Tracy Blencowe, Business Solutions Director, Eclipse Legal System

Eclipse Legal Systems – the UK’s leading legal software provider – has announced the launch of a new application to assist law firms in attaining compliance with the forthcoming General Data Protection Regulation (GDPR).

As of May 2018, all organisations will be required to comply with GDPR, the new legal framework which seeks to strengthen and unify data protection for all individuals within the EU. More wide-reaching and onerous than the existing Data Protection Act, GDPR also carries the threat of severe financial penalties for firms found to be in breach, with maximum fines being 20 million Euros, or 4% of the firm’s global turnover – whichever is higher.

Created using Eclipse’s suite of rapid development tools, the new application is an ‘Information Asset Register’ – a software tool that provides firms with a ‘map’ of what type of data they hold, if consent has been agreed, where the data was obtained, why the data is being used, and if it has an expiry date. These data ‘reasons’ are all key elements of the GDPR and it is widely accepted that all organisations must have an Information Asset Register as a default requirement.

Eclipse’s Information Asset Register has been created as a standalone application – accessible outside of the firm’s Law Society Endorsed ‘Proclaim’ case and practice management solution in order for all organisations to benefit – not just current Eclipse clients. The system can be delivered on-premise or in a hosted environment.

Eclipse’s business solutions director, Tracy Blencowe (pictured), explains further:

“GDPR will have a huge impact on how organisations collect and manage the data of their staff, clients, and prospective clients. All businesses will need an Information Asset Register to track what data they hold and why – this is a minimum requirement, and businesses without a solution are automatically exposed to the ‘lower’ level fines of the higher of 10 million Euros, or 2% of global turnover.

“Our new Information Asset Register system provides an accessible and low-cost platform to enable law firms to implement best-practise processes and mitigate the risk of the severe financial penalties that a breach of GDPR will bring.”

New litigation funding solution from UK market entrant Kain Knight Limited, together with SpectraLegal Limited, is delighted to announce the launch of a new specialist funding solution for UK law firms.

SpectraLegal is part of BridgePoint Finance Group, the leading provider of specialised forms of working capital finance to Canadian law firms.

Changes following the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act of 2012 have resulted in increasing pressure on law firms’ cash-flow with significant amounts of work in progress locked in and firms are having to fund disbursements. In addition to that, banks are limiting the amount available to fund the day-to-day business of law firms.

LASPO mirrors the reforms enacted in Canada in 2003, so SpectraLegal is uniquely placed to understand the new landscape in the UK and the funding challenges that exist now and in the future.The new funding solution from SpectraLegal enables firms to build a relationship with a flexible litigation financier providing law firms with a powerful tool to grow their practice and satisfy clients.

The benefits of using Kain Knight and Spectra Legal funding solution are:
• Improved cash flow allows law firms to pay suppliers up front to obtain better terms
• Partnership approach to funding with competitive interest rates
• Removes the need to accept early (lower) cost settlement offers
• Ensures more stable and consistent operating cash flow
• Helps firms protect the legal interests of their clients
• Cash is freed up for investment in the business

For more information contact Kain Knight on 01279 755552, or email enquiries@kainknight.co.uk

Commenting on the launch of the new facility Matthew Kain, Kain Knight’s managing director said:

“Our research shows increasing demand amongst our law firm partners for more innovative and flexible forms of funding. Kain Knight has for some time been looking for a business that can deliver what our clients need. We are delighted to be one of the first UK firms to work together with SpectraLegal Limited. We believe this new facility will deliver significant improvements to our partner law firms’ cash-flows and enable them to grow their businesses.”

Matthew Gwynne, SpectraLegal’s business development and client relations director, said:

“The UK has been on our radar for some time. As a new entrant, we were able to take a fresh look at the funding challenges faced by UK law firms; and by working with our friends in Kain Knight, we will deliver a solution that meets the needs of a modern-day legal practice. We look forward to working with Kain Knight and building long-term relationships with their partner law firms”.

Lavender: not too early to look at options for improvement

More than half of barristers conducting civil litigation have seen their income fall since implementation of the Jackson reforms, Bar Council research has found.

Many barristers have also experienced problems with the transition from pre-Jackson conditional fee agreements (CFAs) to new-style CFAs.

The preliminary results of the Bar Council’s survey, undertaken to assess the impact of the first year of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), showed that legal aid barristers have fared even worse, especially family specialists. Some 716 people took part, 90% of whom were barristers.

In all 53% of civil litigators reported that their fee income had gone down since 1 April 2013 (7% said it had risen), with 45% saying case volumes had reduced too.

Across all civil work, 70% of barristers had seen an increase in litigants in person, a figure that rose to 88% in the family courts. Most felt that court delays were also on the rise.

Getting on for half of civil barristers (43%) said they had had trouble with the CFA transitional provisions, with the most common situation seeing the solicitor instructed pre-LASPO and counsel afterwards. The other main pinch-point came when the instructing solicitor wanted to assign a CFA of a counsel signed up under the pre-LASPO arrangements.

Just over a quarter of barristers (27%) reported an increase in general interest in ‘non-traditional’ funding arrangements, such as fixed fees, deferred payment until disposal of property or capital assets, pro bono assessment of risk, third-party funding and damages-based agreements.

The findings also revealed that 61% of all respondents noted an increase in the number of lay clients saying they had difficulty accessing legal advice and representation. Similarly, 60% reported an increase in the number of lay clients requesting free advice and representation.

While the majority of practitioner respondents had no immediate plans to leave the Bar, a significant minority were considering a move to judicial or other positions before 2015. Many respondents indicated that they are actively considering whether they have a long-term future at the Bar, and that the effects of LASPO had caused them to think about the viability of their career at the Bar.

The survey was, however, hedged by the caveats that it is too early to fully understand the impact of LASPO and that the Act “was not implemented in a vacuum”.

Bar Council chairman Nicholas Lavender QC said: “The results will help to guide the formulation of policy and provide some strong messages to government, as we approach the General Election, about how LASPO has affected access to justice, especially on those who are most vulnerable.

“Unsurprisingly, the preliminary results from the survey confirm the concerns we raised with the government some time ago: a significant increase in litigants-in-person, more delays in court, and growing difficulty for individuals in accessing legal advice and representation.”

Mr Lavender said that while it may be too early to understand the full impact of the changes, it is not too early to look at options for improving the current situation.

“These include simplifying court processes to ensure that litigants-in-person are able to fulfill the most basic administrative requirements of the court process, and significantly increasing advertising and promotion of what legal aid services remain available and how they can be accessed.

“There needs to be a comprehensive post-implementation review of LASPO, together with an assessment of the effects of the combination of changes that are occurring in civil and family justice. Such a review would also help to identify the (no doubt, unintended) consequences of policy change and the effects of cost shifting, which may require further attention.

The survey was undertaken with the assistance of Professor Graham Cookson from The University of Surrey. The final report is expected to be published in September.

Nick McDonnell, director at Just Costs Solicitors

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

Founders say it will set new industry standards.

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

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

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

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

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

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

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

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

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

Continued Nick:

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

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

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

Neill: Changes must be evidence-based

The government needs more evidence on how claimants invest their damages before changing the discount rate, MPs said today in a report welcomed by claimant lawyers.

The Lord Chancellor, David Lidington, asked the justice select committee to review its draft legislation amending the way the rate is handled, and the result today was a report urging caution as the evidence provided to date “is not adequate”.

In September, the Ministry of Justice announced that it wanted to change the basis on which the rate was calculated, setting it by reference to ‘low risk’ rather than ‘very low risk’ investments as now.

The committee’s report welcomed the government’s commitment to the principle of full compensation for claimants, but recommended that it clarify what it meant by this, given that lump-sum awards will nearly always either under or over-compensate individual claimants.

It advised caution in considering evidence of claimants’ behaviour to set the discount rate: the risk they accept may be driven by the rate itself.

The committee concluded that while it may be reasonable to change the assumptions on which the discount rate was calculated if they were no longer representative of ‘real world’ behaviour, it needed to be sure this was the case.

The report said: “We do not believe the evidence presented on this point so far is adequate. We recommend that clear and unambiguous evidence is gathered about the way claimants invest their lump sum damages before legislation changes the basis on which the discount rate is calculated.

“If the rate is to take account of investment behaviour, a mechanism must be established to keep those responsible for setting the rate informed about that behaviour. This mechanism must ensure it captures the behaviour of those claimants who do not access professional investment advice and fund management.”

The committee observed that there was no consensus about what type of portfolio would be suitable to set a discount rate for claimants.

“We recommend that the Lord Chancellor publishes the basis upon which he or she has decided upon a particular rate out of the range available. We also think that it may be problematic for the Lord Chancellor to use investment behaviour of claimants to set the rate of return within the range.

“There are no such data widely available, and currently no mechanism in the draft legislation to obtain those data; and also claimants could be taking on more risk because they are being under-compensated.

“Until the government obtains data on whether claimants are being appropriately compensated and not just with regard to investor risk, we recommend that the Lord Chancellor as a starting point sets the rate at the lower end of the range of “low-risk” to avoid the risk of under-compensation for claimants.”

Other recommendations included that the government should establish “a means of assessing whether the legislative framework compensates claimants fairly for their losses, and ensuring adequate safeguards to prevent significant under-compensation of the most vulnerable claimants”.

The committee said that instead of targeting 100% compensation, the government should consider adopting as a target the median level of compensation “to tend towards over-compensation; or should at least ensure that there are adequate safeguards to prevent significant under-compensation of the most vulnerable claimants”.

The report also recommended that legislation should require the expert panel and the Lord Chancellor expressly to consider whether to set different discount rates for different periods of loss or different heads of damage.

Committee chair Bob Neill MP said: “Setting the discount rate is much more than a technical decision. It is about how we as a society treat people who have been seriously injured…

“It involves balancing the interests of claimants with defendants, and also balancing the social costs of increased clinical negligence payouts and increased insurance premiums with protecting the interests of vulnerable claimants.”

“If the government remains convinced that it must change the assumptions it makes about how damages will be invested, to adjust the balance between the interests of different groups in society, it should say so. It is vitally important that we get this right, and that changes are evidence-based”.

Brett Dixon, president of the Association of Personal Injury Lawyers, said: “The justice committee is to be applauded for reminding the Government that it must consider the needs of injured people before changing the way the discount rate is calculated.

“The committee has pulled no punches in challenging the arguments and assumptions made by the government and the insurance industry, and the evidence on which those assumptions are based…

“The government must now stop and take time to gather robust evidence about the impact of its proposed changes on injured people. It must not be pushed into baseless reform by the vested interests of the insurance industry when the welfare of catastrophically injured people and their families is at stake.”

Huw Evans, director-general of the Association of British Insurers, argued that the proposals balanced the interests of claimants, customers and taxpayers “by ensuring that the rate reflects claimant investment behaviour, a fact supported by evidence from financial experts supplied to the government”. He continued: “Further evidence would only become available if claimant advisers were willing to provide it – to date this has not been supplied.

“For good reason no other comparable country in the world has set a rate this low, and it is widely recognised that reform is vital. It is time to press ahead in the interests of getting a system that is fair for everyone.”

David Johnson, a member of the Forum of Insurance Lawyers and partner at Weightmans, said: “Overall, the report does not prevent government from moving forward with the legislation. Some notes of caution are set out within the report and will need to be addressed before the industry can move away from the current -0.75% discount rate towards a higher rate.

“If the government acts on the recommendations within the report, there will be further delays, which in turn, is not good news for insurers.”

European Commission: “misunderstood availability of private law remedies”

Third-party funder Calunius has made a “series of strategic investments” in the CDC Cartel Damage Claims group of companies, which is currently pursuing litigation across Europe worth €500m (£402m).

CDC is a pioneer in recovering damages caused by unlawful cartels which have been found guilty by the European Commission or national competition authorities of manipulating prices and markets in breach of competition law.

CDC is currently pursuing five antitrust damage actions before courts in Germany, the Netherlands and Finland with total damages exceeding €500m. They concern the European hydrogen peroxide cartel, the European sodium chlorate cartel, the European paraffin wax cartel and the German cement cartel.

The investments will secure long-term funding for these cases and for the expansion of CDC’s activities.

CDC founder Ulrich Classen said: “European businesses still forego justified compensation claims in the billions of Euros annually. The strategic collaboration between CDC and the Calunius Fund is fully in line with and supports the established public policy objective of private enforcement of antitrust claims.

“The cooperation with the Calunius Fund confirms that investors increasingly perceive antitrust damage claims as valuable assets. Besides the damage in form of price overcharges and loss of profit, interest at a commercial rate can be claimed from the start of the infringement and plays a key role in giving full reparation to victims.

Christian Stuerwald of Calunius Capital said: “The European Commission has actively encouraged the victims of cartels in Europe to seek compensation for their losses by taking action in their local courts. However, the commission seems to have misunderstood the availability of private law remedies and cartelists are still able to hide behind procedural obstacles which prevent individual victims from getting timely relief.

“CDC’s highly sophisticated case management skills and its organised and thorough approach to litigation appears to us to be addressing the need for private redress for cartel fraud, solving the problem of getting stated public policy objectives to work on the ground and represents to our investors a very interesting investment opportunity.”

Marampa mine: contract dispute

The High Court has refused an application to make a defendant disclose the identity of its third-party funder.

His Honour Judge Keyser QC, sitting as a High Court judge, said that it appeared to be “in the nature of a fishing expedition”.

He was ruling in Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd & Anor [2016] EWHC B19 (TCC), a dispute over payments under a contract for works to be done by the claimant for the defendant at the Marampa mine in Sierra Leone.

The claimant sought, among other things, an order that the defendant disclose the identity of the third-party funder backing its litigation both in England and in Sierra Leone, and confirm in respect of each such funder whether he, she or it comes within the conditions set out in CPR rule 25.14(2)(b), which enable a defendant to seek an order for security for costs against a third-party funder where they are receiving a share of the proceeds in return.

The claimant was making the application as the defendant in Timis’s counterclaim.

HHJ Keyser said: “The evidence that has been put in by the defendant and has not been contradicted is to the effect that its funding comes from two sources: first, its own resources; second, a third party who has received no agreement for a share of proceeds of the litigation, who has taken no security and who has received no fee for the lending.

“In those circumstances, it seems to me that there is simply no evidential basis on which I could properly order disclosure in furtherance of the court’s power under rule 25.14.”

The claimant’s alternative argument was that the court had the power to order disclosure of the funder ancillary to the power under section 51 of the Senior Courts Act 1981 and part 46 of the Civil Procedure Rules 1998 to make an order for costs against a third party.

But the judge was similarly unmoved: “In my judgment, the exercise of such an ancillary power at this stage would be clearly inappropriate. If hereafter the claimant were intending to seek an order for costs against a third-party funder and there appeared to be grounds on which such an order might be made, of course the court would not be prevented from making a third-party costs order because it lacked knowledge of the identity of the third party funder; it would, if it considered appropriate, make an order for disclosure of the identity of the funder and the basis on which the funding had been provided.

“However, I see no proper basis at all for making that kind of an order in advance of circumstances in which an application could be countenanced. To do so would be inappropriately intrusive and in the nature of a fishing expedition.”

Copyright dispute: No error of principle by district judge

A deputy district judge was right to penalise a successful claimant in costs for putting undue pressure on the defendant by threatening a much more expensive case in the US, the High Court has ruled.

The case was a copyright infringement case over a photograph of the poet Dylan Thomas and his wife.

The claimant initially brought proceedings in Ireland and threatened to do so in the US, which Deputy District Judge Vary said appeared to be deliberately intended to maximise cost and pressure on the defendant to settle.

This was, he said “one of the rare cases where the court should mark its disapproval of the litigation conduct of a successful party by ordering that he pay a portion of his opponent’s costs”.

The defendant had taken a copy of the photo from the website VisitWales.com and used a cropped version showing only Dylan Thomas’s head on a website his parents used to advertise holiday cottages in Wales.

The claimant in Pablo Star Media Ltd v Bowen [2017] EWHC 2541 (IPEC) obtained judgment in default and the trial concerned only damages. DDJ Vary awarded the claimant (called ‘Media’ in the ruling) £250 in damages plus £3 interest, applying the ‘user principle’.

He declined to award Media any costs but, because its conduct of the case had been in breach of the overriding objective, ordered Media to pay a proportion of the defendant’s costs, namely the £164 travelling costs he incurred attending the trial. Mr Bowen was ordered to pay the claimant the balance of £89.

The claimant’s sole director, Haydn Price, told His Honour Judge Hacon, sitting in the Intellectual Property Enterprise Court, that he had instigated Media’s action in Ireland because that was where he lived and because court fees were lower, but started fresh proceedings in England and Wales because of delays and the lack of progress in Ireland.

HHJ Hacon said he would assume in Mr Price’s favour that the Irish proceedings did not in themselves constitute an oppressive campaign.

“I do not think that the same can be said of Mr Price’s indication that if Mr Bowen did not meet his demands, Media may sue in the United States and seek payment of $150,000…

“Mr Price appears to be an enthusiastic litigator. I take the view that Mr Price not only indicated that Media could bring litigation in the United States absent a deal on terms satisfactory to Mr Price – he may well have made good on his indication but for the judgment from the district judge and the present appeal.

“I think he did intend to put pressure on Mr Bowen and a reasonable person in Mr Bowen’s shoes would have known it.”

Despite his finding on the Irish proceedings, HHJ Hacon said there was still “no clear error of principle” given the court’s wide discretion on costs and the requirement in CPR 44.4(3)(a)(i) that the court have regard to the conduct of the parties before as well as during the proceedings.

“This implies that the court can, and sometimes should, take into account conduct which has a bearing on the proceedings even though it takes place outside the four corners of the action before the court.

“That could include the threat of overseas litigation to attempt to pressurise a party with limited financial resources into an unfair settlement. It does include the suggested litigation against Mr Bowen in the United States.

“I am not entirely sure that I would have made the same order as the district judge, but I do not believe that I should interfere with the decision that Media should pay Mr Bowen’s travelling costs of £164.10.”

MoJ: “simply untrue” that it is not using the personal injury portal

Thompsons Solicitors has accused the Ministry of Justice (MoJ) of double standards for failing to use the portal for lower value personal injury claims.

The firm said that in the last 12 months, it had lodged 172 cases involving the MoJ on behalf of injured clients but in each instance found that the MoJ had not registered itself on its own system.

The MoJ has denied this, saying it was “simply untrue to suggest we do not use the personal injury portal”.

Tom Jones, head of policy at Thompsons Solicitors, said: “Despite having forced through its use by everyone else in all cases, the MoJ hasn’t bothered to register itself on a portal it insisted was set up,”

“As they aren’t registered on the portal, we aren’t able to use the portal system to communicate with them as defendants. This means we’re incurring additional costs which they then refuse to pay,” he said.

“It’s an absolute farce that the government brought in major reforms to the legal system – and will bring in more if it gets its way – and yet can’t get its own house in order to use them.

“This is yet another example of the government making one rule for themselves and one for everyone else. They harp on about addressing the so-called ‘fraud culture’ and the issue of ‘excessive costs’ but they are being dishonest themselves – not adhering to their own rules and running up costs they won’t pay back.”

However, a spokeswoman for the MoJ said: “It is simply untrue to suggest we do not use the personal injury portal.

“Claims involving the Ministry of Justice or National Offender Management Service go through the portal via the independent company that handles claims on our behalf.

“We are absolutely committed to providing excellent health and safety, and the portal allows claimants to gain resolutions in an efficient and satisfactory way.”

John Dickerson, partner and practice director at Anderson Rowntree

Eclipse Legal Systems, the Law Society’s sole Endorsed legal software provider, is implementing its Proclaim Practice Management Software solution at Anderson Rowntree, one of the oldest law firms in West Sussex.

Established around 1850, Anderson Rowntree has an enviable reputation for results and service, and prides itself on its firm roots within the local community. Offering services across property, private client, family and litigation, the experienced team provide an entirely client-focused and efficient service, earning the firm a recommendation rate of over 98%.

The six figure deal will see Eclipse implement pre-configured Proclaim work types for all staff to provide a core centralised productivity suite. For financial management, Proclaim’s Credit Control Centre (CCC) will provide the firm with a central dashboard of key financial and payment information, including the ability to drill directly into bills, clients and matters. As part of the implementation process, Eclipse will conduct a complete data migration from the practice’s incumbent system, resulting in increased efficiency throughout all departments.

Furthermore, to ensure firm-wide compliance, Anderson Rowntree has opted for Eclipse’s integrated compliance toolset to assist with the extensive SRA obligations, and to provide an improved risk management strategy.

Additionally, as part of the drive to further enhance client service, Anderson Rowntree will also take advantage of the integrated Proclaim lead management system, empowering the firm to track and analyse sources of new business, and streamline the inception process. Taking this further, the firm will benefit from Eclipse’s integration with an online ID and AML service, providing end-to-end ‘one-click’ verification and instant on-screen validation.

John Dickerson, partner and practice director at Anderson Rowntree, comments:

“It is crucial that we achieve our goal of staying ahead of the competition and strengthening our enviable reputation for outstanding client service. Proclaim will be fundamental to our future success, by providing a flexible central solution, embraced by all departments and therefore guaranteeing a consistent approach to matter management.

“Proclaim will not only improve our internal efficiencies and compliance, but will also provide client-facing systems to enable an online service. The fact that Proclaim’s scope is this broad made the system our first choice by a large margin.”

Pickering: heading CJC working group

The Jackson reforms could inhibit access to justice for defamation and privacy claimants and so a Civil Justice Council (CJC) working group looking at costs protection for them needs to find a solution, MPs and peers said today.

CJC member John Pickering, the chief executive of Irwin Mitchell, is to head the working group, which should meet for the first time next week, Litigation Futures can reveal.

The government had rejected Lord Justice Jackson’s recommendation that it introduce qualified one-way costs-shifting (QOCS) for defamation and privacy, although Lord Justice Leveson said in his report last month that this should be taken forward if the new press regulator does not set up a cost-free arbitral process for claimants.

During the second reading of the Defamation Bill in October, justice minister Lord McNally agreed to ask the CJC to look at the issue afresh.

In a report on the Bill published today, Parliament’s joint committee on human rights said it was concerned that the changes in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) “may inhibit access to justice for those claimants and defendants who are middle-income, but not eligible for legal aid. We are particularly concerned that the reforms in the LASPO Act 2012 do not tackle this issue, as the [rules] on CFAs may prevent claimants and defendants of modest means from accessing the courts, a particularly pertinent concern when the action is one of defamation.

“We note the government’s ongoing efforts to address this particular issue, and welcome its ongoing consideration of the ‘costs protection’ issue. We remind the government that a solution to the difficulty faced by ‘middle income, not eligible for legal aid’ claimants and defendants is necessary if defamation reform is to be effective in practice, so that all persons, regardless of financial means, can access justice in defamation proceedings.”

The working group’s terms of reference are to identify whether there are meritorious actions for defamation and privacy, which could not properly be brought or defended without some form of costs protection, and if so to advise in which types of cases (or stages of cases) it should apply; and what options for costs protection might be considered, with their advantages and disadvantages. It has to report by the end of March.

The committee’s report is muddled in places – it appears to believe that the LASPO changes are already in force and that legal aid is available for defamation, while it does not contemplate claimants paying for after-the-event insurance out of their damages.

Stark: many solicitors have still not properly engaged with the process

Just 2% of costs specialists work with solicitors who always stuck to their budgets, according to the Association of Costs Lawyers (ACL).

At a time when the success of costs management, or lack of it, is under scrutiny with plans to extend fixed recoverable costs, the ACL said the research highlighted how it has failed to change behaviours as was hoped.

The survey of 117 costs lawyers found that 72% said solicitors “sometimes” went over their budgets, while 22% said this always happened.

It said one reason may be that budgeting takes place too early on in proceedings. Half (51%) of costs lawyers said that instead of doing it at the first case management conference as now, the hearing should be held later, once the course of the litigation is clearer.

In the meantime, solicitors should be updating their budgets if required as the case progresses. However, judges have often complained that this rarely happens, and the survey backs that up – almost a third of costs lawyers (32%) said they had never seen an application to update a budget, while only 18% reported that their number was increasing.

However, judges continue to be a problem. Given a set of statements on how costs management was working, the most popular (ticked by 62% of respondents) was that “it depends on which judge you’re before”, while 32% agreed that “judicial inconsistency is killing it”.

Just 10% thought that judges were finally getting the hang of costs management. Some 41% of costs lawyers said the process had brought their skills to the fore.

The survey also uncovered concern about the Court of Appeal ruling earlier this year in Sarpd Oil International Ltd v Addax Energy SA [2016] EWCA Civ 120, which suggested that the first case and costs management conference was the place to contest the reasonableness and proportionality of costs that have already been incurred – rather than just those to be incurred in the future. It had been thought that these should be left to detailed assessment at the end.

Four in ten Costs Lawyers said the ruling had made the first conference much more contested and significantly increased the amount of preparatory work as a result. The same number said there needed to be a rule change – something that is under consideration.

ACL chairman Iain Stark said: “We are more than three years into costs budgeting and the reality is that – while it has been of benefit in some instances – it has not delivered in the way that was hoped. This is, at least in part, because many solicitors have still not properly engaged with the process, even though they risk court sanctions as a result.

“The alternative, as laid out starkly by the senior judiciary recently, is fixed costs for cases worth up to £250,000 – a figure that covers the vast majority of litigation in England and Wales. Maybe this is the shock solicitors need to get serious about costs budgeting. Costs lawyers stand ready to help them.”

Mr Stark has been appointed as one of the 14 assessors working with Lord Justice Jackson in his review of fixed recoverable costs.

Deadman: it’s not just about the law

Posted by Chris Deadman, director of operations at Litigation Futures Associate Invicta Capital Funding

Any investment strategy, whether it is buying shares or investing in commercial litigation, is a cocktail comprising equal parts art and science.

In third-party funding, the science component is relatively straightforward – assess the underlying legal merits, calculate the commercial returns and determine recoverability. But that is only half the story. Often overlooked is the human element, the dramatis personae of a claim who can frequently mean the difference between success and failure.

I have often said that litigation funders have a foot in both the HR industry and the financial sector, because in the final analysis, investment in a piece of litigation is a wager, a leap of faith in the talents and abilities of the legal team (including the client) to bring home the proverbial bacon.

I am not a lawyer myself unless you count a grade B O-Level in General Principles of English Law (Donohue v Stevenson anyone?). So if a lawyer passed me a cast-iron certainty of a case, there is a very high probability that I would mess things up royally without clear step-by-step instructions. This is because I haven’t got the faintest idea how to run commercial litigation.

And the reverse is also true. Give a supremely talented commercial litigator a genuine 50/50 case and there is a good chance that with a fair wind and a sensible claimant and defendant, they will engineer a commercially acceptable outcome for their client. The common theme here is the legal team – a good one can be enough to secure victory and vice versa.

But the claimant’s legal team is just one, albeit very important, piece in the jigsaw. What about the claimant? Are they a cool-headed corporate entity who will be prepared to look rationally at an offer of settlement or a private individual with significant emotional investment in the claim who wants ‘justice’? Who are the decision makers? What are their motivations? What do they want to achieve?

And this qualitative analysis should not be restricted to the claimant’s side. The same questions need to be asked of the defendant’s team, as there is sometimes a lazy tendency to assume that they will want to settle a matter in order to make it go away.

I recall an investment being made several years ago in a case that looked eminently sensible on several levels. It soon became apparent, however, that we had massively underestimated the degree of personal animosity that existed between the claimant and the CEO of this large and credible company.

No matter how commercially sensible it might have been for the defendant to make an offer of settlement, their shared history made it a badge of honour for the CEO to resist any attempts at concluding the case amicably, whatever the financial cost.

All of these factors need to be considered carefully by any prospective funder. And this qualitative aspect can sometimes be overlooked because funders usually feel most comfortable analysing the financial risk. But litigation is game played by people and as we all know, people can do the strangest things.

Andrew Watson, Ringrose Law’s finance director calls Eclipse the “number one choice by a fair margin”

Full service law firm, Ringrose Law, is implementing the Proclaim Practice Management Software solution from Eclipse Legal Systems.

Ringrose Law operates from seven offices providing a broad portfolio of services to private individuals and businesses across Lincolnshire and Nottinghamshire.  Lexcel accredited for ten years, the practice employs over 130 staff and has been at the forefront of local legal services for over 100 years.

With a history of successfully reshaping as markets and legislation have changed, Ringrose Law entered a rigorous and lengthy selection process to replace the incumbent Matter Management and financial accounting systems.

Ringrose Law is rolling out the integrated Proclaim Practice Management solution across the entire firm, providing instant desktop access to productivity, financial and client management toolsets.  Proclaim Process Management solutions will be introduced for the conveyancing and personal injury departments, while for less prescriptive work areas (including court of protection, employment, family, probate and crime), Proclaim Matter Management solutions will be utilised.

As part of the practice-wide integrated solution, Ringrose Law will be utilising Proclaim client inception and CRM tools, to manage the ‘new enquiry’ process and introduce business on-stream in a consistent manner.

Taking this further, the practice will also benefit from Eclipse’s client self-service toolsets – TouchPoint, SecureDocs and FileView – enabling clients to agree documents online, monitor file progress, and communicate with the firm through the full life of a matter.

As an integral part of the system rollout, Eclipse will be carrying out a conversion of both client and financial data from Ringrose Law’s incumbent software systems.

Andrew Watson, finance director at Ringrose Law, comments:

“When we first met Eclipse in 2013, at the Legal IT exhibition in London, we were taken both by the approachability of the Eclipse team and the power of the Proclaim solution.  As part of our ongoing growth strategy we were investigating software solutions that could further improve our internal processes and provide consistency across how teams perform and are measured.

“What we found in Proclaim was that the system could not only improve internal efficiencies, financial management and compliance, but it could also provide direct client-facing systems to enable online self-service for the people and businesses we help every day.  The fact that Proclaim provides this broad business benefit for us made the system our number one choice by a fair margin.”

Thomas: international forum of commercial courts already underway

Commercial cases could one day be heard before joint international courts, involving tribunals made up of judges from each jurisdiction, according to an idea “thinking the unthinkable” floated by the Lord Chief Justice of England and Wales.

Meanwhile, the head of the judiciary has set in motion the creation of a forum of commercial courts to bring a common approach to the resolution of international disputes.

The project is to be headed by Mr Justice Blair, the judge in charge of the London Commercial Court, and has so far had a positive response from prospective members, the Lord Chief Justice said.

Giving a lecture entitled Commercial justice in the global village: the role of commercial courts last week to the Dubai International Financial Centre (DIFC) Courts and the DIFC Academy of Law, Lord Thomas addressed the issue of commercial courts and “how they can be made fully fit to underpin global prosperity in the 21st century” in the context of the digital revolution.

He observed the development of memoranda of guidance between commercial courts across the world and speculated that such cooperation could form the basis of joint hearings.

If technology advanced to enable such a move, it might in future be possible “to devise joinder of proceedings across jurisdictions: applying the same substantive law, with the parties and court determining which of the jurisdictions’ procedure and law of evidence to apply, with the tribunal made up of a judge from each jurisdiction – with perhaps a third judge chosen from a roster of international commercial judges, and parallel judgments being rendered”.

He admitted the idea was ambitious but asked: “Should not our thinking be that ambitious? Yes, we must think what is unthinkable in our current process.”

If such an international venture were possible, he said, it “may well be one possible means to cure the problem of effective cross-border enforcement. If a judgment is a judgment in both states, it is difficult to see what problems would arise were the parties to seek enforcement in either of them”.

Bringing international commercial courts together was necessary, said the Lord Chief Justice. He acknowledged this could be hampered by “an element of competition” between them but said: “I believe this can be done without compromising in any way our competiveness or our independence, in the same way that central bankers set about their duties to maintain international financial stability and growth.”

Putting the case for a forum of commercial courts, he said: “In our interconnected world, our global village, the judges of the commercial courts have a similar role in ensuring our global prosperity continues to be underpinned by an effective legal framework and by law which develops in harmony with the rapidly changing markets and commerce brought about by the digital revolution.

“No commercial court can do this on its own. The commercial courts of the world are not unconnected islands, but have a common duty working together to innovate and to lead.”

He had proposed the idea for the forum to international colleagues over the New Year vacation “with the full support of the senior judiciary of England and Wales”. It had met with a “very enthusiastic response” from “colleagues responsible for other commercial courts”.

He explained that its objective was “to build on and develop a more systematic approach to providing a common approach to the resolution of disputes and, as important, to developing the law to keep pace with the way our global village is developing”.

He added: “If we are able to start to develop more structured links, share best practices, consider problematic areas and novel developments, build that mutual confidence so important to the recognition of judgments of other courts and engage constructively with our court users, our courts will realise better their potential to ensure the prosperity and good order of the digital village.”

He stressed the forum would “be no talking shop. It must deliver concrete benefits”, adding: “I have no doubt we shall see these before too long.”

He expected to see the first symposia organised over the course of the next 18 months.

Topics that could be addressed included “cross-border enforcement, best use of IT, the response of commercial courts to topical issues in arbitration… how to enhance international co-ordination and, in the light of recent experience, how we can best respond to international financial crises and their aftermath”.

Manchester Civil Justice Centre: move to national county court

The statement of truth to be used in verifying a costs budget is to be changed, the latest update to the Civil Procedure Rules has revealed – but there is no word as yet about whether the level at which the costs management exemption kicks in will be increased.

The 69^th update – which will take effect from 6 April – was published this week and amends Precedent H to replace the statement of truth as currently specified in paragraph 2.2A of practice direction 22.

It will say: “This budget is a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation.”

The current version says: “The costs stated to have been incurred do not exceed the costs which my client is liable to pay in respect of such work. The future costs stated in this budget are a proper estimate of the reasonable and proportionate costs which my client will incur in this litigation.”

Publication last month of minutes and papers from the December 2013 meeting of the Civil Procedure Rule Committee indicated that a new blanket rule is likely to be introduced that will require costs management in all cases worth less than £10m. However, there is no mention of it in the update, although there is still time for supplemental changes to be made.

A change to part 42 will allow chartered legal executives, costs lawyers, patent attorneys, and trade mark attorneys – as persons authorised to conduct litigation under the Legal Services Act 2007 – to be entered on the court record.

The update also makes provision for the creation of the single county court as legislated for in the Crime and Courts Act 2013. By removing geographical jurisdictional boundaries, the county court will sit at various locations within England and Wales in a way similar to the High Court and will have a single seal and a single identity to indicate its national jurisdiction.

The court houses in which it will convene will act as hearing centres with court administrative offices attached to them.

Among other parts amended are part 16 – providing that financial claims below £100,000 must be brought in the county court from 22 April – and part 52 so that any order refusing permission to appeal will in future indicate the court to which any further application should be made and the level of judge who should hear the application. The full list of changes can be found here.

Meanwhile, the Jackson reforms apply to the rules on setting aside a judgment entered in default as much as those areas explicitly affected, the High Court has confirmed.

In Samara v MBI & Partners UK Ltd & Anor [2014] EWHC 563 (QB), Mr Justice Silber said he did not agree with the contention that the new regime did not apply to the special rules under part 13 because there had been no trial.

Although there had been no specific reference to part 13 in the Jackson report or subsequent implementation lectures, “the new regime has universal application to all rules in the CPR”, he said. “Indeed, it is based on and underpinned by the changes to the overriding objectives which apply to all parts of the CPR.”

He continued: “There is no express statement that CPR part 13 or that any part of it is excluded from these provisions and I have found nothing in the rules or in the decided cases to show expressly or impliedly that this is so.

“Further, there is no theoretical justification from excluding this rule from the new regime and the new underlying objectives. Indeed, most importantly, the Master of the Rolls, Lord Dyson, described the effect of the new regime in very general terms and as being of universal application when giving the judgment of the Court of Appeal in Mitchell v News Group.”

Brennan: strong investment approach Photo: Steve Nimmons

Third-party funder Juridica has made a £23m profit on four separate cases that have partially settled, it announced yesterday.

In a statement, the AIM-listed company said the cash, which it emphasised is a realised gain rather than a return on capital, was in line with expectations for these cases as previously reflected in its unrealised profits. It will receive the vast majority of the proceeds at its year-end.

Juridica expects to release its half-year results in mid-September. The statement said: “As it moves further into the year and has more visibility on expected year-end results in the portfolio, the board will consider at its 6 September meeting the announcement of an interim dividend to be paid to shareholders at or prior to the year-end. It is the Board's intention to pay-out a significant part of these proceeds as dividends, as and when received.”

Juridica initially raised £115m of capital in two tranches. With the latest settlements, it has now generated £53m in gross proceeds and returned £16m to shareholders in the form of £11m in dividends and £6m when it acquired company shares in its September 2010 buy-back programme.

Lord Brennan, Juridica’s chairman, said: “I am pleased to report that we are starting to see the benefits of some of our investments in larger cases, which often have a longer time to completion but also can generate larger returns.

“The cash results announced today demonstrate the strength of our investment approach and are equivalent to 20% of the total capital raised by the company. The board and its investment manager are really pleased about this opportunity to return significant dividends to shareholders in the near term.”

Richard Fields, chairman and chief executive of Juridica Capital Management, the investment manager, said: “When we first developed this market, we committed Juridica to invest in bigger cases with a desire to generate significant returns for our investors over the long term. We are thrilled to see the results and truly hope the investors who have been with us throughout this process feel the same way.”

Meanwhile, Australian funder IMF is backing an A$223m (£150m) unfair fees action being brought by Maurice Blackburn Lawyers against eight banks in the country. With 170,000 claims, it is the biggest series of class actions brought in Australia.

The class actions are being funded by IMF on a no-win, no-fee basis for participants.

Lord Briggs: Transparency will have to be improved

Commercial courts may have to use their new right to determine issues of market importance by declaration if Brexit leads to a boom in arbitration, Lord Briggs has warned.

While agreeing with Lord Neuberger that Brexit would “if anything” make English commercial law “more attractive as the chosen law”, Lord Briggs made no attempt to hide concerns over the enforceability of judgments.

The Supreme Court justice said that if Brexit or “other moves away from sharing jurisdiction” led to private arbitration and ADR taking over from public courts as the main means for resolving cross-border commercial disputes, “ways will need to be found to remedy the deficit in transparency” that resulted.

“This may perhaps include the newly created – but as yet unused – jurisdiction in the Business and Property Courts to determine by declaration legal issues of strategic market importance without there being an underlying dispute.

“It may call for a freeing up of routes of appeal from arbitrators on questions of law of general public importance, or some relaxation of privacy which might, for example, permit the publication of anonymised awards.”

On enforceability, Lord Briggs said the “available choices” appeared to be a Danish-style solution, by which the UK would voluntarily join the Brussels Regulation regime, a Lugano-type solution or a “reversion to common law rules, only slightly fortified” by rejoining the Hague Convention.

In a speech entitled Dispute resolution in uncertain times, delivered at the PRIME finance conference at the Hague, he said: “The current thinking of the UK government, which largely concurs with the view of the House of Lords EU committee, favours a Brussels-type regime in principle.

“But its implementation faces the formidable obstacle constituted by the probable demand of the EU 27 that the CJEU retain its suzerainty, while at the same time deprived of UK involvement, either in the form of members of the court (including advocates general) or the locus standi of the UK government to make submissions, which it has traditionally done with great vigour.

“That is what Denmark and (to a lesser extent) the non-EU members of the Lugano convention have signed up to.

“The current form of the Lugano Convention critically lacks the benefit of improved recognition of party choice of jurisdiction now to be found in the recast Brussels Regulation.

“An attempt to join either of those regimes will require the other members’ consent to the terms. Meanwhile, a reversion to the common law rules, coupled with the loss of EU wide reciprocal enforcement of judgments, has been described by commentators as a recipe for confusion, expense and uncertainty.”

Lord Briggs said almost 40 years of involvement in financial dispute resolution in court, through arbitration and ADR, had “quietly imbued me with the settled perception that, in this field, there was an unstoppable move towards what I will loosely call globalism”.

However, he doubted whether in 2018 most people “would still take the further onward march of globalisation in dispute resolution as a given, in quite the same way as we may have done in the past”.

Along with Brexit, Lord Briggs mentioned the “advance in several countries” of “what may be described as an ‘us first’ approach to national engagement with global problems”.

He said this was called ‘America First’ in the USA, and manifested itself in its decision to withdraw from international trade, environmental and diplomatic agreements.

“These changes may not impact directly upon dispute resolution, but they may herald a worldwide retreat from an earlier ambition to find global solutions to global problems, with adverse consequences for the continuation of the current view that a global approach to dispute resolution is a Good Thing which can safely be taken for granted.”

Lord Briggs said the UK’s membership of the EU had been seen as the “essential glue attaching the mainly civil law jurisdictions of the other member states to the common law world, including for this purpose the USA”.

He said the common law had in some respects benefited from its “enforced exposure” to European jurisprudence.

He added: “I have no reason to think that European jurisprudence will not continue to play an important part in the further development of the common law, as it has always done.”

SRA: proportionate outcome

A solicitor who failed to comply with court orders has been rebuked by the Solicitors Regulation Authority (SRA) after the judge complained to the regulator.

Paul Ireland, a sole practitioner in Warrington, accepted his sanction in a regulatory settlement agreement that means he avoids a referral to the Solicitors Disciplinary Tribunal.

The court told the SRA that Mr Ireland appeared at a county court by telephone, representing the defendant in a civil dispute. An order was made requiring him to file a perfected order, but he did not do so.

Three months later, court wrote to him, requiring him to file it within a week, but again he did not comply.

A further order was made, stating that unless Mr Ireland filed the perfected order by the following week, he should attend the court to explain his failure. Mr Ireland neither filed the order nor attended court as required.

Mr Ireland attributed his failures due to administrative errors at his office. The agreement said: “He confirmed that by the time he became aware of the orders it was too late for him to take action. He did not contact the court to inform it of the reasons for his failures.”

He wrote to the Court some months later apologising for his conduct.

Mr Ireland admitted that he failed to uphold the proper administration of justice in breach of principle 1 of the SRA Principles 2011 and failed to achieve outcomes 5.3 and 5.6 of the code of conduct – you must comply with court orders that place obligations on you, and you must comply with your duties to the court.

The SRA said the agreed outcome was “a proportionate outcome in the public interest” given that the conduct was “neither trivial nor justifiably inadvertent”.

It took into account that Mr Ireland had a clean record up to this point, has put systems in place to avoid future breaches, and has apologised for his misconduct.

Mr Ireland will also pay costs of £300.

Parliament: bill in ping-pong mode

The House of Lords yesterday reinstated two of the three amendments it previously passed on the government’s judicial review reforms as it emerged that Lord Chancellor Chris Grayling had given MPs incorrect information over a key aspect of them last week.

Peers supported Lord Pannick QC in amending clause 64 of the Criminal Justice & Courts Bill to give judges greater discretion over whether to reject a case if the defendant showed that it was highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred.

They also backed a change to clause 65 so as to allow judges to grant leave where “appropriate” to pursue a JR without details of how the case was being financed.

However, they rejected Lord Pannick’s bid to reinstate the previous change to clause 67 in favour of judicial discretion over granting costs orders against interveners. This came after the government reformulated the clause when it was in the House of Commons last week so that a costs order would not be made if certain conditions were met.

The bill is currently in its ‘ping-pong’ stage where two Houses try to reconcile the conflicting versions that they passed.

However, during the hour-long debate last week, Mr Grayling had suggested to fellow Conservative MP Geoffrey Cox – who was against the government’s position – that clause 64 included an ‘exceptional circumstances’ provision that gave judges discretion.

But in a letter to Mr Cox, Mr Grayling admitted that he had “inadvertently” got this wrong, indicating that he been confused by a similar provision in clause 67.

Without apologising for the error, he said: “It is my view that the clause does have a level of judicial discretion within the ‘highly likely’ test.

“I would like to make it clear that the clause as introduced strikes an appropriate balance, and that where there is any real doubt that there could have been a substantial difference for the applicant, the court will be able to find that the threshold had not been met and can grant permission to proceed with the judicial review.”

Peers criticised Mr Grayling for this error. Lord Woolf said he had “misled” the House of Commons, adding: “It is extremely important that the one member of the lower House who has a statutory responsibility of a particular nature with regard to the rule of law and the administration of justice should have made that mistake, because he dealt very summarily and quickly with the position which was before this House in some detail.”

Conservative Lord Cormack said: “The fact is that the House of Commons made its decision having been wrongly advised and made it in a very short space of time.”

Former Conservative Lord Chancellor Lord Mackay said: “I would like to see this amendment going back to the House of Commons, not necessarily to change the result – that is a matter for the Commons – but so that the debate should proceed on a basis that is 110% correct.”

The bill will now return to the Commons.

Posted by Richard Burcher, chairman of Burcher Jennings

I’m a New Zealander, so please excuse me if I misunderstand the stereotypes. But I’m led to believe that certain Scots have a reputation for being careful with money. What I find surprising is that this might be considered a matter for embarrassment. Certainly every law firm manager, wherever their firm practices, should have their eyes firmly on the twin issues of pricing and costs.

In April this year, Burcher Jennings was created, bringing together unparalleled expertise in pricing strategy and costs management. I’m pleased to say that being between consenting adults, this marriage did not require the help of any Gretna Green blacksmith.

Nevertheless, flying in the face of three centuries of peaceful Union, in the last few weeks Burcher Jennings has led cross-border incursions. I spoke at a Law Society of Scotland big firms conference on current trends, challenges and opportunities in pricing legal services. I also presented a CPD session north of the border, attended by a broad range of Scottish firms. And alongside other Burcher Jennings colleagues I have been working closely with two significant Edinburgh and Glasgow firms to help them devise pricing strategies and manage costs.

The jurisdiction of Scottish law remains firmly independent from its English and Welsh neighbours, along with a different appetite for liberalisation of regulatory and ownership structures. However, clients’ expectations are moving in the same direction in Edinburgh, Aberdeen and Dundee as they are in London, Cardiff and Manchester.   Contrary to the assumptions of many, credible research suggests that business clients aren’t necessarily looking for the legal services at the cheapest price.

What GCs are looking for is predictability, transparency and value – in other words they desire an honest partnership with those providing professional legal advice and support. The success of such brands as Waitrose and BMW suggests that many consumers also are prepared to pay for quality and service, even in austere times, though increasing promiscuity of the online generation sees those same consumers buying essentials in Lidl and a parking a Dacia alongside the BMW in the drive.

Whatever the outcome of the September 14 vote, it’s clear that the most successful law firms on both sides of the border will be those who adopt effective pricing strategies and manage costs efficiently.  Getting price and costs right is the key to winning and retaining clients, building income and increasing profitability.

Regan: no attempt to dilute indemnity costs

Masters in the Senior Courts Costs Office are mulling over whether the amended overriding objective undermines the concept of indemnity costs, it was claimed last week.

Professor Dominic Regan reported that “one senior costs judge” is arguing that the added reference in rule 1 of the Civil Procedure Rules for cases to be dealt with justly and at proportionate cost has a universal impact, including on indemnity costs.

He was speaking at a seminar run by NeoLaw, the new brand for the business services practice and London office of midlands firm Keelys, which has a well-known costs practice run by Simon Murray.

Professor Regan, however, said he disagreed with the judge’s assessment. “Yes indeed part 1 does represent the guiding principles that shape judicial discretion but it cannot contradict express measures enacted, such as the very reference to indemnity costs,” he explained.

There has been no attempt to dilute indemnity costs, he continued, and they form a fundamental part of part 36. Nonetheless he thought it would prove an interesting point to run.

Professor Regan’s case was arguably strengthened by the first speech on the reforms given by Lord Justice Jackson since his return to the bench following illness.

His address to the Australian Bar Association Conference in Bologna, Italy last week was mainly just a recitation of his reforms, but on the new proportionality test he said: “It is intended that the new proportionality rule will dominate the way in which costs are assessed on the standard basis.”

Jackson LJ also took a swipe at the “many vested interests” that came together to oppose his recommendation for fixed costs across the fast-track, in the same way as they did to thwart Lord Woolf bid to achieve it 13 years ago.

“I understand, however, that there have recently been second thoughts within the Ministry of Justice and that rules for fast-track fixed costs may be introduced later this year,” he said.

RBS: Signature represents large number of claimants

The law firm acting for shareholders in the RBS rights issue litigation has secured a substantial correction from the Sunday Express to a story that implied it was in dispute with its clients, after making a complaint to the Independent Press Standards Organisation (IPSO).

Signature Litigation said the newspaper had breached clause 1 of the IPSO code – on accuracy – in an article in the newspaper headlined “RBS shareholders tackle own lawyers”, published last November. The online version’s headline was “RBS to lock horns with former lawyers in legal battle over £200m payout”.

The firm acts for a large number of claimants in the case and was retained in that capacity by the RBoS Shareholders Action Group, which acts as agent for the claimants. Last March, the role performed by the group was delegated to Manx Capital Partners on a sole exclusive basis.

According to a resolution statement issued by IPSO – which ultimately did not need to adjudicate on the complaint – a dispute arose between the action group and Manx as to the terms and effect of that delegation, which resulted in litigation. Signature was not a party to it.

It was settled with the action group agreeing not to appoint or instruct any other solicitors.

The Sunday Express article referred both to settlement damages paid to the claimants represented by Signature and also to the Manx dispute.

The firm said the newspaper was operating “on a fundamental misunderstanding of the matter upon which it was reporting” by conflating the two, which it argued resulted in a number of inaccuracies being published by the newspaper, including in the headlines.

The newspaper disagreed but offered Signature the opportunity to submit a letter for publication.

As a result, IPSO began an investigation, after which the newspaper offered to remove the original online article and replace it with an amended article, “the content of which had been agreed between the parties and which removed the inaccuracies that the complainant had complained of”.

The paper also removed the original online article from the other online platforms over which it had control, including its apps.

Signature said these steps resolved the matter to its satisfaction, meaning IPSO did not make a determination as to whether there had been any breach of the code.

A firm spokesman said: “The RBS rights issue litigation has in the past suffered from misreporting, which it has been important to correct in order that claimants and the public are not misinformed. We took action in this case to correct a number of inaccuracies and we were pleased to resolve the complaint having all of those removed.

“Signature Litigation has only ever acted for claimants, and not for the RBoS Shareholders Action Group Limited, which was the former agent in that case. The new agent is Manx Capital Partners Limited, by whom we are instructed on behalf of the claimants.

“The action group company recently challenged Manx’s authority to manage the litigation, but this was resolved by the court in Manx’s favour.

“We are delighted with the result we achieved for the claimants in the RBS rights issue litigation, which was more than double that achieved for any other claimant group. We are currently verifying all the shares and costs incurred in this case, in order to distribute funds to the claimants as soon as possible.”

Medical reporting: new service standards

The number of high-volume national medical reporting organisations (MROs) registered with MedCo is set to fall after some failed the auditing process, it has emerged.

There are currently 14 so-called tier 1 MROs and according to a MedCo spokeswoman, it has advised “a number” of them that they have failed to meet the qualifying criteria and are to be reclassified as tier 2 non-national MROs.

MedCo is now dealing with appeals against its decisions, and the spokeswoman said that “on completion of the appeal processes MedCo will be able to advise on the number of [tier 1] MROs that have been reclassified”.

The recent PI Futures conference heard that in all there were 175 MROs on the MedCo system.

Meanwhile, Richard Mason, deputy director for civil justice at the Ministry of Justice, has admitted that the government had seen “business practices from the MRO side that we weren’t expecting”.

Speaking at last week’s Bond Solon expert witness conference, he said some MROs registered as tier 1 and then registered again, while others “argued that they had more capacity than they have”.

Mr Mason said the MoJ had estimated that there would only be six MROs in tier 1.

Also last week, MedCo introduced minimum service standards which must be met by medical experts and tier 2 MROs. Tier 1 MROs are already bound by their own minimum standards and service levels as defined by MedCo.

A statement explained: “It has been brought to MedCo’s attention that some authorised users of the MedCo system are not receiving consistent and reasonable standards of service from all registered providers of medical reports.”

Under the standards, experts have to acknowledge their initial instructions within 24 hours, provide an appointment date within 14 days, identify a clinic that is no more than 30 miles from the claimant’s home or work, and deliver the report within 14 days of the appointment or, where relevant, receipt of all the claimant’s medical records. Any further comments or amendments must also be made within 14 days.

Failure to meet these minimum service standards would result in enforcement action and potential suspension, MedCo warned.

Lloyds of London: significant fall in number of disputes

Virtually all law firms serving the insurance industry have lost business in recent years amid “a high level of disruption driven by major changes in the underwriting businesses they support”, new research has found.

At the same time, Clyde & Co, Kennedys and RPC continue to be the dominant players, it said.

Gracechurch, a research consultancy to the insurance industry, said its 2016 Insurance Law Report, found there have been some “dramatic shifts” especially in the middle and lower tiers of the market.

“This is mainly driven by a significant fall in the number of disputes, quite often because insurers are less willing to get into conflict with their policyholders.

“Despite this, the top three players have managed to maintain share, mainly because the combination of international and specialist capabilities and coverage are in demand from London market businesses.”

The company said that Clyde & Co received work from 76% of the insurance market, followed by Kennedys (63%), RPC (43%), DAC Beachcroft (33%), and DWF (20%).

Ben Bolton, CEO of Gracechurch, said: “These figures illustrate an emerging group of new, ambitious businesses intent on winning share. DWF and BLM have both increased their share of mind and voice by over 200% since 2012. They appear be mainly threatening the middle ground of the sector. This situation is fascinating, suggesting that the whole area is ripe for change.”

Gracechurch said that the 200 ‘claims decision-makers’ who took part in the research all identified three major trends that were affecting their business: a desire to grow their topline, particularly by entering new markets internationally; cost containment, given that investment income was low and underwriting returns depressed; and client retention – “with market competition fierce, handling claims in a way that retains the right business is vital”.

Mr Bolton continued: “There is no doubt that the law firms in the insurance sector are being significantly impacted by strategic changes in the industry they support. The challenges to insurers’ top and bottom lines means that they want law firms to understand and respond to their commercial aims in a number of ways.

“But it is not all about price. Segmentation of work is particularly important – delivering efficient low-cost services in the high-volume space and technical knowledge and expertise to support complex claims matters.

“Insurers also genuinely want to build deeper relationships with firms. Their desire to create panels of suppliers means they can work with fewer people to create better relationships.

“With better relationships, they find they get a better quality of support. And, with an increasingly global footprint, insurers also want assurances that their legal partners can help them resolve disputes in other parts of the world.”

The report said: “Underlying analysis of usage by business class showed that Clyde, Kennedys and RPC dominate all classes, pretty much in line with their overall market share and maintained since 2012.

“The one exception is in the area of claims advice, where DAC Beachcroft still holds a strong position. The big three also dominate share in the property and PI [professional indemnity] classes, with DAC Beachcroft and a number of others losing share.

“DWF and BLM are making inroads in casualty and property business, with little evidence of presence in PI. In PI there is a wider range of players who have significant share, including Mayer Brown and CMS, both of whom have declined in property and casualty business.

“This indicates that a number of traditional players are moving away from volume business to focus on cherry-picking more complex work.”

The report said contentious work was still the most competitive area. Here too, Berryman Lace Mawer and DWF “have quickly built share so it can be seen that the new competition isn’t just aiming at commodity services”.

Costs budgeting: new time limits

The amended costs management rules came into force today as part of the latest CPR update, following the review carried out by a Civil Procedure Rules Committee group headed by Mr Justice Coulson.

A key change is that budgets for claims worth over £50,000 should be filed three weeks before the case and costs management conference (CCMC). Budgets for claims worth less than £50,000 should be filed with the directions questionnaire. The existing time limit for filing is seven days before the first CMC.

Under a new rule 3.13(2), in the event that a party files and exchanges a budget, all other parties will have to file an agreed budget discussion report (new Precedent R) no later than seven days before the first CCMC. The amended practice direction says this report must set out those figures which are agreed and not agreed for each phase, and a brief summary of the grounds of dispute.

Separately, a new paragraph 7.10 in practice direction 3E that aims to put to bed the debate over the role of hourly rates in the budgeting process.

It says: “The making of a costs management order under part 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.”

Other changes include:

• Only the first page of Precedent H is to be exchanged and filed in cases where the value of the claims is under £50,000 or the costs are less than £25,000;
• Claims made on behalf of a child are excluded from the regime, and in cases where the claimant has a limited or severely impaired life expectation, the court will ordinarily disapply cost management; and
• Costs claimed in each phase of the proceedings are made available to the court when assessing costs at the end of a case; and
• Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.

Though there has been some confusion about transitional provisions, it appears that the new rules only apply to cases commenced on or after today.

Motor accidents: claims go up while casualties go down

MPs have accused personal injury (PI) solicitors and insurers of losing sight “of the interests of their customers as a whole by encouraging claims to be maximised”. They called for action over the level of fees paid to lawyers while questioning the effectiveness of the referral fee ban.

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In a follow-up report on last year’s investigation into the cost of motor insurance, the transport select committee concluded that the growth in PI claims is the main reason for the rise in premiums and called for the evidential burden of whiplash to rise.

Claims rose 17% during 2010/11 to 790,999, even though the number of casualties in road accidents fell 6% to 208,648.

It called for the fees paid to lawyers under the RTA portal to be reviewed, with a report back within six months, to see if they “relate to the cost of the actual work involved”, along with whether the scheme “acts as an incentive for insurers to concede claims”.

The report laid a large amount blame on insurers, calling on the industry to abandon “sharp practices” in the management of car accident claims, such as passing drivers’ personal data to other parties or taking secretive referral fees from solicitors, garages and car hire firms.

They backed justice committee calls for penalties for breaches of the Data Protection Act 1998 to be beefed up, and said the government should initiate an investigation of cold calling intended to generate PI claims, “with a view to examining the legal and regulatory options for curtailing this activity”.

The MPs said: “We are disappointed that the insurers, who have complained about the dysfunctionality of the current system, have not done more to improve it.”

They noted that their earlier call for greater transparency around the referral fees insurers receive from all those involved in claims “was met with silence from the insurers, which perhaps tells its own story”.

The proposed referral fee ban is likely to reach the statute book this spring and the report said: “Implementation will come later, perhaps much later, and will depend on how the regulators approach questions such as definition of ‘referral fee’. In the meantime, the introduction of alternative business structures could transform the market for legal services and render this debate largely redundant.”

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In any case, it said the government should focus on stopping insurers from receiving any referral fees, rather than only in relation to legal action, once the ban is in force.

On whiplash, it questioned diagnoses unsupported by further evidence of injury or personal inconvenience as the basis for a claim. “The threshold for receiving compensation in whiplash cases should be raised and, if the number such claims does not fall significantly, the government should bring forward primary legislation to require objective evidence… before compensation is paid.”

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Committee chairwoman Louise Ellman said: “Insurers, solicitors and claims management companies have themselves driven up the cost of motor premiums by encouraging people caught up in road accidents they did not cause to claim for personal injury, car hire, and other legal costs.

“Although we strongly support access to justice, drivers should not be railroaded by cold callers into launching legal action.”

Claimant lawyer groups – the Association of Personal Injury Lawyers (APIL), Motor Accident Solicitors Society and Access to Justice Action Group – all welcomed the committee’s focus on insurers’ activities, but warned against raising the bar on whiplash.

An APIL statement said: “Whiplash injuries can be extremely painful and can often linger, leaving some people with chronic conditions. It must be remembered that the burden of proof lies with the victim. The defendant has every right, and opportunity, to challenge medical opinion if it is thought to be wrong.”

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E-disclosure: inadvertent errors

The courts’ tough approach to relief from sanctions since 1 April has been tempered by a ruling where it declined to strike out a defence because of errors made in complying with an ‘unless order’.

In Wyche v Careforce Group PLC (unreported, QBD, 25 July 2013), the defendant was subject to an ‘unless order’ in relation to e-disclosure.

According to summaries of the case published online, the defendant’s compliance was inadequate in relation to the search terms used and the miscategorisation of certain documents as privileged. The errors were rectified once they were drawn to the defendant’s attention.

The claimant applied to strike out the defence on the basis of the non-compliance and the defendant sought relief from sanctions under new CPR 3.9.

Mr Justice Walker granted relief, reportedly ruling that the court could make allowance for human error and that whether it was inadvertent or deliberate was a relevant – but not determining – factor. Here the errors had been inadvertent, they had been speedily remedied, and they had not affected the scheduled trial date.

Therefore he said that the claimant’s application to strike out the defence ought not to have been brought and the defendant was entitled to relief from sanctions.

A briefing from City firm Herbert Smith Freehills commented: “This decision illustrates that, despite the court’s increased focus on compliance as a result of the Jackson reforms, the court can still make allowance for human error and grant relief in an appropriate case.

“Nonetheless, given the court’s broad discretion on such matters and the general trend toward a strict approach, parties would be well advised to comply carefully with rules and court orders so as to avoid falling foul of tough decisions under the new regime.

Writing on his blog, Gordon Exall, a barrister at Zenith Chambers in Leeds, added: “It appears that breach of a peremptory order is not fatal. Honesty about the breach and prompt action to rectify can be extremely important factors.”

Vara: fee increases are necessary to “fix the economy”

Justice minister Shailesh Vara has today announced a further wave of court fee rises for possession, divorce and general civil claims.

At the same time he has unveiled plans to raise the £10,000 cap on money claims to “at least £20,000”, and double fees in the Immigration and Asylum Chamber.

Responding to a consultation launched in January this year, the minister said fees for issuing a possession claim in the county court would rise by £75, from £280 to £355.

Fees for issuing divorce proceedings will go up from £410 to £550. The Ministry of Justice (MoJ) said it had “carefully considered the concerns raised during the consultation and decided not to increase fees by 80%” as originally proposed.

“Instead we will press ahead with a more affordable increase of about a third. We are also protecting the most vulnerable by ensuring that fee remission is available for those who need it, such as women in low-wage households.”

Fees for general applications in civil proceedings are to increase from £50 to £100 for applications by consent, and from £155 to £255 for contested applications.

“In order to ensure the most vulnerable are not affected, we are excluding from this fee rise applications such as those to vary or extend an injunction for protection from harassment or violence,” Mr Vara said.

The minister said it had estimated that the latest wave of court fee rises would deliver over £60m in additional income each year.

However, Mr Vara said yet more court fee hikes would be necessary to raise a further £48m.

The MoJ is proposing to increase the cap on fees for money claims from £10,000 to “at least £20,000”.

“Many of the claims brought for higher values will involve large multi-national organisations or wealthy individuals, and we believe it is right to ask them to contribute more,” he said.

“In order to protect the most vulnerable, personal injury and clinical negligence claims will be excluded from this higher cap and fee remissions for those of limited means will continue to apply.”

At the same time, the MoJ is proposing to double fees in the Immigration and Asylum Chamber, while applying exemptions to protect the most vulnerable.

Mr Vara promised that the existing remissions scheme would become “more generous” and the amount of disposal capital people paying a “larger court fee” needed to have in order to quality would increase.

“We recognise that fee increases are not popular, but they are necessary if we are to deliver our promises to fix the economy and bring the nation into surplus,” he said. “Every pound we collect from these fee increases will be spent on providing an efficient and effective system of courts and tribunals.”