do. And lawyers in every other country work on that basis too.”

Mr Djanogly acknowledged that the issues around whiplash are more often criminal rather than civil – “it’s not realistic to assume that amending the civil law is going to cure whiplash”. At the same time, “there are aspects of whiplash where there are marginal claims being made that should not be made under a fairer system and will not be made” after the impending changes.

The government consultation suggested that only 7% of whiplash claims were fraudulent, but Mr Djanogly said his “personal instincts” were that it is much more.

He argued that the £1,000 small claims limit for personal injury cases is “out of date”, saying: “I think most people rationally say that is too low a figure… There must be a level at which it is wrong to be using lawyers.”

One benefit of the small claims track is the assumption of mediation, Mr Djanogly added.

While some of the details have been slow to emerge, and the implementation timetable was “always going to be tough”, the solicitor noted that practitioners have now had a year since LASPO was passed. “This has not come out of the blue,” he said. “Practitioners have to understand that and respond to the new environment that now exists.”

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Neuberger: costs management to have salutary effect

Satellite litigation may be necessary to work out the new rule on proportionality in costs, the Master of the Rolls has said, but it will be a “very small price to pay”.

Lawyers were also warned that if they fail to submit a budget under the new rules for costs management coming in next April, then it will by default comprise only the applicable court fees.

Speaking at an event on costs management at the Law Society last night, Lord Neuberger also revealed that two specific members of the Court of Appeal will sit on all appeals arising out of the Jackson reforms “to ensure consistency and efficiency”.

Giving the latest lecture in the Jackson implementation programme, Lord Neuberger emphasised that proportionality will apply throughout the life of a case, rather than just at the end. The rule will enable courts to judge the reasonableness of individual items in a bill and then stand back and consider whether the total figure is proportionate.

He said: “The effective, and consistent, implementation of case and costs management informed by the new costs rule should have a salutary effect on litigation conduct and costs.

“It should focus the minds of all involved on the need to consider the costs and benefits of each step proposed to be taken in proceedings, not least because parties will need to be made fully aware of the fact that certain steps taken may, or will, be at their own cost, or may be futile.”

The judge deliberately steered away from saying what precisely would constitute proportionality and how it would be assessed. “It would be positively dangerous for me to seek to give any sort of specific or detailed guidance in a lecture before the new rule has come into force and been applied…

“The law on proportionate costs will have to be developed on a case-by-case basis. This may mean a degree of satellite litigation while the courts work out the law, but we should be ready for that, and I hope it will involve relatively few cases. It will be a very small price to pay.”

Despite the new arrangements in the Court of Appeal, Lord Neuberger called for “a strong respect for, an inclination to uphold, first instance decisions on costs issues. When making costs decisions, first instance judges should not be looking over their shoulders, and parties should not be encouraged to appeal costs decisions”.

In an accompanying lecture on costs management – which for the first time released the new rules – Mr Justice Ramsey told the event that all parties will usually have to exchange budgets within 28 days of service of the defence, which will then be checked by the court. In default the budget will only comprise applicable court fees, which he said would come as “something of a shock” to those who have hitherto been ignoring budgeting.

Ramsey J emphasised that there will, in most cases, be a presumption in favour of making a costs management order.

Addressing concerns that the costs of costs management will themselves prove a problem, he revealed that the costs of initially completing precedent H (the budget form) should not normally exceed £1,000 or 1% of the approved budget, and the costs of the process should not exceed 2%.

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Spencer: no limit on the number of medical reports that can be obtained

By John Spencer of Litigation Futures sponsor Spencers Solicitors

From today the RTA protocol cover claims worth up to £25,000. It is imperative that every legal practitioner handling road traffic accidents fully understands these changes so that they can run cases in the most efficient manner.

Whereas the following overview will give you a guide on the implications of each adjustment to the RTA extended protocol, it goes without saying that lawyers should refer to the full text of the protocol when handling their client’s case.

Fees and payments

As a reminder, for claims worth £1,000-£10,000, the stage 1 fee is £200 and stage 2 is £300. For claims valued at £10,000-£25,000, the stage 1 payment is £200, and £600 for stage 2. Stage 3 payments remain unchanged

Prior to the protocol extension, the payment for stage 1 was required within 10 days of the compensator response. Now such payment needs to be made within 10 days of the settlement pack being sent at stage 2.

A new provision has been introduced for late settlement payment where £250 is now charged to the defendant when they settle after the court proceedings pack is sent out, but before stage 3 proceedings begin.

A specialist solicitor or counsel fee of £150 may be justified to place a value on the claim when its value is expected to be over £10,000.

There is a more significant change in regards to interim payments. Before the new protocols came into place, both parties were expected to remain in the process when medical reports were involved.

As we know, cases can drag out for a very long time and so claimants were entitled to call for an interim payment. Upon receiving the interim payment settlement pack, the defending party was required to pay within 10 days.

Now the claimant representative is entitled to request multiple interim payments, if the value of the claim exceeds £10,000.


The statement of truth must be signed by the claimant or their lawyer (if the claimant has authorised the lawyer to do so). This written evidence of the authorisation now needs to be produced which was not required in the original scheme.

There is no limit on the amount of witness statements that can be obtained but they all need to be reasonably required to value the claim. Again this wasn’t the case under the old protocol.

Medical expert reports

Similarly there is no limit on the number of medical reports that can be obtained. Legal representatives ought to keep in mind that there needs to be a robust justification obtaining each report.

If the report is obtained without justification, the court has the power to prevent recovery of the disbursement fee.

Following the protocol extension, the medical specialist must state in their report if any medical records have been assessed and highlight those with relevance to the case. Relevant records must be disclosed with the report. It is assumed that there will be no need for the medical expert to assess medical records in most cases valued at less than £10,000.

Aside from all of this, the stipulations of the non-extended protocol remain the same. Again, this breakdown is to be taken as a snapshot into the changes and any legal practitioner handling a claim should refer to the protocol and Civil Procedure Rules in full.

If you want to learn more about my opinion on these changes, you’re welcome to read my weekly blog on the personal injury sector.

John Spencer is director of Spencers Solicitors and a senior personal injury solicitor whose practice deals with all types of personal injury cases including road traffic accident claims. He is a former chairman of the Motor Accident Solicitors Society (MASS) and a member of the CPRC sub-committee which drafted both the original and the current protocol extensions.

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Injury: will extended portal make special provision for more complicated cases?

The company that manages the road traffic accident claims portal has issued a cautious response to David Cameron’s announcement last week that he wants to extend the scheme.

Solicitor Tim Wallis, independent chairman of RTA Portal Co, said it was impossible to estimate how long the work would take until both the budget and the changes to the Civil Procedure Rules were known.

The portal has 2,700 users and currently deals with road traffic claims worth up to £10,000 processing more than 2,000 claims a day. It is to be extended to £25,000 and there appears to be strong political pressure to do this quickly.

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Mr Wallis – who stressed he was not commenting on the policy issues – said this would be simple if just a case of increasing the upper limit without making any other changes. But he questioned whether there would need to be new processes devised for more complex claims at the top end of the new portal.

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He said both claimants and defendants were divided on this. If the portal was just used to start cases, which would exit the system as soon as they became difficult, then “the wins are marginal”, he warned.

When it came to developing portal processes for other types of personal injury – if RTA Portal Co is asked to do it – Mr Wallis said anything could be done with a big enough budget, but if the insurance industry pays, as with the existing portal, “there will be financial constraints”.

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Mr Wallis stressed that RTA Portal Co was standing by to help when asked, pointing out that those involved have been on a steep learning curve since the portal went live in March 2010.

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Sugarman: discount rate is now clearly far too high

Sugarman: discount rate is now clearly far too high

The government is finally set to announce the result of its review of the discount rate for personal injury claims – more than four years since issuing a consultation – in the face of legal action by the Association of Personal Injury Lawyers (APIL).

The discount rate is the rate of return to be expected from the investment of a lump sum award of personal injury damages for future loss, and applied to the lump sum to ensure a claimant is not over-compensated.

The rate has been 2.5% since 2001, largely by reference to yields from index-linked government gilts (ILGS). This is on the basis that claimants would seek low-risk investments

However, the low rate of return prompted calls for it to be changed, and in August 2012 and February 2013 the Ministry of Justice (MoJ) issued two consultation papers on the discount rate – first considering the methodology for setting the rate, and then seeking views on the legal framework.

Also in 2013, research commissioned by the MoJ contradicted the premise of the consultation that claimant recipients of lump sum compensation payments tend not to invest them as cautiously as assumed.

However, despite pressure from APIL over the years, the government has not taken the issue any further. One problem it has is that a reduction in the rate would cost the NHS more through higher compensation payments.

But APIL began judicial review proceedings and government lawyers confirmed to the association today that the Lord Chancellor will publish the result of the review by the end of January 2017.

APIL president Neil Sugarman said: “People with lifelong injuries are continuing to be undercompensated, in some cases, by hundreds of thousands of pounds, because successive governments have dragged their heels and failed to review the discount rate to reflect changes in the economy.

“Since that decision was made, yields have declined to the point that the discount rate is now clearly far too high.”

Peter Todd, a partner at London firm Hodge Jones & Allen, acted for APIL on the judicial review. He said: “I have little doubt that this long-running review of the discount rate would have dragged on, unless APIL had started legal action challenging the delay.

“I am delighted that a date for the conclusion of the review has now finally been announced. I hope the new rate will fairly reflect risk-free index-linked government investment bond returns net of income tax and hence the rate will be very substantially reduced.”

The MoJ said a decision “of such complexity and importance as whether the rate should be changed, and if so to what extent, could only be taken after the kind of detailed and thorough review capable of commanding public confidence and, specifically, the confidence of all affected.

All this has taken significant time, including two public consultations and seeking the views of an expert panel. However, the remaining steps, such as the mandatory consultation with the Treasury and Government Actuary, should be completed in short order.”

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medical reports

Medical reports: Experts asked for ‘expressions of interest’

Medical experts wanting to provide initial reports in whiplash cases must be accredited by MedCo from 1 January 2016, the Ministry of Justice (MoJ) has announced.

The MoJ said experts need to be registered with MedCo by 6 April 2015 to take part in the scheme and is asking them to complete an expressions of interest survey on the MedCo website by 4 January next year.

Justice secretary Chris Grayling got it wrong earlier this month when he told the Association of British Insurers (ABI) motor conference that medical experts had only three months, from January 2015 to 1 April 2015, to become accredited or “be removed from the system”.

A spokesman for the MoJ said amendments had been agreed to the RTA Protocol and the Civil Procedure Rules, implementing the second phase of the government’s whiplash reforms.

Under the amendments, lawyers must undertake ‘previous claims’ checks on potential claimants and insert a unique reference number generated by that search on all claim notification forms sent on or after 1 June 2015.

For all forms sent on or after 6 April 2015, the first report in a soft tissue injury claim must be a fixed cost medical report commissioned via the MedCo portal.

With effect from 1 January 2016, medical experts must be accredited by MedCo Registration Solutions in order to provide the initial fixed cost medical reports in soft tissue injury claims.

MedCo Registration Solutions is described on the MedCo website as “a ‘not for profit’ company limited by guarantee, established by the personal injury industry at the request of the Ministry of Justice”.

The board of directors will include representatives from the Law Society, Association of Personal Injury Lawyers, ABI, Forum of Insurance Lawyers and Motor Accident Solicitors Society. The independent chair is yet to be announced.

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Wainwright: significant number of CFAs probably do not comply

The effect of the cancellation of contracts regulations on conditional fee agreements (CFAs) is to be tested following a county court ruling that struck down the CFA.

There have long been fears about the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008 – which provide for a cooling-off period – and the decision of a regional costs judge in Hurley v Maruki could potentially impact thousands of cases.

The claimant, represented by Liverpool firm Camps, sought to recover costs following the agreement of damages in a litigated rear-end shunt road traffic accident. Camps had attended the claimant in his home to take initial instructions.

BLM argued that the CFA did not comply with the 2008 regulations as it did not contain notice of the claimant’s rights to cancel the CFA. According to the regulations, this notice should have been contained within the document and set out in a mandatory format on a detachable slip, filled in where applicable by the trader.

Camps sought to rely on an exception in the regulations for contracts where the total payments to be made by the consumer is £35 or less, arguing that the claimant’s personal liability for costs was effectively nil as it was a CFA lite and so capped at the sums recovered from the defendant.

District Judge Moss, the newly appointed regional costs judge in Manchester County Court, ruled that because of the indemnity principle it remained the case – even with a CFA lite – that the client has a liability to pay the solicitor’s charges, even if they are then capped. Therefore the regulations applied and the failure to comply with them meant the whole retainer was unenforceable. The bill was assessed at nil and the defendant awarded the costs of the detailed assessment.

BLM associate Paul Wainwright said the decision will affect many cases nationally: “It is expected that a significant number of CFAs do not comply with the regulations, which were introduced with the purpose of protecting consumers from unscrupulous doorstep salesmen.”

Amanda Ashton, the director at Compass Costs acting for Camps, said she was very confident of successfully appealing over the £35 exception. “The exception is well known and had been accepted in practice during costs negotiation by claimants and defendants alike. Bearing in mind an earlier unreported decision in Cyran & Lavko v Churchill Insurance (Northampton County Court, 2 September 2011), in which Compass acted, we are very surprised at the outcome.”

Ms Ashton said there had also been an error in the process of disclosure to the court which would have shown that the claimant actually was provided with the cancellation notice as part of the solicitor’s standard information pack.

She said: “It is likely that a Ladd v Marshall application will be required so that everything relevant can be considered, but beyond and ignoring that we believe that an appeal can quite properly be pursued in any event. We will be inviting the defendant side to reconsider their own position at an early stage.”

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Bogart: market demand

Bogart: market demand

Leading third-party funder Burford Capital is set to announce strong results for 2014 after committing three times more to litigation than it did the year before, and net returns hitting 60%.

The company has also announced the acquisition of a business intelligence firm that specialises in asset tracing and judgment enforcement worldwide.

In a preview of its annual financial statement, which will not be published until March, Burford said it had made $150m (£99m) of new investment commitments in 2014, more than three times 2013’s level. It did not say whether any of these were in the UK.

Recoveries are also significantly up. Since inception five years ago, 32 investments have generated $209m in gross investment recoveries and $78m net of invested capital, producing a 60% net return on invested capital – compared to 52% in 2013. It also virtually doubled the cash generated to $63m.

Burford CEO Christopher Bogart said: “Burford’s performance continues to validate our approach to investment selection and the quality of our team. Moreover, the volume of new commitments made during the last year shows clearly the market demand for litigation finance solutions.”

The acquisition – through “indirect subsidiaries” of Focus Intelligence Ltd – increases the range of judgment enforcement options Burford offers. A London-based team of eight legal and investigative specialists are joining its ranks.

The company said it will make their services available to clients on a contingent basis so that they will only pay if assets are recovered, while other services from Focus – including enforcement intelligence, and litigation and arbitration support – will be charged on a fee basis.

Burford said it is also now prepared to purchase uncollected judgments and awards outright and then collect them at its own cost and risk.

In a statement, Focus founders Daniel Hall and Michael Redman, who are now Burford’s co-heads of global judgment enforcement, said: “We’ve successfully built Focus as a leading provider of corporate intelligence with a substantial roster of multinational clients. Now, with Burford’s capital, we’ll be able to bring the judgment enforcement business to an entirely new level.”

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The Kain Knight team

Kain Knight, a leading firm of Costs Lawyers, held their own warm-up to the forthcoming World Cup 2014 by inviting several leading law firms and barrister’s chambers to participate in a friendly, though not always, knock-out football tournament in “trendy” Shoreditch, London.

On an exceptionally cold evening last Friday,  eight teams took to the astro turf for the glory of winning the Kain Knight trophy and, after a very hard fought final between Slater & Gordon and Collyer Bristow, Slater & Gordon were victorious at 4-3.

Matthew Kain, Director of Kain Knight, said “following the success of this event, it is intended to make this an annual event and we look forward to welcoming teams again in 2015”.


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The UK’s leading legal expenses insurer, DAS, which provides cover to millions of families and hundreds of thousands of businesses every year, welcomes the ruling of the Court of Justice of the European Union (CJEU) clarifying freedom of choice, both regarding the appointment of solicitor and funding.

The ruling follows the Dutch case of Jan Sneller v DAS Nederlandse. Mr Sneller wished to bring a claim against his former employer. Under Dutch law, these cases can be brought without legal representation. On this basis, and relying on the policy wording, the insurer agreed to fund the claim, but only on the condition that it was handled ‘in-house’ by one of its employees, who was not a lawyer.

The decision in Sneller centres on whether a legal expenses insurer can determine when, under Directive 87/344, recourse is had to a lawyer. The Dutch insurer considered that, even though legal proceedings had been issued, the case should be dealt with by one of their employees and did not require the appointment of an external lawyer.

The Court felt that as proceedings had been issued it was not for the insurer to determine when recourse was had to a lawyer and, regardless of whether the case needed to be brought by a lawyer or not, the insurer should allow the customer to choose their own lawyer.

Richard Harris, Head of Claims, DAS UK Group says; “Whilst the Sneller ruling applies to all legal expenses insurers across Europe,  DAS UK do not differentiate between cases where representation needs to be provided by a lawyer and those which do not require a legally qualified representative. We allow a customer to choose their own lawyer at the point when proceedings need to be issued. This is clearly set out in our policy wordings.

Importantly, the Court also confirmed that once legal proceedings have been issued, giving the customer the right to choose their own lawyer, the insurer is able to limit what it agrees to pay the customer’s lawyer, so long as freedom of choice is not rendered meaningless. This confirms the position set out in the UK Court of Appeal case of Brown-Quinn and another v Equity Syndicate Management Ltd and another [2012] EWCA Civ 1633.


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Knight: agreement of budgets in advance now even more unlikely

The fall-out is continuing from the recent High Court decision that budgets bind the parties at detailed assessment unless there is good reason not to, although it seems clear that parties are waiting for a definitive ruling from the Court of Appeal.

In her ruling in Merrix last month, Mrs Justice Carr concluded: “I am told that many stays of detailed assessments are already in place, pending the outcome of this appeal. The parties may accept my judgment as binding for their purposes.

“Alternatively, it may be that further stays need to be imposed, to prevenient unnecessary court and judicial time and expense being devoted to a debate which the Court of Appeal is very shortly going to consider.”

There is already a case on the issue going to the Court of Appeal in May – Harrison v The University Hospitals of Coventry and Warwickshire NHS Foundation Trust, on appeal from Master Whalan – and it is possible that this will be conjoined with an appeal in Merrix.

Gary Knight, a partner at costs firm Harmans, told Litigation Futures that the defendant in a case he is handling sought an adjournment of a three-day detailed assessment listed for early next month, arguing that “with all due respect, Mrs Justice Carr’s decision in Merrix is incorrect”

He said: “The dilemma is the claimant applied for detailed assessment hearing back in October 2016 and whilst six months from application to hearing is a fair turnaround time by today’s standards, any adjournment is likely to add a further delay of six months for the assessment hearing (and subsequent payment) of costs… It is clear that Merrix was not the final word on this issue.”

He said live issues included the need for further case law to define “good reason” to depart.

“One thing that can almost certainly be guaranteed is that the agreement of claimant budgets in advance of any case management hearing just became even more unlikely and given this latest guidance, can the courts continue to adopt the approach that hourly rates are not to be debated at the case management hearings?

“Should parties now insist on a mini-detailed assessment at case management hearings whereat the location of solicitors, grade of fee earner and rates applied are debated, as rates are clearly a key element in the decision to allow profit costs for each phase.”

Lee Coulthard, Leeds-based assistant regional manager at costs firm John M Hayes, said that while “a clearer, more common sense judgment would be hard to envisage”, the issue would have to be settled by the Court of Appeal. “However, it would be no great surprise if the decision on appeal in Merrix were upheld.”

He said the ruling did not mean the end of detailed assessment, as – in addition to cases where there was a good reason to depart from the budget – other issues would still need determining, such as incurred costs, costs of unforeseen interim applications, costs excluded from the budget, all costs awarded on the indemnity basis.

Mr Coulthard also challenged the “perceived wisdom” that front-loading cases would be beneficial because it would take those costs outside of the scope of costs budgeting.

He said: “Given that costs judges are no longer bound to allow reasonable or necessary costs on assessment, and can reduce costs on the grounds of proportionality, any costs not included within the scope of costs budgeting are surely at much greater risk on assessment.

“Even if a particularly harsh budget is set in the costs management phase, at least the parties have the benefit of foresight in respect of the limit on recoverable costs.”

Writing on the blog of specialist costs law firm MRN Solicitors, solicitor Adam Fenton said the definition of a ‘good reason’ to depart would be “key in determining whether Mrs Justice Carr’s interpretation of the cost management rules has any real chance of achieving the desired savings with regard to assessment”.

He said: If ‘good reason’ emerges as a high barrier to overcome, detailed assessments could well be streamlined considerably; with non-exceeded phases likely to be agreed before the assessment. On the other hand, if ‘good reason’ is a low barrier, then the new interpretation may become little more than a synonym for detailed assessment, with no significant reduction in the arguments being heard.”

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Mark Higgins

Mark Higgins, Director of the practice

Based in Stockport, Higgins Miller Solicitors specialises in divorce, matrimonial, family issues and children disputes. Offering legal services across the whole of England and Wales, the firm provides friendly but robust and practical client service.

Recognising that finances can often cause concern for clients, Higgins Miller ensures a flexible and innovative approach to funding, including fixed fees, competitive hourly rates, monthly payments and Legal Aid.

Mark Higgins, Director of Higgins Miller, speaks to Eclipse about the firm’s choice of legal software.

Why was your previous software replaced?

Over the years we have significantly expanded – both in terms of client base and staff – and our previous software was generally very old and wasn’t continuously developed. As a result, we realised it didn’t meet the requirements of modern practice, and more specifically, it wasn’t in line with the future of our firm, and where we planned to be.

How did you hear about Eclipse, and why was it your chosen provider?

Eclipse is the market-leader and its reputation as such is extremely prominent within the legal sector, so when looking around for a new system, Proclaim was definitely at the top of our list.

The wealth of experience Eclipse has, and the amount of years the business has been around means the team has really taken the time to understand the needs of a law firm – and has developed Proclaim as those requirements change. Essentially, it gives us the confidence to know that Proclaim will continue to be supported and developed, even as the legal sector and law firms dynamically evolve.

I have to say the Law Society Endorsement also played a part in our selection process, as it simply reinforces what we already know –  that Proclaim is a tried, tested and trusted solution.

How was the implementation process?

Any big project is always a nerve-wracking process, especially one such as this which includes the installation of a completely new system and the migration of sensitive data. Fortunately, we were in safe hands with Eclipse!

From start to finish, the process was handled smoothly and efficiently. We never felt out of the loop as we were constantly updated with progress, and any questions we had were answered speedily and accurately. Importantly for us, we felt in control the entire time, and knew Eclipse was on hand and contactable should we have needed to speak to them.

The training was also a great aspect of the overall installation process. The depth of knowledge that the Eclipse training team has is brilliant, and the courses put us in a position to take what we learnt from the sessions, and use that to explore the system further, not to mention they gave us the confidence to know we can configure the solution without breaking it!

What are some of the benefits to using Proclaim?  

One of the main benefits for us is that it’s a fully centralised system. For our fee earners it means they can see every matter, so even if one of the team is away, their cases are still accessible. Taking this further, because Proclaim just has the one interface, it means all transactions are available at-a-glance upon case opening, resulting in effortless viewing. For our clients it means they can always get an update on the progress we’re making and their cases are never delayed, even if their solicitor is away from the office.

Additionally, it’s so simple to maintain as everything is all in one place, we don’t need any extra software or additional products – it just works from the start!

How does Proclaim’s ability to cater for Legal Aid work enhance your efficiency?

The fact that Proclaim caters for Legal Aid work is in itself a fantastic benefit, but with the added experience and longevity that Eclipse has in the industry, it cements our confidence in knowing the process is, and will continue to be extremely proficient.

Firstly, Proclaim’s ability to export data to the LAA’s online portal is a very straightforward and easy process, and has already enhanced our efficiency, but with the training we’ve received, it means we can tweak the system, which we are in the process of doing, to make sure data migration to the LAA portal is fully in line with our specific requirements.

Secondly, Proclaim’s ability to generate bills is excellent – this feature has increased our efficiency massively! As part of this, the CMR form is automatically completed for us – case details are seamlessly populated into the form, where its then held in the system ready to produce the summary CMR at the end of our accounting period. This is a huge time saver for us and has eliminated the need for duplicate data entry, meaning we can focus elsewhere.

Finally, and perhaps most importantly, it’s great in enabling us to track costs and ensure we don’t exceed them – basically, with Proclaim we have the confidence to know we aren’t missing anything!

Do you use the in-built reporting suite?

We use the reporting suite for our internal reporting requirements at the minute, and I can say with absolute certainty that the range and wealth of reports is phenomenal, and I think I’ve only discovered about 10% of them!

The amount of information available to us is also brilliant – we can report upon anything we need to, or could possibly want to, and the fact that it’s user-definable means we can conduct an in-depth interrogation of any element and for any staff member.

How does Proclaim suit your on-going requirements?

Very well – it’s a great platform for us to move forward with, and from here make it our own system. We’re still learning to make changes to ensure it’s in line with our future needs, and the next big step for us is to develop it further. With other case management systems, that can be quite a daunting prospect, but Proclaim is so flexible that it allows us to tweak it as and when we need to, so we aren’t using an ‘off-the-shelf’ version – Proclaim has the ability to work around us, so we don’t need to change the way we work.

In the future, we’re looking to implement the Compliance module, as that will be a fantastic addition to our system to ensure we’re keeping in line with the extensive SRA obligations. Additionally, to further enhance the practice, we’re going to start offering Probate services, and once that’s established, we’ll look to incorporate the Proclaim Probate system. This is another great benefit to being an Eclipse client as we have the freedom to add new areas of law to our service offering, and know we will be fully and seamlessly supported by Proclaim!

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Lord Thomas: not attacking arbitration

Lord Thomas: not attacking arbitration

A way must be found to put into the public domain the decisions of leading ex-judges who are now sitting as arbitrators, the Lord Chief Justice said yesterday.

Lord Thomas’s speech at the launch of TheCityUK’s 2016 legal services report coincided with the announcement that the now retired Master of the Rolls, Lord Dyson, was returning to 39 Essex Chambers, where he would act as an arbitrator.

The speech also followed one Lord Thomas made earlier this year, in which he suggested that the growth of arbitration as a means of resolving commercial disputes has retarded the development of the common law.

This was because there had been a big drop in the number of appeals from arbitral awards coming before the courts after a narrow test for the grant of permission to appeal was introduced in the 1996 Arbitration Act.

In his speech yesterday, which considered how best to meet the twin challenges of keeping the law up-to-date and “keeping our system the best in the world”, Lord Thomas said one of the issues was collaboration between arbitral organisations and the judiciary to aid the ongoing development of English law.

He said: “I spoke earlier this year, in a speech that caused not a little controversy, about the problem of developing law without enough court decisions. Many thought that I had made an attack on arbitration. It certainly was not, but it was trying to explore in an open way how do you make certain that, where we have got excellent retired judges who sit as arbitrators, decisions get into the public domain.

“Do you do it by the route, which I personally would favour, of loosening the restrictions on appeal in the Arbitration Act or do you find some other method? But it is very, very undesirable that we are entering into a stage where great legal minds have retired from the bench, are giving awards and setting out principles which are known only to the cognoscenti. This is not good. So I think there is a very fruitful avenue here in exploring this.”

Commending work to promote the contribution of English law both domestically and internationally, Lord Thomas also said the City should explain “why everything we do is relevant to our broader society”.

He explained: “I do think… there is a tremendous task in showing that, actually, the work we do through the providing of legal services does not just benefit the City, but the UK as a whole.

“If you take the opening of offices to do legal work in other parts of the UK (Belfast is a prime example), that is bringing highly paid jobs to other parts of the country and addressing, in part, what some perceive to be the different levels of remuneration and reward in society.

“I know the City has been very keen on doing this in relation to the problems in London, but I do think that trying to see that the legal work that comes through the City provides benefits throughout the rest of the UK – like in Belfast – is tremendously important.”


A golden opportunity for the ATE market to innovate

Enrique Gomez Head of ATE DAS UK Group

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

July 16th, 2018