Kerry Underwood

Archive for December 2017

ATE: ROUNDUP OF LATEST CASES

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This blog first appeared on the Practical Law Dispute Resolution Blog on 14 December.

In Percy v Anderson-Young [2017] EWHC 2712 (QB)

the Queen’s Bench Division of the High Court allowed recovery of an After the Event insurance premium of £533,017.13, overturning the District Judge’s decision to cut it to £82,513.07.

The District Judge had taken into account the extent of the additional cover, the amount of the premium and the late stage at which the cover was increased.

While considering it reasonable to take out the extra cover, the DJ held that the premium should have been structured so that the increase only incurred after mediation.

On appeal the High Court distinguished cases where a judge thought the level of cover was too high from the position here, where the judge found the underwriting decision to be flawed.

In cases of over-insurance the court could reduce the premium proportionately to reflect the appropriate level of cover, on a broad brush basis as in

Rogers v Merthyr Tydfil [2006] EWCA 1134.

However the DJ should not have used a broad brush approach to claim that he was better placed than the underwriter to identify the financial risk which the insurer faced.

Furthermore it was wrong to reduce the premium to such an extent without hearing expert evidence.

There was no evidence here that the underwriting risk was misjudged and therefore the High Court found that the premium was proportionate.

Due to the way the policy had been structured the Defendant had had no opportunity to settle before the final stage premium was reached but the court said that a Defendant who settles late must know that he is taking that risk and an experienced Defendant, as here – an insurance company – will know that a Claimant is likely to have taken out additional ATE insurance.

The High Court said that the District Judge having decided that it was reasonable for the Claimant to have increased cover, should not then have criticized him for taking it out at that late stage.

The true issue then was the reasonableness of the amount and that was a separate and freestanding question.

The facts of this decision are complex and the full judgment needs to be read for those, but the message is that it is difficult to challenge the reasonableness of ATE premiums and that judges should not second guess decisions of underwriters, at least without hearing expert evidence.

The court also said that the so called “silver bullet” schemes whereby the premium insures itself is lawful:

“… I should state that it is clear that it is wholly permissible to insure the premium so that it is not payable by the Claimant in the event that the case is lost,…” (Paragraph 55).

 

SECURITY FOR COSTS

In Premier Motorauctions Ltd (in liquidation) (1) & Premier Motorauctions (2) v Pricewaterhousecoopers LLP & Lloyds Bank PLC (2) [2017] EWCA Civ 1872

the Court of Appeal considered the extent to which the existence of After the Event insurance is relevant when the court is considering an application for security for costs sought by the Defendants in a claim brought by an insolvent company in liquidation.

Once a court is satisfied that a company is insolvent, then it has jurisdiction to order security for costs providing that ordering security does not stifle the claim, and it will normally be appropriate to order security for costs, whether or not there is After the Event insurance in place.

Nevertheless an appropriately framed ATE insurance policy “can in theory be an answer to an application for security.”

The Court of Appeal rejected the submissions on behalf of those seeking security to the effect that ATE insurance is not to be considered at all and said that it is necessary to consider whether the particular ATE insurance in any given case gives the Defendants sufficient protection.

On the facts of this case, the Court of Appeal held that the ATE policy did not give sufficient protection, and therefore ordered security for costs.

The judgment considers the case law on the interplay between security for costs orders and ATE insurance, but holds that it will always be a fact sensitive issue, largely depending upon the terms of the particular ATE policy.

 

ATE INSURERS HAVE NO LIEN OVER SUMS RECOVERED BY THEIR INSURED

 In Glasgow (Bankruptcy Trustee of Harlequin Property Svg Ltd) v ELS Law Ltd and others [2017] EWHC 3004 (Ch)

the High Court rejected claims by ATE insurers for security, including liens, over sums recovered by their now insolvent  insured in its successful litigation against professional advisors.

The insurers argued that they had a claim by way of a lien in respect of premiums due, because their position was similar to that of the lawyers who brought the case to trial.

In particular, without the insurance, the claimant would not have obtained judgment.

The court referred to the decision in R (Prudential plc) v Special Commissioners of Income Tax [2013] 2 AC 185 and held that the decision whether persons in the position of the insurers should be entitled to the benefit of a lien, by analogy with a solicitor’s lien, was a decision for Parliament and not the courts.

To hold otherwise would create an exception to the statutory regime for the distribution of insolvent estates contained in the Insolvency Act 1986.

In addition, the insurers’ arguments were inconsistent with a Priorities Agreement reached between the claimant, its legal team, insurers and relevant funders, whereby the insurers did not have a right of priority to the relevant sums in respect of their claims to premium.

The principle in R v Condon, ex p James [1874-80] All ER Rep 388 ,that, in certain circumstances, the court has a discretionary jurisdiction to disregard a legal right of a trustee in bankruptcy administering an estate, did not apply because the bankruptcy trustee here was not an officer of the English court.

To minimise their exposure, ATE insurers if agreeing to defer payment, should ensure that any agreement regulating the rights of recovery confers on them an enforceable right to priority in respect of the premium.

The court was reluctant to put insurers in a better position than they had bargained for as they had contracted for unsecured rights only.

PREMIUM RECOVERABLE WHEN INCURRED AT OUTSET

In Peterborough & Stamford Hospitals NHS Trust v McMenemy & Others [2017] EWCA Civ 1941

the Court of Appeal held that in clinical negligence cases, where recoverability is still allowed to a limited extent, claimants can take out ATE insurance immediately a case commences and  recover the premium.

The recoverable element in  policies taken out on or after 1 April 2013 is in relation to the cost of the Claimant’s own expert reports.

Here the claimants took out insurance immediately solicitors were instructed and both cases were settled before proceedings were issued and before any expert report was commissioned.

The premium in each case was around £5,000.00.

The Court of Appeal said that it was known that such policies were taken out at the same time as clients entered into Conditional Fee Agreements with their solicitors, generally very early on in the case, and, when restricting , but not abolishing, recoverability in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, Parliament had chosen “not to disturb that practice”.

Echoing the views of the High Court in Percy v Anderson the Court of Appeal said that it was not for judges to second guess the insurance market and judges should not deconstruct an ATE policy that is offered as part of a package to firms of solicitors.

The Court of Appeal also said that it was unfortunate that the Civil Procedure Rules Committee had decided that there was no need for rules or Practice Directions dealing with the recovery of ATE premiums in clinical negligence cases.

The Court of Appeal asked the committee to reconsider this issue.

It also held that the new proportionality test applies to this type of premium, that is the post-April 2013 limited recoverability premiums.

Recovery of such premiums engaged the Civil Procedure Rules in relation to matters such as proportionality, and the fact that the CPR made no mention of this type of premium and its recoverability was irrelevant.

Once a costs order was made, then the assessment of costs, including the ATE premium, is subject to the Civil Procedure Rules.

As in Percy v Anderson, the Court of Appeal approved the silver bullet concept of the insurance premium insuring itself if the case was lost, meaning that the Claimant in a losing case never had to pay the premium.

This case confirms the point that it is very difficult for a paying party to challenge After the Event insurance premiums.

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Written by kerryunderwood

December 15, 2017 at 9:46 am

Posted in Uncategorized

QOCS, MULTIPLE DEFENDANTS AND SET-OFF

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In Bowman v (1) Norfran Aluminium Limited (2) RM Easedale & Co Limited (3) Norfran Limited, unreported

a Claimant discontinued against one Defendant, having discovered that it had never employed her.

The Claimant succeeded against other Defendants.

The successful Defendant argued that it was entitled to have the costs order in its favour set-off against the damages that the Claimant recovered from the other Defendants.

HHJ Freedman said that CPR 38.6 applied and therefore a costs order should be made against the discontinuing Claimant in favour of the successful Defendant in the usual way.

However, QOCS applied and the judge held that a successful Defendant was not entitled to a set-off of its costs against damages paid by other parties, and thus was unable to enforce the order.

CPR 44.14(1) allowed a set-off of costs against damages, as well as costs, but the concept of set-off involved a mutuality of liabilities where there were cross-claims between a paying party and a receiving party.

There could not be set-off in favour of a party which was due to receive money, but not pay it.

Had it been the intention of the Civil Procedure Rules that a successful Defendant could enforce its costs order against damages paid by another Defendant, then they would have said so.

Written by kerryunderwood

December 14, 2017 at 9:08 am

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CONTRA PROFERENTEM AND INSOLVENCY EXCLUSION IN PROFESSIONAL INDEMNITY INSURANCE POLICY

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In Crowden & Another v QBE Insurance (Europe) Ltd [2017] EWHC 2597 (Comm)

the London Circuit Commercial Court held that a liability insurer was entitled to summary judgment against the third party Claimants who had commenced proceedings against it under the Third Parties (Rights Against Insurers) Act 1930.

The court held that a third party, standing in the shoes of an insolvent insured, had no real prospect of succeeding in an argument that the claim of the insolvent insured person fell outside the insolvency exclusion contained in the professional indemnity policy.

The decision casts further doubt on the contra proferentem rule in insurance exclusion clauses.

The application of the rule to such clauses was called into question by the Supreme Court in

Impact Funding Solutions Ltd v Barrington Support Services Ltd [2016] UKSC 57.

Here the court said:

“60. However, I am not aware of any authority where the Canada Steamship line of authority has been applied to an insurance contract. Nor was Mr Lilly able to identify any such authority. I suspect that this is for good reason, because these authorities are concerned with contractual attempts to exclude, restrict or limit primary liability which a party in breach of contract or guilty of tortious conduct would otherwise bear. The position in respect of insurance contracts is wholly distinguishable in that an exclusion clause in an insurance policy is not designed to exclude, restrict or limit a primary liability on the part of the insurer; instead, it is intended to define the risk which the insurer is prepared to accept by way of the insurance contract. Further, the exclusion clause in an insurance policy does not ordinarily operate to deprive the insured of rights which existed prior to or but for the cover afforded by the Policy.”

In that case, the Supreme Court held that the doctrine of contra proferentem related to exclusions which aimed to exclude or limit liability arising by operation of law, such as liability for negligence.

However, insurance exclusions are intended to define the risk which the insurer is prepared to accept.

Nevertheless, the narrow approach, that is applying the contra proferentem rule, may be appropriate where the clause, properly construed in the context of the particular insurance contract, is in fact an exclusion because it aims to limit or exclude the cover that the insurer intended to provide.

Thus there should be no automatic application of the contra proferentem doctrine.

Written by kerryunderwood

December 13, 2017 at 11:20 am

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PERMISSION TO APPEAL REFUSED WHERE ACADEMIC SAVE AS TO PREVIOUS COSTS ORDERS

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In Christodoulides v Marcou [2017] EWHC 2691 (Ch)

the High Court has refused permission to appeal a decision where the appeal was limited to an academic question and the only possible effect of the outcome of the appeal was in relation to previous costs orders.

The appellant brought proceedings against her sister, seeking to set aside a transfer by their mother to the appellant of the mother’s share in a property.

The parties accepted that the ultimate position as to the beneficial interests in the property would not be affected by the proceedings, because the mother’s Will had been held to be invalid in separate proceedings, and therefore the 50% share would be transferred to the parties in equal shares, either under the transfer or on due administration of the estate.

In refusing permission to appeal the first instance decision that the transfer was valid, the court set out the following principles:

  • the fact that an appellant’s success on an issue raised on appeal (which, on its own, has become academic) could lead to previous costs orders being revisited, may persuade the court that the appeal, as a whole, is not academic;

 

  • in such cases, the court must consider how certain it is that the success of the appeal will improve the appellant’s previous position on costs. The more uncertainty there is, the less likely it is that the court will entertain the appeal;

 

  • where the only possible effect of the outcome is in relation to previous costs orders, the court will be very cautious before allowing the appeal to proceed.

On the facts, taking into account the possible outcomes of the appeal and the different ways in which it might be dismissed, the court concluded that the appeal did not have a real prospect of success.

In addition, given that the only possible effect of a successful appeal was in relation to the previous costs orders, and in view of the caution to be exercised in such cases, the court held that it was not a case in which permission should be granted.

Written by kerryunderwood

December 12, 2017 at 9:46 am

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CIVIL PROCEDURE RULES: 93rd UPDATE

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In force: 22 November 2017 – can be accessed here

Costs Management

Paragraph 7.2 of Practice Direction 3E is amended to provide that for the purposes of calculating the recoverable costs for initially completing Precedent H, and for all other recoverable costs involved in the budgeting and costs management process, incurred costs, as agreed or allowed on assessment, should be taken into account, as well as the agreed or approved budgeted costs.

The costs of initially completing Precedent H are capped at the higher of £1,000.00 or 1% of the total incurred and budgeted costs.

In relation to all other costs of budgeting and costs management, the costs are capped at 2% of the incurred and budgeted costs.

Expert evidence

New paragraphs 11.1 to 11.3 in Practice Direction 35 expressly allow the court to order expert evidence to be given in “any appropriate manner”, including so called “hot-tubbing” where expert evidence is given concurrently.

The procedure for evidence to be given concurrently is set out in paragraph 11.4 of the Practice Direction.

Paragraph 11.2 specifically allows expert evidence to be given on an issue by issue basis, that is with each party calling its experts to give evidence on a particular issue, followed by the other parties calling their experts to give evidence on that issue and so on.

The Financial Markets Test Case Pilot Scheme

The Pilot Scheme has been extended for three years until 30 September 2020.

The scheme applies to a claim started in the Financial List and which raises issues of general importance in relation to which immediately relevant authoritative English law guidance is needed.

It is dealt with in Practice Direction 51M.

The Electronic Working Pilot Scheme

This is governed by Practice Direction 51O and is extended until 6 April 2018, but with many amendments.

Paragraph 2.2 provides that, with effect from 1 October 2017, electronic working must be used by legally represented parties to start and/or continue “any relevant claims or applications”, and may be used by litigants in person, in the Rolls Building jurisdiction.

Guidance is added in relation to filing confidential documents, the procedure when there are errors of procedure in using E-filing, payment provisions, calculation of time periods and clarification of the procedure in insolvency proceedings and amendments to reflect that the Insolvency Rules 1986 have been replaced by the Insolvency (England and Wales) Rules 2016 (SI 2016/0124).

The size of documents that may be filed has been increased from 10 megabytes to 50 megabytes.

Appeals 

Practice Direction 52A is amended to provide details of the relevant appeal centres for appeals in the County Court and High Court and to set out the procedure for transfers between appeal centres.

Paragraph 4.A1 defines the categories of Judge allowed to hear appeals from specified jurisdictions and sets out which appeals will be allocated to which categories of Judge.

It is complicated and technical, but, for example, in relation to appeals from Masters, applications for permission to appeal must be heard by a Group A Judge, but the substantive appeal may be heard by a Group A Judge or a Group B Judge.

A Group A Judge is a High Court Judge or a person authorised under paragraphs (1), (2) or (4) of the Table in Section 9 (1) of the Senior Courts Act 1981 to act as a Judge of the High Court.

A Group B Judge is any person who is not a Group A Judge but who is authorised under Section 9 of the Senior Courts Act 1981 to act as a Judge of the High Court.

Comment

The Practice Direction dealing with the categories of Judge and their definitions and the allocation of appeals is considerably longer than the full Civil Procedure Rules and Practice Direction dealing with the whole concept and procedure in relation to Qualified One-Way Costs Shifting.

Nero, fiddling and Rome burning come to mind.

Written by kerryunderwood

December 11, 2017 at 7:19 am

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PRE-JACKSON CFA SUCCESS FEE ALWAYS RECOVERABLE – BUDANA CONSIDERED

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In Budana v The Leeds Teaching Hospitals NHS Trust and The Law Society (Intervener) [2017] EWHC Civ 1980

the Court of Appeal in a 42 page and long awaited judgment, has ruled that a success fee in a pre-Jackson Conditional Fee Agreement remains recoverable if the CFA is assigned or novated, whatever the circumstances.

The background to this decision is that the 13 year regime of recoverability of success fees and After-the-Event insurance premiums ended on 31 March 2013, as a result of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, itself implementing some of Lord Justice Jackson’s Reforms.

The transitional provisions meant that the success fee remained recoverable if the CFA was “entered into before [1 April 2013]” (Section 44 (6)) and that month saw lawyers do little else but sign Conditional Fee Agreements.

What was not clear, until this judgment, was the position when the pre-Jackson case continued, but there was a change of law firm on or after Jackson Day, that is 1 April 2013.

This could occur in a number of ways, including:

(i)         the client going to a new firm because the lawyer had moved there – the Jenkins scenario;

(ii)        the client changing firms, but not because the lawyer had moved;

(ii)        the original firm ceasing to do that type of work, either through choice or closing down;

(iv)      the structure of the firm changing, for example from a partnership to a limited liability   partnership, or limited company;

(v)       the nature of the firm changing, for example from a law firm to an Alternative Business Structure;

(vi)      the commercial purchase of claims and clients by one firm from another.

 

The only one of these situations in which the parties could be confident that there was a valid assignment was where the client had followed his or her solicitor to the new firm – the Jenkins scenario (i) above.

That followed the decision in

Jenkins v Young Bros Transport Ltd [2006] EWHC 151 (QB)

where the client had three consecutive law firms because the solicitor had moved from the original Firm 1 to Firm 2 and Firm 3.

In a controversial decision, often thought to be wrong, it was held in Jenkins that as assignment in such cases preserved the personal nature of the contract between solicitor and client, it formed an exception to the general rule that contracts for personal services could not be assigned.

The point in Jenkins was that by allowing assignment the court allowed the preservation of that personal relationship, which was what the rule against assignment was designed to protect.

The problem with the decision is that if there is a prohibition on assignment, then that is that and the fact that it would allow the client to instruct the same personal solicitor was irrelevant.

The traditional view has been that a contract for the provision of legal advice is a contract for personal services, although the Court of Appeal cast doubt on that here in the context of modern personal injury practice.

As we shall see later, the Court of Appeal, by a majority decision on that point, rejected the reasoning in Jenkins, while arriving at the same conclusion.

The minority judgement upheld the reasoning in Jenkins.

Novation

Lurking in the shadows of assignment has been the concept of novation , that is the creation of a new contract.

Assignment and novation have always been held to be mutually exclusive; if there was a new contract then the old one was not assigned, but was replaced by that new contract.

For what it is worth I have never begun to understand the case law on benefits and burdens,  which seems to me hopelessly mixed up, illogical and incomprehensible and reliant on circular arguments.

Although the Court of Appeal does not quite use those words in this judgment, that is the essence of it.

If there is a new party to a contract, that surely must a novation, whether or not the original contract is assigned as what can be more new than a new party?

The traditional view of the law is that one change of a semicolon in a contract amounts to a novation destroying the original contract, but a completely new party, or both parties, to the same contract was not a new contract at all, but simply an assignment.

It puts one in mind of the old joke, famously used by Trigger in Only Fools and Horses:

I have had this same broom for 20 years. It has had 18 new brushes and 16 new handles, but it is the same broom.”

 

Indeed the whole basis of the Jenkins exception was that in reality there was no new party, that is the solicitor and the client were the same, so in effect there was not really an assignment.

In a radical move the Court of Appeal has swept away, in the context of CFAs, the relevance of the distinction between assignment and novation.

 

The facts of this case are that the original firm decided to stop doing personal injury work on the ground that it would no longer be profitable following the Jackson Reform.

As the whole point of this case was that the original CFA had a recoverable success fee, one may doubt the legitimacy of that statement, something which may have influenced the original judge who held that the CFA had been terminated and thus was incapable of assignment.

This case came within scenario (vi) above, that is the commercial purchase of claims and clients by one firm from another, which is unquestionably the least attractive of all of the scenarios and something which very many people find distasteful.

The first instance judge held that if the retainer had not been terminated, then the CFA was capable of assignment, even though not within the Jenkins exception as maintaining a contract for personal skills.

 

There can be no doubt that as the Court of Appeal has allowed continuing recoverability in this least attractive of the scenarios, all lawful pre-Jackson CFAs, whether the subjects of transfer, assignment, novation, change of structure of the firm etc. have recoverability preserved.

 

The judgment contains a long, and to me frankly incomprehensible, debate about burdens and benefits, but the tone of this judgment is typified by the heading above paragraph 30

 

The economic environment in which personal injury litigation is conducted today

 

 and the opening line of paragraph 30:

 

 In my judgment, the issues which fall for determination in this case have to be approached with an appreciation of the economic environment in which personal injury litigation is conducted today.”

  

Paragraphs 30 to 36 set out, in less than flattering terms, the consequences of government policy in the personal injury field over the last 20 years.

 

Facts

 On the facts of the case the Court of Appeal held that the District Judge had erred in law in finding that the original contract had been terminated as it is trite law that a repudiatory breach by one party cannot terminate the contract.

Rather, the innocent party may elect between termination and affirmation of the contract, and unless and until the innocent party terminates the contract, it continues in existence.

Thus the Claimant’s appeal against the District Judge is finding on that point succeeded.

The importance of the decision is in the rejection of the Defendant’s cross appeal against that part of the District Judge’s decision holding that, in the absence of termination, a Conditional Fee Agreement could be assigned, even though outwith the Jenkins exception.

The court held that “there is no reason in principle why rights and benefits under a firm of solicitors’ contracts with its clients, or its books of business, should not be capable of assignment in today’s business environment …”

and that the question of assignability of rights and benefits is not limited to a situation where the client’s solicitor moves to a different firm – The Jenkins scenario – or where there are technical, effectively internal, assignments to a successor firm, as in

Plevin v Paragon Personal Finance Limited [2017] UKSC 23

It would include situations such as the present, where a third party firm buys an existing firm’s goodwill and work in progress.

The Court of Appeal also suggested that in the current personal injury environment a solicitor – client contract is not necessarily a personal contract:

“What the client wants is representation by a competent practitioner and not necessarily representation by a specific individual (whom he or she may probably never meet).”

(Paragraph 47)

The law

Nevertheless client consent is always needed (paragraph 48) and the Court of Appeal had to consider whether consent inevitably means novation.

The court then set out the facts and findings in Plevin, which involved an After-the-Event insurance premium and, while accepting that that decision was not binding authority to the effect that rights under a CFA were assignable, held that it supported three important propositions relevant to the determination of the present case:

(i)        that as a matter of law rights and benefits  under a CFA together with the benefits of any accompanying retainer are capable of assignment, notwithstanding the fact that a client may place trust and confidence in a solicitor;

(ii)        that an original CFA can remain in existence, as a contract valid as the date of creation, notwithstanding its transfer as between  successive firms of solicitors;

(ii)        that even if a client subsequently consents to such a transfer, as Mrs Plevin did, nonetheless     the client’s original CFA remains in existence as a contract valid as its original date.

 

The Court of Appeal then delivered, by a majority, a rejection of the logic of the Jenkins decision – see paragraphs 62 and 63.

The Court of Appeal held that the client here had entered into a new contract with the second set of solicitors on 10 April 2013, that is after Jackson Day.

It was a novation.

The Court of Appeal quoted to its own decision in

Essar Steel Limited v Argo Fund Limited [2006] EWCA Civ 241:

“In English law a distinguishing feature of novation from assignment is that the effect of novation is not to assign or transfer a right or liability but to extinguish the original contract and replace it with another.”

The Court of Appeal then said:

“70. However, in my judgment the fact that there was a new contract does not mean that, for the purposes of section 44(6) of LASPO, the success fee payable by the claimant to NH ,  [the new solicitors] as a result of the contractual arrangements, did not qualify as “a success fee payable by …. [the claimant] under a conditional fee agreement entered into before” 1 April 2013.”

Thus the Court of Appeal held that the transitional provisions in LASPO apply whether there is an assignment or novation to preserve recoverability provided always that the original CFA was entered into before 1 April 2013.

The court said that the modern approach to statutory interpretation takes into account the apparent policy of the legislation and that here was to preserve rights and expectations arising from the previous law.

That purpose would be defeated by “an over technical application of the doctrine of novation so as to prevent any litigant, who had begun a claim under a CFA prior to 1 April 2013, from recovering costs in respect of a success fee, simply because a novation had occurred as a result of a change in the constitution of the firm of solicitors acting for her, or as a result of conduct of her claim case being transferred, for whatever reason, to a new firm of solicitors. Obviously, whether or not any relevant CFA under which the success fee was payable to a new firm could be characterised, as in the present case, as “payable under a conditional fee agreement entered into before” 1 April 2013, would depend on the precise terms of the relevant contractual arrangements entered into between the parties and whether the new firm was indeed intended to operate “under” the terms of the previous CFA. But where, as here, the parties expressly provide by their contractual arrangements that their vested rights and expectations, under the previous CFA entered into under the previous law, should be continued, I see no difficulty in construing section 44 to give effect to that intention. “  (Paragraph 74)

“As Mr Holland QC, on behalf of the Law Society, submitted, such a construction was necessary in order to achieve the intention expressed by Parliament: namely, a division between litigants who had instructed solicitors before LASPO came into force, whose rights and expectations would be preserved, and those who had done so post-LASPO, who would lose some of the advantages of the pre-LASPO regime but receive some mitigating benefits. The defendant’s argument would mean the worst of both worlds for the claimant: she would lose the pre-LASPO regime advantages but receive none of the mitigating benefits. This would place the claimant into a third category of litigant which Parliament had not intended to create. Indeed, whilst it is not necessary to decidethe point, the result suggested by the defendant may impede the constitutional right of access to the court for those in a similar position to the claimant”. (Paragraph 75).

Minority decision

Lord Justice Davis, concurred in the result, but for different reasons.

He held that the decision in Jenkins was correct and that there had been an assignment, and not a novation.

Nevertheless, had there been a novation, as the majority found, LJ Davis would have upheld recoverability for the reasons given by the majority, even though “any success fee”  would be payable  “under” that novated CFA which had been “entered into ” after 1 April 2013.

“Moreover, whilst that could give rise to harsh results – in this and other comparable cases – it could not necessarily be described as a wholly senseless interpretation: in that Parliament may, albeit with the risk of unintended casualties, have wanted the certainty of a bright line rule.”

LJ Davis then said that that would be too narrow an approach.

He also pointed out that any other result would deprive the Claimant of the pre-Jackson benefit of recoverability and also leave him or her without the post-Jackson benefits, presumably Qualified One-Way Costs Shifting, although the judge did not so specify.

 

Comment

A sensible, just, pragmatic, purposive decision that has adapted the common law to meet changing circumstances, which is the whole point and benefit of the common law.

As with the Supreme Court’s decision in Unison, the Court of Appeal has gone beyond what was necessary on the strict legal issues in the case to clarify what is now public policy.

It could have simply said that there was no termination and that there was a valid assignment.

It has gone much further and said that in this context it matters not what the technical legal position is – novation, assignment or something else.

The legitimate expectation of the client was that the success fee was recoverable.

It is as clear a warning as possible to insurance companies that morally bankrupt and meritless technical arguments will not be tolerated.

The government’s love-in with insurers is not shared by the courts.

Compare and contrast this decision with the fatuous and false statement this week by John Hayes MP, Minister of State, that

“Compensation claims continue to be paid quickly, fairly and easily in line with longstanding insurance practice.”

Nationalize the lot of them.

 

Written by kerryunderwood

December 6, 2017 at 4:00 pm

Posted in Uncategorized

CIVIL PROCEDURE RULES – 92nd UPDATE

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This is now in force, this can be accessed here.

Practice Direction 47: Detailed Assessment

The revised Practice Direction 47 allows bills of costs to be filed in the new electronic spreadsheet format from 1 October 2017.

Use of the new form is compulsory for bills relating to costs recoverable for work done after 6 April 2018 and applies to all Part 7 Multi-Track claims unless:

– it is a fixed costs case; or

– the receiving party is a litigant in person; or

– the court orders otherwise; or

all work was undertaken before 6 April 2018.

Where work is done both before and after 6 April 2018, a party may use an electronic bill for all work, or a paper bill for pre-6 April 2018 work and an electronic bill for work on or after 6 April 2018.

Thus, any work from 6 April 2018 onwards must be on an electronic bill.

By new  Paragraph 5.1A, whenever electronic bills are served or filed at court, they must also be served or filed in hardcopy, in a manageable paper format as shown in the PDF version of Precedent S.

At the same time, a copy of the full electronic spreadsheet version of the bill must be provided to the paying party and filed at the court by email, or other electronic means.

A model electronic bill is annexed to the Practice Direction.

Practice Direction 7

These amendments largely deal with the name changes brought about by the introduction of the Business and Property Courts.

Other Practice Directions are updated to reflect these name changes, for example Practice Direction 4 – Forms.

Practice Direction re: Business and Property Courts

The update contains the full text of the lengthy new Practice Direction relating to Business and Property Courts.

It deals with all procedural issues, including issuing proceedings, transfer of claims and what is specialist work.

Written by kerryunderwood

December 6, 2017 at 8:18 am

Posted in Uncategorized

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