We have been asked to take down this story due to confusion over the current status of the judgment reported. Once this has been cleared up, we will repost it.

Doerries: timely move

The details of the joint working group set up to investigate the viability of a contingent legal aid fund (CLAF) at the urging of Lord Justice Jackson, have finally been published today – even though it has now already had two meetings.

The group is chaired by Justin Fenwick QC and has representatives of the Law Society, Bar Council and Chartered Institute of Legal Executives (CILEx).

For the purposes of the working group, a CLAF is defined as “a self-sustaining pooled fund to cover the legal costs of a claimant’s civil money claim, where (i) in cases that win, the claimant’s legal costs are recovered from the losing party and a portion of the damages or other sums recovered by the client is paid into the fund, and (ii) in cases that lose, the claimant’s appropriate legal costs are reimbursed by the fund”.

Last week Law Society chief executive Catherine Dixon said the group was seeking to identify “the most promising areas where a CLAF might have a role to play. If the group concludes that there are no areas that appear sufficiently promising, it will report accordingly.

“If areas are identified where a CLAF could have a useful role, the group will undertake further work to establish whether an economically viable model can be set up.”

A key issue the working party will have to address is where the initial funding could come from – in his speech in February, Lord Justice Jackson suggested it could come from the government, the National Lottery or ‘quasi-debentures’ bought by individual lawyers and/or institutions.

Bar Council chair Chantal-Aimee Doerries QC said: “The Bar Council has examined this as a possible alternative source of funding civil justice over many years. Our first report was published as long ago as 1998. Since our last report on the subject in 2011, the civil justice landscape has changed considerably.

“The Legal Aid, Sentencing and Punishment of Offenders Act 2012 resulted in significant cuts in civil legal aid and in some cases the removal of public funding from entire areas of civil work.

“It is therefore timely to re-examine the feasibility of an independent, not-for-profit CLAF established by the legal profession, in the public interest, to promote access to justice.”

Law Society president Robert Bourns agreed that a CLAF “could provide a valuable method to fund litigation and facilitate access to justice for those who lack the means to pay for legal services”.

He added: “We are keen to discuss ways to overcome the obstacles that prevented this idea from proceeding in the past. It is also important to consider any unintended consequences on existing funding options, which are presently working well for people.”

CILEx president Martin Callan noted that CLAF models “do operate successfully in other jurisdictions”.

The group plans to produce an initial report by the end of September and a final report before the end of the year.

Its terms of reference are:

1. To investigate and report whether a CLAF could be viable in any area(s) of civil litigation and in particular as to whether it could be self-sustaining.
2. To consider whether there are any gaps in civil litigation funding which could be filled appropriately with a CLAF.
3. To consider whether a CLAF could provide a satisfactory means of civil litigation funding alongside, or as an alternative to, existing funding methods.
4. To identify how a CLAF could be funded and what funding arrangements with lawyers, clients, insurers, funders or others would be necessary to make it viable.
5. Against that background to set out the essential characteristics of a viable CLAF, including how it would operate and the outcomes it would deliver for clients, lawyers and the wider justice system.
6. To make recommendations as to whether any and if so what changes would be needed to make a CLAF viable, in particular: (i) changes to other forms of funding (abolition or amendment); and (ii) legislative changes (primary or secondary legislation, including any changes to the Civil Procedure Rules).
7. To make recommendations as to how a CLAF could be established (including its initial finance).
8. To provide an initial feasibility report by September 2016 and a final report before the end of December 2016.

Burcher Jennings are ‘proud’ to be nominated for two categories at award show

Leading legal costs and pricing consultancy Burcher Jennings has been shortlisted not once, but twice for the Modern Law Awards.

Established earlier this year by bringing together the expertise and experience of Jennings Costs and renowned international pricing consultancy Validatum, Burcher Jennings was shortlisted in the ‘new entrant’ category while its Market Pricing Data service was picked out by the judges in the ‘innovation’ category.

Martyn Jennings, Burcher Jennings’ CEO said:

“We are the first firm to combine leading edge expertise in pricing and costs. It is a great honour to be shortlisted by judges of the Modern Law Awards, but the endorsement which we value above all is that from our clients.

“Whereas costs draftsmen used to provide law firms a mechanical function, linked to the hourly rate at the end of a case, we can provide an integrated suite of pricing and payment options. Our clients really appreciate being able to tackle pricing and costs together. The feedback from them is so positive.”

Richard Burcher, Burcher Jennings’ chairman said:

“Our Market Pricing Data service is an innovation of which we are truly proud. It has the potential to remove the guesswork completely from pricing legal services, by providing subscribers with segmented data on the market. We are delighted that the judges have acknowledged this by shortlisting it in the ‘innovation’ category of the Modern Law Awards.

Burcher Jennings offers law firms on-site pricing training, pricing templates and guidelines, negotiation and pitch training, assistance on budgets and estimates, simplified client care documents and advice on pricing individual cases. These comprehensive solutions improve profitability and cashflow.

With fewer time and fee write-­offs, safer margins and less time lost to resolving cost complaints, firms can ensure their costs and pricing policy matches their potential.

2015 was a busy year for litigators, with changes affecting all areas of the profession. Wouldn’t it be great if there was a summary of all the main changes to make sure you are up to speed on all the big topics from last year? Well you’re in luck!

Our 2015 review looks back at all of the main talking points from 2015 and includes some insightful commentary from our team. We’ve also teamed up with Professor David Chalk of the Department of Law and the Centre for Information Rights at the University of Winchester who discusses the big topics on the horizon in 2016.

https://www.daslawassist.co.uk/news/read/181/?ref=general

Coming inside the budget does not prevent further cuts, says judge

The budgeting regime does not fetter the powers and discretion of the judge at detailed assessment even if the receiving party comes in within the budgeted figures, a regional costs judge has ruled.

However, in a significant decision, District Judge Lumb in Birmingham urged greater co-operation between parties so that a far more accurate budget is prepared in the first place.

The judge, who is also a specialist clinical negligence district judge, said that though there was no direct authority on the relationship between the two, there were numerous examples in the CPR and case law to support the contention that cost budgeting was not intended to replace detailed assessment.

For example, there were no wholesale changes made to CPR parts 44 and 47 when budgeting came in.

DJ Lumb said: “The amendment that was made was to CPR 44 was to include an additional factor (h) in the ‘pillars of wisdom’ under CPR 44.4 (3).

“The receiving party’s last agreed or approved budget is just another factor that the court will have regard to. No special weight is attached to that budget. The rules were not amended to say that ‘first consideration’ would be given to the budget or that it would be ‘of paramount importance’ which are familiar terms in family law when weighing up the interests of children.”

In Merrix v Heart of England NHS Foundation Trust, the successful clinical negligence claimant argued that if her costs were claimed at or less than the figure approved or agreed for that phase of the budget, then they should be assessed as claimed without further consideration – unless the defendant put forward a good reason to depart from the budget.

The defendant’s position was that the costs judge’s powers and discretion were not fettered by the budgeting figure, but that the budget was just one factor to be considered in determining reasonable and proportionate costs on assessment.

While DJ Lumb ruled that the assessing judge was not fettered by the budgeting regime – save that budgeted figures should not be exceeded unless good reason could be shown – he said the full answer was “more nuanced than the defendant’s position of ‘open season’ and complete discretion to attack a bill on detailed assessment and the claimant’s opportunistic attempt to impose a straight-jacket on the costs judge and claim a fixed figure”.

He explained: “There is some merit in elements of both parties’ arguments in the present case. At the same time, their entrenched positions illustrate why some observers consider that costs budgeting has failed to be as successful in practice as it ought to have been.

“The analysis in this judgment demonstrates that the preliminary issue question itself as posed was based upon a misunderstanding of the objectives and function of costs budgeting which is a different costs management tool from costs assessment.

“If the claimants arguments were correct and that for large sections of a parties costs the only opportunity to challenge those costs, absent ‘good reason’, would be at the CCMC, those hearings would be at risk of being far lengthier than they already are. That cannot be consistent with the overriding objective of dealing with cases expeditiously at proportionate cost.

“It is the duty of the parties to help the court to further the overriding objective by narrowing the issues between them. By adopting an ADR-like philosophy in negotiation and the preparation of budget discussion reports it should then be possible, in the majority of cases, to produce a proportionate budget that is so accurate when compared to the actual, yet still proportionate costs, incurred at the conclusion of the case that the difference between the parties should be so negligible that it would not be worth the time, trouble or risk to pursue a detailed assessment.

“To get to that ideal position requires a realistic engagement by the parties and by the case managing judge who has not only the experience of effective case management but also of the proportionate sums involved in the efficient conduct of the case. The benefits to all, if this panacea can be achieved, are obvious.”

A spokesman for Irwin Mitchell, which acted for the claimant, said permission to appeal was granted by the regional costs judge and the firm was considering its position.

He added: “There is a tension in the court rules between CPR 3.18 and rule 44 which needs clarifying by the courts. Last week it was reported that Master Rowley in the Senior Court Costs Office in a costs claim against Peterbrorough and Stamford NHS Trust had allowed various phases of a claimant’s anticipated costs budget as claimed without undertaking a detailed assessment of these costs.

“It appears that there is different judicial thinking at the moment on this issue.”

A spokesman for the NHS Litigation Authority said: “We are pleased with the court’s decision in this case. If CPR 3.18 were used by costs judges to ‘rubberstamp’ payment of costs budgets at detailed assessment hearings, this would result in a massive increase in the costs of litigation. The burden of this would ultimately be paid by the taxpayer in NHS cases.

“It would also be contrary to the primary intention of the Jackson reforms, which were implemented to control costs and promote access to justice.”

Edis J: Insurers admitted Mr Forrett drove car “but denied everything else”

Insurer Admiral has been attacked by a High Court judge for conduct “redolent of an era which had begun to fade into history” even before the Woolf reforms came into force.

Mr Justice Edis was ruling on a road traffic accident case in which a driver insured by Admiral denied liability for three years following a conviction for driving without due care and attention.

Edis J said the conduct of Thomas Forrett and his insurer was “designed to secure an advantage” to which they were not entitled.

“It did so at risk of causing substantially more work and thus cost to themselves and all other parties. This is redolent of an era which had begun to fade into history even before 26th April 1999 when the Civil Procedure Rules 1998 came into force.”

Ruling in Davies v Forrett and others [2015] EWHC 1761 (QB), Edis J recounted that Daniel Davies was a passenger being driven to work by Ryan Partington, who decided to overtake three cars at once.

One of them, a Vectra, decided it wanted to overtake as well, and Mr Partington’s car braked sharply, causing it to veer off the road into a tree.

Edis J said both Mr Davies and Mr Partington “sustained serious injuries”, but Mr Forrett, in the Vectra, “drove on to his place of work”.

The court heard that the police investigated and recovered CCTV which showed Mr Forrett’s Vectra “very near the scene of the accident, very near the time of the accident” and that he arrived for work “very soon afterwards”.

Despite the very strong evidence against him, Mr Forrett denied the car was his Vectra but he was convicted of driving without due care and attention at the local magistrates’ court.

Edis J said: “On that basis, if the magistrates convicted him correctly, he was guilty of disgraceful behaviour. He had played a part in causing a very serious accident, driven away from it, and then lied on oath to avoid its consequences.

“Obviously if he continued to adopt that stance in any subsequent civil proceedings, such conduct might become relevant to costs.”

Edis J said the particulars of claim were served in May 2014 and relied on the conviction, while Mr Forrett’s insurers admitted “that he was the driver of his red Vectra on the road on the relevant day, but denied everything else. It alleged that the accident was entirely the fault of Partington”.

He noted that in relation to the conviction, “the defence contains the following time honoured but, here as in many cases, mystifying words: ‘The defendant admits the conviction referred to in the particulars of claim but denies its relevance to the civil proceedings.'”

Meanwhile Southern Rock, which insured Mr Partington’s car, had tried and failed from June 2012 to May 2014 to get a “straight answer” from the solicitors acting for Admiral, Horwich Farrelly, as to whether Mr Forrett was denying liability or not.

The judge said: “I have not set out above the detail of the lengthy correspondence between Sintons on behalf of Southern Rock and Horwich Farrelly on behalf of Forrett, although I have referred to the main dates.

“On one side the correspondence is appropriate throughout. Initially it is polite and constructive but becomes more insistent as time wears on. Almost every letter refers to the mounting costs caused by the refusal of Admiral on behalf of Forrett to accept his obvious fault…

“Moving from the correspondence to the steps taken in the proceedings, it appears to me that the same approach continued to govern the conduct of Forrett’s case, despite CPR 1.3. This imposes a duty on the parties to help the court to further the overriding objective. This is a duty and not an exhortation. Breach of duty is a significant matter which is directly relevant to costs issues…

“In contrast to the behaviour of Forrett, Davies and Southern Rock both conducted themselves sensibly, in my judgment.”

It was agreed that Mr Davies was entitled to an order that Mr Forrett pay the costs of bringing the claim against him.

Edis J ordered that Mr Davies was also entitled to an order against Mr Forrett for the costs of suing Mr Partington and Southern Rock and Mr Forrett will pay for the cost of defending those proceedings, which the judge said were only brought because of uncertainty “connived at by Forrett”.

The judge said there would no order relating to Mr Partington’s costs of the claim, but Mr Forrett would also pay for Southern Rock’s costs of a successful part 20 claim against Mr Partington, seeking a declaration that it had liability to him because the car’s policy did not cover a named driver commuting to work.

Both Admiral and Horwich Farrelly declined to comment.

From Legal Futures’ Associate ARAG.

In our new video, ATE Account Manager, Paul Morgan, talks about our Recourse Complete product, the certainty it provides and the benefits of insuring all types of personal injury cases with ARAG.

Morgan: precedent for a personal injury case

Welsh firm Hugh James has struck a blow for claimants with a High Court ruling that backed its “somewhat novel” credit agreement to fund clients’ disbursements of £787,500.

The firm represented a number of successful lead claimants in the Phurnacite Workers Group Litigation (PWGL) against the Secretary of State for Energy and Climate Change and Coal Products Ltd.

The high-profile group action was brought by former employees and their families of a phurnacite plant in South Wales, successfully claiming exposure to harmful dust and fumes caused Mesothelioma.

But in order to progress the case through the courts, Hugh James agreed a credit arrangement with the claimants to fund the disbursements that Mrs Justice Swift described as “at least in the personal injury sphere… somewhat novel”.

Interest was set at 4% above base rate and payable out of damages if the claims were successful. If the individual claim was unsuccessful, the credit agreements were covered by after-the-event insurance.

The defendants sought to argue that by Hugh James paying the disbursements, it was simply an overhead of the firm – usually payable by an uplift or an additional percentage success fee – and so the burden was on the claimant to pay any interest.

However, for the claimants, Benjamin Williams argued that the terms of the conditional fee arrangement was a recoverable cost in the same way as if they had secured a bank loan or used a credit card to fund the disbursements – and that the credit agreement was at a more beneficial rate.

Mrs Justice Swift found that the claimants’ case for interest was not effectively a claim by the firm and said: “Hugh James fulfilled the role of a bank, but on terms more advantageous to the claimants than those which would have been offered by any bank”.

She set the recoverable rate of interest on the pre-judgment disbursements at 4% above base rate, saying it was not “excessive or unreasonable”.

Gareth Morgan, lead partner on the case for Hugh James, said: “This is a precedent for a personal injury case. What it means is that if a claimant enters into a funding arrangement and incurs interest on disbursements, then in appropriate circumstances, that is a cost which can be charged against the defendant in the event of a successful claim.

“This switches the burden of funding disbursements from claimant to defendant.”

He added: “It is a small movement in favour of the claimant, because up to now the tide has been going very strongly against the claimant.

“Up to now they’ve had the possibility of losing up to 25% of the damages. But at least that’s all they are going to have to fund, because the cost of disbursements – an essential part of a large case – can be transferred to the defendant.”

Zebra LC, trusted advisor and due diligence specialist within the UK legal sector, has achieved certificated approval for its quality management system under ISO 9001: 2008.

Zebra is unique, delivering client projects with a distinct market leading approach and known for advising in some of highest profile deals in the legal services market. Clients include leading law firms, banks, insurers, investors, funders and new entrants such as Fairpoint Group PLC and North Edge Capital.

The business has a specialist role, enabling a deeper understanding of law firms’ risk, value and opportunity profile by placing technical due diligence and independent review at the core of its value proposition. This includes using technical legal specialists across a multi-discipline of lawyers, costs, financial and risk and compliance experts.

Zoe Holland, managing director, “Zebra works within a highly regulated environment and as such quality and risk procedures are critical to both our business and our clients. Achieving a quality mark with ISO 9001 supports our mission to provide outstanding quality, innovation and technical brilliance in the delivery of our clients’ requirements.”

“The team within Zebra has worked hard under the helm of our head of risk, Hazel Ryan, to achieve the accreditation. We work to a bespoke Project Assurance Plan. Our clients take comfort in our risk based and measured approach to projects whether they be consultancy based, bank focused WIP profiling, diagnostic audits or M&A due diligence within the legal sector. I am delighted with this result.”

Egan: Judgment is good news for our members

The Law Society has encouraged solicitors to consider taking action against insurers who settled personal injury cases directly with their clients without paying their fees.

It comes following yesterday’s Supreme Court ruling, which upheld the Court of Appeal ruling that Haven Insurance should pay Gavin Edmondson Solicitors what it was due.

The Law Society intervened in the Supreme Court, making written representations.

President Joe Egan said solicitors “may now wish to consider whether they have any claims against insurers who took action similar to Haven”.

He added: “The society intervened in this case because we believed this was an important point of principle for the profession.

“This judgment is good news for our members. It confirms that solicitors will have a remedy to recover their costs in these circumstances where an insurer has tried to avoid payment by going to the claimant direct.

“It will also be good for consumers as it reduces any incentive for insurers to go directly to claimants, cutting solicitors out and therefore losing the protection a solicitor brings in representing the client in a claim.

“The case is also a useful confirmation given the expected broader application of fixed recoverable costs regimes in the future.”

Haven issued a bullish response to the decision, urging claimants to come to it directly without solicitors.

Claims director Joe O’Connell said: “While we are naturally very disappointed by the decision, this case was not about whether insurers should settle directly with claimants. It was only about the claimants’ solicitors’ costs and it turned on a technical analysis of their retainers.

“The court did not criticise Haven in any way and there has never been any suggestion that the underlying claimants received any less than the compensation to which they were entitled.

“In fact, Haven believes that they received more than they would have received had they settled their claims through solicitors.”

He made these comments even though the Supreme Court said that once an insurer knew that a claimant was represented by solicitors acting under the RTA protocol, “they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable”.

Mr O’Connell added: “Haven has always acted fairly towards claimants and will continue to do so. We believe that it is in claimants’ interests to settle directly with us and we will continue to provide an excellent service to those who choose to do so.

“Claimants who deal directly with Haven will resolve their claims more quickly and are likely to receive more in compensation than they would if they involved solicitors, particularly as solicitors will deduct up to 25% from claimants’ damages to cover success fees and other legal costs.

“Haven strongly believes that every claimant has the right to decide how to deal with their own claim and that claimants should not be forced to use solicitors. We encourage any claimant to speak to us before committing themselves to instructing solicitors.”

Radford: Film dispute

The Court of Appeal has upheld a decision that a leading media law firm could not recover hundreds of thousands of pounds in costs because its conditional fee agreement (CFA) did not cover much of the work it undertook.

Giving the unanimous ruling of the Court of Appeal in Radford & Anor v Frade & Ors [2018] EWCA Civ 119, Lord Justice McCombe said he rejected the appeal “not without regret”.

London firm Taylor Hampton (TH) was acting for individual and corporate defendants in an action brought by Oscar-nominated film director Michael Radford over a project to make a Spanish film called La Mula.

Mr Radford was retained to direct the film but in time the parties fell out and the director left the shoot and was replaced.

In July 2010, Mr Radford and the partnership through which he traded started legal action and obtained injunctions, which included prohibiting the defendants from using or publishing film footage he had shot without his authority.

Taylor Hampton and Augustus Ullstein QC were instructed under CFAs to set aside the injunctions and also dispute the jurisdiction of the English court and service of the proceedings.

According to Mr Justice Warby’s ruling in the High Court: “The initial objective was substantially achieved by a consent order made by Tugendhat J on 23 May 2012… By this point the substantive proceedings against the individual defendants were over. But they continued against the corporate defendants.”

Though the case continued for another 26 months, when TH successfully applied for summary judgment, Master Haworth at first instance ruled that the work done after May 2012 was outside the scope of the CFA, which was meant to cover only procedural issues such as service and jurisdiction.

An implied agreement to pay after that period was a CFA, and “TH failed to take the precaution of ensuring that this CFA was reduced to writing”, he said.

TH had submitted a bill in the sum of £805,500, most of which Warby J said related to that post May 2012 period.

As the clients were not liable for the fees of either solicitors or counsel, the indemnity principle meant they were not recoverable from the claimants.

Master Haworth had also ruled that the defendants could not recover any fees for work done by counsel after 23 May 2012, because his CFA was made with TH, and the clients had no liability to pay TH.

He further found that, in any event, no fees could be recovered for work done by counsel in respect of the corporate defendants, who were not identified as counsel’s clients in his CFA with TH. There was an attempt to address this second problem with a deed of rectification in July 2015 during the assessment proceedings.

His ruling was upheld by Mr Justice Warby, and in agreeing with them, McCombe LJ said he found it “impossible” to accept TH’s argument that the initial conventional retainer continued after the CFA was signed so as to pick up such items of work by the solicitors as were not covered by the CFA.

“In my judgment, it only makes sense that the solicitors and clients understood that the CFA superseded the original conventional retainer which had been entered into in circumstances of urgency and before the viability of a CFA could be assessed.”

He found that TH’s conduct indicated that it was “carrying on as usual” after 23 May 2012 and nothing had changed. “The misfortune was that the continuing willingness to work on a conditional basis only was not fully recorded in writing.”

In relation to counsel, McCombe LJ held that “the making of the retrospective variation of counsel’s CFA, after the making of the costs order in favour of the appellants, cannot be effective to increase the liability of the respondents as paying parties under that order”.

Taylor Hampton partner Daniel Taylor said: “While we are obviously disappointed by the judgment, it is clear that this was a very finely balanced decision.

“Unfortunately on this occasion the judges ruled, to quote the judgement ‘not without  regret’, to dismiss our appeal.”

Lord Neuberger: no explanation which justified second application

Litigants are not entitled to make a second application for relief from sanctions unless there has been a “material change in circumstances”, the Supreme Court has ruled.

It also did not seek to revisit the guidance on relief set down by the Court of Appeal in Mitchell and Denton.

Upholding an earlier ruling by the Court of Appeal, the Supreme Court ruled that under CPR 3.7, a deputy High Court judge “simply had no grounds to justify his entertaining the second relief application on its merits”.

Giving the judgment of the court, Lord Neuberger said late compliance with an ‘unless order’ could, in certain circumstances, give rise to a successful second application for relief.

“If, say, the unless order required a person or company to pay a sum of money, and the court subsequently refused relief from sanctions when the money remained unpaid, the payment of the money thereafter might be capable of constituting a material change of circumstances, provided that it was accompanied by other facts.

“For instance, if the late payment was explained by the individual having inherited a sum of money subsequent to the hearing of the first application which enabled him to pay, or if the company had gone into liquidation since the hearing of the first application and, unlike the directors, the liquidator was now able to raise money.”

However, in the case before him, Lord Neuberger said compliance with the unless order “was not accompanied by any explanation which could possibly have justified a court concluding” that there had been a material change of circumstances.

The Supreme Court heard in Theravajah v Riordan and others [2015] UKSC 78, that Mr Theravajah entered into an agreement with John Riordan and Eugene and Barrington Burke to buy the shares they owned in a property company.

Having paid £1.57m to the appellants, Mr Theravajah sought specific performance of the agreement and obtained a freezing order in May 2013 which required them to provide disclosure.

The appellants failed to comply in full and the following month Mr Theravajah obtained an unless order from the High Court, which warned the appellants that they would be debarred from defending the claim unless they complied.

After the appellants failed to comply, Mr Justice Hildyard made the debarring order later that summer and rejected the first application for relief from sanctions.

The day before the trial on 3 October 2015, the applicants provided what they considered to be full disclosure and made a second application for relief from sanctions.

Andrew Sutcliffe QC, sitting as a deputy High Court, granted relief from the debarring order. However, Mr Theravajah appealed successfully to the Court of Appeal.

Lord Neuberger said he agreed with the ruling of Lord Justice Richards in that court, and although the original trial judge, Mr Justice Hildyard, gave his decision before the judgments in Mitchell and Denton, his reasoning and decision reflected the guidance and approach set out in them.

“Quite rightly, there has been no suggestion that we should reconsider what was said in those decisions,” Lord Neuberger said. He dismissed the appeal.

Fenn: “we need to keep a close eye on high-value claims”

The introduction of fixed recoverable costs (FRC) in clinical negligence cases is still planned for 1 October 2016, the Department of Health has confirmed.

The news came as independent research of the pre-LASPO regime concluded that conditional fee agreements (CFAs) gave people on middle incomes access to justice and did not result in “a feast of ambulance-chasing”.

The original plan was that the consultation on FRC would be published in October 2015, but that was postponed to “early 2016”. It has yet to be published.

Labour justice spokesman Andy Slaughter asked the government whether it had considered delaying the introduction of FRC until the planned reductions in costs resulting from LASPO had been seen.

Health minister Ben Gummer replied this week: “The intention is to introduce FRC for clinical negligence claims from 1 October 2016, following the outcome of the public consultation.

“The department is aware that there are pre-Legal Aid, Sentencing and Punishment of Offenders Act 2012 cases in the system and will be for a number of years. However, FRC for clinical negligence is not a new concept and had been proposed by Lord Woolf and Lord Justice Jackson in 1996 and 2009 respectively in order to better manage clinical negligence claims through the legal process.”

With time for the consultation fast reducing, given the need for new rules to be approved by both the Civil Procedure Rule Committee and then Parliament, the reply indicates that there may only be a short consultation on the detail of an FRC scheme, rather than the principle of it.

The Department of Health has previously indicated that it would look to introduce FRC for claims worth up to £100,000, or possibly £250,000.

Julie Say, a clinical negligence partner at Hodge Jones & Allen, said she was “dismayed” by the announcement.

“It appears that the government is intent on introducing a fixed costs regime come what may and that the long-promised consultation will be nothing more than an exercise in how a fixed costs regime should work, rather than considering how clinical negligence cases are run and the drivers behind legal costs in such cases.”

The research into clinical negligence litigation between 2001 and 2013, funded by the Nuffield Foundation, found that the “demise of legal aid” reduced the “propensity for claim for those in lower income groups”.

Led by Professor Paul Fenn at Nottingham Business School, researchers found that the number of clinical negligence claims in 2013 was “not very different from the level of claiming in 2001”.

This was explained by a steady fall in claims between 2001 and 2009, followed by a rise, with the number of new claims “approximately doubling” between 2009 and 2013. The study did not cover the post-LASPO period.

Funding clinical negligence cases: access to justice at reasonable cost? found that while the number of claims was not that different during the period, the “socio-economic composition of claimants” did change.

The proportion of those on middle incomes who pursued medical negligence claims increased from less than 4% in 2001 to 22% in 2013, while those in the lowest income group fell from 15% to only 7%.

“A snapshot of clinical negligence experience in 2001 would have revealed a situation in which the majority of patients with valid claims against doctors or hospitals were unable to fund their legal expenses because they were not eligible for (means-tested) legal aid, but were not sufficiently wealthy to pay lawyers from their own resources.”

The study found that the number of medical negligence claims fell between 2001 and 2009, but then rose between 2009 and 2013. By 2012/13, there were 10,129 new claims against NHS bodies, up from 6,652 in 2009/10.

A total of £1.26bn was paid in connection with clinical negligence claims in 2012/13, including £205m in claimants’ legal costs, compared with £787m in 2009/10.

The proportion of successful claims increased from around 45% in 2001 to around 70% in 2009, but researchers found “signs that this increase in the success rate had stopped (and may have been reversed) after 2009”, corresponding with the period of rising claims.

“This may reflect a less cautious approach to risk assessment on average as new, non-specialist law firms entered the clinical negligence market.”

Professor Paul Fenn commented: “There have been concerns that the shift to using ‘no win, no fee’ lawyers to fund the majority of clinical negligence claims might act as a barrier to justice because lawyers would be too cautious to take cases, or conversely that they would lead to a surge in ‘ambulance-chasing’ behaviour.

“Our research shows that neither of these things has happened, although we need to keep a close eye on high-value claims relating to infants over eight weeks to ensure this group is not falling through the cracks.

“We also need to be aware of the recent trend towards higher claim frequencies and costs with a view to monitoring the impact of the LASPO reforms, introduced in 2013.”

Augusta Ventures, the UK’s leading specialist financier for small to medium commercial claims, has announced a strategic partnership with the UK’s largest barrister direct access portal, myBarrister.

Augusta will offer on an exclusive basis its Trinity finance solution to all barristers who are members of myBarrister, providing them with the ability to offer finance to the client leads they receive from the myBarrister portal.

Louis Young, CEO of Augusta said: “The partnership with myBarrister provides us with a proven distribution channel for Augusta’s Trinity product to the premier Chambers in the UK and beyond . While in the main we rely on law firms to make their clients aware of our financing solution, there has been a steady increase in the number claimants instructing the Bar directly.

“In these circumstances, both the claimant and barrister will have the same need for equitable and flexible finance as those who choose to employ a solicitor to conduct their litigation. We believe that this is a significant step towards litigation finance becoming a mainstream option for litigants, and by looking to finance Direct Access-led work, we are further strengthening our portfolio of claims.”

Car accidents: case for equitable intervention

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

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

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

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

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

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

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

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

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

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

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

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

Lords Justice Laws and Elias agreed.

Here we go again: will hostilities start again in the courts?

Posted by Neil Rose, Editor, Litigation Futures

It may appear that little is happening on the Jackson reforms, and concern rises another notch as every day ticks over and takes us closer to 1 April 2013, but there is a considerable amount of activity going on beneath the radar.

This is in the form of mini-consultations with key stakeholders. Last week we reported on the Civil Procedure Rule Committee’s consultation on the draft pre-action protocols that will underpin portal extension, while I learned last Friday that it was the final day of a consultation on the draft Conditional Fee Agreements Order 2012 and the draft Damages-Based Agreements Regulations 2012.

Before making these, the Lord Chancellor is required to consult the designated judges, the Bar Council, the Law Society and “such other bodies as the Lord Chancellor considers appropriate”. The consultation also included the draft Conditional Fee Agreement Regulations 2012 and the draft Offer to Settle in Civil Proceedings Order 2012, neither of which require formal consultation.

The reason I’m writing this as a blog rather than a news story is that, now I’ve seen them, they reflect what was announced as the government’s policy decisions at the start of the month, such as the 50% cap on all damages-based agreements (DBAs) except where they are in personal injury or employment, where the caps are 25% and 35% respectively.

But what caught my attention, and that of others who have seen the drafts, is the wording around the information requirements. The draft CFA regulations say that before a CFA is made, the lawyer “must” provide information to the client in writing about the circumstances in which the success fee will be payable, how the success fee will be calculated, and the reason for setting the success fee at the level agreed.

When it comes to DBAs, the lawyer must tell the client in writing the point at which expenses become payable and a “reasonable estimate of the amount that is likely to be spent upon expenses, inclusive of VAT”. In personal injury cases the lawyer must also explain how the payment will be calculated, while there are additional information requirements for employment cases carried over from the current regulations.

The 2012 regulations, once brought into force, will revoke the 2000 CFA Regulations, the litigation from which is to a large extent the reason we are where we are today. But might they live on in spirit? It was the prescriptive nature of those regulations, the demand that solicitors “must” take certain steps, that caused so many problems and led to some of the most ridiculous technical challenges that any litigator has ever dreamed up (the challenge on the basis that the CFA did not say that there was no postponement element in the success fee has stuck with me as an example).

Should this be the case, the ingenuity of defendant lawyers will come up against the avowed intention of the new Master of the Rolls, Lord Dyson, to clamp down on satellite litigation post-April.

In his first speech since slipping into the robes earlier this month, Lord Dyson said that “while it is inevitable that new rules and procedures will give rise to some satellite litigation, it is vitally important that the courts and lawyers do what they can to minimise the risk of [it]”.

This means the rules providing “as much certainty as possible” and then clear, authoritative guidance from the Court of Appeal. How will this be achieved? Through “consistency in approach”, Lord Dyson said. A small number of Court of Appeal judges will be designated to deal with procedural cases; he will also sit on those appeals, as will the deputy head of civil justice. “We will not sit on all the appeals, nor will we form the entire constitution which hears those appeals. But at least one of the designated judges will sit on each procedural appeal.”

Lord Dyson hoped such guidance will not be needed often. “But we must be realistic,” he said. The lesson is there from the costs war. Is battle about to recommence?

Leading legal expenses insurer DAS broadly welcomes the Competition Commission provisional findings on the private motor market but urges caution on how it now progresses.

Richard Harris, head of claims at DAS UK Group, said: “We have read the Competition Commission investigation with interest and intend to submit responses to some of the remedies that are proposed within it. The overarching theme of our responses will be that access to justice is not compromised in the pursuit of reducing premiums.

“We acknowledge that the commission has put the customer at the heart of its proposals and we would seek assurance that there are no unintended consequences as a result of the remedies.

“The law is in place to protect individuals and the industry must be careful to ensure these rights for individuals are not compromised in an attempt to lower motor premiums across the market as a whole. These premiums are influenced by many other factors that are well within the control of general insurers.

“We particularly welcome the Competition Commission proposals to increase the awareness of consumer’s legal rights following an accident. These proposals complement the findings of the Financial Conduct Authority in its thematic review of motor legal expenses insurance (MLEI) – particularly the need to increase customer understanding of the product.

“DAS has already undertaken a significant amount of work to improve how we highlight this to our customers in our literature and processes and we will continue to work on improving this understanding.”

For add-ons, DAS wants much greater transparency of the value for money these products can offer customers.

Richard Harris added: “Policyholders should be able to compare and understand on what basis those add-ons, especially motor legal expenses, operate. Whilst the basic features of MLEI are common to most products, individual policies can differ greatly.

“An example is the inclusion in some policies of damaged-based agreements (DBAs) that can see customers surrender up to 25% of any damages they receive after being injured in a non-fault accident.”

Delay: particulars served 20 days late

A Commercial Court judge who was criticised by the Court of Appeal in Mitchell for focusing exclusively on doing justice between the parties, rather than considering wider interests, yesterday showed he had learnt his lesson by refusing to grant a retrospective time extension in a case where he said fairness between the parties alone would have led to the opposite result.

Mr Justice Andrew Smith said “the emphasis that the Court of Appeal has given to enforcement of the CPR in order to encourage procedural discipline” drove him to strike out a case where the claimant had been 20 days late in serving particulars of claim.

In Raayan Al Iraq Co Ltd & Ors v Trans Victory Marine Inc & Ors [2013] EWHC 2696 (Comm), three months before Mitchell, the judge had granted relief from sanction where the claimant had been two days late in serving its particulars of claim.

The Mitchell court made specific reference to the ruling and suggested Smith J “may not have recognised the particular importance of the two elements of the overriding objective that are mentioned in the revised version of CPR 3.9… the judge was focusing exclusively on doing justice between the parties in the individual case and not applying the new approach which seeks to have regard to a wide range of interests”.

The present case, Associated Electrical Industries Ltd v Alstom UK [2014] EWHC 430 (Comm), concerned a claim for indemnity over a payout in a mesothelioma case. AEI sought a retrospective time extension, while Alstom wanted the case struck out.

The judge said: “Looking at the position simply between the parties… I would consider an order striking out the claim form to be a disproportionate response to AEI’s non-compliance, given that the delay in serving the particulars, though not insignificant, was remedied after 20 days and that it did not disadvantage Alstom. This assessment is reinforced by the uncertainties about limitation and whether new proceedings would be struck out.”

Smith J said a retrospective application for an extension of time to serve particulars of claim was analogous to an application under CPR 3.9, but that it would be taking the analogy “too far… to conclude that the Court of Appeal meant that in the case of retrospective extensions of time the two considerations specifically mentioned in CPR 3.9 are of greater weight than other considerations involved in dealing with cases justly and at proportionate cost”.

But even if he was right, it did not much help the claimant: “The court must still seek to give effect to the overriding objective, including the aspects of it emphasised in CPR 3.9.”

The requirement to deal with cases at proportionate cost was not in point here as AEI’s non-compliance did not aggravate the costs; the focus was on the importance of enforcing the requirements of the CPR.

He said: “The emphasis that the Court of Appeal has given to enforcement of the CPR in order to encourage procedural discipline drives me to conclude that I should grant Alstom’s application and refuse that of AEI.

“This conclusion is, I think, confirmed by what the Court of Appeal has said about the Raayan al Iraq case. As here, the non-compliance in that case did not attract an automatic sanction, and no significant court resources were used because of the breach. As here, the probable result of refusing the extension would have been satellite litigation and the amount in issue was relatively modest in relation to the costs that it would involve.

“However, Raayan al Iraq Co Ltd was, I think, in a stronger position than AEI: its particulars were only two days late; they were served late, as I concluded, because of an unfortunate oversight on the part of its solicitor despite his careful system for avoiding such errors, not because of indifference to compliance with the CPR; and the application for an extension of time was prompt.

“Nevertheless… my decision [his emphasis] in Raayan al Iraq was criticised by the Court of Appeal, and not only the observation to which specific reference was made in Mitchell. The result in this case seems to me to follow a fortiori.”

Costs: judge takes knife to partner time

The High Court has more than halved a successful party’s costs on summary assessment on the basis of proportionality, with the fees charged by the partner running the case hit particularly hard.

Mr Justice Akenhead’s ruling in Savoye and Savoye Ltd v Spicers Ltd [2015] EWHC 33 (TCC) is one of the clearest applications of the new proportionality rule to date.

Savoye sought costs of £201,790 after successfully enforcing an adjudicator’s decision worth nearly £900,000 in its favour. The only issue at trial revolved around the proper meaning of a term in the Housing Grants, Construction and Regeneration Act 1996.

There were in total four hearings – three of which concerned a claimant application for summary judgment – lasting seven hours in total. The main elements of the costs claim by Savoye’s solicitors, Reed Smith, were 111 hours of partner time at £520, 223 hours of associate time at £370, and counsel’s fees of £27,800.

Deciding that while useful to others, the case could not be considered a test case, the judge said the court proceedings involved a re-run of the same arguments and evidence as in the arbitration, “albeit I do accept that the later proceedings went into somewhat greater detail and in some respects had a different emphasis”.

He continued: “This context would lead to the inference that the costs of the court proceedings could have been relatively modest, taking into account that the legal team knew exactly what the issue was about and what evidence needed to be deployed in the court proceedings to counter the likely jurisdictional challenge.

“In the light of the foregoing, I am led to the inevitable conclusion that a costs bill of over £200,000, albeit in relation to a claim worth just under £900,000, must be considered to be disproportionate.”

Akenhead J said that if only the headline costs figure had been available, he would have been minded to rule that half of the costs claimed as proportionate.

But on a summary assessment he took into account other factors “which should reduce the figure claimed very substantially in any event”.

He said it was clear that the partner did “much more than simply supervise a competent associate and liaise with the client; he got involved in drafting pleadings and witness statements. It cannot be reasonable or proportionate for Spicers to have to pay anything like 111 hours’ worth of partner’s time at partners’ rates. I would have thought that something like 20 hours was justifiable at that rate”.

The total amount of solicitors’ time equated to about nine weeks. “It is not reasonable or proportionate for anything like that to be payable by Spicers, particularly when the basic issue had already been ventilated and investigated in the adjudication,” he said.

The judge continued: “Just on time alone, I would have assessed as reasonable and proportionate a total of about half of this. For instance, the spending of up to about 150 hours on witness statement evidence seems to be excessive (particularly, when one looks at the relatively short witness statements and the fact that the ground covered was not new); it is not reasonable to expect Spicers to have to pay for the attendance at all four hearings of both partner and associate solicitor; the spending of some 43 hours preparing the claim form, particulars of claim, summary judgment application and witness evidence can properly be said not to be reasonable and proportionate particularly for experienced construction lawyers who seek to justify large hourly rates.”

He also thought counsel Anneliese Day QC’s £12,000 brief fee for the final trial, “given her extensive involvement beforehand”, could well be considered as too high for it to be reasonable and proportionate for the defendant to have to pay, and said half would be reasonable.

Akenhead J reduced the recoverable partner time to 20 hours, the associate time to 160 hours and counsel’s fees to £18,800, with the total coming in at £96,465.

Allianz Legal Protection (ALP) has partnered with national law firm Freeths to provide After the Event (ATE) insurance.

ALP will provide insurance for the firm’s Clinical Negligence business to protect customers against the adverse cost risk associated in bringing a claim.

The ATE insurance will cover defendant costs if the claim fails to beat a Part 36 offer, as well as covering the cost of any unrecovered disbursements such as expert reports and counsel’s fees.

A key benefit of the scheme is the wide delegated authority which allows Freeths the autonomy to issue policies for all its clients.

Tony Dyas, senior business developer at Allianz Legal Protection, commented: “Freeths has a wealth of experience and a proven track record in Clinical Negligence. We are very much looking forward to working with them in what is likely to be a very challenging time with the fixed cost proposals expected in 2017.”

Jane Williams, head of clinical negligence at Freeths, commented:  “We are delighted to be working with Allianz Legal Protection, who we feel are best placed to adapt their product to meet our customers’ requirements’’.

Sumption: CFA argument was “bad point”

The Supreme Court has allowed the recovery of a pre-LASPO success fee and after-the-event (ATE) premium where the conditional fee agreement (CFA) and insurance had to be extended after 1 April 2013 to cover appeals.

In a significant ruling on the Act’s transitional provisions, Lord Sumption said that the purpose of the transitional provisions was to “preserve vested rights and expectations arising from the previous law”.

That purpose would be defeated “by a rigid distinction between different stages of the same litigation”, he said, giving the majority ruling in Plevin v Paragon Personal Finance Ltd [2017] UKSC 23, supported by Lady Hale, Lord Clarke and Lord Carnwath. Lord Hodge dissented.

The Supreme Court dismissed Paragon’s appeal in the substantive case and ordered it to pay Mrs Plevin’s costs, which were assessed at £751,463, including £31,378 for the success fee and £531,235 for the ATE insurance premium.

Both the CFA and insurance was agreed in 2008, but the former was varied and latter topped up twice after 1 April 2013 to deal with the appeals to the Court of Appeal and then Supreme Court.

Paragon argued that the two variations were new CFAs and so not therefore covered by the transitional provisions of LASPO.

Lord Sumption dismissed this as “a bad point”, saying that the deeds of variation provided for litigation services in relation to the same underlying dispute as the original CFA.

Paragon would only have succeeded if the effect of the deeds was to discharge the original CFA and replace it with new agreements, which was not the case.

The transitional provisions relating to ATE are worded slightly differently, linking to the insurance to the ‘proceedings’, rather than their subject matter.

Lord Sumption said: “The purpose of the transitional provisions of LASPO, in relation to both success fees and ATE premiums, is to preserve vested rights and expectations arising from the previous law. That purpose would be defeated by a rigid distinction between different stages of the same litigation.

“It may or may not be reasonable to expect an insured party who fails at trial to abandon the fight for want of funding. That will depend mainly on the merits of the appeal. But an insured claimant who succeeds at trial and becomes the respondent to an appeal is locked into the litigation.

“Unless he is prepared to forego the fruits of his judgment, which by definition represents his rights unless and until it is set aside, he has no option but to defend the appeal. The topping-up of his ATE policy to cover the appeal is in reality part of the cost of defending what he has won by virtue of being funded under the original policy.

“The effect, if the top-up premium is not recoverable, would be retrospectively to alter the balance of risks on the basis of which the litigation was begun.”

He added that though the legislation used different wording, there was “no rational reason” why Parliament would have meant to treat success fees and ATE premiums differently.

The defendant also sought to challenge the CFA on the basis on ineffective assignment on two occasions when the claimant’s solicitors, Miller Gardner, reorganised itself, first into an LLP and then into a limited company. However, Lord Sumption said that on the basis of how the agreements transferring the firm’s assets were worded, the argument had “no merit”.

Paragon argued that ‘work in progress’ included only work already done at the transfer date, not further work on the same matter done thereafter.

“If this were correct, it would mean that the only right of the successor firm was to bill the clients for work done before the transfer date, leaving them with no solicitor to act for them other than the defunct shell of the old firm. This plainly cannot have been intended,” Lord Sumption said.

Master McCloud: “default position” in favour of open justice

A huge collection of documents, including “those relating to the history and development of knowledge in the 20^th century about the risks of asbestos”, must be disclosed to the public, the High Court has ruled.

Master Victoria McCloud ruled that Graham Dring, who made the application on behalf of an asbestos victims’ support group, had a “legitimate interest” in the documents.

Master McCloud said parties to proceedings did not have “full sovereignty” to determine by private agreement the extent to which the public may be made aware of any aspect of the case.

“There is an inherent and foreseeable possibility that material deployed in court by the parties, or filed upon the records of the court as part of its process, will form part of the corpus of material which may be deployed in other cases, used for the purposes of legal advice, being academically or journalistically discussed, or considered by Parliament.”

Master McCloud said CPR 5.4C was the “primary means” by which the courts controlled public access to documents from the court record, but common law was “the master and not the servant” of the rules.

“Documents filed on the record of the court and which are read or treated as read in court are subject to a default position in favour of the principle of open justice if the applicant has a legitimate interest.

“Where the applicant has a legitimate interest then the court must still carry out a balancing exercise in relation to any harm to other parties legitimate interests when deciding whether to allow access.”

Master McCloud went on: “A legitimate interest can include academic interest, use by a pressure group or use in some journalistic form and indeed any number of other uses which are ulterior (in the proper sense of that word) without being illegitimate.

“Mr Dring acts for a group which provides help and support to asbestos victims. In some respects it is also a pressure group and is involved in lobbying and in promoting asbestos knowledge and safety. Those are legitimate activities and provide legitimate interest.”

Delivering judgment in Dring v Cape Distribution and Another [2017] EWHC 3154 (QB), Master McCloud said the documents in question were in court for a “lengthy trial” conducted by Mr Justice Picken of claims by insurers that Cape group companies had failed to give adequate warnings of the risks of asbestos exposure.

Master McCloud said that unusually, and possibly “uniquely” in the history of asbestos litigation, the disclosure exercise involved the “putting together of extensive quantities of historic material and records relating to asbestos safety and regulation in a way which one can safely take it would have been disproportionate in a run-of-the-mill asbestos claim”.

She said that among Mr Dring’s intended uses of the documents were to make them publicly available, “understand the industrial history of Cape and its development of knowledge of asbestos safety”, and “assist court claims and the provision of advice to asbestos disease sufferers”.

The master said she was satisfied that the documents were likely to be “of academic and scientific interest”, likely to be “considered by advisers advising parties to asbestos litigation”, would be relevant to the “product safety of asbestos” as it was understood by manufacturers, and relevant to the “extent to which employer defendants could have expected to appreciate the risks”.

Master McCloud said: “Partial access to the documents could lead to ‘cherry picking’ in terms of the publishing of negative material especially if access was only given to material which paints asbestos, and perhaps Cape, in a bad light.

“There is a risk, but a much-reduced risk, of cherry picking if access is given less selectively and more rather than less widely.”

She said she was not presented by Cape with “substantial evidence or argument” as to the harm it would suffer from disclosure, and did not regard the post hoc concerns raised by the company about privacy as a “credible or weighty” ground for refusing disclosure.

Master McCloud ruled that all the witness statements, expert reports, transcripts, written submissions and skeletons, statements of case and disclosed documents relied on by the parties at trial should be disclosed.

She said the contents of an online collection of documents served but not deployed at trial, should not be disclosed, to avoid non-parties to the case being placed in a better place than the parties.

Master McCloud added that in her judgement there was “no real prospect of a successful appeal and no other good reason for an appeal” and refused permission.

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.”

Burnett: takes over on 2 October

Lord Justice Burnett – who acted as counsel to several of the most high-profile inquiries of recent decades – has been named the next Lord Chief Justice in succession to Lord Thomas, who retires on 1 October.

Sir Ian Burnett is 59. A grammar school pupil, he studied law at Oxford and was called to the Bar in 1980. Appointed QC in 1998, he spent his career at the Bar at Temple Garden Chambers, and had been head of chambers for five years when he was appointed to the High Court bench in 2008.

In the early stages of his career, he had a broad-ranging common law practice before focusing on public and administrative law, personal injury and health and safety law.

He acted as junior counsel to the King’s Cross Fire inquiry and to the inquiry into the convictions of the Guildford Four and Maguire family.

He was also leading counsel to the inquiry into the Southall rail crash and into train protection systems following the Paddington train crash.

Sir Ian’s final case at the Bar was as counsel to the inquests into the deaths of Diana, Princess of Wales and Dodi al Fayed.

Appointed as a Recorder in 2000, he joined the Queen’s Bench Division when he became a High Court judge. He was Presiding Judge of the Western Circuit from 2011 until 2014 when he was appointed to the Court of Appeal. He was also deputy chairman of the Security Vetting Appeals Panel.

Lord Justice Burnett is the judge of the Court of Appeal with responsibility for extradition cases and is also supervising Lord Justice for immigration and public law appeals.

He was vice-chairman of the Judicial Appointments Commission from November 2015 until March 2017, when he decided to step down to apply for this role.

Law Society president Joe Egan said: “Lord Justice Burnett takes up his new job in challenging times. Among the items in his in-tray are the court modernisation process and the thorny issue of fixed recoverable costs.

“We are also very much hoping that he will take a leading role in promoting the law of England and Wales overseas.”

Whiplash: might a physio exam be the best starting place?

Posted by Helen Elkin of Litigation Futures sponsor Bott & Co

Whiplash – such a simple term and yet one which strikes fear into the hearts of the insurance giants and generates cries of ‘fraud’ from the general public.

So much has been published about fraudulent whiplash claims that the government, swayed by the large insurance companies, seems to have convinced the average person on the street that all whiplash claims are fake; or worse still, that the condition does not even exist at all.

The topic is obviously emotive, what with the ever increasing insurance premiums; however, amongst all this debate the innocent victims of road traffic accidents appear to have been completely forgotten.

As a claimant personal injury solicitor, with experience of also working in defendant RTA insurance fraud and having suffered a whiplash injury myself, I have experienced whiplash claims from every angle. Does whiplash exist? Most certainly. Can physical signs of injury be detected? Not visibly. Do some people invent or exaggerate symptoms? Yes.

It is easy to see how an individual could bring a false claim but should the small minority that make fraudulent claims ruin the chances of those actually suffering from seeking compensation. Furthermore, are the changes proposed by the government really going to tackle the issue? Insurers seem to deal with the issue in one of two ways: settle cheaply or raise spurious fraud ‘concerns’ and increase the costs of investigating such matters.

My experience working for insurers suggests that the issue has been made so high-profile that handlers are seeing fraud at every corner, with many claims being referred to claims validation teams simply because there happened to be three or four people in the vehicle. This obviously has a huge impact on the investigation costs. The flip side is that some insurers try to settle the claims cheaply at a very early stage.

The Ministry of Justice has recently decided against a total ban on such pre-medical offers – but by leaving the door open to such offers, are they not encouraging fraudulent claims as settlement on such a basis means the claimant is not asked to prove their injury?

The government has now cut medical report fees to £180. Given the difficulty in diagnosing whiplash injuries, curtailing the fee is not the answer. Many medical examinations are already limited to 10-15 minute slots, which leave no time for claimants to fully explain the extent of their injuries. It certainly does not give the expert enough time to perform a thorough examination. Restricting costs yet further will pressure experts into quickening the process still more to ensure that they remain cost effective.

From personal experience, whiplash injuries can have a debilitating effect; enduring pain, aching, tightness and countless physiotherapy sessions, sometimes for many years after the original injury. So, how then do we properly assess these injuries? Perhaps the answer is to move away from the traditional medical report in favour of an initial assessment by a physiotherapist.

These are the professionals who treat whiplash injuries day-in, day-out. They know the signs and can feel the knots, spasms and tightness in the muscles which are not visible. A physical exam is also likely to dissuade an individual from pursuing a fraudulent claim and any invented or exaggerated symptoms are more likely to be detected.

Would this improve things? Who knows? This is certainly a debate that is going to keep recurring until the right balance is found between preventing fraudulent claims and allowing access to justice for those injured through no fault of their own.

30 further jobs being created for Just Costs Solicitors

Just Costs Solicitors, the largest Solicitor’s practice in England specialising in costs, is to create a further 30 new jobs in Manchester, Chesterfield, London and Leeds.

The award winning firm – which provides expertise in costs solutions for other solicitors including a specialism in costs management and budgeting – is growing its 100 plus strong workforce with immediate effect, having already added 29 new members of staff over the last twelve months.

“We are driving the business forward through growth and creating job opportunities at every level,” said Managing Director, Paul Shenton.

“The costs market is buoyant at present and now is the time to kick on and explore the opportunities available to us.  Every aspect of the business is performing well.”

Just Costs Solicitors is currently enjoying the most progressive period in its history and has just agreed a £1.1 million funding package with NatWest.

Due to the nature of its business, Just Costs employs a number of non lawyers in the form of costs draftsmen – and having been granted an ABS licence last year, the firm is able to appoint non lawyers as directors of the business.

Concluded Paul Shenton:

“Our expansion drive will recognise and reward people right across the board – solicitors, costs draftsmen and non fee earning staff.”

Mesothelioma claims: average base costs are £8,300

A fixed recoverable costs (FRC) regime for mesothelioma claims could enable claimant lawyers “to build more predictability into their business models for managing claims”, the government said yesterday.

Issuing a consultation on its planned Mesothelioma Bill, the Ministry of Justice said FRC may also reduce the costs to claimants of ‘shopping around’ to find the best deal from lawyers and cut the ‘costs of the costs’.

The bill is designed to speed up the claims process, with research showing that 50% of mesothelioma cases take more than 12 months to settle; however, sufferers only live seven to nine months on average after diagnosis.

The proposals, which follow an agreement with the Association of British Insurers, aim to have cases with a traceable insurer resolved within six months – three months for straightforward cases – by cutting out litigation through a dedicated mesothelioma pre-action protocol (MPAP). This would replace the current pre-action protocol for disease and illness.

An industry-funded electronic secure mesothelioma claims gateway would provide a secure method for the exchange of information between parties, such as medical records, and also handle untraced claims.

The proposal is that FRC should only apply to cases entering the MPAP. Cases conducted outside of it would still go through the Royal Courts of Justice fast-track procedure and be subject to the guideline hourly rates. “However, the settlement of legal costs for cases which do not use the MPAP might take into consideration whether those cases might reasonably have been resolved in accordance with the MPAP,” the consultation said.

It also sought views on whether a similar or a different structure or approach should be taken for defendants’ costs, to help maintain balance in the settlement process. Its current position is that defendant costs are not recoverable for claims which settle under the MPAP.

The consultation paper stressed that the FRC should be set at a level which accurately reflects the nature of the legal work needed so as not to “compromise access to justice” for sufferers and their dependants, as well as allow lawyers to provide adequate work.

The report said the regime should not “discourage parties from using the MPAP to reach settlement without the need for litigation”.

The in the proposals put out for consideration this week, the MOJ suggests three models for the FRC:

• A single flat fee – where one fixed sum would be recoverable to cover all cases settled within the MPAP, irrespective of variations such as the level of damages awarded;
• Separate flat fees for different stages of the MPAP – under which the total single flat fee could be broken down by the stages of the MPAP, with individual staged fees only being recoverable once the relevant stages of the MPAP have been undertaken; or
• Multiple flat fees or variable fees – under which there would be a set of flat for different groups of mesothelioma claims, or alternatively a FRC scheme with variable elements on top of a lower base flat fee or staged fee.

According to the proposals, research shows that the median base legal costs for all non-litigated cases is around £8,300.

The Jackson reforms do not currently apply to mesothelioma cases but the consultation suggested removing this exemption, raising the possibility that claimant lawyers in these cases would have to take a success fee out of damages.

Claimant lawyers have previously expressed concern that the new regime could leave their clients out of pocket and that it doesn’t include victims of other asbestos-related diseases.

But Matthew Stockwell, president of the Association of Personal Injury Lawyers, was more conciliatory following publication of the consultation: “Mesothelioma is a tragic and highly sensitive issue and there is much to discuss if we are to get this right for sufferers.

“We hope this exercise will result in a fairer system which will benefit people who are dying from a truly awful disease they contracted just because they turned up for work, often many decades ago…

“We look forward to ongoing discussions over the next few months and are encouraged by the government’s expressed willingness to listen to new ideas.”

Augusta Ventures – the UK’s leading litigation financier for the SME market – has this week launched its blog: Diary of a Litigation Funder – a sideways look at the world of litigation finance.

Weekly posts from the Augusta team will provide a fresh take on the funding market, you can view the blog here: http://diaryofalitigationfunder.tumblr.com/ and keep up to date with new posts by following the blog on Tumblr.

Managing director Louis Young says: “Financing for litigation is no longer a last resort option for many lawyers, nor is it seen as something that is only used by mid-bracket firms to prop up their workbook. Over the past 18 months financing  demand among claimants has increased dramatically and there is a growing realisation among solicitors that those who are familiar with the ins and outs of financing will be much better positioned to secure appointments to run a matter. This blog is our way of providing firms with an insight into how a financier thinks – as by knowing what the other side is thinking you have a much better chance of getting what you want.”

Augusta is well on its way to achieving a half century of claims financed since it started operations in 2014. While other funders focus on a handful of multi-million pound investments in big cases, Augusta invests between £10,000 and £600,000 in a broad range of commercial litigation matters, making them the first choice for may law firms and claimants.

Nash: recognition

The number of students applying for the new training course run by the Association of Costs Lawyers (ACL) has nearly doubled, with leading firms such as Irwin Mitchell, Kain Knight and Masters all supporting staff through it.

The ACL said it has 185 students registered to undertake the three-year qualification, starting this month. In previous years, the ACL has attracted around 100 students a year.

The 2014 intake is a mixture of law graduates and non-law graduates, which the ACL said “is an endorsement that the new course provides a credible first choice for those interested in pursuing a legal career in costs with associated rights to conduct reserved legal activities”.

Irwin Mitchell, which already employs 24 fully-qualified costs lawyers, is enrolling 12 staff members on the course this year. Among the specialist costs firms, Kain Knight is supporting at least 17 of its staff through the course, while Masters Legal Costs Services and Law Lords Cost Consultants have enrolled eight and seven students respectively. Some 95% of all students are sponsored by their employer.

Costs lawyer Steven Green, who heads the costs team at Irwin Mitchell, said: “We encourage all of our costs law fee-earners to undertake the ACL qualification. The qualification is very well recognised by the judiciary and the courts and I believe it has the added benefit of enabling qualified costs lawyers to achieve higher rights of audience in costs related matters and higher hourly rates than their non-qualified counterparts.”

The Master of the Rolls recently agreed that costs lawyers should be recognised in the guideline hourly rates and able to recover up to grade B rates.

Sue Nash, chairman of ACL, says: “I’m thrilled that so many students – and their employers – recognise the value of a recognised costs qualification. It shows that that the legal profession understands the value of good-quality costs advice and how central this has become.”

The new course recognises that many trainees will be in full-time employment, meaning it will be delivered through a bespoke online learning platform, accessible on mobile phones and tablets, to enable easier access to learning materials, tutor interaction and administrative support.

Another major change over the previous qualification format is that students will be examined at the end of each year.

Students take three units, one each year, broken down into various modules. The first two years of the course cover all the fundamental building blocks to become a costs lawyer – from knowledge of procedure to ethics and advocacy – while in the third year there are options to allow for specialisation in the costs of different areas of practice, such as personal injury and clinical negligence, land law, criminal law, company law, and family law.

Ramsey: free market should probably come in

The rules on damages-based agreements (DBAs) should be changed to free up solicitors to offer a mixture of contingency fees and hourly rates in commercial cases, the judge in charge of Jackson implementation said this week.

The current DBA regulations currently prohibit such hybrid or partial DBAs, but speaking at an IBC Legal conference in London, Sir Vivian Ramsey, who sits in the Technology and Construction Court, said his personal view was that the marketplace should decide and that a change was “under active consideration”.

The Ministry of Justice is thought to believe that allowing firms to take a percentage of damages on top of hourly fees would amount to a “charter” for them to treat it as a “bonus” that would ultimately push up litigation costs. It is, however, reviewing the DBA regulations already.

Ramsey J said that in his view it was right that solicitors should be able to use “time and rate up to a certain stage” in a case – for instance up to trial – and then “take a percentage of the winnings” after that. Other formulations could include recovering low base costs if you lost.

“I think there are two viewpoints… one is that the concern is that it may just become a bonus… if solicitors say ‘we’ll take our base costs plus 20% of damages’, there is a concern that this will be a charter for solicitors just to charge their normal rates and take the 20% as a bonus, therefore driving up costs.

“On the other hand… if one looks at, for instance, litigation funders who aren’t subject to limitations, should the market place, particularly for commercial DBAs, come in, [meaning] one should be able, as a solicitor and a client, on a commercial case to set [the] arrangement you want to have; a DBA for part of it… or whatever you like.”

The judge said his “personal view” was that the “free market should probably come in” although he agreed that a ban on hybrid DBAs in employment and personal injury cases should remain. He added: “I think one perhaps should be looking more widely at the availability of DBAs as commercial arrangements elsewhere.”

However, leading costs specialist barrister, Nick Bacon QC of 4 New Square chambers, who chaired the conference and is a member of the Civil Procedure Rule Committee, predicted that there would not be a change to the DBA rules until next April.