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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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Tax dispute

Case centred on company director’s remuneration

A senior tax judge has become one of the first to go through the Denton principles on relief from sanction, in finding that an 11-day delay in serving a statement of case was not significant.

In his ruling in the Tax Chamber of the First Tier Tribunal, Judge Jonathan Cannan outlined how the approach set out in Denton could be applied by other non-specialist courts.

Judge Cannan said the first stage of the Denton test was to focus “not on whether the breach has been trivial, but on whether it has been serious or significant”.

He went on: “Whether a breach imperils future hearing dates or otherwise disrupts the conduct of the litigation may well be a useful measure of whether it has been serious or significant.”

Judge Cannan said the first stage of the test did “involve consideration of unrelated failures”, which were better dealt with at the third stage.

He said that when, during the second stage of the test, courts considered why the default occurred, they could find “good and bad reasons” in the Mitchell ruling. “Plainly pressure of work will rarely be a good reason.”

The judge went on: “The third stage involves consideration of all the circumstances of the case. The need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules are of particular importance in the third stage and should be given particular weight.”

Judge Cannan was ruling in Elder v HMRC [2014] UKFTT 728 (TC), a case in which HMRC failed to serve its statement of case as directed; 11 days after the deadline, the time for service was extended by a tribunal judge. The applicable rule does not contain a sanction, but the claimant sought to have HMRC disbarred from taking part in the proceedings and Judge Cannan said the Denton guidance was directly relevant, and that – as the Court of Appeal said in its ruling – it was not necessary to cite pre-Denton rulings.

Referring to Lord Dyson’s comment in Denton that courts should always “have regard to all the circumstances of the case”, Judge Cannan said the 11-day delay was not “serious or significant”. “That is not a significant delay in the context of appeals generally, or in the context of the first and second appeals in the present case.

“That is not to say that such delays are to be in any way encouraged. However it did not imperil a future hearing date. Nor should it have disrupted the conduct of these appeals or other appeals.”

Judge Cannan accepted that there was “no good reason” for HMRC not to have sought extension of time for service of the documents, and noted its failure to engage with the appellant to agree directions and that the statement of case did not “deal adequately with quantum”.

However, “apart from these aspects”, the judge said he was not satisfied that any other breaches were significant. He dismissed the application.



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Raab: Better bang for the taxpayers’ buck

Birmingham and Stoke-on-Trent have been chosen to house the country’s first Courts & Tribunals Service Centres, but a decision also to centralise the collection of criminal fines has sparked a warning from the Public and Commercial Services Union (PCS) about the wider impact of court modernisation on staff.

HM Courts and Tribunals Service (HMCTS) said the aim was “to bring together expertise in managing court and tribunal cases as they transform from traditional paper-based processes to modern digital systems”.

The two centres will employ more than 300 people each, in roles ranging from processing cases, and issuing court orders and hearing notices, to answering telephone and web enquiries.

HMCTS dealt with over 4.1 million cases last year and it said that many of the enquiries relating to them will be channelled through the centres as more open.

“Bringing knowledge together means a better service. The Loughborough HMCTS contact centre, which deals with telephone calls from many county courts, has improved the speed and reliability of responses, and has very good feedback from those using it”

Justice minister Dominic Raab said: “These new administrative centres will make sure we deliver better services for those using the courts system, whilst delivering better bang for the taxpayers’ buck.”

HMCTS said it also planned to consolidate the 50 bases from which the National Compliance and Enforcement Service operates into three – in Leeds, Runcorn and Cwmbran. The service collects criminal fines.

“Our hard-working staff have been hampered by an ICT system which was created in 1989. The new operating model will improve efficiency, reduce delays and increase the amount of fines collected,” it said.

But the PCS has pledged to fight the move, saying that 500 people could lose their jobs as a result.

It said HMCTS has agreed that the PCS would be able to make the case against closures: “The union has a clear view that HMCTS must make decisions based on people, their lives and expertise. All of which are at risk if this proposal goes ahead unamended.”

In a statement, the PCS said: “This decision… is a taste of what will happen across the whole of HMCTS as functions are centralised and jobs are cut as a result of the digitisation of the courts and tribunals service.

“The HMCTS also plans to privatise the work of the civilian enforcement officers where work will be transferred to private sector bailiff companies and will no longer be directly answerable to the judiciary.”

PCS general secretary Mark Serwotka added: “We are opposed to work being centralised and our members’ jobs being put at risk. We will, in consultation with our members, produce strong cases against office closures which we expect the employer to listen to and act upon.

“Failure to do so will give us no alternative but to actively consider all other means to stop the closures including industrial action.”

An HMCTS spokesman said: “We are transforming the way we collect fines to make it faster and more effective.

“We recognise the impact of these changes on employees, which is why we are focused on helping our permanent staff find new roles either within the new service or in wider government.”

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Keith Hardington, partner at Walker Foster

Eclipse Legal Systems, the Law Society’s sole endorsed legal software provider, today announced the implementation of its Proclaim Practice Management Software solution at Walker Foster Solicitors.

The practice operates from offices across West Yorkshire, North Yorkshire and Lancashire, and prides itself on its reputation as a leading, local firm of expert solicitors.

With an objective to provide clients with high quality and value-for-money legal services, fee earners strive to achieve pragmatic solutions to all client requirements.

In a 6-figure deal, the Proclaim Practice Management Software solution is being rolled out to 50 staff across the Conveyancing and Probate departments. Proclaim will provide fee earners with a centralised and consistent approach to case management – from instruction through to completion – whilst the accounting toolset will provide a detailed analysis of the firm’s operations.

Furthermore, Eclipse’s Credit Control Centre will provide the practice with a central dashboard display of key financial and payment information, with the ability to drill directly into bills, clients and matters.

In addition, Walker Foster has opted for Eclipse’s legal Compliance toolset. Fully integrated within Proclaim, users will have access to a number of tools – including a Risk Register, a configurable reporting system and a Compliance Library – to assist with the extensive obligations required by the SRA.

Keith Hardington, managing partner at Walker Foster Solicitors, comments:

“As an established and respected practice, we chose Eclipse’s Proclaim system to meet our demands for a reliable and robust legal software solution that would scale with us as we grow.

“The integrated tools Eclipse offers to manage elements such as compliance further cemented our decision, and the overall solution will ensure we manage all elements of matter management efficiently and effectively on a day-to-day basis.”

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Profit: Therium back in the black

Third-party funder Therium Capital Management has generated a return of double the investment on cases closed in the first six months of its financial year, new figures have shown.

In a report to the stock market, City of London Group plc (COLG), which has a 50% stake in the funder, said that in the six months to 30 September 2014 Therium has had four cases resolved, winning three and settling one with a partial loss.

Therium’s investors put £4.5m into these cases, which generated a return of £8.8m.

Therium’s profit before tax for the period was £304,000 – as against a loss of £240,000 in the first half of 2013/14 – “the improvement reflecting performance fees earned in the period on positive case results”, COLG’s market announcement said.

It added: “In August 2014 Therium was pleased to be appointed as litigation advisor to a newly established fund of €7m.”

In July COLG announced that it had been working with the management of Therium to identify a new investor to acquire its stake and to develop further the litigation funding business. “Good progress has been made in this search and exclusive negotiations with a potential new investor are at an advanced stage. We hope that a transaction will be concluded shortly.”

Novitas, Therium’s 50% owned associate, which extends secured lending to law firms and their clients “has continued to deliver strong growth in its loan book and profits”, the report added.

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Eclipse2014 200x200LHD Solicitors is implementing the Proclaim Practice Management Software Solution from Eclipse Legal Systems, the Law Society’s endorsed provider.

Based in Lancaster, LHD Solicitors specialises in dealing with every aspect of criminal defence work from the investigation stage through to appeals. The firm prides itself on the talent and expertise of its solicitors who boast an exceptional reputation for knowledge and experience, resulting in the firm being both the largest and most preferred in the area.

The Proclaim Criminal Case Management Software system will be utilised firm-wide. Staff will have instant desktop access ensuring a secure and consistent approach from all users. The software will also provide LHD Solicitors with a solution to the administrative hurdles inherent in Criminal work, streamlining the case handling process for fee earners.

In addition, the integrated Proclaim practice accounting and financial management toolset will be implemented to boost efficiency and provide detailed analysis of the firm’s operations.

Rachel Hood, director at LHD Solicitors, comments:

“With Proclaim we can enhance our efficiency, removing the time-consuming administrative tasks and therefore allowing our fee earners more time to focus on our clients. Proclaim’s inherent flexibility also allows us to adapt and develop in line with the ever-changing needs of the legal sector – something that is crucial for us if we are to continue standing apart from the competition. Furthermore, the team at Eclipse have provided us with exceptional support throughout the entire implementation, reinforcing their reputation as market-leaders.”

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Burcher Jennings200Burcher Jennings, a leading national legal cost and pricing consultancy is delighted to announce that it will be holding its inaugural Pricing Funding and Costs Conference in London on 1 July 2015.

The event is in recognition of the growing pressure on law firms to establish modern day pricing solutions, and will provide attendees with insight into what currently constitutes best practice across the related issues of pricing, funding and costs. The event will take place at the Grange City Hotel in London from 9am to 5pm.

The conference agenda, content and speakers have been specifically tailored to the needs and interests of law firms and will be of particular interest to: Managing Partners; Practice area Department Heads (Partner level); CEOs; CFOs; FDs; CIOs; Heads of L&D and Heads of Marketing & BD.

Martyn Jennings, Chief Executive commented: “Pricing for value is, to my mind, one of the most critical challenges for providers of legal services at the moment. The need to understand value – from a client’s perspective – and the ability to construct an appropriate pricing offer are now key attributes of a modern practitioner. In light of this, our event will seek to provide guidance and direction on everything pricing, funding and costs related including pricing, litigation costs, litigation funding, pricing IT, marketing and BD using pricing – this event has it all.”

Many leading practitioners across law and finance will be speaking at the event including: Professor Stephen Mayson; Richard Burcher, Managing Director, Validatum®; Robert Camp, Managing Partner, Stephens Scown; Richard Marshall, Managing Partner, Lupton; Chris Bull, Executive Director, Kingsmead Square; Neil Cameron, Neil Cameron Consulting Group; Steve Din, Doorway Capital; Rocco Pirozzolo, Director of Litigation Funding at Harbour Litigation Funding; Professor Dominic Regan, the leading UK authority on litigation costs and Lord Justice Jackson’s civil costs reforms; Joanne Powell, Costs Consultant & Head of London Office, Burcher Jennings;  Scott Keyser, Scott Keyser Proposals, bid advisor to large professional service providers such as Allen & Overy, Nabarro and Ernst & Young and Abby Winkworth, MBA, CCIM, Partner and Director of Marketing and Business Development, IBB Solicitors.

For further information, please visit Burcher Jenning’s website here.

This event is CPD accredited for 6 hours. CPD code – EXG/VALI.

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Jackson: greater take-up

Jackson: greater take-up

The new format bill of costs is set to become compulsory in a year’s time after the rule committee decoupled it from mandatory use of the J-Codes, it has emerged.

The revised practice direction 51L – in force from 3 October in the latest update to the CPR – said the voluntary pilot has been extended for a further year and changes made “with a view to establishing a mandatory form of bill of costs to apply to all work done after 1 October 2017”.

It added that the Civil Procedure Rule Committee will monitor and review the pilot scheme and aim to fix the mandatory form of the new bill of costs at its meeting in May 2017.

The notes to the update said changes aimed “to alleviate concerns raised about the existing form’s reliance on J-Codes”.

“Parties will be able to file their bill in electronic format which will assist the court in assessing the bill as any adjustment made by the court, to say the rate or hours claimed, will automatically be carried through to all relevant parts of the bill.”

In a speech in April, Lord Justice Jackson recommended that the new format bill of costs developed by the Hutton committee needed to be brought into use but should be decoupled from the J-Codes to make it more palatable to the profession.

He said this would allow “greater flexibility” and promote take-up given that “most – if not all – of the criticisms about the new format bill of costs are aimed at the J-Codes”.

Writing in June about their experience of handling the first case under the voluntary pilot, Bradley Meads of Kain Knight and Virginia Rylatt of Rylatt Chubb said: “The experience showed that the new J-Codes are too complicated, that dealing with such costs is too labour-intensive and that the time spent dealing with costs under the new scheme is at least 100% increased on what they would have been otherwise.”

As a result, the revised practice direction includes a new Precedent AB, and it says that in addition to the existing new bill format, parties can use any other spreadsheet so long as it:

  • Reports and aggregates costs based on the phases, tasks, activities and expenses defined in schedule 1 to the practice direction;
  • Reports summary totals in a form comparable to Precedent AB;
  • Automatically recalculates intermediate and overall summary totals if input data is changed; and
  • Contains all calculations and reference formulae in a transparent manner “so as to make its full functionality available to the court and all other parties”.

The Association of Costs Lawyers has been promoting a simplified version of the new bill.

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

By John Spencer of Litigation Futures sponsor Spencers Solicitors

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

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

Fees and payments

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

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

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

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

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

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

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


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

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

Medical expert reports

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

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

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

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

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

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

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Open for business: the PI market hasn't suffered the closures that were expected

Open for business: the PI market hasn’t suffered the closures that were expected

Posted by Rory Wilson, business development manager at Litigation Futures sponsor Amberis ATE Solutions

As we approach the second anniversary of implementation of the Legal Aid, Sentencing & Punishment of Offenders Act 2012, many firms are now starting to recognise a way to work under the new conditions and look towards growth and expansion.

In the months leading up to implementation, the question of survival was dominating conferences and media publications alike.

Many firms considered moving out of the PI market place entirely, and observers prophesised the downfall of all but the largest firms due to the demands of working in an perceivably impossible market. If closures weren’t to be seen, then mass consolidation would be the net result, with firms joining forces to compete with the behemoth, investment-backed corporations led in part by the advent of alternative business structures.

Despite such pessimism, the majority of firms embraced the changes, and looked to their own internal processes and structures to re-model the blueprint for profitability.

Some decided that diversification was the key, moving into generally unaffected areas of personal injury or focussing on high-value cases too complex to manage through a fixed-cost portal process.

The casualty rate has been far lower than many thought, save for some high-profile closures not all related to LASPO but certainly influenced by it. The much-publicised professional indemnity issues experienced by a number of firms led to others taking advantage by acquiring WIP on more profitable pre-LASPO cases to assist in their growth.

Small firms are realising there is still a market for a high street presence and even the acquisition of new work. While most will agree that re-scaling, downsizing and streamlining has been a difficult process, it has provided them with a sustainable method of approaching PI in the modern environment.

The market still exists and while actual numbers are often disputed vehemently from both sides, there is no indication of a landslide drop in claims. Firms have now started to be able to profile settled cases and are seeing that with the right changes profit can be made. Anecdotally, solicitors have suggested that profit margins range between 10% and 17% – an enviable level in any industry, not just the legal profession.

For suppliers, the past two years have perhaps not been as busy but the concerns were mutual in the lead up. While firms focused on re-structuring and profitability, little time was, or could be, spared looking at the supporting role suppliers played commercially or in terms of efficiency.

The changes, then and subsequently, have forced suppliers’ hands also. The need to innovate and redefine their product offerings was needed to breathe new life into an industry which had become stagnant and tied.

After-the-event (ATE) insurance was believed to be the first major casualty with the introduction of qualified one-way costs shifting; however, it was soon realised that it wasn’t the ‘perfect solution’.

ATE insurers scrambled to develop the right products at the right price for the market, whether it be a firm umbrella policy, part 36, fixed or staged premiums. Time was given to refine products by the fact that many solicitors simply continued with their incumbent Insurer as time was focused upon their firm’s survival.

The result is an almost entirely new ATE landscape and a new attitude to risk from insurers. Some are identifying the need for an efficient way to offer protection through integration and minimal reporting, while others are tightening their belts and bracing themselves for a possible influx of pre-LASPO claims.

With so much on offer and each insurer having their own features and benefits, it is extremely difficult and time-consuming for solicitors to assuredly make the right decision for their clients. Firms should turn to brokers.

With the market finally settling, now is the time for firms to look to their suppliers and see what further efficiencies can be drawn from the selecting the right partner. Case management systems have never been more automated, effectively running many aspects of a claim without the need for human interaction. Funding is in demand and with the emergence of auditing firms and WIP appraisal companies, the wariness and anxiety of banks is being removed.

The world in which we operate is still not perfect; the price of new work is still reportedly too high, inflated by the investment backed giants whose initial intention was to starve competition of new work. High-profile closures are still expected, either through lack of adjustment, over confident growth strategies or diversification gone wrong.

It is not the time to rest on your laurels but it is the time to keep moving forward and look at what else the industry can offer you. Just because an efficiency has been found doesn’t mean it can’t be improved. Profitability can be improved!

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Burke: year of transition

Burke: year of transition

Leading legal expenses insurer DAS dipped into the red last year, while its after-the-event insurance business shrank.

The Bristol-based company reported that a loss after tax of £5.7m for 2015, compared to a restated profit of £0.5m in 2014.

Gross written premium for 2015 was £111m– down from £143m – which it attributed primarily to a reduction in ATE business.

The company said ATE premiums were “impacted by a reappraisal of the basis of estimating revenue for clinical negligence products, premium adjustments from a review of old policies and other adjustments” – resulting in a total one-off reduction of £16m.

DAS’s loss ratio hit 76.4%, meaning that it paid out £76.40 in claims for every £100 received in premiums, while the combined operating ratio – calculated by taking the sum of incurred losses and expenses and dividing them by earned premium – also worsened significantly from 103.5% to 119.6%.

More positively DAS reported launching a new home legal expenses offering, while it maintained a “solid capital position”, benefitting from a capital injection of £5.3m from its parent company ERGO during the year.

During 2015, the company also won the gold retail award at the 2015 Nudge Awards for the use of behavioural science in creating communications to increase customer understanding of legal expenses insurance by designing and testing customer welcome letters to maximise comprehension. The Nudge Awards aim to set a gold standard for work in the behavioural science community.

DAS chief executive Andrew Burke described 2015 as “a year of transition”. He explained: “The company undertook a rigorous review of its operations, invested significantly in new platforms and began a refresh of its senior leadership team.

“This is part of our long term strategy to ensure that we have the capability and structure to embrace innovation and continue to enhance our position as a valuable strategic partner.

“While the underlying business remains strong, 2016 has seen further investment in customer propositions, improved systems, controls and expertise which will impact the company’s financial performance in the short-term. Looking further ahead, the strength of our capital position, structure and people means that I am extremely positive about the future of the business.”

The update also confirmed that legal action against former CEO Paul Asplin is continuing. It has been reported in the insurance press that DAS is bringing a private prosecution against Mr Asplin and several others for conspiracy to commit fraud against the company, following an audit of the ATE division.

According to Insurance Age, it was believed that he was originally suspended in 2014 over concerns about his relationship with a former service supplier to the insurer, before leaving the company last year. Mr Asplin has protested his innocence.

A hearing to decide whether the case will progress is expected in December.

  • Insurance premium tax rose from 9.5% to 10% on 1 October.

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RTA: review responses back change to prevent skewing of market

RTA: review responses back changes to prevent skewing of market

There should be a complete ban on pre-medical offers, claimant representatives have argued in responses to the government’s call for evidence on the MedCo portal, while insurers called for the regulation of medical reporting organisations (MROs).

But the Ministry of Justice’s call for evidence, part of the review of MedCo announced in July, which ended earlier this month, saw agreement on the need for changes to prevent the skewing of allocations of experts offered by MedCo to instructing parties, brought about by some large MROs registering multiple smaller companies.

Responding to the ministry’s call, the Association of Personal Injury Lawyers (APIL) observed that the audit and accreditation of MROs should have occurred before MedCo went live in April.

It argued that:

  • The definition of a “national” – that is, tier 1 – MRO should mean that it should not just cover sufficient postcodes, but that it should also be able to provide a medical report within 25 miles of the client within four weeks of the instruction;
  • An algorithm should be used in MedCo’s random selection of experts which “links the ratio of tier one and tier two MROs/experts offered for selection with the total number of tier one and tier two experts registered”. This would prevent market skew; and
  • Each expert selected should be accompanied by “an indication of quality and client care” offered.

APIL said there were insurers that still made offers to settle without a medical report, a practice that was “grossly unjust to the claimant” and should be subject to a “complete ban”.

In its submission to the MoJ, law firm Thompsons Solicitors, which said it spent over £15m on 20,000 medical reports in the year to July 2015, including those in relation to RTA cases, agreed with APIL on the ban, saying: “If the government is really interested in refining a system to the benefit of the consumer – the claimant – not the corporate entities in the market, it should outlaw pre-medical offers with immediate effect. Instead the consultation paper talks merely of ‘discouraging pre-medical offers to settle’.”

The Association of British Insurers (ABI) argued that MROs should be subject to independent regulation, because MedCo was ill-equipped for the role and was currently being forced to act as a “pseudo regulator”.

It continued: “The dysfunctional behaviour witnessed has almost exclusively emanated from MROs in their attempts to undermine the system of random allocation for their own commercial gain.”

The ABI said the statement of financial links made by registering MROs should be widened to prevent connected businesses from appearing in random allocations of experts. But there should be no adjustment to the existing formula for ‘offers’ by MedCo at this point, until the question of multiple registrations was resolved.

Litigation Futures revealed recently that MedCo had started to sanction some MROs for breaches of registration conditions.

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Perrin: code has to mean something

Third-party funders will need to maintain a minimum of £2m of capital if they are to be members of the Association of Litigation Funders (ALF), after it today strengthened its capital adequacy requirements.

As well as updating its code of conduct, the ALF has introduced a detailed complaints procedure by which each funder member will agree to be bound.

The ALF currently has eight funder members: Argentum Capital, Burford Capital, Calunius Capital, Harbour Litigation Funding, Redress Solutions, Therium Capital Management, Vannin Capital and Woodsford Litigation Funding. Juridica Investments is an associate/overseas member.

Previously the code just required members to cover aggregate funding liabilities under all of their funding agreements for a minimum period of 36 months.

Now they have to maintain £2m of capital or such other amount as stipulated by the ALF, and accept a continuous disclosure obligation in respect of their capital adequacy, including a specific obligation to notify the ALF and clients if the funder “reasonably believes that its representations in respect of capital adequacy under the code are no longer valid because of changed circumstances”.

The new code further requires each member to be audited annually by a “recognised” audit firm and provide the ALF with a copy of the audit opinion on their most recent annual statements, along with “reasonable evidence from a qualified third party” that the funder satisfied the minimum capital requirement.

ALF chairman Leslie Perrin, who is also the chairman of Calunius Capital, said the increasing stringency of the capital adequacy requirements – the £2m is likely to increase next year – reflected the experience members had gained of what was needed to operate securely in the market, while at the same time not introducing “arbitrary obstacles” to potential members.

He added: “If the code and membership of the ALF is going to be some kind of mark of approval, the code has got to mean something.” Similarly, “you can’t have a code without a complaints procedure”, although to date the ALF has never received a complaint about a member anyway – although it has about non-members.

The robustness of the code made it harder for lawyers to steer clients to funders who are not members, Mr Perrin noted.

The changes have been welcomed by the Civil Justice Council (CJC), which is chaired by the Master of the Rolls, Lord Dyson. In a statement, it said: “The CJC wishes the ALF success in its continued efforts to progress and achieve a successful and robust regime of self-regulation for litigation funding in England and Wales.”

The other main change to the code makes it more obvious that it applies to any entity with which an ALF member is connected.

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Foskett J: “clearest possible case” for indemnity costs

The NHS Litigation Authority (NHSLA) has been ordered by the High Court to pay indemnity costs after sending a last-minute surveillance video to the claimant’s lawyers which resulted in a trial being vacated.

Mr Justice Foskett said he could “quite understand” why the claimant’s lawyers believed they had been the victims of a “deliberate ambush”.

He went on: “The sending of an edited video (with no reference to the unedited material) by registered post over the Easter weekend, with no courtesy e-mail warning of its impending arrival, was exactly the kind of initial approach that would engender suspicion on the part of the recipient.

“Then to be told that the application for permission to rely on it would be made on the first day of the trial, just before the claimant would give evidence, is exactly the way this kind of issue was dealt with in the past, when ambush was precisely the objective.

“To add to that the suggestion that, on effectively the eve of the trial, the claimant’s solicitor, who will have considerable responsibilities for the arrangements for the trial, should travel to the offices of the surveillance company some 60 miles away to view the unedited footage, was reflective of an obstructive attitude.

“It may not have been intended to be obstructive, but that is undoubtedly how it would have appeared. Some proper professional co-operation at a time like this is essential.”

The High Court heard in Hayden v Maidstone and Tunbridge Wells NHS Trust [2016] EWHC 1121 (QB) that Lorna Hayden, a cardiac physiologist at the hospital, seriously injured her neck while lifting a patient. She sued the trust for almost £1.5m.

Foskett J said there was a dispute about “the extent of her continuing symptoms”.

The defendant’s solicitors applied to the court for permission to rely on video surveillance evidence, but the evidence was not received by the claimant’s solicitors until the first working day after the Easter weekend – eight working days before the trial.

Foskett J said the claimant’s legal team “undoubtedly” regarded themselves as “the victim of an ambush”, and he ordered the trial date to be vacated so they “had the opportunity to consider the position more fully”.

He went on: “A very significant factor in deciding whether to accede to a late application, in my judgment, is the time when a defendant ought reasonably to commission such evidence.

“Once the claimant’s case, both in relation to the disabilities relied upon and their consequences, is clearly articulated and the defendant is possessed of an opinion from an expert upon whom it relies that the claim is ‘suspect’, it seems to me that the obligation actively to obtain surveillance evidence arises if it is considered a proportionate approach to adopt in the particular case.

“The longer it is left and the nearer the time gets to trial, the more likely it is that the court will regard the delay as culpable.”

Foskett J said that, “with considerable misgivings”, he had decided that the interests of justice required that the video evidence should be considered by the court.

He said the claimant and one of her main experts had been able to answer the new material “in a strong fashion”, and the playing field had remained level.

However, rejecting the defendant’s arguments that the costs thrown away by the vacation of the trial date should be dealt with by the trial judge, Foskett J said there was “the clearest possible case” that the defendant should bear them on an indemnity basis for its “unreasonable litigation behaviour”.

In a summary assessment of costs, he awarded the claimants £15,000 for the initial hearing of the defendant’s application, £20,000 for the adjourned hearing and almost £5,000 for expert cancellation charges.

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Tonks: proper consideration was sacrificed

In a dramatic climbdown, the Lord Chancellor Chris Grayling has agreed that extension of the RTA portal to higher-value motor and employer’s and public claims will now not happen in April 2013.

The decision, which emerged late on Friday, follows the judicial review process begun last month by the Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS).

MASS said Mr Grayling had acknowledged it would be unlawful to implement the extension of portal because the full evaluation of the existing portal that was promised when this change was announced has not been carried out.

A Ministry of Justice spokesman said: “Earlier this year, the government announced proposals to extend the road traffic accident scheme for personal injury claims to £25,000. ‪

“Following a legal challenge the Justice Secretary is now considering afresh the timing for implementation of the extended scheme. Further details will be announced in the New Year.”

However, he said the controversial consultation that proposes slashing portal fees by 60%, closing on 4 January, is unaffected by this decision.

MASS chairman Craig Budsworth said: “MASS is pleased at the decision, which will give all parties the opportunity to take a more reasoned and considered approach to this and avoid the headlong rush to the radical changes to the landscape that were all proposed for April 2013.

“This highlights the need to ensure that a full impact assessment of all the proposed changes should be undertaken and not introduced piecemeal. We will continue to work with all stakeholders in ensuring that changes do not prejudice accident victims whilst at the same time continuing to work to eradicate the small percentage of fraudulent claims that are doing so much to detract from the interests of genuinely injured victims.”

APIL president Karl Tonks said: “We have said from the outset that we do not object in principle to the introduction of changes which speed up and improve the civil justice system for the benefit of all parties.

“Our concern in this instance, however, is that proper consideration of key issues was being sacrificed in favour of an impractical ambition to introduce extensions to the RTA portal by next April. We look forward now to offering further input on what the implementation date may be.”

The Ministry of Justice did commission Professor Paul Fenn to conduct an evaluation into the operation of the RTA portal, which was published after much delay in July. This only covered the first year of the portal’s operation and the academic recommended that another year’s worth of data should be collected before taking forward plans to extend it.

It has also been clear early on that it would be challenging for the company that runs the electronic portal to have the extensions in place for April, a point emphasised last week when it expressed concerns about the problems that could flow from the Civil Procedure Rule Committee’s failure to approve the underlying protocols and rules.


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Bundle: full of duplicates and irrelevant documents

Bundle: full of duplicates and irrelevant documents

The bundle prepared for the Court of Appeal should be an aid, “not an obstacle course”, Lord Justice Jackson has said in ruling that no party in a case before him would be entitled to recover the costs of preparing it.

Ruling in an appeal against summary judgment in a construction case, he emphasised paragraph 27 of practice direction 52C, which states the appeal bundle “must contain only those documents relevant to the appeal”.

Jackson LJ – who used to sit in the Technology and Construction Court (TCC) and has made several complaints about the lengths of pleadings – said: “In the last TCC appeal which I heard (a complex case concerning the construction of a road in Gibraltar) the parties were scrupulous in complying with that rule. They thereby saved the court much valuable time. Not so in the present case. Here the parties set about doing precisely the opposite.

“The present appeal bundle (ignoring the authorities bundle) contains 2,550 pages. This includes numerous duplicates and irrelevant documents… The arrangement of the correspondence is, to put it charitably, chaotic. It is certainly not chronological…

“Amongst the jumble of correspondence there are copies of superfluous authorities. The brief chronology furnished by the parties does not contain any page references to aid the hapless judge as he/she struggles to piece together the story of what happened.

“The appeal bundle should be an aid to the court, not an obstacle course. The practice direction governing the conduct of appeals is not difficult to understand. It serves a serious purpose. Experienced practitioners should do what it says.

“In the present case, as I indicated during argument, whatever the outcome of the appeal no party will be entitled to recover any costs referable to the preparation of the bundle.”

Jackson LJ also commented on the ongoing debate over whether the TCC protocol should be retained. He said: “It would be quite wrong for the Court of Appeal to venture into this dispute. I do, however, make three comments. First, so long as the protocol is in place, parties must comply with it.

“Secondly, when issues of compliance with the protocol arise, TCC judges look at the substance of the matter rather than the minutiae of the protocol. Thirdly, the court deplores any excessive front loading of costs in order to comply with protocol: see CIP Properties v Galliford Try [2015] EWHC 481 (TCC).”

In the substantive case, Jackson LJ decided, “after some hesitation”, that Mr Justice Stuart-Smith should not have granted summary judgment. But he stressed that “I am certainly not discouraging robust case management or the use of summary judgment under CPR part 24.

“In appropriate cases part 24 provides a valuable mechanism to avoid holding a trial, with all the expenditure of time and costs which that entails. My conclusion is simply that, for a collection of reasons as stated above, this case falls short of satisfying the requirements of CPR 24.2.”

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Pipkin: time to end the political rhetoric

Posted by David Pipkin, director of Litigation Futures Associate Temple Legal Protection

National Audit Office (NAO) claims that imply excessive legal costs are the cause of rising NHS Resolution expenditure are unhelpful at best, disingenuous at worst and either way do not provide any answers to NHS problems or support genuine access to justice.

The recent NAO comments on the subject contradict themselves by stating first that no evidence has been found relating poorer patient safety to a rise in negligence costs; and then follow on by disclosing that declining performance against waiting time standards is a factor, due to delayed diagnosis or treatment. A slight anomaly, or an unexplained paradox?

Presenting on the rising NHS negligence costs at the Westminster Health Forum seminar on earlier this month, NAO director Jenny George admitted: “The truth is we just don’t have the data to draw any definite conclusions.”

There is, however, much data in circulation to provide some context. Clinical negligence costs may have quadrupled over the past decade to £1.6bn, but this represents a little over 1% of the NHS total budget.

Let’s assume those costs were cut in half overnight. Is it realistic to suggest that patient standards would significantly increase due to the extra half a percent in the kitty, where the other 99% wasn’t enough? That’s assuming excessive legal fees are the real problem; in reality, claimant legal fees only contribute around 20% to the overall, with defence costs in the region of 10%.

I agree with Kimmo Boote, an associate at Dutton Gregory Solicitors and a clinical negligence specialist, who says: “Whilst the government’s stance in wanting to reduce the costs of expensive lawyers who use up valuable NHS resources may strike a chord with voters and taxpayers, the likely result will be that access to justice will be denied to many claimants who will have been injured by the very people that they had trusted to look after them in the first place.”

Perhaps one of the reasons claims are rising is patient dissatisfaction with how they are treated after the incident, with insufficient apologies and explanations of what and why things went wrong.

The UK has very poor risk statistics in many areas, such as birth injury. It is said only 4% of patients that could claim actually do. What if that doubles? It would be a disaster for the NHS but it wouldn’t be an increase in the current risk patients face.

There are many safeguards in place to protect the NHS from spurious claims as well: ATE insurers like us are gate keepers helping to filter out weak or speculative claims.

Perhaps it’s time for the NAO to end the political rhetoric and work together with all interested parties – the NHS, the government, victims of clinical negligence and the legal profession – to source the ‘missing data’ and establish the genuine cause of the rise in clinical negligence within the NHS.

This has to be better than focusing on the outcome of the negligence, which is, after all, that vulnerable victims are seeking support and stability for an uncertain future.

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Ellis: the lessons of Henry are obvious

Henry v NGN, handed down on 16 May 2012, represents the first significant judicial ruling to emerge from the nascent costs management regime. By not finding “good reason” to depart from budget on detailed assessment on the facts of this case, the Senior Costs Judge has sounded the biggest wake-up call yet to the legal profession regarding budgetary control. His message can be paraphrased as ‘engage or suffer accordingly’.

The case of Henry falls under the defamation costs management pilot scheme, which is governed by Practice Direction 51D. The importance of establishing guidance as to what circumstances might provide an escape valve for receiving parties who overspend is clear.

Costs management rules will be implemented to coincide with Jackson big bang in April 2013 across the full range of multi-track cases. These are expected to follow the principles piloted in the defamation and Mercantile/TCC schemes. We will know more about that on 29 May when the next Jackson implementation lecture is delivered, focusing on costs management.

No doubt with this background in mind, Chief Master Hurst gave permission to the claimant to appeal even before it had been sought; an invitation that the claimant’s lawyers have stated they will take up. At the time of writing it is not yet known whether the appeal will be fast-tracked to the Court of Appeal, but that has to be a strong possibility.

The brief facts of the case are that Ms Henry was a member of Haringey’s social work team assigned to the tragic case of Baby P. A raft of defamation cases arose against a number of newspapers that reported on the disciplinary proceedings involving Ms Henry and others. Once those disciplinary proceedings exonerated Ms Henry, the cases other than that against NGN, settled fairly quickly, providing vindication to the claimant by way of compensation, statements in open court and costs.

The case against NGN (whose reporting was characterised as a campaign) continued to be defended until settlement in favour of the Claimant was reached shortly before trial in July 2011. Henry v NGN therefore reached the necessary procedural stage to be captured by the pilot scheme.

Costs budgets were approved in September 2010 for both sides’ costs, which were remarkably similar in total, albeit the components differed. The claimant’s base costs estimate (including allowance for a trial that was ultimately avoided) came in at £539,847 against the Defendant’s £531,746.

Having succeeded in the case, Taylor Hampton proceeded to serve a bill of costs on NGN that was prepared upon conventional lines – i.e. it did not link the work to the budget categories. NGN’s costs lawyer (me in this case) undertook the task of decomposing the bill in order to measure how closely the costs incurred aligned with the approved budget. That exercise was powerfully revealing in the following respects.

HHJ Simon Brown QC, the judge in charge of the Birmingham costs pilot, likes to use the term ‘Manhattans’ to describe the spikes within a costs budget. In Henry the equivalents of the Empire State Building and the Rockefeller Centre were the work claimed on witness statements and disclosure, respectively 18 times and eight times higher than the equivalent sections of the budget.

The base costs overspend on these two categories – £292,710 – became the bone of contention in the preliminary issues hearing.

Under paragraph 5.6 of PD 51D, the court, when assessing costs on the standard basis, has to be satisfied that there is “good reason” to depart from the budget if it is to allow a higher figure.

Those united in the love of costs will no doubt pore over the decision in detail but for those who prefer to cut to the chase;

  • Chief Master Hurst was satisfied that a significant, albeit unassessed, amount of work resulted from events that arose after the budget had been set, in particular in the area of disclosure.
  • Hence if establishing good reason requires two hurdles to be cleared, the first – whether legitimate extra work arose – was safely negotiated.
  • The reason the claimant’s lawyers failed to carry on to establish good reason was that they had simply not engaged with the process of costs management.
  • They had not liaised with the defendant (despite prompts), nor had they notified any overspend until well after the horse had bolted, and they did not apply to amend the budget.

I think I can safely say that the lessons of Henry are obvious, and somewhat unusually, are obvious irrespective of the outcome of a pending appeal. Solicitors who cannot arrive on a reliable method of monitoring adherence to budgets will become extremely vulnerable in the new world of costs management.

If that challenge represents a voyage into the unknown, the worst of it (or, I suppose, the best of it, depending on which side you’re on) is that special attention will be required to monitor the budget precisely when the demands of the case increase (often unexpectedly) and when primary focus tends to be on the work rather than the measurement of it.

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EclipseFounded in 2001, Leeds based Michael Lewin Solicitors has grown into a large nationwide personal injury practice employing over 120 staff across five offices.

Back in 2009 Michael Lewin needed to replace its incumbent case management system with a platform and a supplier that were in line with aggressive growth plans. The solution needed to be easy to use, scalable and allow for high volumes of cases to be processed whilst maximising client service.

A Proclaim Practice Management System was chosen and is utilised by all Michael Lewin staff, providing a core centralised solution for a range of injury claim types from minor RTA (Road Traffic Accident) claims – processed seamlessly with Proclaim’s Application to Application integration with the Government’s Claims Portal – through to £multi-million Clinical Negligence matters. The firm also adopted Proclaim as its practice accounting and reporting toolset, providing full integration with fee earner activity. Eclipse also conducted a data migration from the incumbent solution.

Michael Lewin has announced explosive growth at a time of challenging legislation for claimant solicitors. Since implementing Proclaim in 2009, headcount has grown from 15 to over 120, an increase of over 700%. Michael Lewin’s expansion is not complete; Proclaim’s flexibility has been invaluable in allowing the firm to introduce a range of non-personal injury services – all using Proclaim – including debt recovery and employment work.

“Proclaim has delivered over and above expectations, providing an easy to use and incredibly scalable solution. We can process claims with greater speed, greater accuracy, and in greater volumes.” – Abbie Keech, Director, Michael Lewin Solicitors

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Budgeting: Precedent R disregarded

A defendant who offered very low sums in their budget discussion report in the hope that the court may compromise in the middle of the polarised figures put forward by the two sides is guilty of “an abuse of the cost budgeting process”, a High Court judge has ruled.

Warning that budgeting is not “a game”, Mr Justice Coulson said he wanted his ruling published on Bailii “because of the critical need to ensure that the Precedent R process is carefully and properly adhered to”.

In Findcharm Ltd v Churchill Group Ltd [2017] EWHC 1108 (TCC), he said the introduction of Precedent R, which requires each party to comment on the cost budget of the other, has led to a “great saving” of judicial time, “because it has obliged the parties to adopt a realistic attitude to the budget of the other side, and has assisted in the identification of the real disputes between the parties on costs”.

But he continued: “However, even now, some parties seem to treat cost budgeting as a form of game, in which they can seek to exploit the cost budgeting rules in the hope of obtaining a tactical advantage over the other side.

“In extreme cases, this can lead one side to offer very low figures in their Precedent R, in the hope that the court may be tempted to calculate its own amount, somewhere between the wildly different sets of figures put forward by the parties. Unhappily, this case is, in my view, an example of that approach.”

The case involves an £820,000 claim by Findcharm, which operates a restaurant within the Churchill Hotel in London, over a four-month closure that followed a gas explosion.

Coulson J recorded: “In contrast to Findcharm’s detailed pleaded claim, Churchill’s defence could not be more basic. It is a combination of bare denials and non-admissions of the kind that the Civil Procedure Rules was designed to sweep away.

“It is, bluntly, an insurer’s defence straight out of the 1970s. For example, despite the fact that the explosion happened in its hotel, Churchill does not even formally admit the cause of that explosion.”

Findcharm’s budget was £245,000; through its Precedent R, Churchill offered less than £90,000.

The judge said: “In my view, Churchill’s Precedent R is of no utility. It is completely unrealistic. It is designed to put as low a figure as possible on every stage of the process, without justification, in the hope that the court’s subsequent assessment will also be low. In my view, therefore, it is an abuse of the cost budgeting process.”

Among the examples of “the lack of reality” in Churchill’s Precedent R were its offer of £5,300 for Findcharm to prepare three witness statements and consider Churchill’s two; Findcharm’s estimate was £40,235.

“[Churchill’s figure] is simply incredible in a case where, not only does the background and circumstances of the explosion need to be explained, but also where a large claim for loss of profits will need to be underpinned by detailed factual evidence.”

As a result, the judge said he was “obliged” to disregard Churchill’s Precedent R, and considered Findcharm’s budget to be both proportionate and reasonable.

Churchill’s own budget was just under £80,000. “Even on Churchill’s own case, it seems erroneous on its face,” Coulson J said.

“For example, it allows nothing at all for fire experts, even though at the CMC Churchill were arguing that causation was in issue and an expert was necessary. It also purports to estimate a sum of less than £7,000 for the preparation of a High Court trial. It is, therefore, on any view, an unrealistically low budget.”

However, Findcharm had, “not unreasonably”, agreed the Churchill’s budget and so Coulson J approved it.

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Grayling: changes will bring balance to the judicial review system

The government is to introduce legislation that will substantially beef up the costs rules so as to discourage weak or frivolous judicial reviews (JRs), it announced yesterday.

Issuing its response to the consultation held last autumn – to which it received 325 responses – the Ministry of Justice (MoJ) put a “strong package of financial reforms”, heightening the costs risk to claimants and their lawyers, at the centre of achieving its objective of limiting the pursuit of weak claims.

This consists of:

  • Legal aid will only be available once permission has been granted, subject to enabling the Legal Aid Agency to pay in “meritorious” cases which conclude prior to the permission decision;
  • Changing the CPR so that the costs of an oral permission hearing should usually be recoverable by a successful defendant, rather than only in exceptional circumstances as now;
  • Setting out the framework for protective costs orders (PCOs) in primary legislation so that they are only available where there are “serious issues of the highest public interest in cases granted permission and which otherwise would not be able to be taken forward without a PCO”;
  • Introducing a presumption, where a PCO is granted, that the court will also include in the order a cross-cap on the defendant’s liability for the claimant’s costs;
  • Requiring judges making wasted costs orders to report the lawyers involved to their regulator (see full story here);
  • Primary legislation that introduces a presumption that interveners – other than those invited by the court to intervene – will bear their own costs and also those costs arising to the parties from their intervention; and
  • Primary legislation so that an applicant for JR must provide information on funding at the outset and requiring the courts to have regard to this information in order to consider making costs orders against non-parties.

The changes needing legislation will be included in the Criminal Justice and Courts Bill, which was introduced to Parliament yesterday.

On WCOs, the MoJ said the best way to improve their effectiveness was not to amend the existing test for making them, “but instead to strengthen the implications for the legal representative where one is made”.

The response said: “In many situations where a WCO is awarded, professional negligence will be at issue and, as many respondents pointed out, independent regulatory bodies should have a role in these situations…

“Whilst a WCO is a serious matter, there are currently no formal regulatory or contractual consequences for the legal representative who has acted improperly, unreasonably or negligently. The government intends to place a duty on the courts in legislation to consider notifying the relevant regulator and, where appropriate, the Legal Aid Agency, when a WCO is made. This duty will apply in respect of all civil cases, not only judicial reviews.”

Away from costs, the MoJ decided against changing the rules on standing to bring a JR, but will do so over procedural defects.

At the moment the court can refuse to grant permission or award a final remedy on the basis that it is “inevitable” that the complained-of failure would not have made a difference to the original outcome; the threshold will be brought down to “highly unlikely”.

The MoJ is also to create a planning court to deal with disputes over major developments, and widen the criteria to allow certain high-profile cases to leapfrog from the High Court to the Supreme Court.

Justice secretary Chris Grayling said: “Judicial review must continue its role as a crucial check on the powers that be – but we cannot allow meritless cases to be a brake on economic growth. That would be bad for the economy, the taxpayer and the job-seeker, and bad for confidence in justice.

“These changes will bring balance to the judicial review system, so justice is done but unmerited, costly and time-wasting applications no longer stifle progress.”

Shadow justice secretary Sadiq Khan responded that the reforms will “do nothing to improve justice”.

He said: “Instead, it’s about protecting the government and their big corporate friends’ bad decisions from being challenged. It shows, once again, whose side they are on.

“Judicial review is a crucial constitutional check and balance on those in power and should not be messed around with for politically motivated reasons. These changes are an attack not only on the best campaigning organisations and individual citizens’ rights, but also on the rule of law and good governance.”

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Currie: Some benefits coming through

There are too many poor-quality medical reports being produced via MedCo, and so it is premature to extend it to other types of personal injury claim, a leading claimant solicitor has cautioned.

Matt Currie, managing partner for motor road traffic accident claims at Irwin Mitchell, also called on practitioners to tell MedCo about sub-standard reports.

Writing on the blog of the Motor Accident Solicitors Society, Mr Currie said that, at the moment, solicitors could often work through the issues MedCo presented, and the instances of poor quality reports, to achieve the right outcome.

“Post law reform litigants in person will be left in no-man’s land where a doctor has failed to provide an adequate service or report,” he observed.

Nonetheless, he said some of the benefits of MedCo were now coming through: “Some of the data analytics is starting to shine a light on doctors who don’t understand the importance of what they do and some solicitors have started to recognise that attempts to ‘game’ the randomisation can have serious adverse consequences for their business.”

But he suggested that not enough progress has been made given its cost – which ultimately is paid by motorists as MedCo is funded by the Association of British Insurers.

The status of some medical reporting organisations has not been settled, which has meant both more cost and “some agencies… focused on battles with MedCo rather than optimising the service they provide”.

The increase in litigation led to MedCo’s recent announcement of a major hike in fees.

Mr Currie said: “There are anecdotal stories about the approach to audit of some agencies which suggests that the purpose of MedCo has been somewhat forgotten in the audit. Equally there are anecdotal stories about some poor agency behaviours as well.

“Ultimately this distraction means that the obtaining of good-quality independent objective medical evidence in a timely manner is not being progressed in the way it should. Whilst data is helping, practitioners still know that the quality of too many reports is simply not up to scratch.”

There is talk of MedCo’s remit being extended to cover EL/PL claims and also rehabilitation. “There are many arguments why each of this extensions would not be appropriate but the fact that MedCo is essentially still struggling with its own teething problems means that extension could only be viewed as premature,” Mr Currie said.

“Before there is any extension of the remit of MedCo the Ministry of Justice needs to take some responsibility for facilitating a solution that works for the current purpose. MedCo itself needs to ensure that audit is focused on achieving good-quality medical reports.

“At the same time, practitioners need to take responsibility for identifying bad reports and doctors who do not understand their duty. More reporting to MedCo of instances of poor reporting can only help MedCo to focus their audit and training.

“Ultimately the whole industry still needs to work together to make sure that MedCo is working for the consumers who pay for it.”

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Forensic Healthcare Services Ltd (FHC) was established in 1999 by a group of doctors experienced in law, medicine and science to provide training, consultancy and expert witnesses within the justice setting. Clients range from individual law firms to police services and public bodies.

The Challenge:

As FHC grew it became apparent that a paperless, easy to use Case Management Solution was required that could be tailored to its needs and replace the existing system. The incumbent system was a slow, labour intensive, paper-based solution that required the office to be physically manned at all times in order to access centrally filed hard copy case notes. It did not include any efficiency monitors or risk control allowing cases to be instructed, managed and closed without any checking procedures.

The Solution:

A Bespoke Proclaim Case Management System was chosen from Eclipse Legal Systems as it provided a monitored workflow solution with the flexibility for a phased implementation to allow users to feel confident with the transition from paper to digital. The Proclaim platform also offered excellent reliability with market-leading service from the support team.

The Results:

All staff can use Proclaim either from home or at the office making use of the system’s client service boosting features such as the personalised Task List which increased satisfaction levels beyond expectations. There has been a transformation in efficiency and an increase in turnover that is directly attributable to Proclaim.

Proclaim allows FHC to concentrate on expanding and building its client, expert and mediator network. FHC  will be moving to  larger offices with the aim of pursuing growth in the personal injury civil arena, whilst expanding its core business in crime and clinical negligence. The firm remains confident that the underlying business model is superbly served by the paperless Proclaim system.

  • 100% digital Case Management
  • Increased turnover and market-share in a very competitive sector.
  • Transformed client satisfaction beyond expectation
  • Single dedicated database and workflow system
  • Proclaim utilised by all staff

Managing Director, Judy Payne-James, said: “Our service to our clients has increased satisfaction levels beyond our expectation.  We would not be able to operate without our Proclaim Case Management System. It goes without saying the increase in efficiency and turnover is directly attributable to Proclaim.”

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Alistair Williams

Williams: “exciting opportunity to lead on a case”

A paralegal has played a key role in securing a significant costs ruling at the High Court.

Alistair Williams, senior paralegal at Bates Wells Braithwaite, challenged a costs order imposed by Norfolk Magistrates’ Court against a walker who complained about a blocked right of way.

Mr Justice Collins said Mr Wheeler applied to Norfolk County Council, under section 130 of the Highways Act 1980, to get an obstruction blocking a footpath removed.

Collins J said the local authority took the view that there was “no unlawful obstruction”, so the walker exercised his right to apply to the magistrates’ court.

The court rejected the application and made a costs order against Mr Wheeler in favour not of the defendants in the case, Norfolk County Council, but in favour of the person originally accused of obstructing the path, a Mr Dixon.

“The justices took the view that they had a wide power to award costs to the interested party, that is to say the person allegedly responsible for the unlawful obstruction,” Collins J said.

However, the judge said it was “clear beyond any doubt” from section 64 of the Magistrates’ Court Act 1980 that the only power the court had was to “make orders for costs between the parties to the case who are either complainant or defendant”.

Collins J went on: “It is not such as enables the court to make any order in favour of the person who I have described as the interested party – that is to say, the person who has a right to be heard if he wishes as the alleged obstructor of the highway in question.

“In those circumstances, the decision of the justices was clearly wrong. They were not entitled to make an order against the appellant, Mr Wheeler, in favour of Mr Dixon.  In those circumstances, this appeal must be allowed and that order quashed.”

Lord Justice Beatson agreed.

Mr Wheeler is a member of the Ramblers. Mr Williams acted for him and helped advise the charity, which backed the appeal to the High Court. He was supervised by partner Melanie Carter and associate Matthew Orme.

A spokesperson for Bates Wells Braithwaite said Mr Williams, who completed the bar vocational course in 2012, had identified the limit on the powers of magistrates’ courts to award costs.

The paralegal commented: “It was an exciting opportunity to lead on a case for well-known client and I am really pleased with the outcome. I have a personal commitment to the Ramblers, being a walker myself.

“It is an important charity that represents the rights of walkers, and this legal clarification should encourage others to use their rights with less fear as to the cost implications.”



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Shailesh Vara

Vara: “Further details later in the year”

Justice minister Shailesh Vara has announced that the government has decided to drop its plan to extend sections 44 and 46 of LASPO to insolvency cases “for the time being”.

Business groups, led by insolvency trade body R3, have strongly opposed the move, which would end recoverability of success fees and insurance premiums.

In a written statement to the House of Commons today, Mr Vara said the government would delay “for the time being” implementation of sections 44 and 46 of the Legal, Sentencing and Punishment of Offenders Act 2012 for insolvency cases.

“Accordingly, no win no fee agreements in insolvency proceedings will continue for the time being to operate on a pre-LASPO Act basis, with any conditional fee agreement success fees and after the event insurance premiums remaining recoverable from the losing party.

“We will consider the appropriate way forward for insolvency proceedings and will set out further details later in the year.”

Mr Vara said the government had made a priority of addressing the high costs of civil litigation in England and Wales through LASPO, but had agreed to delay implementation of sections 44 and 46 until April 2015.

“This delay was to give insolvency practitioners and other interested parties time to prepare for and adapt to the changes. However, the government now agrees that more time is needed.”

Having initially shown no intention of changing its position on the exemption, the first sign of movement came last month after Conservative peer Lord Flight, citing R3’s lobbying, laid an amendment to the Small Business, Enterprise and Employment Bill that would make the exemption permanent.

Business minister Baroness Neville-Rolfe said she noted the concerns that litigation brought on behalf of insolvent estates has some differences in principle to other types of litigation, and about the potential impacts on litigation practice on behalf of insolvent estates.

“I have heard what has been said and, if I may, I will take this amendment away and consider it urgently with colleagues in the Ministry of Justice in time for report stage.”

A coalition of business groups wrote to David Cameron in October, warning him that ending the exemption on 1 April 2015 could cost creditors over £160m per year – “with rogue directors the big beneficiaries” because only the largest creditors would be able to afford to pursue litigation.

The letter – also sent to Chancellor George Osborne, business secretary Vince Cable and justice secretary Chris Grayling – was signed by R3, the Institute of Credit Management, the British Property Federation, the Institute of Chartered Accountants in England and Wales, the Association of Chartered Certified Accountants, and the Institute of Chartered Accountants Scotland.

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Danger of “cycle” where fees keep rising as cases fall

A further round of court fee increases would amount to a “denial of access to justice”, the Civil Justice Council (CJC) has warned, adding its voice to the cacophony of opposition from the legal profession.

The CJC said individuals, small businesses and litigants in person would be particularly badly hit, with “sizeable court fees” becoming a “tipping point” in persuading them not to pursue a case.

Along with 10% increases in a range of general fees, the CJC cited “striking” increases of 124% for permissions to appeal and 158% for filing an appeal questionnaire at the Court of Appeal.

The Law Society, Bar Council, Chartered Institute of Legal Executives, City of London Law Society and Commercial Bar Association are among the legal bodies that have spoken out strongly against the new fees in recent days as the consultation closed, with the latter two also writing jointly to Lord Chancellor Michael Gove to draw his “personal attention to the serious financial impact that these further increases may have on London’s position as an international leader in dispute resolution”.

The CJC said there should have been monitoring of the impact of previous increases in the last 12 months before further rises were proposed, and noted that the latest proposals were the fourth in two years.

“The CJC will be very interested in seeing the statistics for claims made in the short and medium term and whether the fee rises have had a detrimental impact.

“There appears to the CJC to be a danger of a cycle developing where fees rise, numbers of cases fall, and the following year sees another rise to compensate for the loss of income which then drives further cases out of the system.”

The council said the large range of increase would act as a disincentive for SMEs with “sizeable” increases for business disputes over £20,000, with a claim for £350,000 seeing a 75% rise from £10,000 to £17,500.

The CJC went on: “Providers of arbitration services are already actively citing court fees in their marketing material as a reason not to use the courts.

“An increase in ombudsmen and current trends in establishing dispute resolution forums (for example the parallel government proposal to establish a small business commissioner) mean that the court system must be competitive.”

Internationally, the CJC said litigators would be “looking keenly” at the increase in the cap for high value claims, particularly the suggestion that the cap should be “at least” £20,000, leaving scope for yet higher fees.

The CJC concluded that it viewed “with dismay” the “unequal approach” taken by the government, with “a stated policy objective of using the civil justice system to support and subsidise the criminal, family and tribunal jurisdictions”.

The council added that the Civil Court User Survey 2014/15 found that 76% were not in receipt of state benefits, suggesting that the fee remission scheme would not help most litigants and “reinforcing access to justice concerns.”

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Dyson: GHRs less and less relevant

Dyson: GHRs less and less relevant

The guideline hourly rates (GHR) are to be frozen at their 2010 levels indefinitely after the Master of the Rolls decided there was no prospect of the evidence required to change them being produced.

Lord Dyson said he would instead continue pressing the government to extend the use of fixed fees.

Last July, after a year-long study by the Civil Justice Council’s costs committee, he concluded that there was a “fundamental” shortcoming in the evidence available to amend the rates.

He said he would seek “urgent discussions” with the Law Society and the government to see what steps could be taken to obtain more.

In a note published today, Lord Dyson said: “These discussions… have not made any material change to the position I was placed in last July – there is no funding available from any source for undertaking the sort of in-depth survey which the Civil Justice Council’s costs committee and its expert advisers consider is required to produce an adequate evidence base.

“There is also considerable doubt that even if such funds were forthcoming there would be sufficient numbers of firms willing to participate and provide the level of detailed data required to enable the committee (and in turn myself) to produce accurate and reasonable GHRs.”

Lord Dyson observed that the GHRs are becoming “less and less relevant” for several reasons, including “advances in technology and business practices and models”, “the ever-increasing sub-specialisation of the law which is seeing the market increasingly dictate rates in some fields (particularly commercial law)”, the judiciary’s use of proportionality as a driving principle in assessing costs, and the greater application of costs budgeting.

He added: “Not least, I hope, of such factors, is a trend towards the greater use of fixed costs in litigation. I have long advocated their wider application, and will continue to press this point to ministers and others in the hope that this important element of the Jackson reforms is implemented.”

However, the MR recognised that the GHRs are still widely used in summary and detailed assessments, as well as budgeting, and as a measure for smaller law firms “to base practice charges on and to demonstrate to clients a national benchmark”.

He concluded: “I am not therefore suggesting that the existing GHRs no longer apply. The existing rates will therefore remain in force for the foreseeable future, and will remain a component in the assessment of costs, along with the application by the judiciary of proportionality and costs management.”

Sue Nash, chair of the Association of Costs Lawyers and a member of the costs committee, said: “It is difficult to see what other decision the Master of the Rolls could have taken in the circumstances – at least we have a decision and an end (for now) to further speculation. What will be interesting to see now is whether this will give added impetus to the increasingly wide variety of alternative fee and billing arrangements being entered between solicitors and their clients.”

Adrian Jaggard, managing director of defendant costs firm Jaggards and also a member of the costs committee, said: “It will be disappointing for paying parties that there will be no detailed survey, as many suspect it would lead to a reduction in guideline hourly rates. However, they will be pleased also that there is no imminent prospect of an increase.”

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Mark Riley, solicitor specialising in probate services

Eclipse Legal Systems, the sole law society endorsed legal software provider, is implementing its Proclaim Case Management Software solution at new start-up, MJR Solicitors.

The practice was established by Mark Riley, an experienced solicitor specialising in probate services. Based in Bognor Regis, MJR Solicitors is a boutique and friendly firm offering a truly personalised service to both private and commercial clients.

A considerable amount of Probate work is administrative and necessitates heavy document production. As a new start-up, MJR Solicitors recognised the need to implement Eclipse’s Proclaim Case Management Software solution to streamline these processes and enhance profitability from inception.

The Proclaim Probate Case Management system will eliminate time-consuming duplicate data entry through its integrated document management system. MJR Solicitors will benefit from fast document production, including hundreds of precedents that can be added to and amended whenever required. Additionally, any incoming mail can be quickly scanned and linked to the relevant client matter.

Furthermore, Proclaim will complete the relevant IHT forms based upon data entered in the case, and at the click of a button, MJR Solicitors will be able to view the preparation of the complete estate accounts, saving hours of repetitive data entry and time-sapping administration.

Mark Riley, owner and principal of MJR Solicitors, comments:

“As a sole practitioner, it was vital I selected the correct legal software provider. Eclipse’s Proclaim solution will enable me to automate a huge number of processes, meaning I can focus on the legal aspect of my business, rather than maintaining technology.

“Additionally, and perhaps most importantly, Eclipse has been fantastic throughout the entire implementation process, and the service I’ve received completely reinforces the company’s market leading reputation.”

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Dunn: clear endorsement

The Ontario Superior Court has set out the criteria for approving third-party funding arrangements in a case where it backed Harbour Litigation Funding’s involvement in a C$1bn (£630m) class action.

The ruling in E Eddy Bayens and others v Kinross Gold Corporation and others, 2013 ONSC 4974 – which noted English case law and may prove of assistance here too – highlighted Harbour’s adherence to the Association of Litigation Funders’ code of conduct, and particularly that it does not interfere with the running of a case.

The case is a securities action being brought by the Musicians’ Pension Fund of Canada, which had been denied funding from Ontario’s Class Proceedings Fund – although the judge said nothing should be read into this.

While historically lawyers in Ontario have themselves indemnified class action clients against adverse costs, the court said the “astronomical size of the adverse costs awards” in such cases has “substantially intensified the risk and the associated barriers to justice”. As a result lawyers were turning towards third-party funders.

The ruling, unusually, laid out the terms of Harbour’s funding agreement: an indemnity of up to C$1m for the motions to certify the class action and grant leave to commence the case, and C$5m thereafter in respect of any common issues trial.

If successful, Harbour would be repaid any adverse costs it paid and receive a percentage of the net recovery of the class (net of lawyers’ fees, taxes and other costs) – 7.5% if the case settles before certification or 10% afterwards.

The lawyers are working on a full contingency fee basis and covering the disbursements.

The court held that it had to approve third-party funding agreements in class actions before they took effect and extracted a series of principles from the developing case law that need to be taken into account, including:

  • Third-party funding agreements are not categorically illegal on the grounds of champerty or maintenance, but a particular agreement might be;
  • The agreement is not a privileged document.
  • The agreement “must not compromise or impair the lawyer and client relationship and the lawyer's duties of loyalty and confidentiality or impair the lawyer’s professional judgment and carriage of the litigation”;
  • The agreement must not diminish claimant’s rights to control the litigation.
  • The court must be satisfied that the representative claimant will have less interest in the conduct of the case because they are not at risk of adverse costs;
  • The court must be satisfied that the agreement is necessary in order to provide access to justice; and
  • The court must be satisfied that the agreement is fair and reasonable to the class, and that the funder will not be over-compensated.

Susan Dunn, head of litigation funding at Harbour, said: “This decision reflects a clear endorsement by the Ontario court of the benefits of third-party funding by professional funders like Harbour.

“This is a continuation of decisions Harbour has seen in courts in other common law jurisdictions outside the UK in which it has funded cases – including New Zealand, Bermuda, Jersey and the British Virgin Islands – where the courts have affirmed Harbour's litigation funding and recognised litigation funding as an essential component of the litigation landscape.”

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Dyson: arbitration focus

Dyson: arbitration focus

Lord Dyson, who formally retired as Master of the Rolls on Sunday, has rejoined 39 Essex Chambers, which he once headed.

He will work principally as an arbitrator in all areas of law but with a particular focus on commercial, public international law and sports law.

Lord Dyson, who is 73, said: “I am delighted to return to 39 Essex Chambers which has become hugely successful in so many diverse areas of law.”

David Barnes, chief executive and director of clerking, added: “It is a great pleasure to welcome Lord Dyson back to chambers, following his esteemed judicial career and his retirement this year as the Master of the Rolls. We very much look forward to working with him again as 39 Essex Chambers further expands its international and domestic arbitration services.”

Lord Dyson had four years as Master of the Rolls and head of civil justice, the culmination of 30-year judicial career which saw him appointed to the High Court bench in 1993, the Court of Appeal in 2001 and Supreme Court in 2010, only for him to return to the lower court when he became MR.
Prior to becoming a judge, Lord Dyson had a varied practice at the Bar. Called in 1968, he became a QC in 1982 and in 1986 joined 39 Essex Chambers as head of chambers.

He has been replaced as MR by 65-year-old Sir Terence Etherton, who was the Chancellor of the High Court (that is, head of the Chancery Division).

There has still been no announcement of his replacement as Chancellor. There are strong rumours that it will be either Lord Justice Vos or Lady Justice Gloster, with the latter supposedly favoured by justice secretary Liz Truss, who wants to see a woman in the role.

During her speech today to the Conservative Party conference, Ms Truss highlighted the need for greater diversity in the judiciary.


Avoiding the trap of fixed costs in high-value claims

David Disney

Have you been caught out by fixed costs on a high-value RTA or EL/PL claim that settled prior to allocation to the multi-track? Over the past couple of months, we have seen this issue arise on a number of occasions. So, in what circumstances do fixed recoverable costs (FRC) under part IIIA of CPR 45 apply to high-value claims? They apply if a claim was submitted through the portal but no longer continues under the relevant protocol and the matter is not allocated to the multi-track. This is the scenario we are finding to be quite common in practice and something which practitioners should become familiar with in order to avoid the pitfalls of fixed costs.

February 23rd, 2018