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ARAGARAG plc, the UK legal protection and assistance specialist, has announced 11 per cent growth in consolidated income for 2016, after a decade of trading.

In the company’s tenth year in year business, consolidated income grew from £11.1 million in 2015 to £12.3 million in 2016, while combined income (including reinsurance business generated back into ARAG SE in Germany) increased by 19 per cent from £26.5 million to £31.5 million, generating a £4.2 million profit.

While the company’s gross written premium under management dropped off slightly from 2015 (from £44.3 million to £41.1 million) there was strong growth in the BTE sector and moderate underlying growth in ATE business, resulting in a pre-tax profit for ARAG UK of £2.4 million.

“I’m very pleased that our 10th year in business was such a successful one”, comments Managing Director Tony Buss, “in spite of what continued to prove challenging times for the legal expenses insurance sector.”

“While we have maintained our cautious but flexible approach to the market, ARAG has generated excellent growth in our before-the-event business, particularly with our commercial, family and home assistance policies, and some growth in the after-the-event sector, once we have allowed for the release of provision for pre-LASPO cancellations that occurred in 2015.”

“The challenging market environment that we face shows no sign of abating, with the political, economic and regulatory uncertainty of Brexit and further potential legislative changes on the horizon, but we have always positioned ARAG to be both innovative and flexible which enables the company to be highly adaptable in the face of such changes.“

During the year ARAG also continued to pick up key industry awards, retaining the Legal Expenses Team of the Year and MGA Team of the Year awards at the Underwriting Services Awards.




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Saville: international standard hope

Saville: international standard hope

The Academy of Experts has launched a model form CV to help courts decide whether an expert witness truly is an expert.

Its judicial committee, chaired by Lord Saville and whose members included Lord Justice Jackson, has produced the CV, which will sit alongside the academy’s model form of expert report.

The academy said that with oral evidence being given less and less, a CV is the only way that the court is able to ascertain the appropriateness of an expert.

“Up until now the contents of experts’ CVs have been varied and sometimes more of a marketing device than something appropriate or useful to the court,” it said. “The judicial committee… prepared the model CV in response to an increasing number of concerns raised by senior judges about the quality and content of CVs in the reports they were seeing. CVs are often too long and do not contain information that would assist the courts.”

Lord Saville, who is also the academy’s president, said: “In developing the model form of expert witness CV, the judicial committee wanted to provide a template. This would ensure that experts, irrespective of their discipline, set out their qualifications and experience relevant to matters on which they are expressing their opinion in a clear and simple format.

“In the same way that the model report format has been widely adopted around the world we believe that the model CV could be a new international standard adopted and used by all experts.”

The other members of the committee that drafted the model CV included Lord Reed, Lady Justice Hallett and Mr Justice Bean, along with senior judges from Hong Kong, Scotland and Northern Ireland.




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In a new feature, Litigation Futures is publishing a monthly summary of key costs-related court decisions. These are provided by CaseCheck

Royal Courts of Justice: key costs rulings

Davies v Watkins [2012] EWCA Civ 1570
Appeal concerning the approach to costs of a Beddoe application on the ground that the trustee was entitled to an indemnity out of the estate.

Held: The normal rule for costs of the application for direction that, absent improper conduct, the costs of the trustee and of the beneficiary defendants will be paid out of the trust fund applied. The judge erred in exercising the court’s general discretion as to costs in ordinary litigation instead of starting from the special position of an application for directions by a trustee, with the special rules and practice that apply to such proceedings.

Full ruling here.

 

Connell v Mutch [2012] EWCA Civ 1589
Appeal against an issue-based order for costs dismissed.

Held: It would have been better for the judge to make an order that the claimant/appellant recover only a proportion of his costs and to have made no order for costs in favour of the defendant/respondent, as contemplated by CPR 44.3(6)(c). Such an order is usually in the interests of both parties as minimising the need for further argument at the assessment stage.

However, the judge’s approach did not fall outside the ambit of reasonable decision-making and the litigants would not benefit from an interference with the order. It would be costly and set a bad precedent if the matter were remitted to the judge to craft a proportionate recovery order: ‘No encouragement should be given to appeals of this nature’ (at [28]).

Full ruling here.

 

Webb Resolutions Ltd v Waller Needham & Green [2012] EWHC 3529 (Ch)
Pursuant to the acceptance of a part 36 offer, the court was asked to make an order as to costs where the claimant failed to comply with the professional negligence pre-action protocol by refusing to disclose documents.

Held: The normal rule is that the claimant gets costs up to acceptance by the defendant of the offer unless the defendant can show that it would be unjust to do so taking into consideration all of the circumstances of the case, including those expressly set out in CPR 36.14(4), whether or not there has been substantial compliance with the protocol and whether sanctions might be appropriate (SG v Hewitt [2012] EWCA Civ 1053 followed).

In the present case, a normal order under CPR 36.10(4) would be unjust: the claimant’s refusal to provide documentation necessary for the defendant to assess its liability was not reasonable and consistent with the expressed aim of the protocol. Claimant awarded costs up to the date when it refused to disclose but ordered to pay the defendant’s costs incurred thereafter.

Full ruling here.

 

Ryder plc v Beever [2012] EWCA Civ 1737
Appeal concerning an application for relief from the sanction of strike-out for failing to serve a costs schedule.

Held: The delay in providing the costs schedule had not caused any real prejudice to the defendant, nor had it delayed the progress of the action. There was no justification for striking out the action when its overall effects were not grave, considered together with the potentially severe prejudice which would be caused to the claimant if relief were refused.

In any event, the powers of the court on making a costs order are wide and allowance can be made at the part 36 offer stage for any prejudice that a party has suffered as a result of the delayed service of a costs schedule.

Full ruling here.

NB We have not included Henry v NGN as it has been extensively reported on Litigation Futures already




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Walton: independent report

Creditors face losing more than £150m per year if the exemption from the Jackson reforms for insolvency litigation ends as planned next April, according to an independent report commissioned by the insolvency profession.

However, the report also acknowledged that success fees and after-the-event insurance premiums are “rarely paid in full and often not paid at all” at the moment.

The Association of Business Recovery Specialists, known as R3, has launched a press and parliamentary campaign to call for a permanent exemption for insolvency litigation.

It commissioned Professor Peter Walton of the University of Wolverhampton to research and write the report, with the support of the Association of Chartered Certified Accountants, the Insolvency Practitioners Association, the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants Scotland, claims specialists JLT Specialty, solicitors Moon Beever, and accountants Moore Stephens.

R3 said that without the ability to recover costs fully, legal action to reclaim debts from directors would be unaffordable in most cases.

Using 2010 figures from the Insolvency Service and a survey of R3 members, the research estimated that insolvency litigation conducted under conditional fee agreements (CFAs) realises £150-160m a year. A majority of claims realise £50,000 or less, and it said practitioners believe such “relatively small” claims are generally unlikely to be pursued if the exemption comes to an end.

But it also admitted that “in reality, the CFA uplift (and ATE insurance premium) are rarely paid in full and often not paid at all (even where the insolvency litigation has been successful)”. But the report continued that nonetheless, “the existence of the risk to defendants of having to satisfy such claims, does concentrate their minds. The current system does encourage a large majority of claims to settle.

“The view of practitioners is that Jackson would lead to fewer cases being brought and of those that are brought, fewer would settle. Those that would still settle would settle for a lesser amount.”

This meant that “wrongdoers are more likely to ‘get away with it’, and further culpable behaviour will be encouraged”.

Phillip Sykes, deputy vice-president of R3, says: “Insolvency litigation is absolutely in the public interest, and it is absurd that the government is considering making it all but impossible for such cases to continue. The Jackson reforms were supposed to protect exactly this type of case.”

“The government’s only justification for ending the exemption is that it would make the Jackson reforms consistent across the board, regardless of the consequences. It’s just lazy thinking.”

The report argued that insolvency litigation differs from ordinary civil litigation in a number of ways that should continue to be recognised by the law.

“Insolvency litigation is in the public interest and claims brought are not frivolous nor do they have disproportionate costs. For example, when a public body is sued successfully public funds are reduced, yet when insolvency litigation is successful, it is often public funds that benefit, through returns from the insolvent estate to HMRC. Alternative funding, whilst available has a high acceptance threshold and a high cost.”

Further, it said disproportionate costs are not a problem in insolvency litigation.




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Jackson: An unglamorous task

Many of the causes of excessive costs have been eliminated but litigation is still too expensive, Sir Rupert Jackson has claimed on the eve of his retirement from the Court of Appeal.

In a speech that signalled the judge’s hurt and exasperation at the criticism that has come his way over the past decade, he nonetheless argued that it was “all worth it”.

Speaking to the Cambridge law faculty yesterday ahead of his retirement tomorrow, when he reaches the age of 70, Sir Rupert said he still thought costs were too high, but that “many of the causes of excessive costs have been eliminated and significant improvements have been made in the litigation process”.

He continued: “As things stood 10 years ago, someone had to do something about costs (especially the absurd CFA/ATE regime). Whoever received that poisoned chalice was bound to make themselves extremely unpopular – unless they ducked every controversial issue.

“Despite all the criticisms which [I have] received over the last ten years, the blunt and inescapable fact is that the Jackson reforms have achieved significant reductions in the costs of litigation…

“Most of the reforms have worked well, but a few have not. Those reforms which work well have also promoted access to justice.

“[So] was it all worth it? That is for listeners and readers to judge. But it is submitted that the answer is yes.”

Reflecting on his work since being appointed in 2008 to review the costs of litigation, the judge observed: “To spend 10 years reforming the rules of procedure in an effort to reduce litigation costs is about as unglamorous as it gets.

“Lawyers generally don’t like change and they particularly dislike anyone meddling with costs. Therefore, the task allotted to me was bound to, and did, generate quite a few irate letters to newspapers and numerous onslaughts in the legal journals.

“Almost everyone perceives the public interest as residing in a state of affairs which coincides with their own commercial interests. That is not dishonesty or disingenuousness. It is just human nature.”

He bemoaned the failure by a university or similar body to systematically monitor the effectiveness of the reforms: “Instead there has been a stream of journal articles, usually written by people who dislike this or that aspect of the reforms. For obvious reasons, no-one who is content would dream of writing an article to say that…

“When a reform works well, no-one remembers where it comes from. But when people dislike a reform, the author comes under heavy gunfire.”

Going through the reforms, Lord Justice Jackson argued that most of them have been successful.

Speaking about recoverability, for example, he said: “Recoverable success fees distorted incentives and drove up costs massively. [Their] abolition… has substantially reduced litigation costs.

“When combined with several counterweight measures (including increased damages, enhanced rewards for claimant part 36 offers, restriction of success fees deductible from personal injury damages), this package of reforms has controlled costs without inhibiting access to justice. There is no evidence that the reforms have led to a drop off in claims, quite the reverse.”

Damages-based agreements (DBAs), however, have not been a success, which Sir Rupert put down to the failure to implement his recommendation to abolish the indemnity principle, the unsatisfactory nature of the DBA rules and the fact that the regulations do not permit ‘hybrid’ DBAs, “thereby inhibiting access to justice for no remotely sensible reason”.

He said: “There is a pressing need for work here by the Ministry of Justice and the rule committee.”

Jackson LJ also recognised that the profession was becoming “impatient” for guidance on the proportionality test from the Court of Appeal.

“The remedy lies in their own hands. The Court of Appeal can only decide the cases which come before it.”

Sir Rupert also identified the control of costs incurred before the costs management process as an area still needing reform.

In his supplemental report last year, Sir Rupert put forward a solution, but this required primary legislation.

“Once that legislation is in place, the rule committee can draw up a grid of acceptable pre-action/pre-case and costs management conference costs for different categories of case, coupled with a procedure for pre-action applications for permission to exceed the specified limits.”

A key element of his first report was that there should be no more cuts to legal aid. “On the very day when the reforms were introduced, there were swingeing cutbacks in civil legal aid. I regret and deplore those cutbacks.

“Likewise, my plea for restraint in setting court fees has fallen on deaf ears.”

As to whether his recommendations last year for fixed recoverable costs will come to fruition, Sir Rupert said: “Obviously, this paragraph is speculation. Delays are inevitable following the ministerial re-shuffle in January 2018. Based on past experience, however, it seems likely that the government will accept most of the proposals.

“The recommendations are backed up by evidence and supported by reasonably full argument. Also, they follow wide consultation.”




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Hudson: anger isn’t enough

Some law firms will undoubtedly go bust as a result of the civil justice reforms, the chief executive of the Law Society has admitted.

Des Hudson also said the civil justice reforms showed that the legal profession – and the Law Society – need to improve the way they make their case to the government and other policymakers.

Speaking at the launch of the society’s civil justice roadshows this week, Des Hudson said that on behalf of the profession, he was “angry that insurers’ advice to government seems to go unchallenged”.

He continued: “I’m angry that many solicitors who work hard for their clients are going to struggle – some firms will undoubtedly fold. But I am most angry that in all the spurious talk about fraudulent claims, many innocent victims with real, debilitating injuries will lose out. They will not get the redress they deserve; the individuals and companies at fault will have fewer incentives to correct their behaviour.”

However, he said that “anger isn’t enough. We have to learn, as a profession and as a Law Society, to explain better our role, to evidence the value we add, to our clients, to society, to justice.

“We have to redouble our efforts to engage with government and parliamentarians, and those others who influence policy.”

Mr Hudson predicted that firms were going to have to start deducting from damages to make a reasonable return for their work.

In addition to the roadshows, the Law Society will publish new and revised practice notes, while a work group is devising a new model conditional fee agreement and a model damages-based agreement, although it is not yet known whether these will be published before 1 April.




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LEAP is a cloud-based practice management system developed for small to medium sized law firms which includes powerful features that allow litigators to manage matters more effectively from anywhere, anytime and from any device.

As the solution is cloud-based you eliminate the need for a server, reducing hardware and support costs, simplifying your IT infrastructure.

Leading the way in digital litigation, LEAP allows litigators to manage their matters, build evidence and present and prepare cases more efficiently.

This unique and powerful solution significantly reduces the time and resources required by fee-earners to manage the litigation process and present and deliver first-rate advice to the client.

LEAP simplifies the preparation of a justifiable costs budget, automates the task of completing Precedent H at all stages of a case and the subsequent Precedent S electronic bill of costs, avoiding unexpected problems and any subsequent claims for costs.

LEAP invest more than £8,000,000 a year into research and development aimed solely at refining the product. This investment in new technology ensures your law firm has access to the same technological advantages as large firms.

To see LEAP and discover all the benefits that it can bring to your law firm visit our website and book a free, no obligation demo today.

Head Office Address: LEAP Legal Software, Level 1, Regal House, 70 London Road. Twickenham. TW1 3QS

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RCJ: from here the costs world can be your oyster

The appointment process for the new Senior Costs Judge is set to begin next month, with current incumbent Peter Hurst due to retire later this year.

The Judicial Appointments Commission (JAC) said the recruitment exercise is likely to start on 3 April for a role that pays £130,875.

Master Hurst has been a costs judge since 1981 and took up his present role in 1992. He will retire on 30 September.

The post is open to solicitors and barristers in England and Wales with five years’ post qualification experience (PQE) and expertise in costs law, as well as existing costs judges and deputy costs judges.

According to the JAC, the Lord Chancellor “expects that candidates for salaried posts will have sufficient directly relevant previous judicial experience. Only in exceptional cases and if the candidate in question has demonstrated the necessary skills in some other significant way should an exception be made”.

This means candidates should have been sitting as a judge in a salaried or fee-paid capacity; for fee-paid judges, this should be for a period of at least two years or 30 sitting days since appointment.

The Senior Costs Judge has the day-to-day management and leadership of the costs judges, deputy costs judges and the Senior Courts Cost Office (SCCO). The most complex and/or high-value cases are assigned to the Senior Costs Judge.

The job description says the Senior Costs Judge will also be required to provide costs advice to judges “often at short notice”, as well as providing support and advice to cost judges and deputy costs judges “to ensure accurate and timely delivery of decisions”.

Also among the duties are sitting as an assessor with the Court of Appeal, when requested, in complex cases and with High Court judges on appeal, and sitting with the designated civil judge on county court appeals, as well as hearing assessments in the Supreme Court and Privy Council.

The Senior Costs Judge will also be expected to play a significant role in helping to implement the changes following the Jackson reforms.




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Lidington: Review to be completed by summer recess

The Ministry of Justice (MoJ) is likely to complete a review of LASPO’s civil costs reforms by next summer, but has said it does not expect to find much that needs to change – except possibly removing the exception that currently applies to mesothelioma claims.

Yesterday it published a post-legislative memorandum for the Legal Aid, Sentencing and Punishment of Offenders Act 2012, detailing what has happened since it came into force, and Lord Chancellor David Lidington announced the long-awaited post-implementation review of part 1 of the Act, which deals with legal aid.

But he said his predecessors had committed also to a post-implementation review of the civil litigation funding and costs reforms in part 2, largely implementing the Jackson report.

“We are considering how to carry out that review, but we hope to conclude it to the same timetable,” he said.

The part 1 review is due to conclude by Parliament’s 2018 summer recess, the date of which has not yet been confirmed.

The memorandum noted that, in December 2015, the government stated that the part 2 review would take place towards the end of the period from April 2016 to April 2018.

“There has not been any body of opinion calling for an early review, or for the amendment of the statutory provisions in part 2. That may be because the provisions are seen to be working reasonably effectively, or because it is still too early to tell their full impact given the length of civil litigation.”

It concluded in a more bullish fashion: “Whilst there has inevitably been comment on points of detail, we are not aware of significant overarching concerns arising from the implementation of part 2.

“Writing in 2016, Lord Faulks QC (justice minister 2014-16) said: ‘A post-implementation review of part 2 is due to take place in April 2018. I would not, of course, wish to pre-empt the findings of any review, but I would be surprised if the principles of Sir Rupert’s recommendations were found to be unsound.”

The memorandum said the review would encompass section 48 of LASPO, which provides that the recoverability reforms do not apply to mesothelioma claims until a review of the likely impact of the reforms on these cases has been carried out and a report published on the findings.

The MoJ tried to do this in 2013, but its decision to implement the reforms was successfully challenged, with the High Court ruling in October 2014 that the government’s review had not complied with section 48.

The memorandum said the section 48 review would form part of the post-implementation review.




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West: government must not create change for changes sake

Specialist defendant law firms have responded cautiously to yesterday’s whiplash consultation paper amid fury from claimant lawyers and groups.

The Ministry of Justice is considering raising the small claims limit for whiplash or all road traffic injury claims to £5,000 and introducing independent medical panels.

The Association of British Insurers and Insurance Fraud Bureau strongly backed the proposals, with the former saying it was “pleased that the government recognises that tough action is needed to protect honest motorists from the UK’s whiplash epidemic”.

While welcoming the direction of travel, defendant lawyers raised concerns over their timing and detail. Steve Thomas, director of market and public affairs at Keoghs, said that if the small claims rise is limited to whiplash only, “then we have little doubt that soft tissue injuries will manifest themselves in another guise which will take them out of scope and back into recoverable costs. We also believe that a £5,000 small claims track would spawn a prevalence of lawyers operating under damages-based agreements, which in turn may promote damages inflation.

“This consultation at first blush appears an attractive proposition but as ever, it is the unintended consequences that need to be thought through as the industry sets out its position with government.”

Mr Thomas said his initial concern over medical evidence is that “we do not simply move to neither re-badge the current process and practice nor layer additional cost when the ambition here is exactly the opposite”.

He explained: “It will also be important to incorporate the scope of appropriate medical evidence for simple whiplash claims. We are increasingly seeing psychologist’s reports as the norm. Many of these reports add little to the overall picture but seek to drive damages and layer in expensive disbursements. To paraphrase Jackson, are such reports both ‘necessary and proportionate’?”

City firm Kennedys said it supported the drive to reduce inappropriate claims, arguing that both claimant lawyers and insurers will be better off as a result.

But it said any new legislation must be properly thought through, maintain access to justice for innocent victims and create a proportionate framework of new rules and sanctions. It was particularly concerned about the timing, given the other civil justice reforms being implemented in April.

Partner Richard West said: “It’s important that the Ministry of Justice does not create change for changes sake. There are many good reforms to the legal landscape fast approaching which should have a substantial impact on whiplash claims. The government must resist the temptation to push too much through too quickly or they risk undermining the undoubtedly good intentions underpinning this consultation.”

Alistair Kinley, head of policy development at Berrymans Lace Mawer, said: “These proposals are close to the agenda set out by insurers, which will cause some reaction from industry bodies. To some extent, APIL [the Association of Personal Injury Lawyers] was smart in getting its retaliation in first two or three weeks ago with its own 10-point plan on whiplash fraud.

“There are wider costs reforms already afoot. [Early] questions which occur are: how many cases would go via the RTA scheme/portal if the small claims limit goes up to say above £3,000? What is the risk of damages creep if that happens? Does the news bolster APIL in their attempt to judicially review the extension of the RTA scheme? Time will tell.”

There was unanimous condemnation from claimant lawyers, who argued that many people would be put off pursuing legitimate claims if they had to do it without legal assistance. But they had a range of other criticisms as well.

Craig Budsworth, chairman of the Motor Accident Solicitors Society, said: “It is irresponsible to even consider more changes to our civil justice system at the moment. Implementing the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the proposed changes to the RTA portal mean that we are already in a period of unprecedented reform and uncertainty which could fundamentally alter the balance between defendant and claimant.”

Irwin Mitchell partner Matt Currie said that if the government is serious about tackling the problems in the current system, “then they should continue to focus their attention on the multitude of claims management companies who add little or no value, rather than making genuine victims suffer further. They could start by banning text messaging and cold calling right now.

“Of course, no one should receive any compensation without proper medical assessment so we welcome the chance to work with the government on that but forcing genuine victims to use the small claims track would be a misguided attack on access to justice. Small claims may be effective for disputes over washing machines but it isn’t suitable for more complex injury cases.”

Mark Grover, chief executive of north-west claimant firm Antony Hodari, said: “Claimant law firms use increasingly sophisticated anti-fraud systems, but they would be far more effective if insurers co-operated by giving us access to their own databases. Why would they refuse this? And, if they are so keen to combat fraud, why do insurers continue to offer settlements to claimants before they have seen a solicitor and before they have undergone a medical examination?…

“The government has not considered the economic impact of these proposals. It currently recovers £140m a year in social security benefits paid as a result of an accident where a compensation payment has been made – this will fall dramatically if people are put off making a claim in the first place. And thousands of people in the legal industry could be put out of work by cutting out their legitimate role in helping injured people pursue their legal rights.”

Iain Stark, chairman of the Association of Costs Lawyers, said: “These proposals could spell disaster for both consumers and the legal profession. Access to justice will be the ultimate victim. I foresee a whole new unregulated industry being created to handle claims below £5,000. Furthermore, the courts will be flooded with litigants in person, which will put huge strain on their already limited resources…

“The lack of joined-up thinking is also breathtaking. The government is already consulting on a 60% cut to legal fees for [the RTA portal]. These new proposals will remove most cases from that system, leaving just the higher value, more complex ones at unfairly low fee levels. The government needs to pause for breath and think through its approach before piling on yet more reform.”

 




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Osborne: surprise announcement

Osborne: surprise announcement

Chancellor George Osborne’s announcement yesterday that the small claims limit for personal injury (PI) cases will rise to £5,000, and that general damages for “minor” whiplash claims will be abolished, has sent shockwaves through the market.

Such is their seismic impact on lawyers that we have been covering the reforms on our sister site Legal Futures. There you can find these articles:

Autumn Statement: £5k small claims limit and end to general damages in whiplash

Slater & Gordon’s share price collapses in response to Autumn Statement

Breathing space for PI lawyers? General damages reform will not come in until 2017

Blog: Where now for PI lawyers?




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Hartigan: bringing certainty to law firms’ cash flow

A new costs advance scheme has already paid out over £1m to personal injury solicitors in its first three months of operating, it has emerged.

Put together by Just Costs Solicitors and leading law firm funder Novitas Loans, the scheme aims to fill the gap left four years ago by the exit of Hampshire Trust from the market. So far 20 firms have signed up to it.

It enables law firms to draw down on up to 70% of their likely recoverable costs once they have successfully settled personal injury, clinical negligence and industrial disease cases.

Mark Hartigan, Just Costs’ client services director, said the scheme brought “certainty to law firms’ cash flow” given the uncertainty of when costs will be paid – some large defendants have stopped making interim payments, he noted.

“One of the reasons some law firms are finding themselves on the financial precipice is that they are fundamentally profitable but are not turning unbilled WIP and debtors into cash quickly enough,” Mr Hartigan said. “The amount advanced to date shows how needed this scheme was.”

Operated online, the system works by Just Costs drawing the bill and then advising the funder on what is considers to be a reasonably recoverable amount. The funder will then make up to 70% of this available to draw down, usually within 48 hours of the request. There is no personal guarantee required. Firms are charged a fixed administration fee per case, with interest taken monthly.

Mr Hartigan said the scheme was equivalent to invoice discounting, which lawyers cannot use because of confidentiality issues, and the competitive level of interest was similar too.

Jason Reeve, managing director of Novitas – which came to prominence by providing loans for divorce proceedings – added: “We’re delighted by the rapid take-up of the scheme and we’re looking to complement it in the new year with a new product providing disbursement funding for clinical negligence cases.”




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Evans: MoJ acting recklessly

The Association of British Insurers (ABI) has launched a judicial review of the Lord Chancellor’s decision to announce any change to the discount rate for personal injury damages next month, arguing that the government has not completed the underlying work needed to reach a conclusion.

Without changing the methodology behind setting the rate, the Ministry of Justice’s (MoJ) review would take a flawed approach based on “a fundamental misunderstanding of how people invest their compensation”, the ABI said.

The Association of Personal Injury Lawyers (APIL) has branded the move as “worthy of Scrooge himself”.

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

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

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

In 2014, an expert panel was appointed to provide the Lord Chancellor with investment advice.

Nothing had happened subsequently until earlier this month, in the face of a threatened judicial review by APIL, the MoJ said the Lord Chancellor would finally announce her decision on whether to change the discount rate by 31 January 2017.

The ABI complains that none of the findings of any of this work has been published, which it said was a breach of Cabinet Office guidelines and promises made at the time.

Director-general Huw Evans said: “The discount rate has a significant impact on the amounts paid out by both insurers and public sector bodies like the NHS. This calculation must therefore reflect the type of long-term investment behaviour we know claimants actually use.

“Despite two public consultations over three years ago and convening an expert panel, the MoJ has not yet shared any findings. Instead it is now trying to rush out a new rate for the first time in 15 years at a time of great uncertainty in the investment markets.

“To proceed in these circumstances is reckless and wrong. Insurers are open to a proper dialogue on how to reform the system but this is not the way to do it.”

The ABI described the UK as “an outlier internationally” in its reliance on a single measure when determining the discount rate rather than a formula similar to one used by a “real-life investor”.

APIL president Neil Sugarman responded: “The ABI is literally saying that it does not want to give catastrophically injured people the full support and funding they need, deserve and to which they are entitled…

“Need I remind anybody that compensation paid to an injured person who may never walk, work, or be able to feed themselves again, is not a windfall? They absolutely should not have to make risky investments to eke out their compensation.

“The ABI’s legal challenge is a tactic to stall the result of the review so that the industry can continue to squeeze whatever it can from injured people for as long as possible.

“To suggest that the Lord Chancellor has not been thorough in the review is beyond ludicrous. It has taken three years, two major public consultations, a hefty research paper, and a panel of specially selected experts to make this decision and the only right decision is for the rate to be substantially reduced.”

Meanwhile, the National Audit Office yesterday launched a probe into the rising cost of clinical negligence claims. It will examine whether the Department of Health and the NHS Litigation Authority (NHSLA) “understand what is causing the increase in clinical negligence costs, and evaluate their efforts to manage and reduce the costs associated with clinical negligence claims”.

It added: “We will also assess the NHSLA’s contribution to helping trusts to reduce the number of negligence claims they receive by sharing learning about past incidents and by encouraging wider forms of redress for affected patients.”

The NHSLA described it as a “value for money” study, which it said was “a recognised way to routinely examine major areas of government expenditure”. The statement said the NHSLA welcomed the study and “the independent perspective” that the National Audit Office would provide.




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Stevens: Everything must be considered

Posted by Amanda Stevens, chief executive of Hudgell Solicitors

Outside of my role as chief executive of a law firm in which clinical negligence cases account for a large proportion of our legal work, I am a governor of the Expert Witness Institute (EWI).

EWI is an independent, not-for-profit organisation whose primary objective is the support of the proper administration of justice and the early resolution of disputes, principally through training and support of experts so they can provide fair and unbiased expert evidence.

I am therefore delighted, with my EWI hat on, to have been asked to sit on the core group of industry experts called together by the Civil Justice Council (CJC) to develop a bespoke process for clinical negligence claims where legal costs can be fixed, for damages claims up to a value of £25,000.

It is, of course, not going to be an easy process, but is certainly more achievable than the previous suggestion of Lord Justice Jackson that fixed costs could be applied to all claims up to a value of £250,000.

It is important to stress that, despite being one of only a handful of clinical negligence lawyers at the meetings, my role on this core group of industry ‘experts’ is not to shout out and protect the interests of claimant lawyers. I am only there jointly representing the EWI and the Academy of Experts, reflecting their members’ interests in the process.

In essence, it is my task to ensure the role of expert witnesses, who play such a crucial role in clinical negligence cases, is not compromised in the working group recommendations, such that they cannot properly fulfil their duties to the court in a bid to cut costs, whilst also constructively seeking ways to make the process more streamlined and efficient.

It was certainly interesting to sit around the table at my first meeting of the core group, alongside a small number of claimant and defendant legal representatives, NHS Resolution, the judiciary, counsel and other interested parties, to discuss ideas for the best way forward.

There have been many suggestions as to how we can move to a more cost-effective way of sending instructions to experts, removing the duplication of work that occurs at some stages in current process, and coping with frictional costs caused by missing deadlines. Everything must be considered.

I have put in hand a survey of members of the Institute and the Academy to gather their views on all aspects of expert engagement in the claims process, from initial sourcing of medical records through to final exchange of expert reports.

In a recent Department of Health consultation, it was mooted that there be greater consideration of the use of single joint experts as an option. At the start of the project all ideas are welcomed around streamlining and efficiency – something I hope that my survey of experts will inform us of more fully.

These things, of course, have been attempted before on a smaller scale, as people have long wished to improve on the speed and cost of resolving disputes.

Without CJC assistance in bringing all the relevant parties together on a large project basis, those attempts have not brought about the wider changes felt to be necessary. Now we have a collective opportunity to make a positive difference.

My overall feeling at this early stage is that there is the collective will to meet the challenges ahead, whilst ensuring we don’t conflict the thing that matters above all in this, justice continuing to be served for those who have genuinely suffered as a result of clinical negligence.

The role of impartial medical experts for both parties to assist with that process has never been more important.

The CJC working group has been asked to report with recommendations by the end of September 2018 so it will be a busy summer ahead.




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Prophet Costs

A website dedicated to budgeting is a first in the industry

We’re delighted to announce the launch of our new Prophet Costs website.

After completing many hundreds of successful legal costs budgets via our Prophet Costs programme, we thought it was finally time to dedicate a site reflecting on everything to do with budgets.

The site focuses on three main areas:

  • MRN award winning collaborative solution to budgets and what we can do to help you and your firm maximise the potential of your case
  • All the latest developments on budgets
  • Your questions and responses on all budget related matters

Having won wide acclaim from within the litigation sector for dealing with some of the most complex budgets we feel we are uniquely placed to reflect on the reality on the ground and the decisions coming out of the courts in England & Wales.

Commenting on the site, Director Elliot Mocton said, “The launching of a website dedicated to budgeting is a first in the industry and comes in direct response to solicitors wishing to be kept informed of all the developments in this area.”

For more information on Prophet Costs, please contact either Michael Joseph, Abbey Bukhari or visit our website www.prophetcosts.co.uk

 




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Bellamy: service-led culture

Bellamy: service-led culture

Legal expenses insurer Temple Legal Protection has opened its first branch office – in Bristol – after hiring Phil Bellamy, the former group underwriting, ATE and special risks manager at DAS.

Last week Mr Bellamy – now Temple’s underwriting director – spoke out about his departure from DAS after claiming that the company had breached a confidentiality agreement not to discuss it publicly.

The Temple office will focus in particular on building the commercial and clinical negligence litigation areas of the business. The Guildford-based company – which said it is responsible for underwriting more than £50m of legal expenses insurance a year – added that it was looking to recruit more legal expenses specialists to the office.

Managing director Chris Wait said: “We have strong relationships with law firms and brokers throughout the south-west region. As a company, we place a strong emphasis on working closely with our clients to help them get the best financial protection from our products.

“Our Bristol location gives us excellent opportunities to further develop our services in response to the needs of our clients in this area.”

Mr Bellamy said: “I had a number of interesting opportunities to explore but chose Temple as they have an excellent reputation among law firms for providing robust insurance products that enable companies and individuals to afford to litigate.

“What sets them apart from others is their service-led culture and their ability to adapt. I’m looking forward to being part of such a dynamic team, and joining their board. As a local man, I am personally delighted that Temple have chosen to expand into the south-west.”




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High Court: privacy cases may be on the wane

A drop in the level of libel litigation last year could be down to the phone-hacking scandal and celebrities switching to privacy injunctions, new research has suggested.

Sweet & Maxwell said the number of reported defamation court cases in the UK fell 15%, from 84 to 71, in the year to 31 May 2011. The number of cases where privacy arguments were made by high-profile individuals more than doubled, from nine to 24 in 2011.

“Public scrutiny following the eruption of the phone hacking scandal is leading to a lower appetite for risk for some media outlets,” said Korieh Duodu, a partner at media firm David Price Solicitors and Advocates and the author of Defamation: Law, Procedure and Practice.

“Media companies are concerned that the phone hacking scandal could lead to the imposition of a statutory media standards regulator, and they are have made every effort to put their own houses in order to avoid this. That will mean a more conciliatory, less controversial approach and fewer defamation cases.”

Mr Duodu said privacy injunctions have become “increasingly fashionable” as they can prevent damaging articles from ever seeing the light of day. However, he said tactics are changing as a result of recent rulings such as Giggs and Terry, which showed that it will in future be more difficult to get anonymity orders keeping the identities of parties confidential.

Only seven cases involved celebrities in the year, the lowest for five years, including Big Brother star Imogen Thomas, Welsh singer Charlotte Church, former Smiths frontman, Morrissey, and Nancy Dell’Olio.

Other high profile individuals involved in defamation court cases, including business people and politicians, included Lord Ashcroft, Russian businessman Boris Berezovsky and financier Nat Rothschild.

Sweet & Maxwell said the fall in defamation cases was led by a 36% drop in the number of cases against traditional media companies like newspapers and broadcasters, which reached a five-year low of just 27 cases.

Mr Duodu said another reason why the number of cases might have fallen is that it has become harder for defamation claimants to win. “Two important rulings in the UK’s appeal courts should mean that media companies now find it easier to run defences of ‘responsible journalism’ or ‘comment’. More claimants are being advised that their case may not be strong enough, even though it may well have succeeded previously.”




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Evans: fairer system

Yesterday’s announcement of how the Ministry of Justice intends to reform the discount rate and publication of the National Audit Office’s (NAO) report on clinical negligence claims drew predictably opposing responses from claimant and defendant groups.

On the discount rate, Huw Evans, director general of the Association of British Insurers, welcomed government decision that would produce a system “that is fairer for claimants, customers and taxpayers alike”.

He added: “If implemented it will help relieve some of the cost pressures on motor and liability insurance in a way that can only benefit customers.”

However, it was noted on social media that he made no direct mention of premiums falling as a result, having warned in February that the decision to cut the rate would send them up.

Backing the government, Mark Burton, a partner at defendant law firm Kennedys, said both claimants and compensators “have in any event been pragmatically negotiating settlements within the 0% to 1% range since February, regardless of the prevailing -0.75% rate, in anticipation of further reforms”.

He continued: “The new methodology may therefore lead to a new rate within a similar range to that widely adopted by the market anyway.

“The more rigorous methodology proposed in the draft reforms, including periodic reviews and independent expertise, will hopefully avoid future controversy and ensure a fairer process.”

Simon Kayll, chief executive of the Medical Protection Society, said the current framework failed to consider the impact on the NHS, the public purse “and the affordability of professional protection for healthcare professionals”.

He added: “It is vital that government gets this right if we are to avoid further sudden shocks to the cost of compensation, and the proposed new framework is welcome step which could result in a more common sense approach with the reality of how claimants invest compensation payments at its core.

“It is however dependent on implementation – the new framework will only apply if and when the proposed law is enacted and it will not apply retrospectively.

“We look forward to seeing swift progress on this – and commitment to whole system legal reform to tackle the underlying issue of rising clinical negligence costs.”

On the claimant side, Brett Dixon, president of the Association of Personal Injury Lawyers (APIL), reacted cautiously to the discount rate decision.

“Someone with a life-long, life-changing injury such as brain damage or a spinal injury cannot afford to take any risks with how his compensation is invested… We need to examine the detail of the Ministry of Justice’s response, but what I can say is that the new formula for calculating the rate will be critical to injured people.

“The last thing people with devastating injuries think about when they are lying in hospital is their insurance premiums. They think about how they are going to manage. Insurers say an increased discount rate will ‘benefit’ customers through their premiums. It is of no benefit if they are severely injured and forced to take risks with the compensation they so desperately need.”

Peter Todd, the partner at London firm Hodge Jones & Allen who advised APIL on the court challenge that led to February’s decision, was less on the fence: “The government… will now require injured people to gamble their compensation in investments with risk in order to be able to fund, in particular, the future care they need.

“Whilst many claimants succeed in their investment risks, inevitably some will fail, and will now no longer have a guaranteed safe, secure and dignified future.

“The Conservative government has prioritised the insurance industry’s profits over the secure and dignified future of injured people. It remains to be seen whether they can find a parliamentary majority to enact the proposed new legislation.”

The most radical thoughts came from Malcolm Henké, partner and head of large and complex injury at insurance industry law firm Horwich Farrelly.

He said the firm has been advocating “a rigorous system” for assessing all accident victims: “One thing for certain is that the current basis for calculation is broken and we hope that this latest news means a more radical approach will come into action.

“There is a truly massive gulf between the cost to the state of providing for catastrophically injured individuals with no claim for compensation and the damages paid to those with similar injuries but with a tortfeasor to sue.”

He called for fundamental reform of the way in which compensation is assessed. “Claimants invariably recover damages which will allow them to enjoy a Mercedes Benz package of care, aids, equipment and therapies – although they have no obligation to spend a single penny on the target expenses).

“Their counterparts, dependent on the state or their own resources, will experience anything between a clapped out old banger service and a Skoda: they are subject to the so called postcode lottery.”

He called on defendants to press for a system “by which multiplicands match actual needs and multipliers set at correct levels, again to represent actual rather than assumed investment”.

Mr Henké continued: “A more accurate parallel would be the advice given to someone with a self-invested pension, balancing the preservation of a capital sum with a regular income flow over their lifetime. The difference here is that in most cases the investment ‘pot’ will be far greater than for most pensions and would not be subject to any restrictions.”

On the NAO report, Meg Hillier MP, chair of the House of Commons’ public accounts committee, said: “The costs of clinical negligence claims are spiralling at a time of immense financial pressures on our National Health Service, taking scarce resources away from frontline services and patients.

“The Department of Health and Ministry of Justice have been too slow to work together to turn the tide, with actions to save £90m a year by 2020-21 a drop in the ocean in the face of forecast costs of £3.2bn a year by 2021. We need government to take a good hard look at the financial and personal costs of clinical negligence.

Dr Pallavi Bradshaw, senior medicolegal adviser at the Medical Protection Society, argued that legal reform was needed “to help achieve a balance between compensation that is reasonable, but also affordable – both to the NHS and to healthcare professionals who are feeling the pressure of rising clinical negligence costs through their professional protection subscriptions.

“Of course controlling the cost of clinical negligence, once a claim is made, is just one component of a more sustainable system. This must go hand in hand with continual improvements in patient safety to help prevent adverse events, and a shift to a more open, learning environment in healthcare where mistakes are routinely discussed and learned from.”

APIL’s Brett Dixon stressed the important of the NHS learning from avoidable harm, part of which was better data collection and co-ordination.

He added: “We are just starting to see the impact of cuts to legal costs, which will continue to streamline claimant costs significantly. But more savings could be made with co-operation on both sides to avoid unnecessary delays and additional work, rather than simply slashing claimant lawyers’ costs further or denying injured patients full compensation.

“In cases where fixed costs could be workable, the costs should be set to reflect a better procedure. Meanwhile, the NHS needs to put its house in order – 39% of negligence claims are the result of harm caused by needless delays in diagnosis or treatment and more than twice a week someone has a foreign object left inside of them, including broken drill bits, surgical needles, swabs, and bags used for the retrieval of specimen.

“Let’s not forget that the overriding concern here should be the cost in human misery.”

James Bell, a clinical negligence partner at Hodge Jones & Allen, accused the NAO of having failed patients: “The NAO has approached this issue with a narrow focus and seems to have air-brushed out of history the recommendations it made to the NHS to reduce clinical incidents in 2001, preferring instead to give the organisation a clean bill of health. The reality is that little or no progress has been made by the NHS to bring down the cost or number of claims.

“The continued focus on claimant lawyers as a solution for all the NHS’s financial ills is misguided and disproportionate. Lawyers’ fees are already tightly controlled, capped and limited due to recent reforms; they have to be “reasonable and proportionate” before they are paid and the courts rightly already hold the power to reduce any bill found to be excessive.

“Delays caused by trusts and NHS Resolution can be unrelenting and are hugely distressing to clients. Often legal bills are massively increased as a result of the NHS’s failure to admit fault at an early stage and the way it conducts cases.

“While the narrative remains solely on claimant lawyers, nothing will change.”




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Kightley: firms need to “flex” the fixed-fee regime

“Litigate, don’t procrastinate” was the message yesterday to claimant solicitors as one way to ameliorate the financial loss they will suffer from the new portal and fast-track fixed fees.

Speaking at the Association of Personal Injury Lawyers (APIL) annual conference at Celtic Manor, Stuart Kightley of north London firm Osbornes, said that taking the maximum success fee from all claimants’ damages would not be enough to make up for the impact of the new fees.

Instead firms need to “flex” the fixed-fee regime by being more ready to issue proceedings in cases that fall out of the road traffic accident, employer’s liability and public liability (RTA/EL/PL) portal schemes. “Don’t mess around – just issue,” he said.

He modelled how this would work, and more generally the impact of the new fees, by taking a basket of 300 successful cases at average damages levels – 100 in each category – where the current fee levels (using the figures produced by Professor Paul Fenn) were put up against the new fixed fees with a success fee charged to the client to the maximum level.

Mr Kightley – APIL’s new secretary – then assumed that half of the RTA cases would settle inside the portal, 35% would settle outside the portal and 15% would conclude after proceedings have been issued.

On this basis RTA cases currently generate average costs of £1,750 per case. Under the new fees, it falls by 16% to £1,470 per case. However, by issuing more readily – with 25% of cases concluding after issue – average costs would be £1,720, a fall of just 2% on the present level.

In EL – assuming 80% settling pre-issue – he put averge current revenue at £3,550 per case. Modelling 24% of cases settling within the new portal, and 56% pre-issue, fees would fall 16% to £2,960 per case. But issuing in 30% of cases, rather than 20%, would take it to £3,230, a more modest fall of 9%.

The figures were worst in PL. Average current fees – based on 75% settling pre-issue – are £4,330 per case. Under the new regime, with 19% settling in the portal and 56% pre-issue, it sinks to £3,140. Issuing in 35% of cases, rather than 25%, improves things a bit to £3,410, still a 22% fall.

Put all together, the 300 cases in the basket currently generate £963,000. Even with the maximum success fee, the effect of fixed fees will reduce that revenue by 21% to £757,000, Mr Kightley said.




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Neuberger: three-year stint as MR

The appointment today of Lord Neuberger of Abbotsbury, currently Master of the Rolls, as the next president of the Supreme Court leaves uncertainly as to who will drive judicial implementation of the Jackson reforms.

Lord Neuberger will succeed Lord Phillips of Worth Matravers, who steps down from the role as the most senior judge in the UK on 30 September 2012. The new president will be sworn in at a special ceremony at the court on 1 October 2012.

His replacement as Master of the Rolls – and with it chairman of both the Civil Justice Council and the Judicial Steering Group overseeing implementation of the Jackson reforms – has not yet been announced. There is speculation that Lord Dyson may step down from the Supreme Court to take the role.

The Judicial Steering Group’s other members are Lord Justice Moore-Bick, Lord Justice Maurice Kay and Mr Justice Ramsey, who is standing in for Lord Justice Jackson as he recovers from an operation for cancer.

Lord Neuberger, who has been Master of the Rolls since 2009, said: “It is a great honour to have been given the opportunity to serve as the president of the UK Supreme Court and to work with the eleven other distinguished members of the Court. The UK Supreme Court, like its predecessor, the Appellate Committee of the House of Lords, is rightly respected throughout the world.

“Together with the other members of the court, I will do my best to ensure that it continues to play its proper role in upholding the rule of law, and applying and developing the law in a coherent and principled and practical way, appropriate for today’s world.”

His appointment as President of the Supreme Court was made by The Queen on the advice of the Prime Minister and Lord Chancellor, following the recommendation of an independent selection commission chaired by Lord Phillips. The commission consulted across each of the Supreme Court’s three UK jurisdictions before making its recommendation.

Lord Phillips said: “Identifying a successor to lead the Supreme Court into the next phase of its life was inevitably a task I approached with mixed feelings – a degree of pride in preparing to hand over leadership of an organisation which has maintained a smooth and efficient service as the UK’s highest court following the significant changes brought about by the Constitutional Reform Act, but also an element of sadness in leaving that same organisation.

“But in Lord Neuberger I know we have an extremely talented new president, who brings not only a wealth of judicial experience but the ability to lead a collegiate court. I wish him all the very best and I only hope that he enjoys this very special honour as much as I have.”




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Parliament: how will government monitor pledge to lower premiums?

The government risks damaging access to justice through its plan to raise the small claims limit in personal injury from £1,000 to £5,000, MPs have warned.

They also called on insurers to “immediately put their house in order and end practices which encourage fraud and exaggeration” – particularly settling claims without medical evidence.

Issuing the findings of its inquiry into whiplash, the transport select committee said that if insurers did not do this, “the government should take steps to protect motorists”.

The government also needs to explain how it will monitor that insurers honour their commitment to reduce premiums as a result of lower claims costs.

The committee highlighted the lack of authoritative data on the scale of fraudulent or exaggerated claims and criticised the government’s failure to give “even an estimate of the comparative scale of the problem” before bringing forward its reforms.

It also expressed disappointment that the legal profession had not been invited to last year’s whiplash summit hosted by the Prime Minister.

Its report dismissed the suggestion that whiplash does not exist but “accepted that some of the increase in the number of claims will have been due, in the main, to fraud or exaggeration, even if it is not possible to give even a rough estimate of the problem”.

While seeing “good arguments” for and against raising the small claims limit, the MPs concluded that on balance they did not support the proposal.

“We believe that access to justice is likely to be impaired, particularly for people who do not feel confident to represent themselves in what will seem to some to be a complex and intimidating process. Insurers will use legal professionals to contest claims, which will add to this problem.

“It would be financially difficult for many solicitors to assist litigants fighting personal injury claims using the small claims procedure, given the limited fees available. However, we are concerned that some claims management firms might find a way to enter the process, fuelling another boom in their activities.”

The committee was also concerned that using the small claims track would prove counterproductive in discouraging fraud and exaggeration as a claim where that was alleged would be transferred to the fast-track.

Further, the MPs said the government needs to understand better the impact of the RTA portal on claims and costs before increasing the limit.

The committee was far more supportive of the other limb of the government’s reform proposals: setting up independent medical panels. It said this should go further by reducing the three-year limitation period – given that most whiplash symptoms usually emerge within a few days of the accident and do not last for more than a year – and requiring more information in support of a claim.

This could be proof that the claimant saw a medical practitioner shortly after the accident or evidence of the impact of the injury on everyday life. “There should be a presumption against accepting claims where such information is not provided,” the committee said.

Medical experts should be provided with information about the accident and the claimant’s medical records, it added. “Reports prepared without this information are likely to be of very limited value.”

Other recommendations included considering whether the right to compensation should be limited where it can be shown that a claim is “grossly exaggerated” and for the government to encourage greater data sharing between insurers and lawyers.




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

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

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

The challenge

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

The solution

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

The results

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

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

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

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

 




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Nash: new era for costs lawyers

Nash: new era for costs lawyers

Costs lawyers are seeing the benefits of the Jackson reforms as solicitors turn to them in increasing numbers to cope with the intricacies of budgeting, a poll has shown.

Some 53% of members of the Association of Costs Lawyers (ACL) said they have seen a “significant” growth in demand for  budgeting advice in the past year, with a further 28% saying it had increased “slightly”. This was on the back of similar rises in previous years.

Three-quarters expected even more instructions over the next 12 months.

As a result, 55% of costs lawyers said they had grown their practices, taking on more staff, increasing sales and marketing activity, undertaking more advocacy, and diversifying – with ADR, WIP valuations and legal project management the key areas they are looking at.

The increase in demand for budgeting, hand in hand with more fixed fees in fast-track personal injury work, mean that the nature of costs lawyers’ practices is changing. Multi-track work made up 60% of the average firm’s caseload (up from 52% last year), while fast-track PI fell from 22% to 13%.

Asked how budgeting was working, 60% said it had brought costs lawyers’ skills to the fore. Some 52% replied that it depended which judge they were before – reflecting concerns expressed by the ACL and others that judicial inconsistency is undermining the regime – while a similar number (53%) agreed that ‘solicitors think they can do it – and they’re wrong’.

The proportion who found that solicitors remain in denial or unaware of the demands fell slightly, from 43% last year to 36% this.

Costs lawyers remained concerned about the impact of the Jackson reforms, however, with 40% saying they have discouraged solicitors from taking on less straightforward cases, and 31% believing that they have tilted the playing field in favour of defendants.

ACL chairman Sue Nash said: “The Jackson reforms have ushered in a new era for costs lawyers – one where they play a critical role in managing costs from the start of a case to the end. It is satisfying to see how many are looking to spread their wings into other areas where their skills and experience – which cover far more than their core costs drafting role – can offer real value to solicitors, their clients and others.”




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Lavender: no abuse of process

The Civil Procedure Rule Committee may need to address a hole in the exception from qualified one-way costs-shifting (QOCS) that meant defendants in a personal injury claim could not seek their costs because service of the claim had been set aside, rather than struck out, a High Court judge has ruled.

Shaw v Medtronic Corevalve LLC & Ors [2017] EWHC 1397 (QB) concerned an action being brought by the daughter of a man who died following an operation in which a heart valve was implanted.

Having previously settled with the hospital, she was now suing the manufacturer of the valve.

In January, Mr Justice Lavender set aside both Master McCloud’s order giving leave to serve the claim form out of the jurisdiction on the first and third defendants, and the service of the claim form on the first and third defendants out of the jurisdiction. He also struck out the particulars of claim in relation to the fourth defendant.

Subsequently, the claimant discontinued her claim against the fifth defendant.

The first, third and fifth defendants applied for orders that would allow them to enforce any costs orders made in their favour notwithstanding QOCS.

CPR 44.15.1(a) provides that claimants do not have QOCS protection where the proceedings have been struck out because the claimant has disclosed no reasonable grounds for bringing them. This meant the fourth defendant could have its costs.

Lavender J said: “In relation to the first and third defendants, I have held that the claimant has disclosed no reasonable grounds for bringing the proceedings. If the claim form had been served on them within the jurisdiction, I would have struck it out, but, because it was served on them outside the jurisdiction, the appropriate relief was to set aside service…

“I have not struck out the proceedings against the fifth defendant, because the claimant has discontinued them.

“The Civil Procedure Rule Committee may care to reconsider the scope of CPR 44.15.1(a), but as presently drafted it does not apply to the first, third and fifth defendants.”

The fifth defendant sought an order setting aside the notice of discontinuance, so that the judge could then strike out the proceedings and bring them within the scope of rule 44.15.1(a).

Lavender J said: “I am not persuaded that it would be appropriate to do this. Prima facie, the claimant had a right to discontinue under CPR rule 38.2. It was a proper use of that power, and to be encouraged, for the claimant to recognise, in the light of the first judgment, that her claim against the fifth defendant was not sustainable and to discontinue that claim.

“The court has power under CPR rule 38.4 to set aside a notice of discontinuance. That paragraph does not identify the circumstances in which the power should be exercised. The only guidance on that point in paragraph 38.4.1 of the White Book is to be found in two cases which are cited for the proposition that a court may set aside a notice of discontinuance as an abuse of the process of the court, but there was no abuse of process in the present case.”

Counsel for the defendants submitted that the claimant was trying to avoid the QOCS exception by serving notice of discontinuance.

But the judge said the fact that she was appealing his ruling in relation to the other defendants meant “the possibility that the claimant has simply recognised, in the light of the first judgment, that the claim against the fifth defendant will not stand remains a real one.

“That is perhaps a realisation which should have occurred to the claimant earlier, but it does not, in those circumstances, strike me that this is a case of abuse of process or anything sufficient to justify setting aside the notice of discontinuance.”




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Briggs: joined the Court of Appeal in 2013

Briggs: joined the Court of Appeal in 2013

The judge who led the Chancery modernisation review is to take over as deputy head of civil justice on 1 January next year.

Lord Justice Michael Briggs will succeed Lord Justice Stephen Richards when his three-year term comes to an end.

His appointment was made by the Lord Chief Justice after consultation with the Lord Chancellor, is a statutory one under section 62 of the Courts Act 2003.

Sir Michael, who is 60, was called to the Bar at Lincoln’s Inn in 1978. He was junior counsel to the Crown Chancery from 1988 to 1994, and appointed as a QC in 1994 as well. From 1999 to 2000 he was chairman of the Bar Council’s law reform committee. He was made a bencher of Lincoln’s Inn in 2001.

Later in 2001 he was appointed as the Attorney General to the Duchy of Lancaster, a position he held until 2006. A deputy High Court judge in 2001, he became a High Court judge, allocated to the Chancery Division, in 2006 and was appointed a Lord Justice of Appeal in April 2013.

Sir Michael was a member of the Civil Procedure Rule Committee between 2006 and 2009, and has been the Personal Support Unit liaison judge since 2013.

The deputy head of civil justice plays a leading role on the rule committee, and assists the Master of the Rolls generally in relation to the delivery of civil justice in England and Wales.

Lord Dyson, the Master of the Rolls, said: “I am delighted with this appointment, and look forward to working closely with Michael Briggs. His term of office will coincide with an important period for civil justice, including modernisation of the courts.

“I would also like to pay tribute to Stephen Richards for the outstanding work he has done in this role to date and we will continue to work closely together until his appointment comes to a close.”




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The SRA have announced today that, following a lengthy consultation, they will not be introducing a minimum financial strength rating requirement for participating insurers in the Professional Indemnity market, at this stage.

Elite CEO, Jason Smart, said “I am delighted that common sense has prevailed. As the SRA have themselves alluded to, a financial rating is not in itself an accurate measure of an insurer’s solvency. Introducing a mandatory financial strength rating for insurers in this market will have resulted in a crisis for small to medium size law firms who largely insure with unrated carriers”.

Now with some of the uncertainty removed for many law firms, insurers like Elite can look forward to planning the 2014 renewal season.

As for the further consultation into the Minimum Terms also announced by the SRA, this should prove interesting, but Smart chooses to remain tight lipped on this matter, for the time being.




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Neil Hudgell spends £1m to buy caseload

Acquisitive personal injury firm Neil Hudgell Solicitors has purchased £1m worth of casework from Hull-based QualitySolicitors Lockings, one of the founders of the QualitySolicitors network.

In the past two years Neil Hudgell has bought four legal practices outright and caseloads from eight firms as it looks to work with firms exiting personal injury and clinical negligence.

Managing director Neil Hudgell said: “This is the latest in a series of deals and the third deal we’ve done involving acquisitions from members of the QualitySolicitors network. We’re actively looking to purchase other firms or caseloads as part of our growth strategy.”

Law Society plans model agreements

The Law Society is planning to publish a new model conditional fee agreement, as well as its first model damages-based agreement, Legal Futures can reveal.

The plan is to publish them, together with supporting practice notes, by 1 April.

Bott: tenfold increase in pre-med offers

Aviva plan risks more fraud, claims Bott

Well-known claimant solicitor David Bott has hit out at Aviva’s call to make claimants deal directly with insurers, rather than instruct solicitors, arguing that it will only encourage the behaviour the insurer says it wants to stamp out.

In a detailed rebuttal of Aviva’s plan, Mr Bott – former president of the Association of Personal Injury Lawyers – said insurers are already trying to deal directly with claimants by making pre-medical offers.

“I have seen a tenfold increase in insurers making pre-medical offers to claimants. So has this direct dealing assisted claimants? In my view and experience, these offers are invariably as low as possible and promote the very behaviour insurers say they want to eradicate.

“If an unscrupulous individual knew there was a good chance of his claim being dealt with by a phone call and no medical examination, is that person more or less likely to make a bogus claim?

“Also, is not asking the person who is paying the money to decide how much to pay an inherent conflict of interest? Most insurer pay-outs on the lower value claims are arrived at via a computerised system, it is not beyond comprehension for the system to place values at the lower end of the scale, or for them to be discounted. Further what incentive is there for the law to evolve or for awards to increase under the proposed structure?”

Discount rate challenge

Claimants have to reveal how they invest their damages to ensure an informed debate during the Ministry of Justice’s second consultation on the discount rate, leading insurance law firm Kennedys has said.

Partner Christopher Malla said: “The government is now asking whether the current discount rate is too low. The consultation accepts there is evidence to show recipients of lump sum awards do not invest in index-linked government stocks (ILGS) but invest in a mixed portfolio where the rate of return is greater than ILGS and the current DR of 2.5%.

“Our work on the first discount rate consultation also indicated this, and the onus must now be on claimants to provide real evidence they invest solely in ILGS and that their compensation runs out because it is insufficient.

“The government also wants to understand why periodical payments are not used more widely.  We regularly ask the same question. If claimants want risk-free protection in high-value claims, they should avoid a lump-sum payment in favour of an annual periodical payment, which would be index linked, tax free and paid for the duration of their life regardless of actual life expectancy.  If not, then they should not be treated as a special investor.

“Life expectancy is the other major constituent in calculating a claimant’s lump sum award.  The accuracy or otherwise of life expectancy estimates used to calculate lump sum awards may provide even greater reason for claimants to opt for periodical payments.”

LEI “will protect claimants’ damages from solicitors”

Legal expenses insurance (LEI) will play an important role in protecting claimants’ damages from deductions by solicitors, an LEI provider has claimed.

Richard Finan, a director of Arc Legal, said the end of recoverability of success fees meant claimants without LEI “will face potentially significant deductions from their damages”. Further, if the proposed cut to RTA portal fees goes ahead, “solicitors may look to make up the shortfall from damages-based agreements”.

He argued: “The levels of cost exposure demonstrate what an important role legal expenses insurance will continue to play in protecting the damages received by claims while improving their access to justice.”

Brain Injury Group grows

The Brain Injury Group has appointed two new directors and three new suppliers to support its work in the medico-legal sectors.

Mark Beaumont joins from Just Costs Solicitors as a full-time director, while Geoff Silva also takes a director role while retaining an active role in Silva Legal Services, which provides pagination services to clinical negligence and personal injury solicitors.

The new suppliers are medical reports company Premex; Re:Cognition Health, which provides a “complete service” to patients presenting with symptoms of cognitive impairment; and Silva Legal Services.

The additions follow a restructure last year for the Brain Injury Group, when Sally Dunscombe, one of the founders, became the sole owner. They also reinforce the existing supplier base that includes original shareholders Nestor Partnership, an independent financial advice service; Independent Living Solutions, a case management and rehabilitation company; and Just Costs.

Meeting the Jackson mediation challenge

A barrister and solicitor have taken up Sir Rupert Jackson’s challenge to produce a neutral and definitive Mediation Handbook that is made available to all legal and insurance practitioners.

Jonathan Dingle, of 218 Strand Chambers, and Judith Kelbie, a managing partner of Yorkshire firm 7 Solicitors, have published The Mediation Handbook 2013/2014, an open source free PDF/eBook download. The 170-page publication, produced with the London School of Mediation, includes a guide to preparing for mediation. The pair are respectively a mediator and director of Trust Mediation.

Download the Handbook here.

Kroll and Hudson unveil e-disclosure partnership

Kroll Ontrack and Hudson Legal have announced an e-disclosure partnership that combines their respective expertise in technology and document review.

Hudson, best known as a recruitment company, now also provides managed review services and will in future use Kroll Ontrack’s online review platform, Ontrack Inview, which automatically distributes documents to review teams and actively learns from its solicitor ‘trainers’.

Dean Hager, president and CEO of Kroll Ontrack, said: “This technology, coupled with Hudson’s deep expertise in document review, will produce unsurpassed results for our clients.”




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Brennan: considerable success over Juridica's lifetime

Brennan: considerable success over Juridica’s lifetime

Shares in third-party litigation funder Juridica plummeted today after it announced a loss of £34m for 2015.

The AIM-listed company, which announced last November that it was going into run-off because of a lack of scale, said the loss was mainly due to a change in valuation of its investments.

This was mainly caused by one particular case where a damages appeal was lost and permission to appeal to the US Supreme Court refused. However, it had already delivered gross returns of £62m on an investment of £18m.

Juridica’s shares were down nearly 20% to 42p at the time of writing.

There were 15 investments current at the end of 2015; eight involved litigation (including several which consist of multiple underlying cases), five were in either pre-litigation or a special purpose vehicle in relation to patent monetisation, one has elements of both, and one relates to revenue rights associated with a coal mine.

“A considerable portfolio of litigation remains and there are other investments that require active management in varying degrees,” Juridica told the market.

The fair value of the company’s investments at 31 December 2015 was put at £63m.

Juridica’s chairman, former Bar Council chairman Lord Brennan QC, said: “The board considers that the fund has had considerable success over its lifetime and that having been the first significant litigation funder, especially in the United States market.

“The acceptance of litigation funding as an asset class has been due in large measure to the activities of the company. The board will continue its run-off strategy in order to maximise value to shareholders.”

Juridica paid out an interim dividend of 5p per share in December, meaning it has so far returned 64p to shareholders over the life of the company, which was admitted to AIM in December 2007.

As part of the company’s wind-down, it is looking to slash costs by £625,000 in 2016, which Lord Brennan said “include significant reductions in the fees and expenses of the board”.

The interim dividend and 2015 loss meant that the net asset value per share had fallen to 77p, compared to 107p in 2014.




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Funding: Short-term loan kept litigation going

A solicitor who sought to keep a longstanding client happy at the expense of another, when one provided the other with a loan to pursue High Court litigation, has been struck off.

Mark Harvey Lorrell’s action were “a classic example of a solicitor departing from the complete integrity, probity and trustworthiness expected of a solicitor”, the Solicitors Disciplinary Tribunal (SDT) ruled.

Mr Lorrell was first called to the Bar in 1999 before being admitted as a solicitor in 2003. At the time, he was managing partner of City law firm Lorrells, which had four partners and 30-40 employees.

The firm was wound up in 2015 by way of a creditors’ voluntary liquidation and the SDT said Mr Lorrell was now practising as a barrister.

In 2011, Mr Lorrell was instructed by a ‘Ms C’ under a conditional fee agreement (CFA) to act for her as claimant in a £3m High Court claim for fraudulent misrepresentation, deceit and breach of trust arising out of property dealings. It was ultimately unsuccessful, although he stopped acting before it reached court.

In the summer of 2012, he facilitated longstanding client ‘S Ltd’ lending Ms C £300,000 on a short-term basis to help her continue the case, at an interest rate of 56%.

The loan agreement stated that Mr Lorrell was not acting for Ms C on it, while he said the retainer with S Ltd was strictly limited to drafting the agreement on terms agreed between the clients.

Mr Lorrell argued that there was no conflict of interest as the clients had a common interest in Ms C winning the case.

He did admit to reading through the loan agreement with Ms C and that finding funding fell within his retainer.

The SDT said the solicitor “could not cherry pick among his duties to the client and subdivide the duty to advise on funding litigation and to give her the best advice [as the CFA said he would]”.

The clauses in the loan agreement about not acting for Ms C on it “had not applied in practice”, it continued, and Mr Lorrell had acted for her “in the round” – the loan agreement was part of the litigation.

The SDT also considered that it was “inconceivable” that the retainer with S Ltd was as limited as Mr Lorrell had claimed: “It was not credible that a document was drafted without any advice being given upon it and the terms of the loan agreement did not support that position.”

It went to find there was a conflict or significant risk of conflict between the two clients.

“That conflict lay in their different interests,” the SDT said. “The interests of Ms C were to obtain funding to take her litigation forward and win it. S Ltd wished to lend at a profit and be repaid.”

S Ltd was not a conventional litigation funder and did not want to get more involved in the case – the loan was not dependent on it succeeding: “The loan was clearly intended to be short-term only and to be repaid, which raised the spectre of default where the clients would be pitched against each other.”

There was also no informed consent from either client for Lorrells to act for the other.

Further, the tribunal said, Mr Lorrell had an interest himself in the loan as it would allow him to recover fees and also for the litigation to continue.

He had, it concluded, acted in a “cavalier fashion” and preferred the interests of S Ltd over those of Ms C. “He did not advise her of the risks she was taking by the loan; she exposed herself to an interest rate of 56%.”

There was an alternative – to pay the firm £15,000 to cover counsel’s fees for an imminent hearing – but Mr Lorrell did not advise about this; nor did he advise her to seek independent advice about the loan. He “merely relied on the clauses in the loan agreement that said she had been so advised”.

Mr Lorrell’s conduct displayed a lack of integrity, the SDT concluded.

It also found him guilty of various accounts rule breaches in relation to the loan monies, including paying the firm’s fees from them without sending Ms C a bill.

He was suspended from practice for three months by a previous tribunal in 2016, when he admitted providing banking facilities through his client account and was found to have lacked integrity.

The SDT said that was another case where Mr Lorrell was very close to a client and had not exercised “balanced judgement”. It rejected the Solicitors Regulation Authority’s suggestion that he was incompetent, but said: “He was competent as a lawyer but disregarded the interests of his client if he saw fit.”

Deciding to strike him off, the SDT said there was no indication that a further suspension would prevent Mr Lorrell from acting in the same way again if he decided to return to practise as a solicitor.

“For the protection of the public and the reputation of the profession, [Mr Lorrell] must be struck off.”

He was also ordered to pay costs of £35,700.




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Etherton: Three judges gave joint ruling

The Court of Appeal has unanimously rejected a compensation claim brought by a schizophrenic woman who stabbed her mother to death.

Elicia Henderson, who is not expected to be released from mental hospital for “some significant time”, argued that Dorset Healthcare University NHS Foundation Trust should pay substantial damages for negligence.

In a joint ruling, the Master of the Rolls, Sir Terence Etherton, the Senior President of Tribunals, Sir Ernest Ryder, and Lady Justice Macur upheld the High Court’s ruling that the claim was barred for illegality.

The appeal judges said that following the mother’s death in 2010, an independent investigation found failings by the NHS trust in Ms Henderson’s care and treatment and that a “serious untoward incident” was foreseeable.

“It is, therefore, common ground between the parties that this tragic event would not have happened but for the trust’s breaches of duty in failing to respond in an appropriate way to Ms Henderson’s mental collapse.”

The Court of Appeal heard in Henderson v Dorset Healthcare University NHS Foundation Trust [2018] EWCA Civ 1841 that Ms Henderson, who was born in 1971, began experiencing mental health problems in 1995.

She was charged with murdering her mother, but taking into account the opinions of two psychiatrists, the prosecution accepted a plea of manslaughter by reason of diminished responsibility.

Mr Justice Foskett, as he then was, made a hospital order under the Mental Health Act 1983.

Acting as litigation friend, the Official Solicitor issued proceedings on behalf of Ms Henderson in 2013, claiming damages under six heads.

These included general damages for personal injury, in the form of depression and post-traumatic stress disorder after killing her mother, along with damages for loss of liberty caused by her compulsory detention in a mental hospital.

A claim of just under £62,000 was made by Ms Henderson for not able to inherit a share in her mother’s estate.

The NHS trust accepted liability, but argued that the entirety of the claim should be defeated on illegality or public policy grounds.

Nicholas Bowne QC, counsel for Ms Henderson, argued that the trial judge, Mr Justice Jay, was wrong to conclude that he was bound by the leading Court of Appeal case of Clunis v Camden and Islington Health Authority and the ruling of the House of Lords in Gray v Thames Trains.

However, the appeal judges held that Clunis was “binding authority” for the proposition that the defence of illegality barred that part of Ms Henderson’s claim for damages relating to loss of liberty.

Turning to Gray, the judges said the law lords agreed that Clunis was correctly decided, and, in the context of a criminal conviction for unlawful killing, there was “a wider and a narrower form of public policy which precludes a claim by the killer from recovering damages in proceedings for negligence against the person whose act or omission is alleged to have been responsible for bringing about the claimant’s unlawful conduct in carrying out the killing”.

The appeal judges went on: “Third, the narrower form is that there can be no recovery for damage which flows from loss of liberty, a fine or other punishment lawfully imposed in consequence of the unlawful act since it is the law, as a matter of penal policy, which causes the damage and it would be inconsistent for the law to require compensation for that damage.

“Fourth, the wider form is a combination of public policy and causation. If the tortious conduct of the defendant merely provided the occasion or opportunity for the killing, but (in causation terms) the immediate cause of the damage was the criminal act of the claimant, it is offensive to public notions of the fair distribution of resources that a claimant should be compensated (usually out of public funds) for such damage.

“The consequence of those principles, which bind this court, is that all the heads of loss claimed by Ms Henderson in the present case are barred as a matter of public policy.”

The appeal judges said it was clear that the law lords in Gray had “considered issues which might undermine the application of the rule of public policy applicable in situations such as that in Gray, Clunis and the present case”.

The law lords “considered the situation where the mental illness of a claimant in tort proceedings against a health authority meant that, despite the conviction for manslaughter which predicates that the claimant committed the offence with intent to kill or to cause grievous bodily harm, they bore no or insignificant responsibility for the killing”.

The Court of Appeal concluded: “As stated above, Lords Hoffmann, Roger and Scott were of the view that the claim against the health authority should, nevertheless, be barred on grounds of public policy. For those reasons, Gray remains binding on us and so does Clunis.”


Blog

Are the days of the Arkin cap numbered?

Stephen Innes

The Arkin cap has come to be seen as increasingly unfashionable, and a forthcoming hearing may provide some indication of the prospects of it being consigned to the back of the wardrobe of history. As a reminder, where a claim backed by litigation funding fails, the funder may be susceptible to a non-party costs order in favour of the successful party.

October 5th, 2018