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Toby Moreton, principal at T M Costings

T M Costings, a Buckinghamshire-based firm of dedicated costs lawyers, draftsmen and consultants, has selected a Proclaim Case Management Software solution from Eclipse, the sole Law Society Endorsed legal software provider.

Since its inception in 2005, T M Costings has grown year on year, largely through word of mouth, and now enjoys an enviable reputation for its unwavering commitment to client care, assisted by its continued development and maintenance of quality systems.

T M Costings has implemented a Hosted out-of-the-box Proclaim Costs Drafting Software application to integrate a core case management system with reporting, document management and word processing, providing a complete solution for the business needs of the firm.

As well as further streamlining its case management functions, the fully comprehensive Proclaim software will assist the firm with a number of aspects for bill creation, including production of a ‘red line’ bill.

This latest ability, introduced by Eclipse earlier in the year, means T M Costings will be able to complete the preparation of a red line bill with greater efficiency, whilst maintaining the highest quality standards.

Furthermore, once created, the bill can be electronically forwarded to the firm’s clients for instant review, therefore reducing settlement times and overall cash flow.

Toby Moreton, principal at T M Costings, comments:

“In order to offer our complete ‘cradle to grave’ service, we needed a solution that would seamlessly encompass every aspect of civil and commercial legal costs. By implementing the Proclaim Costs Drafting Software we have significantly simplified the processes associated with these.

“Additionally, as a number of our clients are Proclaim users themselves, we can now offer a seamless file transfer service at the click of a button, ensuring much quicker case progression and a greatly improved bottom line.”


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KainKnight200Kain Knight, one of the UK’s largest firms of costs lawyers, has appointed Scott Jarrold to join Nicholas Clark’s team as the business development manager working across England and Wales with existing clients and new business. This new appointment compliments Kain Knight’s long term policy of controlled expansion in specialist costs areas, building on their significant business development successes.

Scott has been working in the legal sector with business development roles in ATE, funding and costs for the last 7 years and has experience in commercial, personal injury and clinical negligence cases.

Scott has worked with a range of firms from magic circle firms, international, large regional and specialist boutique firms providing solutions for their costs and funding needs.

Kain Knight continue to welcome any approaches from experienced costs lawyers with specialist background in commercial, admiralty, high value personal injury/industrial disease or clinical negligence interested in joining our team.

Matthew Kain, director of Kain Knight, said:

“We are delighted to welcome Scott to the Kain Knight Group. This is the next step in our growth strategy for the UK and International markets. Scott has significant experience in high quality customer service and client retention; he also brings a wealth of knowledge in litigation funding and ATE, adding a new dimension to our business development offering.”


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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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Walker: potential to build a high-quality litigation funding business

Leading listed Australian litigation funder Bentham IMF is finally to enter the UK after sealing a joint venture with US hedge funds.

The joint venture will be based in London with the aim of funding cases throughout Europe but primarily in the UK and the Netherlands. A similar arrangement will co-fund cases in Asia-Pacific.

IMF has agreed co-funding arrangements and joint venture arrangements with subsidiary entities of funds managed by Elliott Management Corporation.

IMF said these funds have billions of US dollars under management globally.

The pair are splitting equally the funding costs and operational expenses of Bentham Ventures BV, and in return will share in the profits and losses on an equal basis. They will jointly guarantee the business’s funding obligations to litigants, including adverse cost exposure.

London-based Bentham Europe Ltd, a wholly owned subsidiary of Bentham Ventures, will identify, evaluate and recommend funding opportunities to the joint venture. IMF will provide “certain consultancy services” for a fee.

IMF said its current expectation is for the joint venture to continue for an initial term of five years and thereafter until such time as determined by the joint venture shareholders.

In Asia-Pacific, IMF has agreed to offer Elliott the opportunity to jointly fund cases, with an initial budget of more than A$8.5 million (£4.7m).

IMF has funded in the UK before – it lost £3.3m in the high-profile failed InnovatorOne professional negligence action in 2012 – but has hesitated over establishing a presence for many years.

IMF chairman Rob Ferguson said the arrangements are a key milestone in IMF’s evolution as a large-scale global litigation funder.

“IMF has a very strong record of success funding claims in Australia, and we have made no secret of our desire to replicate this success internationally after commencing business in the USA over two years ago. Elliott brings to the table not only considerable funding resources but also experience in the field of complex international litigation.

“The arrangements significantly bolster IMF’s footprint and funding capability in Asia and Europe and, alongside our existing US subsidiary completes our global reach.”

IMF executive director John Walker, who will be heading up IMF’s involvement in the joint venture, added: “Based on the claims that have already been brought to our attention, many related to investments made during the financial crash, we see potential to build a high-quality litigation funding business in Europe.”

Last December, IMF announced it was backing a claim filed in The Netherlands against Royal Bank of Scotland N.V. and ratings agency Standard & Poor’s (S&P) on behalf of a group of 16 European institutional investors.

The claim is for up to $250m in damages from losses allegedly suffered on investments in complex financial derivatives called constant proportion debt obligations that were rated AAA by S&P in the lead up to the financial crisis of 2007.

It is the first group action of its kind to be launched in Europe against an investment bank and ratings agency for conduct prior to the crisis.

Last year, IMF (Australia) Ltd changed its name to Bentham IMF Limited both to reflects the company’s growing international presence and to recognises the memory of Jeremy Bentham, the 19th century jurist and social reformer who was among the first to support the utility of litigation funding.

As at 31 December 2013, IMF’s case portfolio stood at 29 cases with an estimated claim value of about $2 billion. Since it listed on the Australian Stock Exchange in 2001, IMF has commenced and completed 149 cases, of which 109 were won or settled, 35 withdrawn and only five lost at judgment.

Total revenue generated has been in excess of A$1.28bn, with A$849M returned to claimants and Bentham IMF receiving net revenue of A$281m.

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Wheeler: Government treating the symptom when it should be treating the cause

Claimant lawyers reacted with caution to the Department of Health’s announcement yesterday that it is setting up a working group on introducing fixed recoverable costs in medical negligence, saying that while costs could be cut in lower-value claims, the real goal had to be avoiding clinical mistakes in the first place.

Brett Dixon, president of the Association of Personal Injury Lawyers (APIL), accepted that there was “scope to streamline the procedures and cost involved in lower-value claims”, but said this was only part of the story.

“So-called NHS ‘never events’ – injuries which are serious and largely preventable – have stayed at the same level in the past two years.

“Analysis of information provided by NHS Resolution in response to a freedom of information request shows that failures of maternity care represented a quarter of the damages paid out to injured patients in 2016/17. Failure in maternity care has been identified for years as a major problem for the NHS yet little seems to have changed.

“The urge to streamline costs and procedures must go hand in hand with a real, systemic, consistent reduction in avoidable injury. Only then will the NHS become more efficient, and only then will we see an end to the needless suffering of patients.”

Law Society president Joe Egan had much the same message: “While the Law Society does not oppose fixed recoverable costs in principle, the real savings for the NHS will come from learning from its mistakes and increasing patient safety…

“Cases which are not necessarily the highest in value can still be complex and challenging. Fixing costs could end up limiting the time specialist solicitors can spend understanding the details of an incident in care.

“Patients must not be denied the legal help they need to get the full compensation they are entitled to in law.”

Mr Egan also questioned the “worryingly short timeframe” for the working group to determine how fixed recoverable costs would work in practice.

Former APIL president Jonathan Wheeler, managing partner of London firm Bolt Burdon Kemp said fixing costs was “fine in principle, as long as the process by which claims are going to be dealt with is fixed first, and fair to both sides”.

He continued: “Those on the claimant side know this can work and have suggested a scheme to the Department of Health, although little progress to date has been made.

“My worry is that if patients’ needs are not taken into account, we are setting a dangerous precedent by allowing the wrong doer to fix the process by which they will be held to account. Where the wrongdoer is effectively the state, this throws up constitutional issues.”

He said the government was “treating the symptom, when it should be treating the cause: get your house in order, learn from your mistakes, adopt best practice, and cut down on the negligence in the first place”.

Agata Usewicz, head of the clinical negligence team at London law firm Hodge Jones & Allen, added: “It is dispiriting that the NHS’s focus remains on clamping down of ‘spiralling’ clinical negligence costs, when the most obvious way of cutting the costs of clinical negligence is to reduce incidents of harm in the first place.

“The Department of Health continues to perpetuate the myth that that is no limit on legal costs. In fact, costs are already tightly controlled, and subject to budgeting and detailed assessments”.

“The response to the consultation makes it clear that access to justice is a real concern to the majority of respondents, something else ignored by Jeremy Hunt’s comments.

“If access to justice is to be preserved, fatal claims, still-births, claimants lacking mental or legal capacity and claims where the client has a very short life expectancy must be exempted from any fixed recoverable cost scheme.”

From the defendant side, Christopher Malla, a partner City firm Kennedys – one of the firms that acts for the NHS – said claimants’ legal costs should be proportionate.

“Patient’s legal costs are often significantly higher than a patient’s damages, particularly in claims below £25,000, and these legal costs are taking vital funds away from front-line patient care.

“Any bespoke process designed by the working group must also take into account the importance of patient safety, ensuring lessons are learnt from incidents, with the overall aim of achieving the Secretary of State’s ambition of making the NHS the safest healthcare system in the world.

“This should reduce harm, clinical negligence claims and the overall cost to the NHS.”

Dr Rob Hendry, medical director at the Medical Protection Society, welcomed the commitment to a fixed recoverable costs scheme for clinical negligence claims.

“From the £1.7bn the NHS paid out on clinical negligence costs in 2016/17, legal costs accounted for 37% of that bill. It is right that we question whether such costs are sustainable for the NHS, and whether this amount of NHS money should be spent on lawyer fees.”

He said the society had hoped to see “a bolder decision” that put the threshold at cases worth up to £250,000.

“However a £25,000 threshold is a positive first step – one which we hope will be reviewed and possibly increased over time.”

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Bogart: market demand

Burford Capital, the world’s biggest litigation funder, has reported a surge in funding commitments in the first half of this year.

In a trading update, Burford said the amount committed in the past six months, £36m, was five times higher than in the same period last year.

Further, £14m in cash had been generated in the past six months from the investment portfolio, an increase of 94% on the same period last year.

Since its inception in 2009, the company said 26 cases had concluded, yielding £102m in gross investment recoveries and £39m net of invested capital – a net return of 63%.

Christopher Bogart, Burford’s chief executive, said the company’s performance vindicated its approach to investment selection. “Moreover, the volume of new commitments made during the last six months shows clearly the market demand for litigation finance solutions.”

Mr Bogart added that the success of the Rurelec transaction showed its continuing market leadership. In the Rurelec deal, announced in April, Burford said it had made a £6.6m profit on a £9m investment by providing a corporate debt facility linked to an arbitration claim.

Burford added that it would release its full interim financial statements for the six months ending 30 June 2014 in September.

In a separate development Vannin Capital has announced that it provided funding for Gul Bottlers, a soft drinks manufacturer in Pakistan, in a successful High Court claim against Nichols plc, owner of the Vimto brand.

Mr Justice Cooke awarded Gul Bottlers the equivalent of £8m in damages, after Gul Brothers complained about the withdrawal of a license agreement.

Iain McKenny, solicitor at Vannin Capital, said: “Vannin successfully funds a great many cases like this every year and it is unusual that we get to talk about the results so openly as most of the awards are confidential or settle under confidential terms.

“We were confident that Gul had a strong case, having undertaken our rigorous assessment process before agreeing to fund it, and we are delighted that we were able to help the company access the justice it deserved.”

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Tomlinson LJ: “outside the bounds of reasonable decision-making”

There is no longer a “near miss” rule for part 36 offers, appeal judges have made clear as they overturned a High Court decision which seemed to suggest that there was one.

Lord Justice Tomlinson said Mr Justice Eder’s decision was “outside the bounds of reasonable decision-making” since the damages obtained by the claimant exceeded the defendant’s part 36 offer “by a comfortable margin”.

Tomlinson LJ said the claimant’s failure to succeed on all parts of its claim was “adequately reflected” in Eder J’s decision to deprive it of 30% of its costs.

However, overturning the judge’s decision that the claimant should pay the remaining 70% of the defendant’s costs after expiration of the part 36 offer, Tomlinson LJ ruled that instead the defendant must pay 70% of the claimant’s costs.

He said there was “no basis” on which it would appropriate to deprive the claimants of their costs after the defendant’s offer expired, “still less to require them to pay the defendant’s costs”.

The ‘near miss’ rule adopted by the courts pre-Jackson was ended by the 2013 reforms.

The court heard in Sugar Hut Group v A J Insurance Service [2016] EWCA Civ 46, that the Sugar Hut Club in Brentwood, Essex, was hit by a serious fire in 2009.

Tomlinson LJ said the club’s insurers avoided the policy for material non-disclosure, and when the claimants sued them, the claim was dismissed by the High Court. The club then sued its brokers for negligence.

Liability was compromised but there was no agreement on some elements of the damages, which came to trial before Eder J in October 2014.

Tomlinson LJ said part 36 and Calderbank offers had been made by both sides, but it was common ground that none had been effective, in that each of the claimant’s offers had been for higher amounts that the damages awarded and each of the defendant’s for lower amounts.

However, the claimants argued that by ordering the claimants to pay 70% of the defendant’s costs from 21 days after the defendants made its final part 36 offer, the judge had effectively treated the part 36 offer as having been successful.

Tomlinson LJ said Eder J had “effectively characterised as misconduct” the club’s claim for business interruption losses of over £600,000 after receipt of the defendant’s final part 36 offer.

The lord justice said it could not be “misconduct, or unreasonable conduct, simply to pursue a claim in an amount greater than that at which it is valued by the opponent party”; something more was required to “render pursuit of the claim unreasonable”.

Employing a “happy phrase once coined in this context by a distinguished maritime arbitrator”, Tomlinson LJ said “the question is whether the claim exceeded the bounds of permissible optimism”; Eder J had “made no findings upon the basis of which it could be said that it did”.

He said the conduct which the judge took into account as justifying his “unusual order” after expiration of the part 36 offer was “the same as the considerations which had informed the withholding from the claimants of 30% of their costs” before that time, meaning that there was “justification in the claimants’ complaint that they have been twice penalised for the same shortcoming”.

Tomlinson LJ allowed the club’s appeal amended Eder J’s costs order so that the defendants continued to pay 70% of the claimant’s costs after expiry of the part 36 offer. Lord Justices Longmore and McCombe agreed.

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Taussig: Broadhurst provided the answer

Taussig: Broadhurst provided the answer

A successful part 36 offer in a provisional assessment removes the £1,500 costs cap, the High Court has ruled.

Overturning a decision of Master Whalan in the Senior Courts Costs Office, Mrs Justice Laing followed the reasoning of the Court of Appeal earlier this year in Broadhurst v Tan, when it ruled that a party who beat a part 36 offer in a case where fixed fees applied was eligible for indemnity costs,

The thus-far unreported case of Lowin considered whether CPR 36.17(4) – indemnity costs on beating an offer – dislodged the £1,500 cap set out in rule 47.15(5) for the costs of a detailed assessment that concluded at provisional assessment stage.

According to a blog by Gurion Taussig, a barrister at 9 Gough Square who acted for the successful party, the master agreed that her costs should be assessed on the indemnity basis, but ruled that the cap remained intact. He drew a distinction the Broadhurst case.

Mr Taussig, who was instructed by Boyes Turner, said that on appeal, Mrs Justice Laing held that there was a conflict between rules 36.17 and 47.15(5), because the latter derogated from the entitlement to costs on the indemnity basis conferred by part 36.

“In resolving the conflict, the scheme of reasoning contained in Broadhurst provided the answer. If the draftsman of the rule committee had wished part 36 to be modified so that the cap would remain, then that would have been stated. The court further stated that the dislodging of the cap would incentivise parties to accept reasonable costs offers because, if they did not, they would be at risk of adverse cost orders pursuant to part 36.”

The matter was remitted to Master Whalan to re-assess the appellant’s costs of the detailed assessment on an indemnity basis.

Mr Taussig added: “The decision represents an important extension of the Broadhurst principle, and one that potentially affects all cases that proceed to provisional assessment of costs in part 47 proceedings.

“Parties should indeed be incentivised to make reasonable cost offers, but equally they must be aware that a failure to accept a reasonable part 36 offer is likely to have cost consequences if the offeror achieves a better result on provisional assessment.”

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Eclipse200Eclipse Legal Systems, the sole law society-endorsed legal software provider, has announced integration with new-to-market ReviewSolicitors.

Founded by trio Saleem Arif (co-founder of QualitySolicitors), Michael Hanney and Pete Storey, ReviewSolicitors is a review site exclusively for the legal profession. It uniquely enables law firms to capture client feedback and display it upon an unbiased online platform.

The integration between ReviewSolicitors and Eclipse’s market-leading proclaim case and practice management solution will allow law firms to automatically email clients at the end of their transaction, requesting a review be left at This automated feedback capture process will enable law firms to refine their service offerings and provide invaluable information to assist new clients seeking legal advice.

Darren Gower, marketing director at Eclipse, comments:

“This integration with ReviewSolicitors will enable Proclaim users to harness the latest review technology platform, capturing vital satisfaction data in a way that is a seamless part of their client and matter management process.”

Saleem Arif of ReviewSolicitors adds:

“In the past, review sites in the legal profession have attracted two types of review: either from those who are extremely satisfied with their service, or those that have had a bad experience. This integration will help to provide a fuller and more representative sample of overall client satisfaction, not just the extremes. This adds a new level of integrity, helping clients to make an informed decision.”

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Vernon: Significant sums saved

The Court of Appeal has found for NHS Resolution (NHSR) in three test cases over the reasonableness of solicitors switching clients from legal aid to conditional fee agreements (CFAs) ahead of the introduction of LASPO.

NHSR said the ruling to overturn the decision of Mr Justice Foskett saved it £270,000 in these three cases – all run by Irwin Mitchell – and potentially millions more in other cases where clients were switched.

The three cases – Kai Surrey, AH and Yesil – all involved medical negligence victims who were switched from legal aid to CFAs shortly before 1 April 2013, when LASPO restricted the right to recover success fees and after-the-event insurance premiums.

The Court of Appeal ruling in Simmons v Castle sought to counter the effect on damages with the 10% uplift.

At first instance, Irwin Mitchell lost the right to recover the success fees and insurance premiums because it was held that they failed to advise on the 10% uplift before switching clients from legal aid.

However, on appeal, Foskett J, sitting with the Senior Costs Judge Master Gordon-Saker as assessor, overturned these decisions.

He was clear that he wanted to avoid a return to the “bad old days” of the costs wars in the early 2000s, and ruled that in each case staying on legal aid and claiming the 10% would only have achieved a marginal gain.

Giving the unanimous ruling of the Court of Appeal, Lord Justice Lewison said “the real issue is not the advice as such, but the reasons why the receiving party made the choice that he did”.

He said: “The bottom line is that in each of the three cases the advice given to the client had exaggerated (and in two cases misrepresented) the disadvantages of remaining with legal aid funding; and had omitted entirely any mention of the certain disadvantage of entering into a CFA,” Lewison LJ said.

“Moreover, one of the advantages of entering into the CFA was Irwin Mitchell’s own prospective entitlement to a substantial success fee. In those circumstances I consider that DJ Besford [in Yesil] was correct in saying: ‘Where one of two or more options available to a client is more financially beneficial to the solicitor, the need for transparency becomes ever greater.’”

He agreed with Foskett J that the analogy all three costs judges made to the 2016 Supreme Court ruling over informed consent to medical treatment, Montgomery v Lanarkshire Health Board, was a “distraction”.

Foskett J criticised the weight the costs judges gave to the analogy. Lewison LJ said: “Even if that were a fair criticism (and I do not think that it is), it does not amount to saying either that the costs judges took into account an irrelevant consideration; nor that their decisions on the facts were outside the ambit of reasonable decisions open on the facts of the three cases.

“In questions involving the exercise of a discretion, questions of weight are questions for the primary decision maker: not for an appeal court… I do not consider that the judge applied the right test to his appellate role.”

Foskett J was not entitled to interfere with the evaluative judgment of the three costs judges, the court found.

NHSR said there were potentially millions of pounds of savings waiting the wings after this decision. Chief executive Helen Vernon said: “We welcome the Court of Appeal’s decision in this case which shows how important it is for claimants to be properly informed when it comes to their legal costs.

“Having detected this issue and taken the decision to challenge it through the higher courts, we were able to save significant sums for the NHS whilst ensuring that claimants receive the compensation they are entitled to.”

In a statement, Irwin Mitchell said: “Over five years ago, we advised a small proportion of our legally aided clients who had medical negligence claims to switch from legal aid to a [CFA] ahead of unprecedented law reforms…

“This allowed our clients to pursue their cases to a successful conclusion unfettered by any (existing or future) restrictions around legal aid and without having to make any contribution to legal costs (as the [CFAs] pre-dated the change in the law) and many have since recovered many millions of pounds in compensation to provide for their long term needs

“The Court of Appeal is critical of our advice in three individual cases but we remain of the view that the switch was reasonable and in the best interests of those clients as the High Court agreed back in 2016.

“We are considering our position on appeal.”

Lewison LJ found other faults in the High Court ruling. He said Foskett J was wrong to say that the 10% point was determinative in Yesil and so “because he mischaracterised those conclusions, he gave no reasons for disagreeing with them”.

Lewison LJ added: “In my judgment DJ Besford’s conclusions were fully justified on the evidence that he had; and I consider that the judge was wrong to reverse him.”

The 10% uplift was determinative in the other two cases, but the Court of Appeal said Foskett J got the appeal test wrong.

“The judge’s approach casts on the paying party the burden of showing that the decision would have been different. By contrast, the costs judges’ approach casts on the receiving party the burden of showing that the decision would have been the same.

“Since not only does the burden of proof rest on the receiving party, but also any doubt is to be resolved in favour of the paying party, I consider that the costs judges’ approach was right, and the judge’s was wrong.”

Foskett J was also wrong to compare the overall damages claim and the 10% uplift: “The right comparison was one between the amount of costs for which the individual claimant might have been liable on the facts of the particular case, balanced against the amount of the… uplift, as DJ Besford correctly held.

“If costs for which a claimant would be potentially liable (either because of a failure to beat a part 36 offer or because of the operation of the statutory charge) would have been absorbed by the Simmons v Castle uplift, then if the risk eventuates the client is no worse off. If it does not, then the client is obviously better off.

“But since the one is a risk and the other is a certainty, the comparison cannot fairly be made without assessing the seriousness of the risk on the facts of the particular case. The judge did not perform that exercise, even in a ‘broad way’.”

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inCase200Revolutionary award-winning mobile app inCase continues to impress with another shortlisting for the Technology Initiative of the Year Award.

This is the fifth time in 12 months that inCase has been shortlisted for an award and having already attained two winner trophies, the founder and developer, Sucheet Amin is hoping to walk away with a third at the Modern Claims Awards 2015 to be held on 30 April 2015.

Redefining the way in which law firms deliver legal services, inCase delivers a complete communications package for clients, measurable financial savings for law firms and drastically improving client service.

Sucheet said “being shortlisted for this award is recognition that inCase is benefiting law firms and bringing real value to those firms and the clients they serve. With our recent launch of an app specifically designed for conveyancing firms and a facility for clients to pay via inCase, we are really pushing the boundaries of this cutting edge technology”.

Sucheet, a personal injury solicitor with his own legal practice, Aequitas Legal in Manchester, first developed his own mobile app in 2012 for his clients. Learning what made clients engage with mobile apps and his knowledge of the PI industry, he was able to develop a unique solution as demand for information and regular updates from his clients grew.

Sucheet added “we are in a varied and tough group of finalists. However, the whole inCase team is proud to be amongst them and we just hope that the judges recognise the importance of mobile apps forming part of a firm’s digital strategy and how we help overcome that particular challenge.”

The mobile apps market has grown considerably with the strength of smartphones. inCase takes advantage of this communication tool, providing an all-encompassing experience for clients whilst delivering real cost savings to those firms recognising the importance of a mobile app service.


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High Court: Premium was reasonable

A regional costs judge was “quite wrong” to assume that “his underwriting skill was better than that of the underwriter” and slashing an after-the-event insurance premium by 85%, the High Court has ruled.

Mr Justice Martin Spencer also found that the claimant had little choice but to accept the quoted premium “and the necessity of so doing makes the premium proportionate”.

In Percy v Anderson-Young [2017] EWHC 2712 (QB), the claimant suffered a severe head injury as a passenger in a road traffic accident.

Her claim settled at mediation and the parties agreed all the costs except for the after-the-event (ATE) insurance premium of £533,017 payable to LAMP.

A regional costs judge, District Judge Moss, reduced the recoverable premium to £82,513.

Initially LAMP provided £50,000 of cover but as it emerged the case was likely to go to trial, the insurer – though on the evidence reluctant to take on the “very significant risk” that a part 36 offer would not be bettered – agreed to top up the cover to £500,000. The premium quoted was £319,315 up to 45 days before trial and £533,017 within 45 days of trial.

Contrary to the expectation of both parties, the claim settled shortly before trial for £1.4m. Costs of £1.1m included the ATE premium. All was agreed except the premium.

Spencer J said there was “an important distinction” between a case where a cost judge decided whether the level of cover was too high – which was not the situation here – and one where the suggestion was that the underwriting decision was flawed and the judge was essentially second-guessing the underwriter.

“District Judge Moss did indeed fall plainly and directly into the trap identified by the Court of Appeal in Rogers and set himself up as better placed than the underwriter to identify the financial risk which the insurer faced.

“Furthermore, if the district judge was to apply such a huge reduction to the premium, a reduction in excess of £400,000, I am very surprised that the district judge did not give directions for expert evidence and/or for [Alan Strange, LAMP’s chief information officer] to give oral evidence: in my judgment he should have done and his decision was flawed in the absence of having so done.

“No-one could suggest that this would have been disproportionate, given the sum at stake.”

Spencer J also criticised the district judge for concluding that the underwriting decision was flawed because it looked only at the chance of the matter going to trial and not at the chance of the claimant exceeding the part 36 offer.

He said it was fair to assume the defendant thought he had a very good chance of securing an award within the part 36 offer, while “this was archetypically the kind of case which could have seriously unravelled for the claimant at trial”.

He continued: “In my judgment, a wholly reasonable attitude for the underwriter to have taken would have been to say: ‘Once the matter gets to trial, all bets are off.’ I expect that this was in fact Mr Strange’s approach.”

Spencer J further criticised the district judge for not actually applying a broad-brush approach, but rather carrying out “a form of mathematical exercise” by wrongly starting with the premium of £319,350 and then applying “an arbitrary” deduction of 75% in assessing the premium at 25% of the starting point.

He also found “considerable force” in the claimant’s submission that the district judge’s ruling would leave claimants’ solicitors in an impossible position. The claimant her faced a binary choice of taking out the additional cover or run the risk of losing a 10-day trial and facing a costs order in excess of £500,000.

“In my judgment it is fanciful to suggest that, had [claimant solicitor Andrew Duff] said to Mr Strange ‘I think your premium is too high’, Mr Strange would have responded, ‘Oh, very well then, I will reduce it by over £400,000’.

“Mr Duff was entitled to assume that the premium he was being quoted was a bona fide and reasonable premium for the risk which the insurer was undertaking, not least because he, Mr Duff, also believed that the prospects of settlement at the mediation were small and that this was a case which was likely to go to trial.

“If he did not think that the claimant could possibly take the risk of going to trial without this insurance, why should he have thought that the underwriter ought to have a different perception of the risk?

“In my judgment, the claimant in this case had little choice but to accept the quotation from LAMP and the necessity of so doing makes the premium proportionate.”

The premium was reasonable, he concluded, and there was no evidence to suggest the underwriting risk was misjudged.

As a result, Spencer J allowed the appeal and assessed the ATE premium at £533,017.

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Coulson J: claim was ‘disposed of’ at trial

Allowing a claimant’s barrister to recover a trial advocacy fee in a fast-track personal injury case, settled on the morning of the hearing, “hardly amounts to a windfall”, a High Court judge has said.

Mr Justice Coulson said counsel in the case agreed that there was no authority on whether the fee could be claimed where a case settled on the day of a trial, but before it had actually started.

Coulson J accused counsel for the defendant of seeking to make an “artificial distinction” between preparation of advocacy and attendance at trial and “actual performance of advocacy”.

The judge went on: “And what if the trial goes ahead and the judge does not call on counsel or the solicitor-advocate for the claimant because the other side’s case is so poor?

“He or she would not perform any advocacy in such circumstances, so, if the defendant is right, he or she would not be entitled to be paid. That would be an absurd result.”

Coulson J said: “The fact that the trial advocacy fee is recoverable by the barrister or solicitor advocate for their preparation for, and attendance at trial, which would not otherwise be recoverable, hardly amounts to some sort of windfall.”

The court heard in Mendes v Hochtief (UK) Construction [2016] EWHC 976 (QB), that Mr Mendes was injured in a traffic accident and a claim was started under the RTA protocol. The defendant denied liability, so the claim exited the portal.

The parties attended court for a one-day fast-track trial and were both represented by counsel. Coulson J said: “They twice indicated to the learned recorder who was to hear the trial that, if granted a little more time, they might well be able to settle the case. That is what happened.”

Mr Mendes accepted damages of £20,000 plus costs. In accordance with part IIIA of CPR part 45 – the fixed-costs regime that applies for cases that start under the protocol – Coulson J said Recorder Palmer QC awarded two elements of fixed costs – £2,655 and 20%.

However, Recorder Palmer refused to award the third element, the fixed trial advocacy fee, on the grounds that “the case was settled before the final contested hearing had commenced”. The claimant appealed.

Coulson J said that section C of the table of fixed costs where claims left the RTA protocol, set out in CPR 45.29C, applied to the case and it could be regarded as having been ‘disposed of at trial’.

He went on: “Counsel twice asked the learned recorder for more time which he granted and in consequence the settlement occurred. I do not believe that it strains the language of the rule to conclude that this was a case where the claim was ‘disposed of at trial’, albeit by way of settlement rather than judgment.”

Mr Justice Coulson allowed the claimant’s appeal. “It seems to me that, on first principles, the learned recorder was wrong to reach the conclusions he did. The trial advocacy fee is recoverable on the facts of this case.”

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Brennan: portfolio continues to mature

Listed third-party litigation funder Juridica is to pay $16m (£10.6m) in dividends early next year after securing gross cash proceeds of $17.5m from one of its investments.

In a statement released yesterday to the London Stock Exchange, the AIM-listed company said the proceeds “represent a realised gain on the company’s investment and not a return of capital. The return generated is in line with the company’s expectations, as previously reflected in the unrealised profits of the company”.

Payment is due at the end of the year, and the dividend of 10p per share will be payable on 15 January 2014 to shareholders registered at 13 December 2013.

The statement said: “This latest successful investment return for Juridica continues the company’s strong record of investment selection and brings the lifetime gross proceeds achieved by the company to $105m. After payment of the dividend… Juridica will have returned $64m (or approximately £42m) to shareholders in the form of $54m in dividends and $10m as a result of the September 2010 share buy-back scheme. Juridica has so far raised £115m ($210m) of capital in two tranches.”

Lord Brennan QC, Juridica’s chairman, said: “We are pleased that the portfolio continues to mature and deliver cash proceeds. The board anticipates making dividend payments to shareholders over the next 12 months if the portfolio develops as expected; and will continue to pursue the company’s objectives of dividend income and NAV [net asset value] growth.”

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Johnson: FOIL has a serious voice

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

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

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

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

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

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

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

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

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

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

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Whiplash: government to scope out scale of fraud problem

The government wants insurers to end the practice of making pre-med offers to settle claims, justice secretary Chris Grayling said today.

The Ministry of Justice (MoJ) will also be talking to the Solicitors Regulation Authority about its recent decision not to ban solicitors from offering cash inducements to potential claimants.

The end of pre-med offers has been a central plank of claimant lawyers’ counter-proposals to cut whiplash fraud and comes on top of today’s decision to defer any rise in the small claims limit.

Mr Grayling identified pre-med offers as one of the practices “which can contribute to the inflated number of whiplash claims”.

He added: “We also want insurers to share more of their data on suspected fraudulent or exaggerated claims with claimant lawyers, and we want claimant lawyers to carry out more effective checks on their potential clients before taking on claims.”

Releasing the detail of its response to the whiplash consultation, to which there were 292 submissions, the MoJ said it was “attracted to introducing a rule to ensure that a medical examination and report is completed before a claim can proceed”.

The exact proposal is being developed, but the MoJ said this should provide more certainty to the costs of medical reports and provide both parties with the information they require to make an accurate assessment of the treatment and/or compensation required to settle the claim.

“This should also mean an end to the practice of pre-medical offers to settle, which can lead to unmeritorious or exaggerated claims being made by some claimants, including fraudulent claims by uninjured claimants, and reduce the risk of under-settlement for the genuinely injured.”

Other aspects of ongoing work include developing accurate baseline data on the number of neck and back whiplash and other soft tissue injuries, which will help identify and classify fraudulent or exaggerated whiplash claims.

Recognising that the data on fraudulent claims is not robust, the MoJ said: “This will enable us to validate the estimates made by those in the personal injury sector and ensure the public are aware of the true scale and nature of the problem.”

On inducements, the consultation response noted that the MoJ banned claims management companies from offering cash inducements to consumers to make claims on 1 April 2013, and that both the Association of Personal Injury Lawyers and Motor Accident Solicitors Society have called for this ban to be extended to cover solicitors.

“The government will consider this issue with the Solicitors Regulation Authority,” it said.

A further measure will be to look at ways to “increase transparency to the consumer in relation to the financial and other links between insurers and other companies which may have an interest in a claim”.

The response document also outlined more detail about the decision on the small claims limit, and emphasised that it sees “good arguments” for extending the small claims limit generally for personal injury claims.

But on balance it was persuaded that it would not be appropriate to increase the limit for RTA-related personal injury at this stage.

It said: “The government accepts that currently extending the small claims limit may have an adverse effect on genuine victims of RTA injuries. In particular, the government will seek to ensure that adequate safeguards are developed to protect genuine claimants from any detrimental effects relating to access to justice or to the under-settling of claims from any future rise in the limit.

“The government is also keen to ensure that raising the small claims limit does not lead to any unscrupulous CMCs taking advantage of any resulting increase in self-representing litigants and entering the market to offer advice services which might not be in claimants’ best interests.”

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Employers’ liability: protocol follows RTA example

An end to the ‘£400 Club’ of claimant solicitors who play the RTA portal is in sight after the Master of the Rolls revealed a draft amended pre-action protocol, as well as draft protocols for employers’ liability and public liability (EL/PL) claims.

The draft protocols are the clearest sign yet that the vertical and horizontal extensions of the RTA portal will go ahead in April 2013, although in his letter to stakeholders Lord Dyson made no reference to whether the underlying technology will be ready in time – which many observers consider unlikely.

In line with a letter earlier this year seeking views on extension from then justice minister Jonathan Djanogly, the draft protocols are not going out to full public consultation. They have been sent to key stakeholders and those who have shown an interest in participating in the consultation, with encouragement to forward them to others where appropriate. The closing date for comments is 23 November.

In his covering letter, Lord Dyson said certain aspects of the protocols are not open to adjustment as they are matters of government policy: the level of costs – with Professor Paul Fenn “updating his work on this” – the exclusion of certain claims from the scope of the protocols, and the response period within stage 1 of the protocols.

The draft revises the RTA protocol so as to incorporate claims up to £25,000 for accidents occurring on or after 6 April 2013. The preamble has been strengthened so that using the portal is mandatory. Steve Thomas, director of market affairs at defendant firm Keoghs, said this will “finally stop those few claimant lawyers who tried to bypass the portal by using facsimile transmission”.

The ‘£400 Club’ refers to solicitors who put in a claim, receive the stage 1 payment of £400 and then withdraw it. From next April, stage 1 costs will be payable within 10 days of receiving the stage 2 settlement pack. “This should eradicate the so-called ‘£400 Club’, Mr Thomas said.

The draft also includes subtle changes to the medical evidence requirements. In cases over £10,000, a new duty will exist to disclose relevant medical records with the medical report.

The EL/PL protocol largely mirrors the RTA process. It will apply claims of up to £25,000 in value, where the accident occurs on or after 1 April 2013, or in the case of a disease claim where no letter of claim has been sent to the defendant before 1 April 2013.

Out of scope are all PL disease claims, as well as EL disease claims where there is more than one tortfeasor. Claims will not continue within the protocol where a defendant alleges contributory negligence.

Defendants will have 30 days to respond with an admission of liability in EL cases, and 40 days for PL. As in motor, there will be a duty to disclose relevant medical records with the medical report, albeit the EL/PL protocol as drafted does not currently contain the £10,000 distinction.

Mr Thomas said: “This is an important step in the journey to secure the Jackson reforms for April 2013. Keoghs will be working with clients and other stakeholders to formulate a detailed response to the Ministry of Justice, to try to ensure that the final rules are both clear and practical, and will operate to keep as many cases in the new process as is possible.”


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AugustaVentures200x200Augusta Ventures, the unique litigation funder targeted at the SME market, has launched a new online calculator which enables lawyers, claimants and introducers to see at a glance the estimated potential outcome of financing their legal fees and disbursements through Augusta.

Users insert the approximate sum of damages, then adjust the scale for the amount of legal fees to run the claim to trial and the amount the claimant can contribute. The calculator then provides an estimate of the returns.

Jeunesse Edwards, Augusta Ventures’ engagement director, said: “Our new claim outcome calculator will enable lawyers and introducers to improve their client relationships and give potential claimants a simple overview as to how litigation finance can work for them.

“At Augusta, we believe that a claim is an asset, and we are prepared to provide finance to realise the value of that asset using the claim as the collateral. In return, provided the claim is successful, we receive our funds back, together with a success fee,” says Jeunesse.

Augusta’s loans are non-recourse so if the claim is not successful, the claimant does not repay the finance. If the claim proceeds but is then unsuccessful, then only 90% of the contribution is insured.

The calculator is available at:

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Guest post by Roger Isaacs, forensic accountant and partner at accountancy firm Milsted Langdon

Isaacs: hot-tubbing far more challenging for the expert than facing traditional cross-examination

Isaacs: hot-tubbing far more challenging for the expert than facing traditional cross-examination

Although the courts have had the power to order expert witnesses to give their evidence concurrently since April 2013, there have been very few reported instances of the procedure (colloquially known as ‘hot-tubbing’, or, more formally, witness conferencing) being used other than as part of the initial pilot project that was undertaken in Manchester.

However, I was recently instructed as one of three expert accountancy witnesses in the case of Swain and others v Swain Plc and others [2015] EWHC 660 (Ch).

The case involved four sisters who were shareholders in a company that had been founded by their late father and his business partner. At the date of the trial, the directors of the company were the business partner and one of the four sisters.

The claimants were the remaining three sisters who had no active involvement in the management of the company. They alleged that they had been deprived of the value of their shares by virtue of the actions of their family solicitor and their family accountant. It was these two advisers and their respective professional indemnity insurers who were the defendants, albeit that the family solicitor had died prior to the trial.

The claimants were represented by one expert accountant and each of the defendants’ professional indemnity insurers had instructed their own experts. The issues that the experts were asked to address concerned the valuation of the family company and the shares therein.

One can easily sympathise with any judge who, faced with the prospect of three solid days of expert accountancy evidence, concluded that any alternative short of self-mutilation would be appealing. It is therefore perhaps not entirely surprising that the suggestion of using hot-tubbing in this case had its genesis in a surfeit of accountants.

The fact that the defendants’ experts and their respective counsel were all in favour of adoption of the procedure was perhaps also influential, although it is interesting that the view was not unanimous and the claimant’s expert was vociferously opposed to it.

Nevertheless, directions were given by the judge at the outset of the trial that the experts were to give evidence concurrently.

Experience suggests that determination of this issue early on in proceedings is vitally important, not least because the judge needs time to prepare for a process in which he is required to undertake a proactive role as chair and inquisitor.

For anyone used to the English adversarial approach to justice, it is a wholly alien experience to see a judge engaging in what is a positively Napoleonic and inquisitorial style of interrogation of witnesses.

The procedure for expert conferencing is set out in practice direction 35.11 and in my recent experience, it was faithfully followed to good effect.

Firstly, before the start of the trial, the experts had met and agreed a joint statement that set out the issues on which they agreed and those on which they disagreed. That statement formed the basis of an agenda, focussing on the issues of disagreement, and that was adopted by the judge and formed the basis of the structured discussion that comprised the hot-tubbing itself.

Before the experts could be sworn in, a practical issue arose as to where in court we should physically sit. It was recognised that it would be impractical to squeeze all three accountants into the witness box. Indeed to have done so would have meant there would have been a danger of creating a hot tub that was more than a mere metaphor.

The agreed solution was to have the experts sitting facing the judge at the front of the court in the positions usually occupied by counsel. Counsel moved back a row and sat behind us experts, demonstrating starkly and visibly their subordination to the judge in the hot-tubbing process.

Once everyone had been suitably arranged in their designated places, the questioning could begin. Of course, if the judge is to take on the role of inquisitor, he can no longer rely on counsel to take him to the relevant evidence as happens in traditional cross-examination. Instead the judge must, and in this case certainly had, become familiar with the details of the experts’ respective reports and joint statements.

Taking the issues listed on the agenda one by one, the judge addressed his questions to each expert in turn, often repeating questions put to the first expert to the second and third in a manner vaguely reminiscent of the Blind Date TV show in which contestants famously put “the same question to number two please”.

Having sought the opinion of each expert, each was given an opportunity to comment on or respond to the comments of the others and finally each counsel was asked if he had any further questions before the debate moved on to the next topic.

It soon became apparent that any interrogation by counsel was somewhat redundant on the basis that if the judge had considered a question relevant or significant, he would have already asked it. There was therefore almost a presumption (albeit unstated) that further questioning by counsel should not be necessary. That said, there was no doubt that counsel was afforded every opportunity to ask questions if they wanted to do so.

Giving evidence in the hot tub can be far more challenging for the expert than facing traditional cross-examination. It is often said that one of the advantages of being an expert witness is that one inevitably knows more about one’s field of expertise than the barrister who is posing the questions. In some cases experts can therefore obfuscate in a manner that can sometimes be difficult to challenge efficiently.

By contrast, in the hot tub there are other experts from the same discipline who can immediately challenge anything that is said with which they do not agree. This creates an immediacy that is conspicuously absent in traditional cross-examination in which, if an opposing view is to be expressed by another expert, it may not be heard until several hours or days later.

One of the aspects of traditional cross-examination that is highlighted by hot-tubbing is the fact that counsel has to anticipate which issues are likely to be relevant to the judge and inevitably time will be spent dealing with matters on which the judge has either already been persuaded or which he considers irrelevant.

By contrast, allowing the judge to be the primary inquisitor means that he can cut to the chase. The effect is dramatic in terms of timing and in the recent trial, three planned days of traditional cross-examination were condensed to just three hours of hot-tubbing.

This exceptional speed puts further pressure on experts who have far less thinking time in the hot tub than they would have if they were to face traditional cross-examination. Specifically, in traditional cross-examination an expert will be taken to the relevant sections of his or her report as a precursor of being asked a question. One of the reasons for this is that it is a means by which the judge can be directed towards the relevant evidence.

This becomes unnecessary in the hot tub and questions are asked with no preamble on the assumption that all concerned – inquisitorial judge, expert and counsel – will all be familiar with the issues and the underlying evidence from the outset.

Happily, by the time of the trial there had been a narrowing of the number of accountancy issues that were in contention. Key amongst these was the value of the company in relation to which opinions differed widely. Although it had a turnover of only £7m, the three accountancy experts had arrived at starkly different valuations ranging from £2.2m to £5.1m.

I concluded that a valuation in between these two extremes of £3m was appropriate and was therefore pleased that ultimately the judge concluded that the company was worth £2.96m.

Roger Isaacs is the vice-chair of the forensic group of the Institute of Chartered Accountants in England and Wales, and national technical director of the Network of Independent Forensic Accountants

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Grant: government does not wish to commit to a formal review

The government has no plans to assess the effect of next month’s changes to the RTA scheme before introducing further reform, justice minister Helen Grant has confirmed.

Meanwhile, the Law Society yesterday published its new model conditional fee agreement (CFA), although it is not yet clear when a model damages-based agreement (DBA) will be completed. 640-822 exam

Labour MP Meg Munn asked in Parliament whether there are plans to make an assessment of the changes being made in April 2013 to the RTA portal before introducing further reforms.

Ms Grant replied that there are no current plans. “The government is prepared to review and assess the effectiveness of the scheme should evidence be provided to demonstrate that this is necessary,” she added. “However, the government does not wish to commit to a formal review at this stage.”

Ms Munn also queried what steps have been taken to improve insurers’ use of the portal. Ms Grant said: “As part of the forthcoming extension of the RTA scheme, incentives have been provided for both insurers and claimants to keep claims within the scheme through to settlement.

“These include provisions in the pre-action protocols which will support the extended scheme, and the introduction of a revised and expanded scheme of fixed recoverable costs.”

The Law Society’s model CFA, accompanied by “interim” advice, came with a warning that it is “not a precedent for use with all clients and that it will need to be adapted/modified depending on the individual clients’ circumstances and solicitors’ business models”.

Asked at yesterday’s Law Society council meeting about the timing of publication so close to the start of the new CFA regime, chief executive Des Hudson blamed the delays in finalising the rules, but he accepted that the society could have done more to keep solicitors up to date on progress with the model CFA.

He said the society would consider doing this in relation to the work on the model DBA.

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Landman: lessons from Wales

Posted by Robert Landman, CEO of Litigation Futures sponsor Spencers Solicitors 

In early December, I wrote about the new HMRC policy doing nothing but stifle access to justice for asbestos victims. And my opinions on that side of things still hold true.

However, since the post went live, there have been significant steps forward in this legal space.

This month saw the opening to debates in the House of Commons regarding the Mesothelioma Bill, and points very similar to mine were raised by the Labour MP Kate Green. In a letter to the Exchequer Secretary, Ms Green requested clarification of the factors driving the new HMRC policy change, and further details on any impact assessments done pre its introduction.

Unfortunately there had been no response to the letter at the time of the debate; however, it was declared that Ministry of Justice officials have been meeting with the Treasury to discuss the matter. I can only interpret this response as positive and I look forward to hearing any further updates.

Improved legal process for UK asbestos claims

On 4 December, courts minister Shailesh Vara announced new plans to “improve the legal process for handling claims from victims of mesothelioma”.

His announcement followed a government U-turn on proposals to introduce an insurer-designed protocol known as the mesothelioma pre-action protocol (MPAP). This was a proposed substitute for the existing pre-action protocol for disease and illness claims (DPAP), designed by the Association of British insurers to help streamline out-of-court settlements.

After reviewing the MPAP consultation in depth, the government decided not to go ahead and implement the protocol. John Spencer has emphasised that the “devil was in the detail” and it became apparent that with the MPAP in place, asbestos sufferers would receive less compensation than they deserved.

With the MPAP cast aside, the government is focusing on how to realistically improve the asbestos claims process. And part of the plan is to introduce a pool of £350m, which will help pay compensation to mesothelioma sufferers, who contracted the disease but cannot trace the responsible employer/insurer.

The pool will be funded by insurers and the Department for Work and Pensions.

Still, there is cause for concern. As John says: “[Asbestos sufferer] claims need to be settled as quickly as possible, for their sake and that of their families. And so, as much as we should welcome this particular U-turn, let’s hope it doesn’t lead to a cul-de-sac, and that the best possible means of giving redress to mesothelioma claimants is put in place as soon as possible.”

Further to John’s apprehension, the Association of Personal Injury Lawyers has taken a cautious stance after Mr Vara also announced changes to no win no fee asbestos claims.

Basically, these will be brought in line with road accident cases – meaning that controversial rules implemented by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) will now apply to mesothelioma claims.

This could mean a lawyer’s success fee would be taken directly from the victim’s. That fee could be up to 25% of their total damages, though some lawyers will take a lower percentage. In turn, there is a worry that this could lead to victims ‘shopping around’ for the cheapest lawyer.

This point was raised by Labour MP Paul Goggins, at the same parliamentary debate that I mentioned earlier. The politician is hopeful that Parliament will continue to be against the idea of a fee being taken directly from a sufferer’s compensation award.

A lesson from Wales …

On the night of 20 November, the Welsh Assembly voted in favour of a law to allow the country’s NHS to recover funds for the treatment of those with asbestos exposure – from negligent employers and insurers.

The Recovery of Medical Costs for Asbestos Diseases (Wales) Bill, will be used to cover the extensive cost of treating sufferers of mesothelioma. With the provisions estimated to raise £1m every year, the Welsh NHS will finally be able to comfortably shoulder that cost.

The costs of treating a road accident victim are usually compensated by the guilty driver’s insurer. There is no reason why asbestos cases shouldn’t work in the same way, and so it is hugely positive to see Wales moving in this direction.

It’s overdue – but it’s happening.

Kristy Price goes into more detail on this comparison with road traffic accident claims here. In her piece, she points at the elephant in the room – why is this law only being applied to Wales and not the rest of the UK?

Well, that’s for the politicians to answer but there looks to be positivity on this front emerging in another form…

If you have your own opinions on these changes in law, positive or negative, please have your say in the comments below.

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Rowles-Davies: original UK focus now completely global

Hundreds of millions of pounds are to be poured into backing litigation after both Vannin Capital and Harbour Litigation Funding unveiled significant funding boosts.

The highest profile of a series of developments in the third-party funding market, Vannin now has £100m available for this year – four times that originally planned – while Harbour has successfully closed a new fund, raising £120m of new capital.

Bramden Investments, which backs Vannin, originally allocated four years of funding at £25m per year. However, the company said that due to the volume of business the funder is receiving, this has now been increased to an overall facility of £100m to be drawn down when required and will be reviewed again, upwardly, within 12 months.

Vannin, which launched in June 2011, said it has already committed in excess of its original year one allocation of £25m. The revised capital figure will see Vannin expand in the US, where it has already signed some high-profile cases.

“As well as high volumes of quality litigation in the UK and US, we are also seeing a good number of international arbitration cases,” said solicitor Nick Rowles-Davies of Vannin Capital. “Our initial remit and capacity targets have expanded many fold since inception, with our original UK focus now being completely global.”

Harbour’s new fund’s portfolio is expected to comprise over 50 cases with a minimum claim value per case of £3m. The fund has a six-year life span, with a targeted spend of over £40 million per year over its three-year commitment period. Investors in the new fund include endowments, family offices, private wealth managers and high-net worth individuals.

In 2010 Harbour closed its first found, worth £60m, and said that last year alone it invested £40m in claims worth in excess of £1bn. While its main focus is the UK, it is already funding cases in the US, Channel Islands, New Zealand and the Caribbean.

Harbour chief executive Brett Carron said the regulatory environment since the publication of the Jackson report and the formation of the Association of Litigation Funders has “definitely advanced the acceptance of litigation funding to the highest levels of the judiciary”.

Susan Dunn, head of litigation funding at Harbour, added: “While we expect an increase in the use of funding for commercial litigation in the UK and other jurisdictions, there is a long way to go. We estimate that only 10% of litigators have used litigation funding.”

Elsewhere in the market, Woodsford Litigation Funding has acquired IM Litigation Funding – which pioneered third-party funding in the UK – including the name, its goodwill, website and ongoing rights relating to certain invested claims.

Annual results from AIM-listed funder Juridica, which is mainly focused on the US, showed total cash profit up 578% to $12.9m (£8m) for 2011 through the full or partial settlement of six cases. It currently has 18 investments worth $155m in 23 different competition, patents and commercial cases.

Burford Capital’s 2011 results, also released last month, showed that the London Stock Exchange-listed funder generated $15.9m in profit in 2011, a 965% increase on 2010, from nine cases which concluded. Buford, which has now formally completed its acquisition of after-the-event insurer Firstassist to pave the way to invest in UK litigation, invested $180m in new litigation last year.

Finally, Therium Capital Management has agreed its first mandate to manage an account for an institutional investor. Therium will act as exclusive investment adviser for this investment of an initial £5m fund in a portfolio of litigation and arbitration claims. It is the parties’ stated intention, in due course, to increase the size of the fund to up to £15m.


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Terry: acquisition helps service growth

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Organisation: court expects parties to plan litigation properly

Posted by Suzanna Popplewell, a costs lawyer at Litigation Futures Associate Harmans

Proportionality is one of the major issues that we find we are dealing with at the end of a matter, particularly in the small-to-medium-value claims.

Why was it introduced? It was considered that the then existing system was not working and that a system needed to be put in place which would “promote access to justice at proportionate cost”.

In 2009, Court of Appeal judge Sir Anthony May said: “Assessments which have to concentrate retrospectively on what the winning party has spent will always risk producing a disproportionate result.”

Lord Justice Jackson believed that the costs of litigation needed to be at the forefront of the parties’ minds at a much earlier stage and not just an afterthought arising at the detailed assessment hearing.

In his 15th implementation lecture, he said: “The forthcoming new approach to proportionate costs… will operate before the issue of the claim form, throughout the life of proceedings, and then at the end of proceedings when costs come to be assessed.”

The rule

“44.3(2) Where the amount of costs is to be assessed on the standard basis, the court will:

(a) only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred…

(5) Costs incurred are proportionate if they bear a reasonable relationship to:

(a) the sums in issue in the proceedings;

(b) the value of any non-monetary relief in issue in the proceedings;

(c) the complexity of the litigation;

(d) any additional work generated by the conduct of the paying party; and

(e) any wider factors involved in the proceedings.”

The reality

There has been little or no guidance and this has led to inconsistency in the approach of the courts, but what we do know is that proportionality trumps necessity.

As Master Rowley put it in May & Anor v Wavell Group Plc & Anor [2016] EWHC B16 (Costs): “The amount that can be recovered from the paying party is not the minimum sum necessary to bring or defend the case successfully.

“It is a sum which it is appropriate for the paying party to pay by reference to the five factors in CPR 44.3(5). It is not the amount required to achieve justice in the eyes of the receiving party but only a contribution to that receiving party’s costs in many cases.”

Initially, additional liabilities were considered to be beyond the scope of proportionality. Not so now.

Jackson LJ’s final report said: “Recoverable costs are liable to be disproportionate in every case brought under a CFA. This is because additional sums are added to that which is reasonable and proportionate (viz the base costs) without regard to the proportionality of the total figure.”

In BNM v MGN Ltd [2016] EWHC B13 (Costs), application of ‘new’ test of proportionality was found to apply to both base costs and additional liabilities – though separately (Court of Appeal, October 2017).

In King v Basildon & Thurrock [2016] EWHC B32 (Costs), proportionality was found not to apply to additional liabilities and likewise in Murrells v Cambridge University NHS Foundation Trust (SCCO, 17 January 2017). In both of these cases, though, the additional liabilities were arguably ‘incurred’ pre April 2013.

However, in Rezel Clarke v Moorfields Eye Hospital [2017] EWHC B5 (Costs), proportionality was found to apply to additional liabilities.

The premium of a post-April 2013 policy was assessed separately. All of the work was post 1 April 2013 and found to be subject to the new rule on proportionality, which meant that even if work was reasonably and necessarily done it can still be disproportionate.

The master criticised the claimant’s solicitors for not planning the necessary work and the way to approach the matter, given that they knew that this was a low value claim which, at its highest, was worth £5,000.

Here the court quoted with approval the passage from HH Judge Alton in Birmingham County Court on 22 June 2000 in an unnamed case, itself approved by the Court of Appeal in Jefferson v National Freight Carriers Plc [2001] EWCA Civ 2082:

“In modern litigation, with the emphasis on proportionality, it is necessary for parties to make an assessment at the outset of the likely value of the claim and its importance and complexity, and then to plan in advance the necessary work, the appropriate level of person to carry out the work, the overall time which will be necessary and appropriate to spend on the various stages in bringing the action to trial, and the likely overall cost.

“While it is not unusual for costs to exceed the amount in issue, it is, in the context of modern litigation such as the present case, one reason for seeking to curb the amount of work done, and the cost by reference to the need for proportionality.”

Where does this leave us?

The new proportionality test was intended to help provide a degree of predictability as to what costs would be payable if a case was lost for those claims not subject to fixed fees. Parties would know that the total would not be more than was proportionate to the claim. However, it has not provided such certainty and if anything has only muddied the waters further.

Lord Justice Jackson offered his solution in a lecture on 23 May 2016: “The best way to satisfy the requests for clarification is to convert the five identified factors into hard figures: in other words, to create a fixed-costs regime… those seeking certainty about how rule 44.3(5) will apply are seeking something akin to a fixed-fee regime for all cases.”

What should we be telling our clients?

We should be warning them of the uncertainty of costs recovery.

Master Rowley in May said: “It seems to me that the new test of proportionality… will require legal representatives to inform their clients that, even if successful, they will receive no more than a contribution to the costs that will be incurred.”

Further, we should caution that proportionality will bite in appropriate cases and that the quantification and measure of proportionality is an inexact science.

What should we be aiming for?

Litigation conducted by the appropriate level of fee-earner, efficiently and with due regard from the early stages of the likely outcome and conducted appropriately. This can be achieved, in part, by obtaining approval of a realistic costs budget and litigating within its boundaries.

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Coupland: Working with Proclaim will enable us to achieve ‘Top 25 Status’ in 2014

In 2013 Advantage Property Lawyers (APL), with the assistance of Eclipse‘s Proclaim Practice Management Solution, won 3 major awards:

– Large Conveyancer of the Year (silver) – Sunday Times Estate Agency of the Year
– Yorkshire & North East Conveyancing Firm of the Year (gold) and
– Conveyancing Firm of the Year (silver) – LFS conveyancing Awards

The challenge

In 2009, as a new start-up, APL needed a Practice Management solution that focused specifically on residential conveyancing. Software was needed that would allow the firm to offer its clients and introducers an outstanding level of service and customer care, whilst maintaining best practice at all times. The solution would also have to be reliable and offer easy scalability in line with APL’s aspirations to become one of the UK’s biggest and best conveyancers.

The solution

Eclipse’s Proclaim Practice Management solution was implemented at APL’s inception as it provided a centralised, secure desktop toolkit for every property transaction – utilised by all staff. Proclaim was also chosen for its out-of-the box conveyancing focus and ease of integration with third party complementary software – as most work came from large corporates and major estate agents.

The results

Proclaim has proved to be an essential ‘enabler’ for providing a superb client experience and reducing turnaround times. Proclaim facilitated APL to achieve over 4,000 completions and increase turnover by 40% in 2013. The financial and reporting toolset is used to provide instant data retrieval with on-going monitoring and analysis of KPIs assisting with the management of systems, processes and risk calculations.

APL is using Proclaim to automate a vast number of administrative processes including document production and hopes to move towards a paperless office soon.

Since implementing Proclaim, APL has grown rapidly requiring an increase in staff numbers by over 200% from 15 to over 50. The firm is now represented on the management board of The Conveyancing Association and was the first conveyancing firm to receive the ‘Legal Eye’ quality standard.

Stephen Coupland, head of sales & marketing at APL says: “Working with Proclaim will enable us to achieve ‘Top 25 Status’ in 2014.”


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

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

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

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

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

For more information about Protect 36 and our current ATE and LEI products and services, please contact

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Burcher JenningsFour years since the Jackson reforms came into force, and with no respite for law firms from the significant challenges posed by ongoing changes in the rules and procedures for costs, Burcher Jennings has today launched a fully updated Costs Masterclass for 2017.

Richard Allen, Senior Costs Lawyer at Burcher Jennings, who leads the Masterclass, drawing on his over 30 years of industry experience, said:

“Across the changing legal landscape in which our industry operates, costs remain one of the most significant challenges today. Balancing the tension between access to justice, client expectations and the need for law firms to turn a reasonable profit will be critical to the prospects of many firms. Our Costs Masterclass is designed to bring clarity, insight and practical guidance for those feeling overwhelmed and underprepared for ongoing upheavals in the costs regime.”

Burcher Jennings is a costs market leader. This expertise, combined with prominent expertise in pricing, as well as law firm and litigation funding, gives the firm a uniquely insightful position from which to deliver such support. The Masterclass is led by Richard Allen, who has more than 30 years’ industry experience, was one of the first professionals to be awarded Costs Lawyer status and is one of only a small number of Costs Lawyers who also made partner in private practice.

The Costs Masterclass is structured either as an intensive two-hour session or a half a day of knowhow and interactive discussion. It will cover an extensive range of topics, from Indemnity Principle and retainers, to Part 36 offers and maximising costs. Practical knowhow is combined with strategic insight and solutions tailored to the firm of the individual participant.

Richard Allen added:

“We are responding to a need for support when it comes to managing the current and future costs challenges. This Masterclass not only focuses on the basic principles but also looks at technical costs and case management issues. Designed to turn costs around for firms that are struggling and allow others to manage costs with strategic and insightful ease, our course is unique in its depth of support and expertise.”

Martyn Jennings, Chief Executive of Burcher Jennings, said:

“This Costs Masterclass is a part of the thought leadership Burcher Jennings is able to deliver thanks to exceptional depth of expertise and experience at the firm. We look forward to being able to support firms through the most recent challenges and make costs management a business asset, rather than an obstacle to be faced.”

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Royal Courts of Justice

Defendant could not conceal the way things had changed

Judges who give permission for the withdrawal of part 36 offers must disclose the arguments and evidence behind their decisions, the High Court has ruled.

Mr Justice Leggatt said that, in a “remarkable” personal injury case, a judge granted an order permitting the defendant NHS trust to withdraw a part 36 offer without the claimant being served with any evidence or any record of what was said at the hearing.

“Even now, the claimant and her representatives do not know the basis on which the ex parte order was made,” Leggatt J said.

“The only information provided to them has been a redacted version of the defendant’s skeleton argument for the hearing on 7 August 2014. This contains a submission that there was a change of circumstances which justified permitting the defendant to withdraw its offer.

“However, in the copy disclosed to the claimant, the parts of the skeleton argument which presumably explained the nature of this alleged change of circumstances have been blanked out.”

The court heard in Evans v Royal Wolverhampton Hospitals NHS Foundation Trust [2014] EWHC 3185 (QB) that the claimant responded by issuing an application to have the ex parte order set aside and for evidence in support to be served on the claimant.

Jayne Evans fell in the street while intoxicated and was discharged from hospital later in the day. The following day she was readmitted, but despite treatment, suffered a brain injury.

On July 3 this year, the defendant made an offer of £325,000 under part 36. Before the 21-day period for acceptance had expired, it served a notice of withdrawal. On the same day, the claimants served a notice accepting the offer.

Unknown to the claimant, on July 24 the defendant issued an application for permission to withdraw the offer, which was granted by Judge McKenna, sitting at the Birmingham District Registry of the High Court, at a hearing the following month.

The claimant complained that the procedure followed was contrary to natural justice and unlawful.

Setting aside Judge McKenna’s ex parte order, Leggatt J said: “It cannot be open to a party who did not have good reason to withdraw its offer at the time when it gave notice of withdrawal during the 21-day period and who would have been refused permission by the court on that date to justify the withdrawal by reference to matters discovered subsequently.

“This being so, I find it difficult to envisage what legitimate reason there possibly be for seeking to conceal from the offeree the way in which circumstances are said to have changed after the offer was made and before the notice of withdrawal was given.”

Mr Justice Leggatt ruled that unless the defendant served the evidence and disclosed the arguments on which it wished to rely, the claimant was entitled to judgment under part 36.


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Scott-Moncrieff: one-sided debate

District judges have been instructed to be strict on enforcing compliance with budgets, it has emerged.

The news comes from the Law Society’s civil justice committee, which is also planning to investigate the feasibility of a conditional legal aid fund, possibly involving third-party funding.

According to the recently released minutes of the committee’s February meeting, representatives held a separate meeting with the Association of District Judges. The judges reported that they are being “urged to be strict on enforcing compliance with budgets; and that courts were unlikely to be concerned about client costs and would not interfere with budgets agreed between the two sides”.

The committee is meeting again today and will be presented with its work plan as approved by the society’s legal affairs and policy board. This includes reference to a review of the feasibility of ‘CLAF and third-party funding’, a report on which should be completed by the end of 2013. The Law Society declined to provide any more details.

The work plan also talked about further work to lobby both the UK and EU “against the manipulation of the market by insurers in respect of legal expenses insurance/freedom of choice of solicitor and third-party capture”. It also said that six new Law Society practice notes relating to the 1 April reforms are due out this month.

The work plan indicates that the committee’s ambitions are to some extent restricted by only have one dedicated policy adviser working at Chancery Lane to help push its work forward.

Meanwhile, the Law Society has told the transport select committee – whose call for evidence as part of its whiplash investigation closed yesterday – that “this is a debate in which all too often the perspective of only a single side − the insurers – is heard”.

In a letter to committee chair Louise Ellman MP, Law Society president Lucy Scott-Moncrieff asserted that government proposals to increase the small claims limit in personal injury cases largely stem from propaganda generated by insurers.

The committee will soon decide from whom it will take oral evidence and Ms Scott-Moncrieff told Ms Ellman: “Such a one-sided debate has the potential to distort the facts leading to, in the society’s view, ill-considered and disproportionate policy-making. I very much hope, therefore, that your committee is able to hear from all sides, including the solicitors’ profession, during the course of your inquiry.”

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Carrington: insurers will be more willing to defend passenger claims

Carrington: insurers will be more willing to defend passenger claims

A recent county court decision on ‘fundamental dishonesty’ opens up a “new avenue for insurers”, leading defendant firm DAC Beachcroft has claimed.

According to counter fraud partner Anthony Carrington, the decision “rewrites the rulebook” for defending ‘bogus passenger’ claims.

The claim in Shahid v Puddick was made following a car accident in 2014. The defendant had indicated that only one of the three claimants was genuine, so insurers decided not to settle the genuine claimant’s claim as she had supported two bogus personal injury claims.

Mr Carrington recorded that the trial judge agreed, describing the entire action as dishonest. He concluded that two of the three claimants had not been present at the accident and then went on to dismiss the ‘genuine’ claimant’s claim, which was worth £2,000. The claimants were also ordered to pay the defendant’s costs.

Mr Carrington, said: “The decision is great news for the insurance industry and marks a significant shift in case law relating to ‘genuine’ claimants who support fraudulent claims. Before the introduction of the Criminal Justice and Courts Act 2015, insurers had little alternative but to settle ‘genuine’ claims.

“Insurers should take confidence from this outcome and not look to settle claims where the ‘genuine’ claimant is supporting bogus claims by individuals who were never involved in the accident.”

DAC Beachcroft said that in the last year, it has had more than 140 claims dismissed at trial or final hearing on grounds of fundamental dishonesty, saving insurers more than £1.4 million in damages and costs. Costs have been assessed in two-thirds of the cases, leading to costs orders totalling over £440,000 being awarded to insurers.

Mr Carrington could not say how many times the firm had claimed fundamental dishonesty and failed, but he said that as it only made the allegation at the end of a case when the facts were clear, they “generally succeed”.

An analysis of all the fundamental dishonesty findings obtained by the firm found that 43% involved fraudulent low velocity impact claims, while more complex frauds where accidents were induced or staged accounted for around 38%. Fewer than 10% of the fundamental dishonesty decisions related to bogus passenger claims.

“Now that the case law in defending this type of fraudulent claim has been so substantially altered, we expect insurers will be more willing to defend these cases in their entirety so bogus passenger claims will account for a greater proportion of fundamental dishonesty results in the future,” said Mr Carrington.

He added that checking a claimant’s social media activity was becoming increasingly important in tackling fraud.

“In a number of these fundamental dishonesty cases, our intelligence team’s investigations of the claimants’ own social media activity unearthed some gems of evidence, which contradicted what the claimants had alleged in their claims.

“In one case, the claimant alleged that his injuries came on within 24 hours of the accident and that he had been unable to go running but his social media showed that the claimant had, in fact, completed a 10km run the day after the accident, recording a personal best time. Following the cross examination at trial, the claimant discontinued and agreed to pay costs in excess of £10,000.”


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