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Nick McDonnell (New2)2

Nick McDonnell, director at Just Costs Solicitors

CostsbudgIT will reduce the time spent on preparing, revising and comparing costs budgets by up to 50%.

Founders say it will set new industry standards.

A new web based software solution is set to “revolutionise” the way in which litigators prepare, revise and compare costs budgets.

CostsbudgIT is the brainchild of Nick McDonnell, director at Just Costs Solicitors. For the past two years, Nick McDonnell has been working with UK software company Ultimedia.

The result of this joint venture is the creation of a web-based system that assists practitioners by guiding user behaviours to ensure quick, efficient and accurate costs budget preparation which will set new industry standards.

“CostsbudgIT is a real game changer,” said Nick McDonnell.

“There’s little doubt the future belongs to law firms that are able to utilise technology in order to maximise efficiencies.  With CostsbudgIT, we have taken this principle and applied it directly to costs budgeting.

“At present, the main methods to prepare costs budgets are the Ministry of Justice’s excel documents, extensions to case management systems and costs drafting software – but they’re all fraught with difficulties and complications for practitioners.

“CostsbudgIT has been designed as a direct response to the problems practitioners face every day when preparing costs budgets.  It has been designed by practitioners and built by software specialists making it the most straightforward and uncomplicated tool for preparing costs budgets.

“With its user friendly layout the software guides the user through a series of prompts and screens directing them to consider the issues of each case ensuring the budget is accurate, complete and represents all work needed in the pursuit or defence of the claim.

“Using CostsbudgIT makes life simpler and more accurate when preparing a costs budget. The system itself guides behaviour, is very easy to navigate and will considerably reduce the time needed to complete the exercise.”

Continued Nick:

“External testing has shown that using CostsbudgIT can reduce the time currently being spent on preparing a costs budget by up to 50%.

“There is already a cap on the recoverable cost of budget preparation, and therefore limitations to the length of time that can be spent, and CostsbudgIT makes far better use of that time. Any time saving exercise contributes to avoiding disproportionate costs.  It also means practitioners can spend time on other fee earning activities.”

Said Garry Diver, CEO of Ultimedia: “We are pleased to have developed this system alongside Nick and the Just Costs team.  We believe will be a step up in the preparation of cost budgets. Our experience is that well designed software can be easy to learn and use and we are certain that CostsbudgIT will meet that goal.”




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Jennings: The next generation of leaders are not just reacting to change but anticipating and leading it

Personal injury specialists Jigsaw Law won the law firm of the year award in the recent 360 Legal Group Awards 2014. The award was sponsored by pricing and costs consultants Burcher Jennings, whose chief executive Martyn Jennings was impressed by the winners and by the overall standard of entries.

Martyn Jennings, CEO of pricing and costs consultants Burcher Jennings, sponsors of 360 Legal Awards law firm of the year said:

“Over the last decade it has become increasingly tough to succeed in the legal sector. Regulation has become more demanding and more expensive.

“Competition has increased, with multiple online and offline challenges to traditional firms. Expectations of clients also have risen, especially in terms of customer care.  Jigsaw Law, and many of the shortlisted entrants have embraced these changes, invested in understanding their clients’ needs and technological and marketing solutions to help meet them.

“Burcher Jennings itself was created to help firms adapt to the changing legal services environment, to help law firms accurately manage costs and develop effective pricing strategies.  Our work brings us into contact with many lawyers and it’s clear that the next generation of leaders are not just reacting to change but anticipating and leading it.

“The 360 Legal Awards were a celebration of the UK legal sector’s positive future prospects.”

 




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Eclipse200Minards Pavlou started life in 1988. The firm specialises in personal injury claims, catering for a range of matter types, with a niche emphasis on motorbike claims.

As a small practice, Minards Pavlou had reached a plateau in the firm’s development. It was decided that, to optimise the speed of matter progression, a new Case Management Software platform should be sought.

Following an initial meeting at the Legal IT Show in London, the practice made the decision to replace its incumbent system with Proclaim. Proclaim was regarded as the market leading solution – the system’s flexibility and data management capabilities greatly appealed to the Minards Pavlou team.

Paul Pavlou, managing partner at Minards Pavlou, reports that upon hearing of the IT investment, he was asked “How can you afford to take the risk of changing your IT systems, as a small firm, just as the recession is biting?”

Paul’s response was concise and to the point: “How can we afford not to?”

Proclaim has seen the practice improve information sharing, remove re-keying and duplication of effort, and reduce administrative overhead. The result is a faster turnaround of files (new instructions fully actioned on the day they are received) and consistent levels of quality for both business partners and clients. Minards Pavlou has been able to expand both its case throughput, and its headcount of legal professionals – a perfect example of utilising technology to help move the business forward.

“Implementing Proclaim Case Management has proved to be a sound business decision and a great investment.” – Paul Pavlou (Managing Partner), Minards Pavlou




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Earnings: Firstassist up 35% year on year

Burford Capital now has full ownership of Firstassist, with no future earn-out payments, after the success of the acquisition led it to make all outstanding payments early.

A trading update for 2012 issued yesterday described last year’s acquisition as “an unqualified financial success in addition to the substantial strategic benefits it has brought to Burford”.

Firstassist, which is best known for its after-the-event insurance but as a result of the acquisition is now also offering third-party funding, generated more than $14m (£9m) in EBITDA (earnings before interest, tax, depreciation and amortisation) during its last financial year, a 35% increase in the previous 12 months.

The statement said: “In addition to growing its leading litigation expenses insurance business, Firstassist launched a UK litigation funding business in 2012 and embarked on a series of initiatives to prepare itself and its clients for the implementation of the Jackson reforms in April 2013.

“The strength of Firstassist’s performance to date and the size of its pool of pending cases made it likely that the earn-out provided for at the time of Burford’s acquisition of Firstassist would be payable. Thus, Burford negotiated an early payment of the earn-out in exchange for a substantial discount – more than $2m – and therefore now owns Firstassist outright with no contingent future payments and no minority shareholders.

Burford, the world’s largest funder, is soon to receive a dividend from the cash generated by Firstassist’s operations to date in an amount in excess of $11m.

More generally 2012 saw Burford generate $18m net of invested capital from 12 investments (the gross recovery was $47m), maintaining its average of recovering a 61% net return. It also made a further $9m in net income from its portfolio financing and cash management activities.

It said: “The acceleration in portfolio activity in 2012 is noteworthy: 2012 alone produced as much in investment recoveries as the two preceding years combined.”

In addition, Burford has seven investments where trial or some initial adjudication has been completed but further proceedings remain, such as an appeal. Pending these, the cases will generate $53m in gross investment recoveries and $19m net of invested capital – a 55% net return on invested capital.

Further, the AIM-listed company sunk $72m into nine new investments during the year, meaning it has 30 live cases with investment of $289m. Since inception, Burford has committed $373m of capital to 46 investments.

The statement said: “Neither Burford nor litigation finance is nascent any longer: Burford has evolved into a full-fledged, internally managed finance and investment business with multiple lines of business, multi-jurisdictional operations and compelling returns.”




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Supreme Court: February hearing

Applications for adjournments of costs assessment until the Supreme Court’s decision in Coventry v Lawrence are rightly being given “short shrift”, the Senior Costs Judge has said.

Andrew Gordon-Saker also suggested that the future of guideline hourly rates could be in doubt if there is insufficient enthusiasm for a second ‘expense of time’ survey.

In February the Supreme Court in Coventry will consider whether the pre-Jackson regime of recoverable additional liabilities was incompatible with the Human Rights Act.

Speaking at the Association of Costs Lawyers’ conference in Manchester last week, Master Gordon-Saker said: “Inevitably in a considerable number of the detailed assessments that have taken place since the end of July [when the Supreme Court flagged up the issue], paying parties have been asking for an adjournment of the assessment of any additional liabilities claim until the Supreme Court’s decision is made. Similarly parties ordered to pay costs at the end of a hearing have been asking for the question of their liability to pay additional liabilities to be adjourned.

“These applications, I understand, have been given short shrift. Additional liabilities are recoverable under primary legislation. If that primary legislation is incompatible with the Human Rights Act, that should not affect recoverability as between the parties, although I know that there are arguments to the contrary.”

The judge said he suspected there would only be another survey of solicitors – to inform new guideline hourly rates – if a better response rate could be guaranteed this time around; it was the failure to gather sufficient evidence that meant the Master of the Rolls decided not to accept the Civil Justice Council’s costs committee’s recommendations to increase the rates.

Supporting the existence of the rates, Master Gordon-Saker said: “In the meantime, we carry on with the 2010 rates, with the important but limited changes approved by the MR. If we do not have another survey, then the future of guideline rates is questionable.”

In a wide-ranging speech, the Senior Costs Judge said fixed costs for all fast-track cases were “inevitable” but he felt it would be too hard to set fixed costs for the wide range of cases at the lower end of the multi-track.

He also revealed that the Senior Courts Costs Office is turning around provisional assessments in around 18 weeks, with little prospect of it being able to hit the six-week target because of court resources.

He said: “You will still get a bill provisionally assessed before you would get a detailed assessment, so you may think that’s something of an advance. Our experience is that there are few requests for an oral hearing, so generally provisional assessment is it.

“The vast majority of cases the parties are accepting the figure allowed on provisional assessment. So to that extent, despite the delays, it could be said that the system is working.”




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Morris: comprehensive teaching platform

Leading costs firm John M Hayes is moving away from just recruiting graduates by launching a three-year traineeship aimed at A-level students.

The company is looking to recruit one trainee in all but one of its 11 offices, to start in September. Applicants need three A-levels at grade C or higher.

Philip Morris, regional manager of John M Hayes’s Birmingham office, claimed that no other costs firm offered “such a comprehensive teaching platform” for trainee costs professionals.

“Nearly everyone in our company started as a trainee or apprentice, all of whom we have taught the skills to become a fully competent law costs draftsman following a successful tried-and-tested in-house training programme developed by our team over many years.” Many of these draftsmen have since become costs lawyers.

Mr Morris said that in launching the traineeship scheme, the firm was “mindful of the government’s concern about youth unemployment and also of the plight of many graduates with huge debts unable to find work”.

He explained: “We have previously had great success in recruiting graduates, a good many of whom have made the grade and stayed with us for many years.

“We thought, however, that we might start a little earlier, particularly given the fact that many students who do not want to go to university can be at a disadvantage in the labour market.”

Applications close on 23 May. Click here for details.




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York: provisional assessment pilot

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The Civil Procedure Rule Committee should this week sign off an unexpected tripling of the limit for provisional assessment to £75,000, it has emerged.

The change has been approved by the government, 9L0-006 a Ministry of Justice spokesman told Litigation Futures yesterday, although it is not yet clear why the increase in the pilot level of £25,000 – at which the national roll-out was also expected – has been made.

The rule committee meets this Friday, when it is also expected to approve a raft of other changes to the CPR.

The news has leaked out after a copy of a resource pack for a judicial training session shortly before Christmas entered into circulation.

Provisional assessment, a recommendation of Lord Justice Jackson’s, will allow for a district judge to carry out an assessment on the papers in respect of bills where the costs claimed do not exceed £75,000. Either party can then seek an oral hearing before the same judge if they are unhappy but will face costs consequences if a 20% adjustment in their favour is not made a result.

The draft rules in the resource pack say the court will not award more than £1,500 to any party “in respect of the costs of the provisional assessment”. Simon Gibbs, a partner at costs practice Gibbs Wyatt Stone, has expressed concern about the failure to separate out the court fee from this, saying it is “clearly a drafting oversight”.

Writing on his well-known blog, he pointed out that the current fee payable for requesting a detailed assessment for a bill where the costs claimed are between £50,000 to £100,000 is £980.

Mr Gibbs said: “Hearings for bills of that size can easily last a full day or more. Given provisional assessments take place on paper and with very limited (at least under the provisional assessment pilot) documentation before the court, the judicial time required to undertake a provisional assessment is a fraction of that for a full detailed assessment. Presumably the new fees will be set at an appropriately modest level…

“If the court fee is not reduced in time for April 2013, and VAT is included in the figure, that leaves £433.33 profit costs for dealing with bill of costs up to £75,000.”

The pilot began in October 2010 in Leeds, Scarborough and York. In the first year 100 cases proceeded to assessment, following which there were 17 requests for an oral hearing, but only two actually made it that far. In neither did the requesting party reach the 20% threshold, although one was successfully appealed.

Speaking last year, Lord Justice Jackson said the pilot had shown the process to be quick and simple – the two district judges (also regional costs judges) involved spent an average of 37 minutes per case, and estimated that the parties saved at least £4,000 per case by avoiding a half or full-day hearing.

However, he highlighted the importance of judicial training, given that more recent experience in the pilot showed that assessments carried out by district judges who are not regional costs judges took markedly longer.

 




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TheJudge is continuing to cement its position as the world’s leading litigation funding broker. Its main office is now 30 St Mary Axe – the famous Gherkin building in the heart of the City of London.

Over the 13 years of the company’s existence, TheJudge has continued to grow exponentially. Following the decision back in 2005 to focus on commercial litigation and arbitration, TheJudge has developed a trustworthy brand among law firms both domestically and internationally.

Whereas 2005 to 2009 largely involved educating major City firms on considering litigation funding and insurance options, 2009 to date has seen the fruits of that labour, with the majority of the referrals being made by many of the largest litigation and arbitration teams from around the world.

Director Matthew Amey says: “Moving into what is perhaps the most iconic building in London is a genuine privilege. We look forward to welcoming our lawyer clients to discuss their cases and clients’ funding requirements over a coffee ‘at the top’. We can now provide a bird’s eye view of the litigation funding market in every sense of the word!

“Whether we are engaged to secure funding for a small business or a major pharmaceutical client, our objective is always to source multiple options from the market to ensure a competitive funding arrangement is secured, which often means pushing the boundaries to achieve prices below market rates.”




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The Court of Appeal laid down the interpretation of the CPR in respect of relief from sanctions and stated that the idea was to eliminate satellite litigation. But these cases still come before the courts and the interpretations vary from circumstance to circumstance.

MBL’s 1 hour webinar will review the approaches that the courts have taken over the last 6 months to consider what will happen in different circumstances. It will provide the information necessary to identify the issues that are relevant to the courts decision on relief; what arguments needed to be addressed to obtain relief in different circumstances and how to oppose applications for relief.

Without the information there is a serious danger of a client making a complaint or alleging negligence for disadvantaging their case.

This pre-recorded webinar will be streamed at 12.30pm on Wednesday 4 June and will be presented by Gary Barker. For more information on webinar costs or to make a booking please click the above link or email lucy@mblseminars.com quoting Litigation Futures.




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Tracy Blencowe

Tracy Blencowe, Business Solutions Director, Eclipse Legal Systems

Eclipse Legal Systems, the Law Society’s sole endorsed software provider, has announced the release of a dedicated Subject Access Requests (SARs) workflow system.

As of May 2018, all organisations will be required to comply with the General Data Protection Regulation (GDPR), the new legal framework which seeks to strengthen and unify data protection for all individuals within the EU.

More wide-reaching and onerous than the existing Data Protection Act, GDPR also carries the threat of severe financial penalties for firms found to be in breach, with maximum fines being 20 million Euros, or 4% of the firm’s global turnover – whichever is higher.

Under GDPR, the process around SARs – the mechanism by which individuals can request from an organisation what data is held about them and why – is set to change, with organisations expected to respond quicker and waive any charges they may have once made.  As a result, SARs are expected to grow in volume and create an administrative overhead.

Eclipse has created a dedicated SARs workflow solution, seamlessly integrated into its market-leading Proclaim case and practice management software system.  The new SARs workflow is available either standalone for non-Eclipse customers, or as a unified toolset for current customers.  The SARs workflow will manage requests and automate their handling, reducing cost and aiding compliance with ongoing legislation.

Eclipse’s business solutions director, Tracy Blencowe, comments:

“GDPR needs to be taken seriously, and existing processes need to be engineered around ensuring that law firms are compliant.  We are dedicated to helping law firms make this transition as painlessly as possible, by providing ready-made tools that make compliance a much less onerous task.  The SARs workflow joins our recently-released ‘Information Asset Register’ tool and together they provide a robust and scalable platform to enable law firms to enter the new GDPR era with confidence.”




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High Court: no power to join party in face of opposition

High Court: no power to join party in face of opposition

The High Court has rejected a defendant’s “novel” bid to join another company as a defendant when the claimant did not agree to it.

Mr Justice Coulson said it would be a “nonsense” to make a claimant potentially liable to another party’s costs against its will.

Milton Keynes BC v Viridor (Community Recycling MK) Limited [2016] EWHC 2764 (TCC) concerns the council’s bid to rectify a contract reached with Viridor to supply waste disposal and recycling services.

At the pre-trial review last month, the defendant applied to join a second company, Viridor Waste Management Limited (VWML) as a second defendant, which the claimant opposed.

Coulson J said: “I do not consider that the court has the power to join a party as a defendant, in circumstances where the claimant opposes that joinder. No authority in support of such a novel proposition was cited to me.”

Reference was made to CPR 19.2(2), which allows the court to add a new party if it is desirable to help resolve the dispute or to a specific issue.

“The proposed joinder of VWML is not caught by either of these provisions. There is no matter in dispute between the council and VWML; indeed, the council has made it plain that, because there is no dispute between it and VWML, it does not wish for VWML to be joined into the proceedings as a defendant. Neither is there any pleaded issue between VWML and the defendant.

“Furthermore, I consider that it would be a nonsense if a defendant could join another defendant into the proceedings against the claimant’s wishes, in circumstances in which that claimant would then become potentially liable for the costs of the new defendant.

“A claimant is entitled to bring proceedings against the parties with whom it considers that it has a dispute. A claimant cannot be forced to issue proceedings against any other party.”




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Ellman: strong views on all sides

The government will wait until the transport select committee finishes its investigation into whiplash – and until the impact of the LASPO reforms begins to show – before announcing the outcome of its consultation on reform, justice minister Helen Grant announced this morning.

The consultation, which closed on 8 March, committed the government to review the submissions received and publish a response in spring 2013.

The committee announced its inquiry into whiplash – including an examination of the government’s consultation proposals – on 15 March.

In a statement laid before Parliament today, Ms Grant said: “The government believes that, prior to taking any final decisions on whiplash reform, it should give due consideration to the views of the transport committee.

“The government also believes that the impact of its recent civil reform programme on the price of motor insurance premiums needs to be assessed. Consumers should be rewarded with the lower litigation costs being reflected in lower insurance premiums.

“For these reasons the government has decided to defer publication of its formal response to the consultation until after the committee has reported.”

The select committee will next week start taking oral evidence as part of its investigation. After receiving 54 written submissions, the committee’s hearing will begin with a focus on the medical questions around whiplash.

The Chartered Society of Physiotherapy will be giving evidence, as will the head of the bioengineering research group and Nottingham University, a lecturer in anatomy and behaviour at Nottingham’s school of veterinary medicine and science.

MPs will also hear from Thatcham Research – the motor insurance repair research centre – the Institute and Faculty of Actuaries, and the Lloyd’s Market Association, which has made some radical suggestions for reform.

Monday’s session will conclude with MPs probing Dr Simon Margolis, chief executive of leading medical reporting agency Premex Services, and Dr Andre Brittain-Dissont of Dr Brittain-Dissont Medico-Legal Reporting.

There will be a further oral evidence session on 17 June, although the witnesses for it have not yet been named.

Louise Ellman MP, chair of the transport committee, said: “There are strong views on all sides of the debate on whiplash claims.  We will hear oral evidence from different groups on the government’s proposals for reducing the number and cost of whiplash claims. We will discuss with witnesses the impact these proposals might have on reducing motor insurance premiums and on access to justice for injured people.”

Speaking at an Association of British Insurers conference in March when she announced the inquiry, Ms Ellman said her instinct was that “a lot of whiplash claims” are fraudulent” – encouraged by cold calling – but that there are “genuine claims in there too” which must not be lost in the rush to tackle fraud.

The committee sought written evidence under five main headings:

  • Whether the government is correct in describing Great Britain as the “whiplash capital of the world”;
  • Whether it is correct to say that the costs of whiplash claims add £90 to the average premium and, if so, what proportion of this additional cost is due to “exaggerated, misrepresented or fabricated” claims;
  • Whether the proposals put forward by the government, in relation to medical evidence of whiplash and incentives to challenge fraudulent or exaggerated claims, are likely to reduce motor insurance premiums and, if so, to what extent;
  • The likely impact of the proposals on access to justice for claimants who are genuinely injured; and
  • Whether there are other steps which the government should be taking to reduce the cost of motor insurane.



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Share valuation provisions, whether in Company Articles or elsewhere, are sometimes vague and imprecise, causing avoidable difficulties and unintended consequences for share valuers and shareholders alike.

MBL’s practical one day course on the subject will be of benefit to legal advisors involved in commercial and family law, litigation, tax and ADR.

By highlighting many examples of the damage and financial loss caused to the latter by inappropriately drafted provisions this course emphasises the importance of ensuring that they are relevant and fit for purpose.

For more information on seminar dates and costs or to make a booking please email lucy@mblseminars.com quoting Litigation Futures. With nationwide dates available there’s sure to be something to suit your diary!




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Etherton: Decision remitted back to Senior Costs Judge

The Senior Costs Judge was wrong to apply the new proportionality test to additional liabilities in a case that began before LASPO took effect on 1 April 2013, the Court of Appeal has ruled.

However, it did not offer any hoped-for guidance on the new test, although it is understood that three conjoined cases raising the issue are due to be heard soon.

In BNM v MGN, a privacy case, the defendant media group agreed to pay damages of £20,000 plus costs.

The claimant sought costs of £241,817, including a 60% success fee for her solicitors, Atkins Thomson, 75% for both counsel, and an after-the-event premium of £58,000 plus insurance premium tax of £3,480 from Temple Legal Protection.

At the detailed assessment, Senior Costs Judge Gordon-Saker ruled that, subject to proportionality, all the success fees would be allowed at 33% and the ATE premium allowed as claimed. On the line-by-line assessment, the costs were reduced to £167,389, including base solicitor costs of £46,000 and base counsel fees of £14,000.

Master Gordon-Saker decided that the new proportionality test applied to the additional liabilities and concluded that it demanded that he halve the costs he had allowed.

Giving the judgment of the Court of Appeal, the Master of the Rolls, Sir Terence Etherton, said: “It seems perfectly clear that… subject to specific saving and transitional provisions in the 2012 Act, the recoverability of success fees and ATE insurance premiums in an order for costs was abolished by the 2012 Act and, where they remain recoverable by virtue of those saving and transitional provisions, they are recoverable in accordance with the old costs rules, including those relating to proportionality, reasonableness and assessment”.

He continued: “If it had been intended that the new proportionality test was to apply to funding arrangements to which the statutory saving and transitional provisions applied, that would have been made clear in the statutory provisions or the new costs rules or both and it was not.”

Both the Senior Costs Judge and the parties had referred to the Jackson report in seeking to interpret the new rules, but Sir Terence said the fact that the 2013 reforms did not entirely reflect all the recommendations made the report “an unsound basis for undermining what I consider to be the clear intention of the drafters of those provisions, rules and practice direction”.

The court remitted the case to the Senior Costs Judge to consider the proportionality of the costs again.

It also partially upheld MGN’s cross-appeal over whether it was reasonable for BNM to issue the proceedings without giving prior notice, when the publisher said they could have reached an agreement without the need to issue and increase the costs.

Master Gordon-Saker found it was, but the Court of Appeal said there were certain factors he had not taken into account in reaching that decision.

But Sir Terence said: “The Senior Costs Judge is highly experienced. Notwithstanding the points I have mentioned, I do not consider that it would be right for us to say on the appeal that there is only one answer to the question [of whether BNM acted reasonably].

“I consider that the appropriate course would be to remit the matter to the Senior Costs Judge to re-consider the issue of prematurity, making it explicit that he has taken the matters I have mentioned into account.”

Francis Kendall, vice-chairman of the Association of Costs Lawyers, described the ruling as “sensible”, adding: “Even now, four years on, it is a decision that will impact a significant number of cases.”

But he said it was “disappointing” that the court chose not to give any guidance on the application of the new proportionality test.

“But we understand that three conjoined cases are set to come before the court shortly that will hopefully be a vehicle for such guidance. The disputes caused by the continuing uncertainty are not helpful and we urge the Court of Appeal to give the profession the strong steer it needs.”

In an obiter point of note for costs specialists, the appeal court rejected MGN’s argument that ATE insurance premiums were ‘expenses’ rather than ‘costs’ under the definition of costs in the new CPR 44.1(1).

It said: “They have nothing to do with the cost of issuing and progressing the litigation, any more than the premiums on a householder’s or car owner’s insurance which contains litigation cover.

“Both before-the-event insurance and after-the-event insurance offset the risk of a person’s financial exposure as a result of litigation but they are not expenses of the litigation itself.”

Simon Browne QC and James Laughland of Temple Garden Chambers, instructed by Atkins Thomson, acted for the claimant, with Alexander Hutton QC and Jamie Carpenter of Hailsham Chambers, instructed by Reynolds Porter Chamberlain, for the defendant.




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Baby cases: need for independent legal advice

Claimant lawyers have strongly criticised government plans for a new administrative compensation scheme for birth injury claims, with the Association of Personal Injury Lawyers saying that families would “be held hostage” under it.

Though welcoming some the principles behind the ‘rapid resolution and redress’ (RRR) scheme – which aims to significantly reduce the amount of litigation that currently takes place – various respondents to the Department of Health’s consultation were especially critical that it did not guarantee access to independent legal advice throughout.

They also opposed the idea of NHS Resolution (the new name for the NHS Litigation Authority) running the scheme, saying it should be independently run because of the risk of conflicts of interests.

APIL argued that the scheme would “pressurise families out of pursuing funds they desperately need for long-term care”.

While recognising that it might be appealing for families when faced with the prospect of litigation, APIL president Brett Dixon said: “While we support promises of early investigations, apologies, and shared learning in the scheme, the approach to damages is crude when compared to the proper assessment of a child’s needs which comes with litigation.

The scheme would pay 90% of an average court settlement, which Mr Dixon said would be “far away from the correct level of compensation for most families”.

He continued: “Under the scheme, parents will be expected to attend initial meetings about their baby’s injuries without any independent advice or support.

“If they change their minds later and opt to pursue compensation through the courts, rehabilitation and therapies already in place will be withdrawn.

“The scheme will apply a factory-style process to dealing with injured children, putting their futures on a metaphorical conveyor belt. And once parents have bought into the scheme they will be held hostage by the terms.”

APIL’s response expressed disappointment that Department of Health officials had not taken on board concerns it expressed as the plan was being formulated, in particular the lack of guaranteed legal advice until stage two of the process, when talks about compensation begin.

It added: “APIL also raised concerns that the scheme lacks provision for any award under the scheme to be approved by the court and for there to be a deputy to manage the injured child’s funds and ensure their needs are met…

“We are concerned that this scheme will ultimately be litigation’s poor relative. If the threshold for compensation is the same as that for a claim in negligence, it is difficult to see how, if given proper independent advice to make an informed choice, a family would choose the rapid redress scheme over litigation.”

The Law Society response said the RRR scheme would “not bring about the benefits that the department hopes for. We believe that enhancing the existing processes is more likely to deliver the department’s vision, and will not require the necessary expenditure of this proposed scheme”.

It too noted “a distinct absence of appropriate lawyer involvement throughout both stages of the scheme”.

The response continued: “Although it is beneficial that the scheme offers an alternative to litigation, we fear that meritorious cases will continue to favour the litigation route, which would have a detrimental impact on the outcomes of the RRR scheme and its financial viability.

“The department will only see strong uptake in this scheme if its outcomes match those of a litigated case. Currently, there is scarce incentive for a strong case to go through the scheme, particularly when damages are estimated to be approximately 90% of a litigated settlement.

“The real saving for the NHSLA will be a decrease in the number of claims and early settlement of claims, not just a decrease in lawyer costs.”

The society also called on the government to underpin the policy with robust evidence, specifically: undertaking a like-for-like comparison with the Swedish model the RRR scheme is based on; a pilot to test the scheme and indicate uptake; an assessment of the impact of changes to the discount rate; and a study that guarantees consistent and reliable funding for reassessments.

In its response, which echoed many of the points made by APIL and the Law Society, London law firm Hodge Jones & Allen cautioned that the scheme might actually cost more than the current system.

It said one of the key assumptions underlying the scheme was that as the number of avoidable incidents fell, so in turn would costs – but evidence from Sweden did not support this.

“We are of the view that the introduction of this scheme has the potential to cost the Department of Health more in the long term. Those with weaker claims will go through the scheme in addition to those who have stronger claims who will litigate in order to achieve 100% compensation.

“There will be increased costs from providing compensation greater than the universal state offer to an increased number of people, and savings from fees on reduced litigation are likely to be eclipsed by the cost of administering the scheme.”

The firm welcomed the notion of early upfront payments but said would need to be far higher than the suggested figure of £50-£100,000 to help families deal with the child’s immediate needs, such as putting a care regime in place, purchasing equipment, and arranging suitable housing.

Agata Usewicz, head of medical negligence at Hodge Jones & Allen, said: “We support any initiative that makes it easier for families to receive the support and compensation they need, and there are positive features in what the Department of Health has proposed.

“However, it requires a lot more thought if it is to deliver its laudable aims, never forgetting that there must be no erosion of access to justice for these families. Independent legal advice should be available to the families from the outset and throughout the process.

“It is vital that any scheme is first piloted, and a full impact assessment undertaken, to assess the impact of any reduction in harm, and the extent of any costs savings.”




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Spencer: combative speech

A legally qualified Lord Chancellor would not have put in place the recent personal injury changes and court fee reform proposals, the new president of the Association of Personal Injury Lawyers (APIL) has claimed.

John Spencer told last week’s APIL annual conference in Newport that it was “a sad day when lord chancellors stopped being legally qualified”.

He said: “While there is no doubt that legally trained lord chancellors haven’t always got it right in the past, I find it hard to believe that a lawyer would have allowed the relentless de facto attack on injured people and indifference to access to justice we’ve seen over recent years.

“And I really find it hard to believe a Lord Chancellor with a grounding in the law would ever countenance the suggestion that court fees should actually generate profit in civil cases, as has been suggested in a recent government consultation.”

Mr Spencer said he hoped this proposal is “allowed to run into the ground”, adding: “Justice for government profit rather than justice at cost is a line which should not be crossed. The government should be ashamed of itself for contemplating it.”

Mr Spencer – who is the first APIL president to have previously been chairman of the Motor Accident Solicitors Society – also urged practitioners to take a step back from the business of law to ensure they do not forget why they became PI lawyers in the first place.

Recalling his own career, he said that “somewhere along the line I realised I’d majored on being a businessman”.

He continued: “I became embroiled in ambitious plans for business growth and was immersed in that, and so focused on the daily work of making a practice grow that I forgot what really mattered. But then I had an opportunity for a rethink – to stop and take stock. I knew I wanted to build something more worthwhile – a professional, ethical practice which put the vulnerable, the injured person, at its centre.”

In a combative speech, Mr Spencer criticised the government and the Association of British Insurers for vilifying injured people and their representatives, using the new mesothelioma scheme as an example.

“Why shouldn’t people with mesothelioma who are forced to use the scheme because their insurers can’t be traced have to give up some of their damages? … Why can’t insurers who’ve taken and invested profits from premiums over decades do the right thing and pass on some of that profit to ensure these people receive 100% of their compensation? It should be socially unacceptable for them even to consider not so doing…

“Political debate during the passage of the Mesothelioma Bill made it very clear that 75% was about the best ‘deal’ the government could get from the insurers. But this shouldn’t be about doing a deal. It should be about doing what’s right.”

Nonetheless, Mr Spencer said he believed “the worst of the reform agenda is behind us”. However, he highlighted a host of issues on which APIL will be campaigning, including improving and widening the law of psychiatric harm after the death or injury of a loved one, and opposing the Medical Innovation Bill, devised by Lord Saatchi.

This seeks to protect doctors from litigation when they use innovative techniques on their patients. “Who could be more vulnerable than some patients in the care of the NHS?” Mr Spencer demanded.

“So how dangerous would it be to remove the protection the law provides for such vulnerable people? … What evidence is there that a cure for cancer has not been found because doctors are so afraid of litigation that they won’t use innovative techniques?”

“It has captured the imaginations of patients who have no idea that it is effectively a license for doctors to play God.”




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Jackson: academics say recommendations will reduce the availability of legal services to injured people

The Jackson proposals to abolish recoverability are fundamentally inconsistent with justice, skewed towards defendants, and likely to hurt serious 70-410 dumps injury victims the most, an influential group of law academics has said.

In a hard-hitting report by a working group of 11 academics, headed by Ken Oliphant, professor of tort law at Bristol University, Lord Justice Jackson’s blueprint is attacked for presenting “a misleading and partial account of the problem… [which] systematically prefers the evidence of the defence lobby” over that favouring injury victims.

Significantly, the academic report, On a slippery slope – a  passrapid  response to the Jackson Report, rejects a key plank underpinning the Jackson reforms: that excessive costs in the present system can be attributed largely to the use of conditional fee agreements (CFAs).

It says: “The evidence presented [by Jackson] fails to substantiate the claim that the primary source of the problem of high costs is rent-seeking by claimant lawyers acting under CFAs.” Rent-seeking is a term applied to those who extract uncompensated value from others without making any contribution to productivity.

The group’s report will be music to the ears of the increasingly vocal opponents of the Jackson reforms. The reforms include scrapping recoverability of success fees and after-the-event insurance premiums in CFAs, along with a 10% increase in general damages to cover this, as well as one-way costs shifting.

It comes ahead of the consultation on the government’s green paper on implementing Jackson, closing on Monday. The consultation proposes various “refinements”, including to recoverability, which Lord Justice Jackson has rejected.

The working group’s report includes chapters by law academics at King’s College, London, and the universities of Cambridge, Cardiff and Birmingham – the Cambridge author is David Howarth, who was the Liberal Democrats’ shadow justice secretary until retiring at the last elec

tion. It was supported, financially and logistically, by national law firm Thompsons, although the academics make it clear that Thompsons had no editorial control.

The report makes two recommendations:

  • That the government reject the core Jackson proposal to take the lawyer’s success fee out of the injured person’s damages; and
  • That the government should appoint a commission of inquiry to gather and assess evidence about the costs of civil litigation. Insurers would provide “unimpeded access” to anonymised case files.

The working group says it set out to submit the Jackson report to “critical analysis” by neutral academics who would “stand up for both the interests of claimants and the general public interest rather than the narrow commercial interests of insurers, personal injury firms, or others with a direct financial stake”.

Its main conclusions were that:

  • The Jackson proposals are “inconsistent” with “the fundamental principle of civil justice” of full compensation for wrongful injury because they entail “raiding” damages. This would be a “slippery slope towards ever greater inroads into compensation to which injured persons are legally entitled”;
  • The “evidential base for such radical reform is entirely inadequate”. The Jackson report “presents a misleading and partial account of the problems” by treating opinion as fact and “systematically prefers the evidence of the defence lobby”;
  • The proposals would “have an adverse impact upon access to justice because they favour the financial interests of defendants over the interests of claimants”;
  • Limits on what lawyers can charge will “reduce the availability of legal services” to injury victims;
  • The proposals will “benefit defendants at the expense of injured persons”, with seriously injured persons “likely to be the biggest losers”;
  • Health and safety will suffer because of the “reduced legal sanction for dangerous practices”;
  • The Jackson report “uses a sledgehammer to crack a nut” and pays too little attention to alternative, proportionate costs-saving measures, such as “a mandatory before-the-event component of motor insurance”; and
  • If adopted, the reforms would make “major changes in the civil litigation system by a process of questionable legitimacy”, because Lord Justice Jackson had determined the issues “on the basis of evidence very largely supplied by one party to a long-running and polarized debate – namely, the defence lobby, consisting largely of liability insurers – with insufficient independent verification”.

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Sims: With the legal services sector becoming increasingly competitive, it is essential for us to stay ahead of the game

Eclipse’s Proclaim Practice Management solution selected in six-figure deal

Leading Essex law firm, Mullis & Peake LLP, has implemented the Proclaim Practice Management Software Solution from Eclipse Legal Systems.

Established in Romford, Essex, over 100 years ago Mullis & Peake LLP has grown into one of the area’s largest and most respected law firms employing over 50 staff. Providing a full range of legal services to both private and corporate clients, the firm boasts an enviable reputation for high quality legal advice at cost effective rates. To further strengthen this position, Mullis & Peake LLP is implementing the Proclaim Practice Management Solution firm-wide for all users.

The Proclaim Solution will be utilised across all work areas including commercial, property, elderly client, family, court of protection and employment. The personal injury team will adopt Proclaim’s direct integration with the RTA (Road Traffic Accident) Portal.

As an integral part of the core Proclaim solution, Mullis & Peake LLP will also be taking the Proclaim New Business Enquiries and Compliance toolsets to provide seamless marketing, file opening, and ongoing adherence to SRA regulations. Prior to implementation of the Proclaim Credit Control Centre, Eclipse will conduct a data conversion from the firm’s incumbent financial management system. Mullis & Peake LLP is also to benefit from seamless digital dictation functionality courtesy of Proclaim’s BigHand integration tool.

Nick Sims, IT Manager at Mullis & Peake LLP, comments:

“With the legal services sector becoming increasingly competitive, it is essential for us to stay ahead of the game and cement our proud reputation for superb client service by investing in technology. Proclaim, with its array of integrated client-centric toolsets, is the perfect platform for us to achieve this.”

 




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The DAS UK Group has launched into partnership with Norwegian insurance agency, Legal24, to underwrite a product for homebuyers.

Home Buyer Insurance enables the purchasers of property in Norway to be able to exercise their legal rights to claim against the seller should any problems arise after purchase. In Norway, the seller of a residential property is personally liable for 5 years after the sale for any undisclosed defects in the property that could have affected the purchase or the purchase price.

Mark Robson, Strategic Underwriting Manager, DAS UK Group commented: “Whilst there has been insurance available for the seller for a number of years, a product for the purchaser is a relatively new development in the Norwegian market.  DAS were approached by Legal 24 with a proposal to enter into partnership with them on this new venture. It is an exciting development and our underwriting experience together with the fact that we already hold a licence to underwrite business anywhere in the EEA made this a perfect opportunity for the DAS UK Group.”




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

Nobis canada

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

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

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

There are then questions over wh

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

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

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

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

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

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




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Marshall: one of three practising solicitors in group

Marshall: one of three practising solicitors in group

Lord Justice Jackson has unveiled a group of 14 assessors to help him with his review of fixed recoverable costs – including more practising barristers (four) than practising solicitors (three), along with one costs lawyer.

He also announced that the deadline for written submissions has been extended by one week, to Monday 23 January 2017, to assist respondents who are also submitting evidence to the government’s consultation on personal injury reform.

A statement from the judiciary added: “Lord Justice Jackson would also like to underline that written evidence should address the extension of fixed recoverable costs across civil litigation, the review is by no means confined to reviewing existing areas of law where fixed costs apply. In fact the main emphasis is likely to be on extending the regime to additional areas of litigation.”

His assessors are:

  • Sara Ashby, founding partner of boutique intellectual property firm Redd Solicitors LLP. She has experience of the capped recoverable costs regime in the Intellectual Property and Enterprise Court;
  • Nicholas Bacon QC, a leading specialist in costs litigation at 4 New Square and chairman of the Bar Council fixed fees working group and a member of the Bar Council;
  • Richard Disney, a professor of economics at the University of Sussex with experience of various pay review bodies;
  • Paul Fenn, an emeritus professor at Nottingham University Business School who has been involved in previous costs work, including as an assessor to Jackson LJ’s civil costs review;
  • Barbara Fontaine, the Senior Queen’s Bench Master, former commercial litigator, and a general editor of the White Book;
  • Senior Costs Judge Andrew Gordon‐Saker;
  • Richard Lander, property specialist at Kings Chambers;
  • David Marshall, managing partner of London firm Anthony Gold, past president of the Association of Personal Injury Lawyers and current chair of the Law Society’s civil justice committee;
  • HHJ Martin McKenna, designated civil judge for Birmingham and former head of litigation in the Birmingham office of Eversheds;
  • District Judge Simon Middleton, a course director for the Judicial College with particular responsibility for devising and delivering costs and costs management modules, and a co‐author of Cook on Costs;
  • Andrew Parker, head of strategic litigation at DAC Beachcroft, an executive member of the Civil Justice Council and another of Lord Justice Jackson’s costs review assessors in 2009;
  • Vikram Sachdeva QC of 39 Essex Chambers, who has appeared in some significant costs cases;
  • Nicole Sandells, an experienced Chancery commercial barrister at 4 New Square;
  • Iain Stark, chairman of the Association of Costs Lawyers and a partner and head of costs at Weightmans.

This article was amended on 24 November to reflect the addition of a further assessor.




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ARAGHigh profile equal pay claims like the one involving BBC presenters may have contributed to a spike in such cases since last summer’s Supreme Court ruling on employment tribunal fees, according to leading provider of legal services and advice to businesses, ARAG.

The first tribunal statistics to include claims made since the government’s fee regime was found to be unlawful were released in December. They show roughly the same number of equal pay claims were made in the third quarter to September last year as in all of 2016.

The row at the BBC began last July when the Corporation published the salaries of its top earners, showing a significant disparity between the pay of men and women. The issue has since been the subject of a campaign featuring numerous high profile journalists and presenters which saw the BBC’s China Editor, Carrie Gracie, resign the post this weekend.

ARAG is warning that removal of the fees that were required to take such claims to tribunal, coupled with publicity surrounding the BBC and other claims such as those involving some major British supermarkets, may have created a perfect storm for UK employers.

The number of equal pay claims received by the tribunal service dropped by 85% immediately after the introduction of tribunal fees in July 2013 and the annual number of claims remained less than half of the total before they were introduced.

Until the Supreme Court ruled that employment tribunal fees were indirectly discriminatory  and thus unlawful in July this year, it cost up to £1,200 to take an equal pay claim to a tribunal hearing, which was clearly enough to discourage many from pursuing their case.

“We always have to treat such figures with caution because the raw number of equal pay claims can be distorted by multiple applications being made against a single, large employer.” comments Head of Underwriting & Marketing, David Haynes “But it’s unlikely this would account for all of this very large increase in claims.”

“There is so much publicity about equal pay at the moment and those firms required to publish their gender pay gap by April have started to do so. It’s inevitable that cases like this  are going to raise the question in people’s minds.”

Last year, the BBC commissioned a report into pay differences throughout the Corporation which revealed a gender pay gap of 9.3%, roughly half the national average, caused by underrepresentation of women in senior positions rather than a widespread failure to pay people equally for doing the same or equivalent work.

“The gender pay issue at the BBC appears to be focussed on a relatively small number of staff in particular roles, ” continues Haynes, “but statistics show that many other organisations have a much wider pay gap.”

“The media understandably focus on the very large cases involving numerous employees at high-profile organisations, but these cases are less likely to have been put off by the tribunal fee regime, because the fee burden could be shared. However, there are always many more smaller or individual claims that employers may now have to face again.

ARAG’s checklist for employers to minimise the risk of gender pay issues:

  • Evaluate – Organisations with more than 250 employees have legal reporting requirements, but any business with more than a handful of staff should evaluate whether any jobs involve ‘equal work’.
  • Report – If any roles are found to entail equal work, then at least annual reporting should be set up to compare the average salaries of men and of women in equal roles.
  • Investigate – Sometimes differences in pay can be justified objectively but any such reasons should be recorded for future reference.
  • Correct – If there are pay discrepancies that cannot be objectively justified, then they must be corrected and the causes addressed to avoid a gap reopening.

“Monitoring your gender pay gap may seem like another piece of difficult or even unnecessary bureaucracy,” sums up Haynes, “but it shouldn’t be too difficult an exercise to carry out. If the simple fairness of paying people equally to do the same job isn’t enough to persuade businesses to do so, they need to realise that getting it wrong is likely to cost a lot more.”

“Both ACAS and the Equality and Human Rights Commission publish good advice for businesses to help them ensure they are rewarding all of their staff fairly and equally.”




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inCase200By Sucheet Amin – CEO of  inCase/Lavatech Ltd

2015 is full of predictions centered on technology and online media. I’ve come across a prediction of the first online political party; a public rubbish bin that alerts the local council that it is getting full and using mobile apps to direct a trained first aider within the locality of an emergency while the ambulance service makes it way to the scene. All interesting and exciting stuff but here are my top three predictions that are more relevant to the legal industry.

  1. App downloads will surpass Facebook friend and Twitter followers for most brands

This is a big one not to be ignored! Mobile is not showing signs of slowing and continues to push ahead and 2015 is the year where app downloads will surpass social media followers. This means that law firms need to invest time and resource in their mobile strategy and ensuring that their client’s mobile experience is a positive one.  According to this article, it’s already started to happen with some top US brands seeing huge sways.

  1. Clients want real-time information

Law firms have always needed to respond to clients needing vital information and updates. Long ago, clients would write a letter and be prepared to wait for a response. Now, email, texts and telephone has taken over with client’s needing immediate answers. This is only going to become more demanding and smart firms will embrace mobile technology to improve performance and delivering real-time information to clients.

  1. Wearable tech will become more mainstream

I talked a lot about this on previous blogs in 2014. Wearable tech such as Google Glass and smart-watches are already out there. Google Glass has been a bit of a flop but don’t expect the same from Apple. Their “iWatch” will take the market by storm and consumers will queue for hours to get their hands on one. Linking direct to smartphones, wearables will provide easier access to online content and apps as well as monitoring health. Law firms should already be thinking about how they are going to be seen on a wearable.

 

 




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Compliance: MRO kicked out for refusing to follow the rules

Compliance: MRO kicked out for refusing to follow the rules

MedCo has started to show its teeth, suspending medical reporting organisations (MROs) for failing to provide proof of the required financial bond, and warning law firms for breaches of its user agreement, Legal Futures can reveal.

Meanwhile, decisions on whether registered MROs meet the criteria to be in either tier 1 – for large, national operators – or tier 2 for smaller businesses are to be made this month.

MedCo requires that tier 2 MROs have to provide a financial bond or other financial instrument of at least £20,000 to demonstrate that the MRO has sufficient funds available to remunerate medical experts from whom it has commissioned medical reports in the case of its failure. Tier 1 MROs need a bond of £100,000.

A MedCo spokeswoman said that 21 tier 2 MROs were suspended for not providing the bond, but the majority have since done so and been reinstated onto the system.

Further, three tier 2 MROs, three firms of solicitors and one medical expert were issued with warning notices that they were in breach of the MedCo user agreement. All but one of the MROs have agreed to change its behaviour accordingly, and that business has now been thrown out of the MedCo system.

On audits, the spokesman said: “MedCo has physically audited all tier 1 MROs and the audit committee is drafting the resulting reports and recommendations for the MedCo board. All operational tier 2s have also been requested to provide evidence that they meet six key criteria.”

The committee’s recommendations will be presented to the MedCo board this month for consideration.

The registration of multiple tier 2 MROs by some of the tier 1 providers – which they say they have done to redress the imbalance in the system against them – is the subject of particular controversy.

In July, the Ministry of Justice brought forward its planned six-month review of MedCo in response to the problems that have been encountered so far, having told MedCo that multiple tier 2 MROs should not be allowed.




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McIvor: insufficient evidence

The Jackson reforms are “excessive and over-zealous” in their impact on personal injury work, failing to achieve their core objective of promoting access to justice at proportionate cost, an  academic study has concluded.

Dr Claire McIvor, a senior lecturer at  CompTIA 220-801 dumps Birmingham Law School, argued that by focusing solely on the task of achieving proportionate costs “from the narrow perspective” of relating them to the financial value of the claim, the judge’s main recommendations “blatantly prioritise the interests 100-101 ICND1 dumps of defendants over the interests of claimants”.

She said the evidence in Lord Justice Jackson’s final report fails to justify this shift because it does not show that defendants are currently under-protected or that the behaviour of claimant solicitors is the cause of high costs.

Dr McIvor – who also contributed to an earlier damning academic report on the reforms – explained: “To conclude such is not to deny that there may be problems with the existing costs system, nor that defendant interests might currently be under-protected. The point being made is simply that any programme of reform which impedes acce

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ss to justice requires the strongest of justifications, and the Jackson report has fallen far short of providing such justification.”

Noting that the judge himself says that 90% of all cases are concluded at proportionate cost, she concluded that at most his report showed that there is a problem with disproportionate costs in a small percentage of cases and that there is “probably some undesirable costs-increasing behaviour on both sides”.

Dr McIvor continued: “As such the most appropriate solution would appear to be better case management. Crucially, the evidence does not necessarily demonstrate that the primary source of the current high level of costs is the recoverability of success fees and after-the-event insurance premiums.”

She said the biggest concern, however, is that despite having been alerted to these problems “and despite having ascertained that the majority of stakeholders are opposed to the main Jackson recommendations, the government has decided to press ahead regardless with its plans for implementation”. The Legal Aid, Sentencing and Punishment of Offenders Bill had its third day of committee in the House of Lords yesterday.

Nigel Muers-Raby, chairman of the Consumer Justice Alliance, welcomed Dr McIvor’s report. He said: “These reforms are wrong in principle and unworkable in practice. Dr McIvor’s report confirms what the government has already been told on countless occasions: it simply hasn’t thought through these proposals in enough detail.”

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Smithers: adverse ruling would have caused huge confusion

Smithers: adverse ruling would have caused huge confusion

Yesterday’s Supreme Court ruling in Coventry v Lawrence has been widely welcomed as a victory for common sense by several of the interveners in the case – and for heading off the chaos that the opposite decision could have wreaked.

Law Society president Jonathan Smithers said a ruling of incompatibility would have had “a serious impact on many thousands of pre-April 2013 cases which are still being litigated, as well as claims to which the pre-Jackson costs rules continue to apply, such as mesothelioma, insolvency and publication and privacy cases”.

He continued: “Such a ruling could also have caused huge confusion in the system, and whatever the merits of the previous ‘no-win, no-fee’ arrangements, that would not have been in the wider interests of justice.”

The Bar Council said that any other outcome “would have resulted in uncertainty and disruption to clients, lawyers and to the justice system as a whole”.

Nicholas Bacon QC, who led the Bar Council’s legal team before the court, said: “This judgment should put an end to the uncertainty which had been troubling clients and practitioners who had entered into pre Jackson CFAs or ATE policies where work in progress was often substantial and where access to justice in continuing cases was severely threatened.”

Chairman of the Bar Alistair MacDonald QC added: “As far as access to justice is concerned, this is the result that is in the best interests of both clients and practitioners.”

Greg Cox, a partner at Colemans-ctts, was also on the Bar Council’s team – the only solicitor-advocate on the benches of the Supreme Court during the ruling – and he said: “The majority of the court has given a clear judgment which reinforces the rights of litigants and their lawyers and should avoid the potential for large scale satellite litigation.

“I am particularly grateful that the court accepted our submission that litigants and lawyers had and have a legitimate expectation (and protected possession rights under article 1 First Protocol [of the European Convention on Human Rights]) in recovering fees and premiums properly incurred under the pre LASPO regime.

“The observations that the current LASPO system may inherently restrict access to justice will undoubtedly stimulate further debate on that point.

“One commentator put the true amount in issue at £15bn. The issues at stake were enough to draw eight interveners into the fray over two and a half days and use up a small forest of paper and materials. Clients and lawyers breathed a huge sigh of relief but, perhaps, not quite as large as the sigh from the government, which had faced the potential £15bn bill if the commentator’s figures were correct.”

Sue Nash, chairman of the Association of Costs Lawyers, said: “The ‘flaws’ in the pre-Jackson CFA regime identified in the judgment – and by Sir Rupert Jackson – have now been fully aired by the highest court in the land.  The ‘costs wars’ generated by that regime, with which we are all familiar, arguably took up a disproportionate amount of the courts’ time, energy and resources.

“The majority judgment has now consigned such arguments to history although it is – again arguably – to be regretted that further argument as to ‘legitimate expectation’ will not now be aired…

“The association welcomes the clarity of the court’s reasoning which is in line with our own submissions and which means that decided and settled cases will not now need revisiting. It will also enable cases to which the ‘old’ regime applies to be determined.”

Frances Coulson, chair of the fraud group of R3, the insolvency trade body, said: “Common sense has won out. This decision is a victory for creditors and will help them get back money that they are owed after insolvencies.

“The case had huge implications for creditors in insolvencies in cases where money was being withheld from them by directors or third parties. A decision the other way would have made legal action by insolvency practitioners to retrieve the money unaffordable in most cases. This would have risked as much as £160m per year not getting back to creditors from rogue directors and others.”

“The threat to creditors’ money is not over, however. The Ministry of Justice is set to review how insolvency litigation is funded by the end of the year. It’s important that that decision goes in creditors’ favour too.”

Ms Coulson is managing partner of London firm Moon Beever and acted pro bono for R3 in its intervention.

David Greene, past president of London Solicitors Litigation Association (LSLA) – which did not intervene in the case – said the ruling was “not an unconditional endorsement” of the pre-Jackson regime, but it did resolve the issue “once and for all”.

He continued: “The court recognised the negative effect the Jackson reforms have had on access to justice. The court conceded that the Jackson reforms have restricted access to justice for claimants. It accepted that the reforms had sought to alleviate the problems for claimants, the introduction of QOCS, for example, but suggested that there was room for improvement to ensure proper access for both claimants and defendants.

“This is an issue that the LSLA has sought to highlight. Whilst not seeking to return to another revolution in costs, the LSLA has campaigned for the Jackson reforms to be revisited to ensure equity in both bringing a claim and defending it. People must be able to pursue and defend rights in front of the court at reasonable risk.

“The pendulum may have swung too far pre-Jackson in providing access for claimants but the swing back with the Jackson reforms and the recent increase in court fees has meant many reasonable claims are locked out. We need to address this and perhaps shove the pendulum back a little.”




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David Spencer

Spencer: Rule will not become ‘stick’ to bear claimants

Insurers’ tactics are likely to “remain the same” after the introduction of the government’s new ‘fundamental dishonesty’ rule for personal injury cases, a leading defence lawyer has argued.

The government has promised that the rule, requiring courts to dismiss in their entirety personal injury claims which they find ‘fundamentally dishonest’, will become law before the May general election.

The measure is contained in the Criminal Justice and Courts Bill, currently awaiting Royal Assent.

David Spencer, partner at BLM, acted for the defendants in the leading case of Summers v Fairclough Homes [2012] UKSC 26, which considered whether a genuine claim could be struck out because of exaggeration. He said fraud in personal injury cases was already a “significant issue” and investigation methods were unlikely to change.

“We need to be careful as defence lawyers only to challenge cases where we have sufficient evidence,” he said.

“The concern expressed by claimant representatives that this statute will be a ‘stick used to beat every claimant’ is baseless.

“An application to dismiss the entire claim can only be made with evidence in support and the courts are unlikely to look kindly on defendants who offer a speculative plea.”

Mr Spencer said there were “delicate cases” where defence lawyers “could not quite get to the point of saying the claimant is a liar”.

He said that the defence may have “some video evidence” that a person who claims not to be able to work is capable of working but it may not be the kind of “smoking gun” you require.

“The first few test cases will set the boundaries as to when a claim is ‘fundamentally dishonest’”, Mr Spencer said.

He said that although the Summers case provided authority for the courts to strike out an entire claim at any stage for abuse of process, the courts could still award fraudulent claimants compensation for the “genuine” element of their claim.

Mr Spencer said the discretionary power “lacked consistency in its practical application” and the publicity around it had “a limited deterrent effect”.




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Edmonds: New high-profile client for Therium

Third-party funder Therium has completed the first close of its new £300m, its largest fund to date.

The first close is at £200m with a further £100m expected before final close. The investors include both Therium’s existing major investor, which is increasing its commitment, and new global institutional investors.

Therium has been in the news of late for backing TV presenter Noel Edmonds’ claim against Lloyds.

It has also emerged that the company is backing the group action being brought by the Justice for Subpostmasters Alliance – currently made up of 550 members – against the Post Office over flaws in its accounting system that meant some subpostmasters were sent to prison for false accounting, and a substantial number lost their homes or were declared bankrupt as a consequence of their loss of income.

John Byrne, co-founder and CEO of Therium Capital Management, said: “The track record of deployment and returns from our past funds has led to a substantial and increasing interest in Therium from a wide range of investors, especially institutional investors, and we continue to see very significant growth potential in litigation funding, globally.”

The new fund follows Therium’s £200m fund raised in April 2015, which at the time was the largest single investment in the litigation funding sector.

Therium said strong demand for funding meant deployed this money more quickly than expected.

Other cases covered by the previous fund include the shareholder group claim against Lloyds Banking Group and several former directors for the acquisition of HBOS in 2008 and the cartel action for the Road Haulage Association against several truck manufacturers.

Other funded cases were PCP Capital Partners’ claim against Barclays related to a $3bn loan to Qatar in 2008; a group claim against Visa and Mastercard relating to interchange fees; the emissions litigation in the UK against Volkswagen for over 45,000 car owners; and the claim for iPhone users against Google relating to the ‘Safari Workaround’.

Since April 2015, Therium has expanded its operations, with teams launching in the USA, Spain, Norway and Germany.

Last month, fellow funder Burford Capital continued to grow its financial muscle after raising $180m (£127m) through an oversubscribed issue of US dollar-denominated bonds on the main market of the London Stock Exchange.




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Cardiff: the home of ADR?

Wales could become the UK’s main hub for ADR by establishing a national dispute resolution centre that would raise funds through offering commercial arbitration, according to a feasibility study.

The scoping study by Skills for Justice, part of the employer-led charity JSSC Group, which seeks to build workplace skills, recommended the centre include the gamut of dispute resolution, including arbitration and conciliation, for disputes of all sizes.

The second phase of a project that previously identified an appetite for a mediation centre in Wales, the study proposed it should have its ‘hub’ at a prestigious location in Cardiff, with ‘spokes’ in Swansea and Wrexham covering the rest of the country.

Central to financing the centre would be a plan to raise funds from high-value commercial dispute resolution “that will allow for funding of community dispute resolution”.

The study revealed its revenue-raising ambitions for the centre went beyond the UK: “Offering commercial dispute resolution services as an additional income stream for the centre would allow for exploration of domestic, European and international dispute resolution markets.”

Hopes for its significance within the UK were also ambitious. It would become “the flagship for dispute resolution within the UK, as the first of its kind to represent all forms of dispute resolution, across all sectors under one roof”.

It continued: “As many of the umbrella bodies are UK wide, this would be the first centre of genuine engagement across the umbrella organisations, and it follows, therefore there will be no need to replicate this elsewhere. The Welsh dispute resolution centre would serve the UK – attracting business and creating jobs.”

Before reaching any conclusions, the study weighed up three options for ADR in Wales: a continuation of the current situation, with no formal dispute resolution centre; establishing a limited centre as a starting point, based on ‘virtual’ satellite locations; and an ‘aspirational’ model involving a large-scale ADR centre “including a new build within a prestigious location”.

The study acknowledged the value of existing ADR umbrella organisations such as the Centre for Effective Dispute Resolution (CEDR), and “maintaining links with the ‘London centric’ nature of disputes and Court of Appeal”.

It also recognised there was an argument for waiting for other developments to run their course: “It is a time of change within the legal sector, and there is case law and European directives influencing litigation practice and the use of dispute resolution, resulting in one school of thought to ‘sit tight’ and see how things evolve.”

But it concluded that there were “financial, economic and social benefits” from establishing a dispute resolution centre, “including a change of culture for dispute resolution generally”.

It added: “A centre will provide a central point of contact… for all disputes across all sectors. It will be a gateway to information, knowledge, choice and support for clients and professionals alike. It will alleviate confusion and put all forms of managing a dispute (including litigation) on a level playing field offering real and open choice for all.”

According to the scoping study, set up costs for an ADR centre, including staff and IT costs, would be in the region of £160,000, with year-on-year costs of a further £143,000. Projections of its income suggested it would not be until year seven that it would break even and become self-funding.


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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