Portal Expansion

We are a few weeks away from major upheaval to Employers and Public Liability claims, extension to the portal for RTA claims up to £25,000 and no sign of any rules.

Those who say that we’ve had draft rules are deluded to think this is acceptable. The original proposal was that Stage 3 of the portal was to be commenced when the Court Proceedings Pack was sent to the opponent and yet when the rules were finalised, some ‘drafter’ had for whatever reason decided to state Stage 3 commenced once all the work had been done and when the pack was sent to the Court, thus depriving the Claimant of Stage 3 costs in many cases where the Defendant came to their senses and caved in.

Speaking of badly drafted rules, those who prepared the rules governing budgets should be made to sit in a room and draft 10 budgets and not be allowed out until they have done so, and see then if they think the budgets are a good idea and the format well thought out.  I have the opinion of the local judiciary still ringing in my ear, and it echoes a message posted by Andrew Hogan on his linked in page.

Apologies to those regular readers for not providing many updates – been in the locked room and not allowed out until the budgets were complete.

Advertisements

One month on…

One month on from Jackson implementation day, and what has changed?

Relief from sanctions were supposed to have been beefed up, but reports from court say nothings changed.

Budgeting is now in force, but is this any different to what good practices already did? Good practice stipulates providing the client with an estimate and regular updates being issued before they are exceeded. Costs lawyers and draftsmen have been helping do this for years.

My favourite change is part 36 offers in costs proceedings, capable of resulting in an increase of 10% should the Judge side with the receiving party on an assessment of costs.

As for Qualified One-way Costs Shifting, the Court of Appeal made sure that these survived the first challenge with their decision in Flatman v Germany, whereby they ruled that a solicitor would have to do more than fund disbursements in order that the successful defendant could not argue for a third party funding order and seek costs from the Claimant Solicitor. It was made clear that the Court of Appeal’s decision was made for policy reasons to enable QOCS to have a chance to survive.

The big changes are to come for personal injury lawyers, with the reduction in portal fees coming in and the expansion of portal fees to Employers Liability claims in July along with fixed fees for those cases escaping the portal.

That said, here at Carlisle Legal Costing, we’re one step ahead of the rest with news and views from both working at the coal face and seeing a wide range of practices to help share best practices.

Giles v Veolia part 2

Further to my earlier post regarding Giles v Veolia, Taylor Rose saw fit to appeal. The appeal was due to be heard on 11th April in the Court Of Appeal. However, at the 11th hour, Taylor Rose have withdrawn their appeal.

Where does that leave Horwich Farrelly, Berrymans, Keoghs, Keelys and Shakespeare who have been riding on the back of Taylor Rose’s appeal having argued that Giles had no wider relevance before changing tune to say they’re not paying ATE pending the Giles appeal. Will be interesting to see if now they capitulate and start paying up since Giles was so relevant.

Change Management

Some call it J day, others call it April Fools Day.

Either way 1st April is going to be the dawn of a new era in legal services and its vital for firms to react and adapt. We have had to repeatedly adapt as we grow up and its now different in law firms. Adapting to the new rules, regulations and opportunities is key.

If you need help, a word of wisdom or ideas on survival, do not hesitate to ask. Hesitation will lead to failure.

Good luck

Everyone ready for the Jackson reforms?

I was talking to a solicitor on Friday and was more than a little surprised to find out he had not yet read the proposed changes to CPR, was not aware of the fact that if you actually are entitled to a detailed assessment, you may get to the end and then have a load more knocked off for good measure, and that you were to be obliged to do a budget in multi track cases?

Is all this news to you too?

Get in touch and we can help you and your legal practice get up to speed.

After The Event Insurance Recoverability

I love reading case law and then seeing the reports on various websites and in points and replies, seeing how cases can be interpreted or misinterpreted as the case may be. For instance, Brush v Bower Cotton apparently is an authority for and against the recoverability of estimated time and time spent drafting attendance notes. How can one thing say two things? Interpretation.

So we have Christie v Wiles, a case that proceeded before District Judge Troy in Newcastle County Court. The background was that Mr Christie instructed Messrs Winns Solicitors to pursue a claim for personal injury and entered into a CFA with ATE. Investigations were undertaken with the client’s insurers with regards to alternative funding. The client’s insurers never responded and so the ATE remained in place. It was accepted by Mr Stansfield of Horwich Farrelly that a claimant was not obliged to use unsuitable Before the Event Insurance. Mr Stansfield however had established on the back of ‘one call’ that there was BTE.

As an aside, the Defendants routinely state that they establish there was LEI in one call, but a) never disclose evidence that it was suitable and b) often get it wrong as it later transpires that the LEI is not an insurance policy but is Legal Assistance. Secondly, due to the fact that ‘Insurers may exchange information for the prevention of fraud’ they are entitled to find out the policy information, whereas Claimant Solicitors have to obtain prior authority from the client to find out such information due to Data Protection imposed by the Insurers. Not sure how an agreement to exchange information for the prevention of fraud applies to disclosure of policy information – double standards if you ask me.

In Christie v Wiles, DJ Troy found that a simple letter of enquiry was too complicated for insurers to understand notwithstanding the fact that they are supposed to be capable of understanding complicated legal jargon – has he not read the small print on his insurance?

DJ Troy found that it was reasonable that if suitable enquiries into alternative funding were made, and it was found that there was no suitable insurance, then the ATE was recoverable. However, in the instant case, it was held that the client should have produced the documentation, notwithstanding the fact that insurers change the policies regularly and so the Defendants scored a close win. You wouldn’t think so having read the Horwich Farrelly website.

All changed in Giles v Veolia. No enquiries were made as the client was a bus passenger and was suing the bus company. It was held in that case that even where no enquiries were made, as the policy held by the bus company was not suitable, and it was unreasonable to use the tort feasor’s policy, the ATE was recoverable. Furthermore, it was held that should BTE be discovered at a later date, if the ATE has already been entered into, it does not have to be unpicked!

Offer & Acceptance

I have long held the view that where a part 36 offer is made and payment is received for the amount offered, then there is a concluded agreement. This view has been unchallenged until recently when my opponent decided to argue that there was no concluded agreement and that we were not entitled to costs.

 

Consideration of case law appears limited. On the one hand is Moriera v Grinch where HHJ Stewart spent a long time on the point and found that a claim for liquidated damages and a cheque being received does not amount to entitlement to costs, whereas in Bessant v Breheny, the Judge gave short shrift to the argument, the difference being was that the offer was made pursuant to CPR 36.

 

Low and behold, my belief was restored when the DJ confirmed that a cheque is a written document and so can be construed as acceptance in writing of a part 36 offer. The deciding factor is if there is any correspondence immediately afterwards indicating otherwise, then the answer may be slightly different..

 

Moral of the story is get the offer and basis of settlement right at the time.

What’s new in the world of costs?

When I undertook my law qualifications I routinely laughed when the criminal lecturer said that the law was in a state of flux following the decision in 1908. Try dealing with costs mate.

Things continue to move on at pace and there’s never any rest for the wicked.

So what’s new. The big debate is will the Jackson changes be ready for implementation in April 2013? Will predictable costs be ready? Will QOWCS be ready? Not likely.

Interesting article in New Law Journal regarding the portal for low value RTAs. Most damages are for circa £3k and yet they are looking to increase the small claims limit to £5k and implement changes to expand the upper limit for the portal to £25k. Net effect – no one will use the portal.

Following the Liverpool Test Case for ATE premiums in portal cases which decided that the court was not prepared to decide on the price of premiums – no surprises there – the next battle lines seem to be back to the good old investigations into alternative funding. Shame Judges and defendants alike have not noticed that the CFA Regs 2000 have been revoked and all a solicitor needs to do is discuss alternative funding. What part of discuss means look at countless policies, phone up the LEI provider and spend 1 hour on hold – guess what I was up to on Friday – to be told there was no LEI after all, only then to hear from the Defendant there was, and I should have kept phoning the LEI until I got an answer that the Defendants liked. Doesn’t work like that.

Moving to a wider costs picture, proportionality has been redefined: As from April 2013:

“44.4(5) Costs incurred are proportionate if they bear a reasonable relationship to:
(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.”

Lord Neuberger summarised the aim of the new test as:
“effectively reversing the approach taken in Lownds. In this way, as Sir Rupert said, disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply: necessity does not render costs proportionate.”

He anticipates that:
“As such it seems likely that, as the courts develop the law, the approach will be as Sir Rupert described it:
‘. . . in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR rule 44.5(3). The court should then stand back and consider whether the total figure is proportionate. If the total figure is not proportionate, the court should make an appropriate reduction.”

So whose ready for the costs wars to break out? Those that wrote these rules?

“there may be a period of slight uncertainty as the case law is developed. … The law on proportionate costs will have to be developed on a case by case basis. This may mean a degree of satellite litigation while the courts work out the law, but we should be ready for that, and I hope it will involve relatively few cases.”

Book your QCs now as they’ll be busy!

After The Event Insurance Premiums Recoverability in the Portal system

When the RTA portal was designed and the rules written, the easiest thing ever would have been to state that a premium was recoverable and it should be either staged or one stage only. But oh no – that would be too easy.

Instead, the rules were drafted to say ‘may’ and so began the war of county court decisions vs county court decisions.

Wanting their cake and eating it, the Defendant lobbyists argued for staged premiums when it was fixed price, or fixed price when it was staged and/or argued there was no need for such a premium as there was no risk on the portal – notwithstanding the huge variety of ways of the case falling out of the portal, the delays caused by Defendants on the go-slow………………

So, the mantle was thrown down for District Judge Smedley sitting in Liverpool County Court to create a test case and the Claimants and Defendants sat back and waited for his decision released today. The salient points are:

“…So, the claimant and his solicitor dealing with funding at the outset know that their particular claim may or may not resolve within the Protocol. If they choose a single premium policy and the case settles within the Protocol, it will be said on assessment that they should have chosen a staged, reduced-premium policy. If they choose such a policy and the case exits the Protocol and goes to trial, it will be said they should have chosen a single premium policy – in each case because the choice made was unreasonable. I accept Mr. Finn’s evidence on this point. There is no “right” or “wrong” decision to be made. Both single premium and staged premium policies are legitimate.

Having regard to all the matters I have considered, I am satisfied that in the present stage of development of the use of the Protocol, with the inevitable teething problems, and with the uncertainty whether a case will remain in the Protocol or not, a claimant and his solicitor are entitled to choose either a single premium policy or one with staged premiums. Either is permissible; neither can properly be said to be unreasonable…”

So DJ Smedley agrees with what most people other than insurers thought.

Commercial Settlements -v- Reasonable Settlements

I was recently asked to negotiate costs on behalf of a landowner who offered to pay me in bales of hay, and was prepared to pay the receiving party in the same manner. Such is the economic climate.

It is not always sensible to push for the settlement you believe your costs deserve. I was once asked to attend an assessment hearing as an agent. My client was legally aided but had failed to file the appropriate statement in order to protect himself. We offered to settle for £10k with payments in instalments. My opponent chose to push for £13k which his bill was worth. However, even though the bill was assessed at £13k, they ended up with £10k including costs of assessment secured with a charging order in case the decaying property were miraculously restored. My client was delighted – in stark contrast to my opponent who had to advise his client that he effectively had nothing, losing £10k cash and gaining a worthless charging order.

The moral of the tale is your legal costs may be worth more than you sometimes have to accept, particularly where the other side is self-funding the payments.