Kerry Underwood

NO WIN – NO FEE AND THE OMBUDSMAN: TIME TO GO

with 13 comments


Civil Legal aid is abolished, Employment Tribunal claims are down 79% due to fees, recoverable costs in personal injury are slashed, court fees are about to treble in some cases, Judicial Review is to be heavily curtailed, criminal lawyers are on strike, the Court of Appeal rules that the efficiency of the State comes before Justice and very many senior and respected commentators feel that we risk losing all that has been achieved in the 800 years since Magna Charta.

So the Legal Service Ombudsman may have felt that there are matters of rather more pressing concern than the nomenclature of no win no fee.  However he has prepared yet another of his reports http://www.legalombudsman.org.uk/downloads/documents/publications/Complaints-in-focus-cfa-report-final-140103.pdf which even under the Mitchell criteria would probably qualify as trivial.  I have hesitated before even bothering to write about it, but he is the Legal Services Ombudsman and the report shows such ignorance that I will spare it a few words.

The Legal Services Ombudsman is a senior civil servant.  Consequently he should refrain from highly political, controversial statements which many of us believe to be untrue insurance company inspired propaganda, eg in relation to the Jackson Reforms.

“aim of these changes is to make legal services more accessible while managing costs” (That is a verbatim quote!)

“The “no win, no fee” model has played its part in fostering a culture of “ambulance chasing” and fraudulent claims, which has inadvertently driven up insurance premiums”.

“moves to rein in the burgeoning personal injury market”.

“The “no win, no fee” market has become increasingly aggressive”.

That is right-wing rhetoric, as well as simply untrue.  Imagine the Ombudsman saying:

The “no win , no fee” model has allowed millions of our citizens to have access to justice which would otherwise have been denied to them by this Government’s savage attack on the ability of ordinary people to go to law.

“They have also cut fraudulent claims as lawyers will be very careful about taking on a losing claim, as they do not get paid.  Under the old system the lawyer gets paid win or lose and so had no interest in the merits of the claim, fraudulent or otherwise.

“We must protect no win no fee at all costs.  It is the only thing keeping the civil litigation system alive.  We must encourage all injured people to seek justice”.

Can’t quite see him coming out with that can you, even though it is obviously true!

 

Transfer of risk

 The Ombudsman complains that there “is a structural weakness in the nature of the agreements which allows some lawyers to pass the risk of unrecovered costs on to the consumer”.

It is not a structural weakness; it is part of the design and what is wrong with it?  What in fact is happening is that the lawyer may be agreeing to charge no fee in the event of defeat, but to charge disbursements.

That is still a massive benefit to the client as compared with hourly rate win or lose funding.  There is no “transfer of risk” except from the client to the lawyer.  All it means is that we are taking only 95% of the risk as compared with 100%.

The hourly rate win or lose brigade are taking 0% of the client’s risk.

In any event this has only occurred because Parliament has abolished recoverability of after-the-event insurance premiums; such insurance of course covered own disbursements and paid its own premium thus ensuring that for a no win no fee client it was just that.

How about this for a totally inaccurate statement of the law; upon which much of the Ombudman’s report is based:

“if the cases loses, they [no win no fee lawyers] are left responsible for the other side’s costs as well as their own”.

No we are not! Wrong.  End of.  Two Court of Appeal decisions are relevant.

In Flatman and German v Weddall and Barchester Health Care Limited [2013] EWCA Civ 278

 the Court of Appeal held that solicitors who help their clients by funding the cost of disbursements should not be liable for costs if the case fails even if no After-the-Event insurance is in place.

Of course the assumed starting point was that we were not allowed to fund such disbursements without risking a costs order; that is why many claimant lawyers felt they had to charge clients disbursements even in the event of defeat, the practise that the Ombudsman so deplores.

The Law Society intervened successfully, on behalf of solicitors, to allow us to pay our clients’ disbursements.  Yes,  Mr Ombudsman, as a profession we went to court to get an order that we could pay our clients’ disbursements.  Can’t quite see that in your report.  Must have missed it.  Please tell us where it is.

In Heron v TNT (UK) Limited and Mackrell Turner Garrett (a firm) [2013] EWCA Civ 469

 the Court of Appeal dismissed an attempt by the employers’ insurers to obtain an order for costs against solicitors who had been acting for the employee until they withdrew from the case.  The claimant had not had after-the-event insurance.  In a passage quoted with approval by the Court of Appeal the Judge at first instance had said:

“As to the suggestion [the solicitors] stood to gain a substantial financial benefit from the case (both in terms of profit costs and a success fee), this is undoubtedly true in the sense that any solicitor engaged on a CFA has an interest in the outcome of the case.  If the submission [is] that this of itself will render a solicitor liable to a [wasted costs order] or [non party costs order], it is simply contrary to the public policy that parties, and in particular, impecunious parties, should have access to justice when they do not have the means to fund litigation themselves.  There must be additional factors before an order can be appropriate”.

The Court of Appeal went on to say, at Paragraph 37:

“A solicitor is entitled to act on a CFA for an impecunious client who they know or suspect will not be able to pay own (or other side’s costs) if unsuccessful.”

 

Case Studies

 The Ombudman’s Report is illustrated by case studies.  Case studies are anecdotal; they are generally used when you do not have the evidence to back up your case.  If you have the evidence to back up your case then you use that evidence.

So here are a few conclusions from some of my case studies:

 

EVERYONE IS INNOCENT!

 Six case studies below show that all the defendants in these cases were found Not Guilty.

 

EVERYONE IS GUILTY!

 Six case studies below show that all the defendants in these cases were found Guilty.

 

Like the current Lord Chancellor, the Legal Service Ombudsman is not a lawyer.  It shows.

 

The post of Legal Service Ombudsman achieves nothing.  It is time it was scrapped.

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Written by kerryunderwood

March 24, 2014 at 10:08 am

Posted in Uncategorized

13 Responses

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  1. […] Kerry Underwood considers litigation funding in No Win No Fee and the Ombusdman: Time to go […]

  2. Dear Kerry,

    As always, a very enlightening and informative post.

    Would you mind very much if my firm (Harmans) repeated this post verbatim in our April Costs Brief Newsletter which has a very wide circulation amongst Claimant law firms.

    I share your views with regard to the unfortunate state of affairs we find ourselves in which is driven by politicians with little understanding of what the legal profession and ordinary members now face with as a result of these reforms.

    In my view your post warrants the widest circulation possible.

    Kind regards

    [cid:image001.png@01CF474C.07883F90]

    Jim Knight

    Jim Knight | Costs Lawyer | Harmans
    59 New London Road, Chelmsford, Essex, CM2 0ND.
    DX: 3302 Chelmsford
    Tel: 01245 250 101
    jim.knight@harmanscosts.com | http://www.harmanscosts.com

    [cid:image002.png@01CF474C.07883F90][cid:image003.png@01CF474C.07883F90][cid:image004.png@01CF474C.07883F90][cid:image005.png@01CF474C.07883F90]

    Jim Knight

    March 24, 2014 at 10:31 am

    • Very happy for you to do so – please just give credit as to where it came from!

      Kerry

      kerryunderwood

      March 25, 2014 at 12:46 am

  3. And breath….

    I particularly like Case Study B, where the ombudsman ordered the solicitors to “waive the other side’s costs”. I have only been in this job for 12 years, so I am relatively new. I didn’t know about the ability to “waive” one’s opponent’s costs!

    I think I shall do that on all my cases from now on!

    Of course the whole thing is part of a patchwork of pub-talk anti-solicitor mentality that appears to have permeated the Government.

    You know when someone asks what you do for a living. You say something about office work. They persist. You mention under your breath the word “solicitor”. There then follows ten minutes of “you solicitors and your private jets. I once knew a guy who was charged £35,000 to change his name by deed poll. Why do you charge for conveyancing when all you do is print off a piece of paper for signing? I got a text off you saying I had PPI, but I don’t. It said in the Daily Mail that all them barristers are going on strike ‘cos they aren’t being allowed to take a butler to court. My wife got screwed over by a solicitor who lied in court to the judge and forced the judge to award my wife’s ex half the house when it never belonged to him. etc.”

    This kind of mentality has allowed the LeO, the Legal Services Act, the SRA, the Legal Aid cuts, Mitchell-Jackson, et al to be put forward.

    You like your historical comparisons, Kerry. I was reading something the other day about how apparantly advocated were only permitted in felony trials to represent the defendant after 1730 of something. Before then, the idea was that if you were innocent, you just had to tell the truth, and the judge could ensure fairness. It seems to me that this idea is back on the ascendancy!

    Dominic Cooper

    March 24, 2014 at 10:47 am

    • But people have a very high opinion of their own lawyer- all surveys confirm that and still huge numbers of youngsters want to become lawyers. We will win, but this country is facing real danger. The parallels with Germany in the late 1920’s are obvious. I am not saying that this Government is Fascist- it is not- but it is potentially paving the way for an extremist Government by removing many if the checks that should exist on any government of any persuasion.

      That is why the Mitchell decision has caused a storm unprecedented in recent times; the Court of Appeal should have been standing up to the State, not writing and then ruling on a Statist report savaging British justice. Jackson will be a name of infamy in he history of this country.

      Kerry

      kerryunderwood

      March 25, 2014 at 12:44 am

    • Dominic

      Sorry for the long delay in getting back to you on this.

      I agree entirely with your observation that this “is part of a patchwork of pub talk anti-solicitor mentality that appears to have permeated the government”.

      This is particularly demonstrated by the dreadful ramblings of the Legal Services Consumer Panel which, among other things, is in favour of paid McKenzie friends. With paid McKenzie friends and Alternative Business Structures, one is tempted to think what is the point of carrying on as a lawyer when we are in competition with uninsured, unregulated, undisciplined people who owe no duty to the court?

      However all of the evidence is that the vast majority of clients – 90% plus on virtually every measure – are very happy with their own lawyer at all levels, approachability, cost, knowledge of the law etc. The government’s own baseline survey prior to the introduction of Alternative Business Structures demonstrated this to be the case.

      In my view that is why Alternative Business Structures have made almost no impact whatsoever in relation to legal services, and indeed a number of big names have spectacularly failed, such as Co-op Legal Services and Eddie Stobart’s lorries with barristers in.

      Talking of historical comparisons it seems to have always been the case – that is a general public moan about lawyers but a high regard for one’s own lawyer.

      As to other historical comparisons have a look at my blog “Back to the Future”.

      Kerry

      kerryunderwood

      July 23, 2014 at 12:32 pm

  4. Pls note new email address sarah.lapsley@cookandtalbot.co.uk

    Sarah Lapsley

    March 24, 2014 at 12:04 pm

    • I have come to the conclusion that this Government (and indeed UK Governments in general) no longer believe in the rule of law at all. They simply regard litigants and criminal defendants as a burden on the public purse.

      Root

      March 24, 2014 at 1:54 pm

      • I agree. Same mentality in relation to everything . Governments should be proud of spending money on justice and health and education etc.

        Kerry

        kerryunderwood

        March 25, 2014 at 12:36 am

      • well the ambulance chasers haven’t really made it any easier … dangling promises of a lot of money in front of regular folks … Its not an easy call to weed out the frauds among all these genuine claims.

        Randoll

        July 11, 2014 at 12:56 am

      • It is if a solicitor sees every client.

        kerryunderwood

        July 11, 2014 at 12:39 pm

  5. Being a member of the public who as a passing interest in the law I can confirm the legal ombudsman are rubbishy and some lawyers and some home insuriance companys butt there is hope .
    One day we will all be dead and life and those that wrote history will be remembered in short nothing will change its back to the work house era

    John fairhurst

    December 7, 2016 at 10:07 am

    • Ombudsmen are part if the abdication of responsibility by Parliament and the courts and should ll be abolished immediately.

      Kerry

      kerryunderwood

      December 7, 2016 at 10:10 am


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