Kerry Underwood

ACCEPTING A PART 36 OFFER DURING TRIAL

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I am organizing, chairing, and speaking at a Part 36 Conference in Central London on Tuesday 14 November with Ben Williams QC and David Pilling. For more information, or to book, click here.

CPR 36.11(3)(d) states that the court’s permission is required to accept a Part 36 offer once a trial is in progress.

In Houghton (Stanley) v P.B.Donoghue (Haulage & Plant Hire Ltd and Others) [2017] EWHC 1738 (CH)

the Chancery Division of the High Court refused to allow a party to accept an outstanding Part 36 offer during the trial.

During the course of litigation the Defendant had made an unwithdrawn Part 36 offer of £360,000.00.

After two days of evidence at the trial, the Claimant applied for permission to accept that Part 36 offer and the Defendant objected.

The judge said:

“I think that the philosophy exists that where a Claimant decides to take his chances with the trial and then repents of his earlier decision to turn down the offer of settlement because the trial, he thinks, is going less well or more badly than predicted, that the court will often take the view that it is not right to give permission to impose a settlement on the reluctant Defendant.”

The court here reviewed the authorities in coming to that conclusion and in particular considered the cases of:

  • Capital Bank Plc v Stickland [2005] 1 WLR 3914;

 

 

 

Although those authorities were given under earlier versions of Part 36, the principles remained the same.

Here the judge said that what he was being asked to do was to impose upon the Defendant a liability to pay £360,000.00, which he was no longer willing to do because it had asked the court to refuse permission.

The Defendant now wished to take its chances with the trial continuing, so the court is imposing a result, imposing a settlement which is not a voluntary settlement any longer.

It is clear that the rules require the court’s permission in such circumstances.

However, the Defendant’s remedy is to withdraw the offer.

In circumstances such as this, the Defendant is eating its cake and still having it, in that it can argue the case, prevent the Claimant from accepting the offer, but still get the very significant costs benefit if the Claimant fails to beat that offer.

The law needs reviewing in this area.

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Written by kerryunderwood

October 10, 2017 at 8:54 am

Posted in Uncategorized

SIGNING SOLICITORS’ BILLS

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The relevant legislation is Section 69 of the Solicitors Act 1974 and the signature requirements are dealt with in Section 69 (2A) which reads:

“(2A) a bill is signed in accordance with this subsection if it is –

(a) signed by the solicitor or on his behalf by an employee of the solicitor authorized by him to sign, or

(b) enclosed in, or accompanied by, a letter which is signed as mentioned in paragraph (a) and refers to the bill.”

 

There is no further reference to authorization and thus that is entirely an internal matter and, in my view, as a matter of common law and general construction that authorization could be retrospective.

Certainly the client does not need to be informed that that employee is authorized by the solicitor to sign bills.

Section 69 (2A)(b) goes further and states that the bill is signed in accordance with the subsection if the bill is enclosed in, or accompanied by, a letter which is signed by the solicitor or by an employee of the solicitor authorized by him to sign.

For all intents and purposes the bill can be signed by anyone.

Section 69(2)(b) also requires the bill to be delivered in accordance with Section 69(2)(C) and that section reads:

 

“(2C) a bill is delivered in accordance with this subsection –

(a) it is delivered to the party to be charged with the bill personally;

(b) it is delivered to that party by being sent to him by post to, or left for him at, his place of business, dwelling house or last known place of abode, or

(c) it is delivered to that party –

(i) by means of an electronic communications network, or

(ii) by other means but in a form nevertheless requires the use of apparatus by the recipient to render it intelligible,

and that party has indicated to the person making the delivery his willingness to accept delivery of a bill sent in the form and manner used.

 

That last part appears to me to apply to both Section 69(2C)(c) (i) and (ii) and thus there is a requirement that the recipient of the bill has indicated willingness to accept delivery by email or in any other non-personal or non-postal form.

Section 69(2D) then provides that any indication given under Section 69(2C)(c) must state the address to be used and must be accompanied by such other information that person requires for the making of the delivery and may be modified or withdrawn at any time by a notice given to that person.

Section 69(2E) creates a statutory presumption that where a bill is proved to have been delivered in compliance with the requirements of sub-sections (2A) and (2C), it is not necessary in the first instance for the solicitor to prove the contents of the bill and it is to be presumed, until the contrary is shown, to be a bill bona fide complying with the Act.

Overall that represents a major relaxation of the earlier law.

Section 69(5) provides that references to an electronic signature are to be read in accordance with Section 7(2) of the Electronic Communications Act 2000. Section 69(6) provides that “Electronic Communications Network” has the same meaning as in the Communications Act 2003.

Section 7 of the Electronic Communications Act 2000 reads as follows:

“7.          Electronic signatures and related certificates.

(1) In any legal proceedings—

(a) an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and

(b) the certification by any person of such a signature, shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.

(2) For the purposes of this section an electronic signature is so much of anything in electronic form as—

(a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and

(b) purports to be used by the individual creating it to sign.

(3) For the purposes of this section an electronic signature incorporated into or associated with a particular electronic communication or particular electronic data is certified by any person if that person (whether before or after the making of the communication) has made a statement confirming that—

(a) the signature,

(b) a means of producing, communicating or verifying the signature, or

(c)a procedure applied to the signature, is (either alone or in combination with other factors) a valid means of signing.”

The Communications Act 2003 has no fewer than 411 Sections and 19 Schedules and, happily, I do not think it necessary to make any further reference to it in this short advice.

Written by kerryunderwood

October 9, 2017 at 9:39 am

Posted in Uncategorized

EMPLOYMENT TRIBUNALS AND SIMMONS V CASTLE 10% UPLIFT

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In De Souza v Vinci Construction (UK) Limited [2017] EWCA Civ 879

the Court of Appeal held that in Employment Tribunal awards for personal injury and injury to feelings, both of those types of award attracted the 10% general damages uplift arising from the Court of Appeal’s decision in Simmons v Castle [2013] 1 ALL E.R 334.

That uplift had been intended to compensate partially Claimants for the fact that they could no longer recover the success fee from the Defendant and would generally have to pay that element of costs to their own solicitor out of damages.

The Court of Appeal in Simmons made it clear that this uplift applied even in circumstances where the client would not in fact have to pay anything out of damages, for example a legally-aided client.

Such clients would receive a windfall, but that was the price to pay for unification and consistency of general damages awards.

Generally no costs are recoverable in Employment Tribunals and so Claimants would not lose out by the loss of recoverability as there has never been recoverability in that forum.

Here, the Court of Appeal held that Section 124(6) of the Equality Act 2010 meant that the amount awarded by an Employment Tribunal for a particular head of loss must be the same as if an award for the same loss had been made in the County Court.

It would be unacceptable for compensation to be different depending upon which part of the Equality Act 2010 applied, that is whether the claim was in the Employment Tribunal or the County Court.

The Court of Appeal observed that no problem should arise in relation to damages for psychiatric injury as the Judicial College Guidelines could incorporate the uplift.

The position was different in relation to awards for injury to feelings, but the same effect could be achieved by applying the uplift to the Vento Bands set out in

Vento v Chief Constable of West Yorkshire Police [2003] IRLR 102.

Written by kerryunderwood

October 5, 2017 at 9:06 am

Posted in Uncategorized

STREAMLINED PROCEDURES

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I am currently on my Autumn Tour on the extension of fixed costs as proposed by Lord Justice Jackson and associated matters until Monday 16 October and these will be my only courses on this subject until at least September 2018.

You can book here.

All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

I have written elsewhere about the streamlined procedure in the new Intermediate Track – See THE NEW INTERMEDIATE TRACK: SCOPE AND PROCEDURE.

However, it is clear that the judiciary in England and Wales has made a deliberate policy decision strictly to limit the production of documents and skeleton arguments in virtually all cases.

The Commercial Court Pilot for claims up to £250,000.00 has a streamlined procedure and that itself reflects the Shorter Trial procedure.

Even where those special procedures do not apply, the courts are becoming increasingly critical of over-long skeleton arguments, core bundles and the “grossly excessive volume of documentation.”

This is a very welcome move and is in sharp contrast to the position in most states of the United States of America where document disclosure and inspection can cost a fortune and paralyse the judicial process.

Here are quotes from three recent decisions which give a flavour of the attitude of the courts here.

 

In ICAP Management Services Ltd v Berry & Anor [2017] EWHC 1321 (QB)

the court said:

“In advance of the hearing, I had received skeleton arguments from all three parties. Paragraph 12.3.8 of the Queen’s Bench Guide sets out the requirements for a skeleton argument. It provides that skeleton arguments should “not normally be longer than twenty pages of doubled spaced A4 paper”. Converting the skeleton arguments in this case to that format produces a skeleton argument from the claimant of 151 pages, plus 35 pages of appendices. For the first defendant the figure was 158 pages, plus eight pages of appendices; for the second defendant the figure was 51 pages, plus six pages of appendices. There was, in fact, no significant issue between the two defendants; the provision of two separate skeletons of such length making similar points was singularly unhelpful.

This was a case with a time estimate of six days including two days for pre-reading. The issue at stake was the enforcement of the terms of an employment contract for something less than three months. The overriding objective, set out in CPR 1.1(2), directs the court to ensure that cases are dealt with “justly and at proportionate cost”. That includes allotting to the case “an appropriate share of the court’s resources”. As I made clear to the parties at the commencement of this hearing, skeleton arguments of the length described above, in a case such as this, are inconsistent with that overriding objective. The skill in drafting a skeleton argument lies in the production of a concise outline of the essential elements of the argument which is to be developed orally in court.

It is evident that the authors of the skeletons in the present case were proceeding on the assumption that they could demand of the court such judicial time as they thought necessary. In that they were mistaken. The length of the written argument means that the vast bulk of such pre-reading time as was allowed had to be devoted to reading them, rather than underlying documents. In fact, in this case, the length and complexity of the written argument served to obfuscate the real issues in the case. In truth, these were not skeleton arguments at all; the arguments contained in these documents were fully fleshed out and dressed in much unnecessary finery.

I indicated at the beginning of these proceedings that I was minded to disallow a substantial part of the costs of preparing the skeleton arguments. I will, of course, hear submissions on that issue, but that remains my preliminary view.

In addition to the excessive skeleton arguments, I was presented with a grossly excessive volume of documentation. The primary bundles for use in court ran to 13 volumes. I also received a further 44 lever arch files of allegedly confidential documentation. Of the 14,000 pages of documentation in the confidential files, I was referred at the hearing to less than 100. I was also provided with six volumes of authorities.

The provision of that sort of volume of material in a four day case is absurd. It too is contrary to the overriding objective. It betrays a failure by those acting for all the parties to adopt a sensible and constructive approach to preparation. My current view, again subject to submissions at the handing down of this judgment, is that a substantial part of the costs of producing or agreeing this vast quantity of material should also be disallowed.”

 

In Network Rail Infrastructure Ltd, R (On the Application Of) v The Secretary of State for the Environment, Food And Rural Affairs [2017] EWHC 2259 (Admin)

the court said:

“I regret the need to have to make some observations on the inappropriate manner in which the claim was put before the court. I do so in order to make it plain to litigants that the practices that were followed in this case, and regrettably sometimes in others, are not acceptable. Notwithstanding the clear statement by Sullivan J (as he then was) in R (Newsmith Stainless Ltd) v Secretary of State for Environment, Transport and the Regions [2001] EWHC (Admin) 74 at paragraphs 6-10, this claim was accompanied by six volumes comprising over 2,000 pages of largely irrelevant material. The Claimant’s skeleton argument was long, diffuse and often confused. It also lacked proper cross-referencing to those pages in the bundles which were being relied upon by the Claimant. The skeleton gave little help to the court.

Shortly before the hearing the court ordered the production of a core bundle for the hearing not exceeding 250 pages. During the hearing, it was necessary to refer to only 5 or 6 pages outside that core bundle. Ultimately, as will be seen below, the claim succeeds on one rather obvious point concerned with the effect of the Grampian condition in the 2016 permission. But this had merely been alluded to in paragraph 76 and the first two lines of paragraph 77 of the skeleton. Indeed, the point was buried within the discussion of Ground 3 of the claim, a part of the Claimant’s argument to which it does not belong. Nevertheless, Mr Tim Buley, who appeared on behalf of the Defendant, acknowledged that he had appreciated that this point could be raised. He was ready to respond to it.

Certainly, for applications for statutory review or judicial review of decisions by Planning Inspectors or by the Secretary of State, including many of those cases designated as “significant” under CPR PD 54E, a core bundle of up to about 250 pages is generally sufficient to enable the parties’ legal arguments to be made. In many cases the bundle might well be smaller. Even where the challenge relates to a decision by a local planning authority, the size of the bundle need not be substantially greater in most cases.

Prolix or diffuse “grounds” and skeletons, along with excessively long bundles, impede the efficient handling of business in the Planning Court and are therefore contrary to the rationale for its establishment. Where the fault lies at the door of a claimant, other parties may incur increased costs in having to deal with such a welter of material before they can respond to the Court in a hopefully more incisive manner. Whichever party is at fault, such practices are likely to result in more time needing to be spent by the judge in pre-reading material so as to penetrate or decode the arguments being presented, the hearing may take longer, and the time needed to prepare a judgment may become extended. Consequently, a disproportionate amount of the Court’s finite resources may have to be given to a case prepared in this way and diverted from other litigants waiting for their matters to be dealt with. Such practices do not comply with the overriding objective and the duties of the parties (CPR 1.1 to 1.3). They are unacceptable.

The Court has wide case management powers to deal with such problems (see for example CPR 3.1). For example, it may consider refusing to accept excessively long skeletons or bundles, or skeletons without proper cross-referencing. It may direct the production of a core bundle or limit the length of a skeleton, so that the arguments are set out incisively and without “forensic chaff”. It is the responsibility of the parties to help the Court to understand in an efficient manner those issues which truly need to be decided and the precise points upon which each such issue turns. The principles in the CPR for dealing with the costs of litigation provide further tools by which the Court may deal with the inappropriate conduct of litigation, so that a party who incurs costs in that manner has to bear them.”

 

In Miley v Friends Life Ltd [2017] EWHC 2415 (QB)

the Queen’s Bench Division of the High Court said:

“I would wish, at this early stage, to repeat an observation I have made in earlier cases in which I have been required to consider and adjudicate on very substantial quantities of material which have, in turn, given rise to lengthy oral and written representations. The parties in this case have produced opening and closing written submissions which run to a very substantial length indeed and all of which I have read carefully. As I remarked in Laporte v The Commissioner of Police of the Metropolis [2015] 3 All E.R. 438 at paragraphs 2 and 3:

“2…Whilst paying tribute to the level of industry to which these well intentioned and articulate submissions attest I resist the temptation to try to reconcile and resolve all of the subordinate issues which have thereby been generated. As the Court of Appeal held in Customs and Excise Commissioners v A and Another [2003] Fam 55:

 

“82. A judge’s task is not easy. One does often have to spend time absorbing arguments advanced by the parties which in the event turn out not to be central to the decision-making process…

83. However, judges should bear in mind that the primary function of a first instance judgment is to find facts and identify the crucial legal points and to advance reasons for deciding them in a particular way. The longer a judgment is and the more issues with which it deals the greater the likelihood that: (i) the losing party, the Court of Appeal and any future readers of the judgment will not be able to identify the crucial matters which swayed the judge; (ii) the judgment will contain something with which the unsuccessful party can legitimately take issue and attempt to launch an appeal; (iii) citation of the judgment in future cases will lengthen the hearing of those future cases because time will be taken sorting out the precise status of the judicial observation in question; (iv) reading the judgment will occupy a considerable amount of the time of legal advisers to other parties in future cases who again will have to sort out the status of the judicial observation in question. All this adds to the cost of obtaining legal advice.

84. Our system of full judgments has many advantages but one must also be conscious of the disadvantages.”

3. I have tried to balance those advantages and disadvantages in what follows by giving reasoned decisions on those issues of fact which I consider to be central but without dealing with every peripheral issue the resolution of which would not in any event impact on my essential findings or upon the outcome of the claims.”

Those observations apply with equal force to the present case.”

Later on in the judgment the court said:

“The volume of material involved, spanning as it does a number of years, is very considerable indeed. It is in this case, as it was in Laporte, a tribute to the industry of the legal teams on each side that this large body of evidence has been subjected to such sedulous analysis in both oral and written submissions. However, there is a risk in cases such as this that too close a scrutiny of the trees risks losing sight of the wood. With each, and ever more closely observed, layer of inspection and analysis, the law of diminishing returns takes a heavier toll.

It is for this reason that I have resisted the temptation to rehearse and resolve every issue of primary fact which has arisen; concluding that the demands of both justice and clarity are best served by an analysis involving a more generic and broader textured approach. The parties can, however, remain confident that where I have not made express reference to any given issue it is because I have considered it unnecessary to resolve that issue before reaching my central and essential conclusions on the evidence as a whole.”

 

Also see:

THE NEW INTERMEDIATE TRACK: SCOPE AND PROCEDURE

FIXED COSTS PILOT

EXTENDED FIXED COSTS PILOT SCHEME

IPEC, FIXED COSTS AND REFUSAL TO TRANSFER CASE TO HIGH COURT

Written by kerryunderwood

October 4, 2017 at 8:30 am

Posted in Uncategorized

CHAMPERTY AND MAINTENANCE: A NEW CASE

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I am currently on my Autumn Tour on the extension of fixed costs as proposed by Lord Justice Jackson and associated matters until Monday 16 October and these will be my only courses on this subject until at least September 2018.

You can book here.

All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

In Casehub Ltd v Wolf Cola Ltd [2017] EWHC 1169 (Ch)

the Chancery Division of the High Court had a rare opportunity to consider the current state of the law in relation to maintenance and champerty, and pointed out that as these concepts are ones of public policy, the law must be kept under review as public policy changes.

The High Court rejected the Defendant’s submission that the Claimant company bringing claims assigned to it by purchase amounted to champerty and maintenance.

It also held that the cancellation fees in the contract between the individual consumers and the Defendant were part of the price payable under those contracts and were therefore exempt from assessment as to their fairness under the Consumer Rights Act 2015.

The Claimant is a company which builds consumer group actions online by entering into claim purchase agreements whereby it takes an assignment of consumers’ claims to recover money alleged to have been unlawfully charged by third parties.

It then aggregates the claims into a single portfolio and, once that portfolio reaches a certain threshold, brings a claim in its own name against the third party.

The Defendant sells service based to business and individuals and charges £20.00 a month for a minimum fixed term of 12 months and if a customer terminates its agreement within that term, a cancelation fee is payable amounting to the rest of the term less the 10% discount which is said to reflect the fact that the customer is paying early.

The system did not work and the customers terminated their agreement within the first month and were charged the whole sum, less the 10% discount.

One form of agreement between the claimant and the consumers was a 40% contingency fee, payable only in the event of recovery of the money and another form was a flat fee of £40.00, payable in any event with the consumers receiving everything else if recovery was achieved.

The Defendant submitted that:

(1)          the assignment is of a bare cause of action and, as such, is champertous;

(2)          the assignment is not conducive to the administration of justice;

(3)          the Claimant has taken too much in damages;

(4)          the assignment of a claim which does not exist and which may never exist is not possible; and

(5)          the Claimant has not taken an assignment of the whole of the claim.

The Claimant submitted that:

(1)          the assignment is not champertous and does not fall foul of the rule against maintenance;

(2)          the scope of the rules against champerty and maintenance is not to be extended;

(3)          public policy is in favour of upholding the assignment;

(4)          EU law requires that national rules do not interfere with the exercise of EU rights;

(5)          the rules against champerty and maintenance are inconsistent with both the assignor’s and the claimant’s right to property and thus inconsistent with Article1 of Protocol 1 of the European Convention on Human Rights (“ECHR”); and

(6)          it is not open to the defendant to invoke the law on champerty and maintenance.

The High Court then reviewed the law and cases in relation to champerty and maintenance (Paragraphs 15 to 26).

Taking into account all aspects of the claims purchase agreements between the Claimant and the individual consumers, there was no “wanton and officious meddling” by the Claimant in the dispute between the consumers and the Defendant.

The Claimant had a legitimate and genuine commercial interest in being able to pursue the restitutionary claims assigned to it, in order to protect certain liquidated sums that it had acquired under the agreement.

This is the first English and Welsh authority holding at the assignment of a restitutionary claim for money had and received is not an assignment of a bare cause of action liable to offend the rules on maintenance and champerty.

This is the case even where liability is disputed.

The High Court also held that there was strong public policy grounds in favour of upholding the assignment, including the fact that the claims were small and, arguably, not worth pursuing on their own, and therefore the assignment enhanced access to justice for the consumer.

Here, the assignment redressed the inequality of arms between the defendant and the individual customers.

The Defendant’s argument that there were alternative means of enabling the customers to pursue their claims, for example by third party financing or with “No Win, No Fee” Agreements was not logical as it did not follow from that that other alternative arrangements should be prevented.

The courts recognise the need for innovative but responsible ways for increasing access to justice for those who could not otherwise afford it.

The court also held that the Claimant was not providing legal services within the meaning of Section 13 of the Legal Services Act 2007, but rather was acting in its capacity as a litigant seeking to enforce its assigned right to recover the charges in question.

Neither did the assignment allow the Claimant to get round the rules on costs as the Claimant could be made the subject of an adverse Costs Order and could be ordered to provide security for the Defendant’s costs in circumstances where an individual customer would not be ordered to provide security.

The High Court found that a charging of a 40% fee was lawful and reasonable, although it noted that in these cases the customer had the option of paying 40% of the total sum recovered or paying a fixed fee.

The Defendant also submitted that the representative action provisions in CPR 19.6 are not available to the Claimant in circumstances where the class members have entered into separate, but identical, contracts and may have lost different, but ascertainable amounts.

CPR 19.6 reads:

Representative parties with same interest

19.6 (1) Where more than one person has the same interest in a claim –

(a) the claim may be begun; or

(b) the court may order that the claim be continued,

by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.

“.

In fact, the court held here that it was not a representative action as the Claimant is bringing one claim in its own name.

The court declined to rule on what the position would be had the Claimants been bringing these claims together through, for example, a solicitor.

The Consumer Rights Act 2015 implements the Unfair Contract Terms Directive (93/13/EEC).

The High Court was bound to follow the decision of the Supreme Court in

Office of Fair Trading v Abbey National plc and others [2009] UKSC 6

and declined to discuss whether subsequent decisions of the European Court of Justice require a different interpretation.

It will require a further case to come before the Supreme Court before there is a substantive review of the law in this field.

Comment

A welcome and sensible decision. It is about time that the concept of champerty and maintenance, along with the Indemnity Principle, finally killed off.

The decision is also interesting in that it upholds a 40% deduction from damages, which is of course precisely the sum I advise under the Underwoods Method in personal injury and other cases.

Written by kerryunderwood

September 27, 2017 at 10:30 am

Posted in Uncategorized

PERSONAL INJURY: SEEING CLIENT, FIXED COSTS, SCOPE OF RETAINER, STIRRING UP CLAIMS

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I am currently on my Autumn Tour on the extension of fixed costs as proposed by Lord Justice Jackson and associated matters until Monday 16 October and these will be my only courses on this subject until at least September 2018.

You can book here.

All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

In Thomas v Hugh James Ford Simey Solicitors [2017] EWCA Civ 1303

the Court of Appeal upheld a first instance decision dismissing the claimant’s allegation of professional negligence in relation to under-claiming damages in a Vibration White Finger claim.

The point of principle identified by the Court of Appeal was whether solicitors acting in a high volume, Fixed Costs Scheme for low value personal injury cases, are under a duty to advise about Heads of Claim which the client has said he does not wish to pursue and for which he says that he cannot provide supporting evidence.

Fairly obviously the answer is “No” and that must be the case in those circumstances, even in a non-fixed costs high value claim.

However the case is noteworthy for a number of observations made by the Court of Appeal.

The Court specifically mentioned the fact that the solicitors met the client and it sets out the time spent – see paragraphs 13 and 17.

Indeed it was this fact that enabled the Court of Appeal to distinguish the cases of

Raleys Solicitors v Barnaby [2014] EWCA Civ 686; and

Procter v Raleys Solicitors [2015] EWCA Civ 400.

The Court of Appeal said:

“But those two authorities are a far cry from the present case. In both Barnaby and Procter the solicitors’ treatment of the case was perfunctory. In neither of those cases did the solicitors even trouble to meet their client.” (Paragraph 44).

“In the present case, unlike Barnaby and Procter, the defendant solicitors did take the trouble to meet their client. Indeed, Ms Kinsey had two separate meetings with the claimant.” (Paragraph 47).

The Court of Appeal was also highly critical of the new firm of solicitors Mellor Hargreaves, now in administration, for giving the Claimant information which “bred a sense of grievance such that he is prepared to advance incorrect assertions”.

“The civil justice system exists to enable injured parties to recover compensation for genuine wrongs. It does not exist to service artificial claims stirred up by advertisements.” (Paragraph 52).

“What is regrettable, however, is that a second firm of solicitors then recruited the claimant to bring an action against the first solicitors in order to ‘top up’ his award. The information given to the claimant by the second firm of solicitors “turned his head” so that he was “prepared to advance incorrect assertions.” (Finding (ii)) (Paragraph 51).

The reference to the solicitors recruiting the client, rather than the client instructing the solicitors is interesting and significant, reflecting the inversion, many would say perversion, of the traditional position.

The decision is also significant for its recognition of the reality of low value fixed costs claims. It should be emphasised that this was not a CPR 45.29 fixed costs claim, but rather a claim under the Claim Handling Arrangement set up by the Department of Trade and Industry in relation to Vibration White Finger claims.

The Claimant solicitors received just £607.00.

At paragraph 46 the Court of Appeal said:

“46. This court has, therefore, already recognised the need to adopt a realistic standard when assessing the performance of solicitors conducting litigation under a high volume, low cost commoditised scheme. Such schemes may be the only practicable way of facilitating access to justice in such cases at proportionate costs. Therefore, no-one should belittle those schemes. The solicitors must still exercise reasonable skill and care in advising clients and pursuing claims. But the solicitors cannot be expected to turn over every stone and to pursue avenues of enquiry which the client has closed down.”

Scope of retainer

The Court of Appeal held that an adult of full capacity has autonomy over her or his case and that a solicitor is “not necessarily under a duty to challenge the decision or to try to change the client’s mind.”

The Court of Appeal reviewed the law and said:

“33. It is axiomatic that the contract of retainer defines the scope of a solicitor’s duties. There are many reported cases on the question how far the solicitor should go beyond the strict confines of his retainer. Both counsel in their supplemental skeleton arguments (lodged on the day after the appeal) helpfully cited examples and I bear those examples in mind. The Court of Appeal reviewed some of those authorities in Minkin v Landsberg [2015] EWCA Civ 1152: [2016] 1 WLR 1489 at [33] – [38]. Mr Pooles relies upon that passage.

  1. In the present case, the problem is the opposite of that discussed in the Minkin line of authorities. The question is not how far a solicitor should travel beyond the confines of the retainer. The question is whether the solicitor should fulfil the original retainer, in circumstances where the client has closed down one avenue of enquiry. As Henderson LJ observed during argument, the issue concerns client autonomy.”

Comment

This is a significant and welcome decision dealing with several issues and will have increased relevance as fixed costs are extended.

Firstly it recognises that physically meeting with clients is a key and distinguishing feature and, as other cases have shown, solicitors who do not meet with client will, for all intents and purposes, be subject to different and harsher standards.

My view is that the time has come to insist that a client must be physically met in every case.

That was the law in relation to Conditional Fee Agreements, and may now be again following the decision in

Vilvarajah v West London Law Limited [2017] EWHC B23 (Costs)

which I deal with in my blog NO SEE NO FEE? IS CFA VOIDABLE IF CLIENT NOT SEEN.

This would wipe out fraud overnight, largely wipe out illegal referrals, significantly cut cold calling and help re-establish the role of lawyers as professionals, and not just profit centres.

Secondly the case gives valuable guidance on the scope of a solicitor’s retainer.

Thirdly it is a kick in the teeth for those solicitors, and there are a few of them out there, whose sole contribution to the life of this country consists of stirring up largely unjustified claims against decent solicitors, either in negligence, or in trying to recover costs so that clients, being adults with full capacity, had agreed with those solicitors.

The conduct of those solicitors is often little short of blackmail.

Of course everyone has a right to bring a claim, but if it is a solicitor fuelled unmeritorious claim, then that solicitor should be hit hard with a Section 51 Wasted Costs Order.

So good news all round 🙂 .

Well done Lord Justice Jackson, whose judgment this is.

Written by kerryunderwood

September 26, 2017 at 8:56 am

Posted in Uncategorized

THE NEW INTERMEDIATE TRACK: SCOPE AND PROCEDURE

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This blog first appeared in Practical Law on 21 September.

I deal with this matter in detail in my Fixed Costs Autumn Tour starting on Monday 25 September– you can book here.

All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

This piece does not deal with the costs figures; that is for another piece.

As part of his Supplemental Report on Fixed Recoverable Costs, which will be considered by the Lord Chief Justice, Master of the Rolls and the government, Jackson LJ has proposed a new intermediate track.

This new track is a streamlined system for cases of no more than “modest complexity” valued at between £25,000 and £100,000, and lasting no more than three days at trial.

It will apply to claims that are principally for monetary relief – that is damages or debt – and will include cases where declarations are sought mainly to support the financial claim. It will not be possible to evade the scheme by including incidental claims for declarations. In exceptional circumstances a claim for non-monetary relief may be included in the track if that is necessary to provide access to justice.

Examples given in Jackson LJ’s report include individuals of modest means bringing defamation claims because of material on the internet and households seeking an injunction to restrain a private nuisance by a nearby industrial enterprise. “Modest means” is not defined and this may go no further, as means testing by the court and the need of the parties to obtain evidence is itself time consuming and expensive. It was never brought in for qualified one-way costs shifting, even though recommended by LJ Jackson.

The proposed criteria for allocating a case to the intermediate track are:

 

  • The case is not suitable for the small claims track or the fast track.

 

  • The claim is for debt, damages or other monetary relief, no higher than £100,000.

 

  • If the case is managed proportionately, the trial will not exceed three days.

 

  • No more than two expert witnesses per side giving oral evidence.

 

  • The case can be justly and proportionately managed under the new expedited procedure (see below).

 

  • There are no wider factors, such as reputation or public importance, which make the case inappropriate for this track.

 

  • Mesothelioma and other asbestos-related lung diseases are excluded.

 

  • There are particular reasons to assign a case to the track, even though it does not meet the above criteria.

 

Clinical negligence

Clinical negligence claims above £25,000 are, in principle, covered, but the report says that such claims:

“… will seldom be suitable for the Intermediate Track, unless both breach of duty and causation have been admitted at an early stage. The Multi-Track will be the normal track for clinical negligence claims above £25,000.00.” (Paragraph 3.5, page 102 of the report).

Other cases that will generally be unsuitable for the track include:

 

  • Some multi-party cases.

 

  • Actions against the police.

 

  • Child sexual abuse claims.

 

  • Intellectual property cases.

 

The complexity bands

Band 1 is likely to include quantum only personal injury claims, debt matters and simple claims where there is only one issue and the trial will take a day or less.

Bands 2 and 3 will be the normal bands “with the more straightforward cases going to into Band 2 and the more complex cases going in to Band 3.”

Band 4 will be for the most complex cases, for example a business dispute or an employers’ liability claim where there are serious issues of fact/law and the trial is likely to last three days.

A new Practice Direction will deal in detail with these matters.

Allocation to track and band

Claimants must state in the letter of claim what track and band the case should be in and the defendant must do so in the letter of response.

If the case settles before issue or allocation without agreement as to the appropriate track and band, then the judge assessing costs will decide the point.

Note that pre-action costs in an unissued case, as well as issued cases, will be subject to fixed recoverable costs.

On allocation the judge will allocate to both track and band. Either party may challenge the band, but not the track, at the subsequent case management conference. If the only reason for the case management conference is the dispute over band assignment, then the losing party on that issue pays £300 to the winner. There will be strictly limited exceptional circumstances in which a case can be removed from the intermediate track after the first case management conference, as otherwise the certainty as to costs will be lost.

It is not clear whether there will be power to move bands. It would seem sensible to be able to move down, but not up, bands, so that costs exposure could be reduced, but not increased. Thus a three day case becomes a one day case because of an admission of liability. It would make sense to move it from Band 4 to Band 1.

However one side’s costs exposure is another side’s costs recovery and so the certainty issue cuts both ways.

Procedure

Statements of case

Statements of case are to be ten pages maximum, with the court being able to order the claimant to redraft to bring it within this limit. Core documents are to be served at the same time.

Case management conference

The court will:

 

  • Review and approve a list of issues.

 

  • Resolve disputed document requests.

 

  • Consider alternative dispute resolution (ADR).

 

  • Give directions and fix a date for trial and a date for any pre-trial review.

 

  • Identify matters on which oral evidence is to be given.

 

  • Limit the number of factual witnesses using the powers contained in CPR 32.2(3).

 

  • Seek to design case management directions so as to have the trial completed in one day.

 

Disclosure 

Non-personal injury cases

CPR 31.5(3) to (8) shall not apply. Each party shall disclose:

  • The documents upon which it relies.

 

  • Any other documents or classes of documents ordered by the court at the case management conference.

The parties shall exchange document requests at least seven days before the case management conference.

Personal injury cases

There is no change in personal injury cases. Standard disclosure remains as now.

Factual evidence

Written witness statements are to stand as evidence-in-chief, with the witness statements for all witnesses of a party limited to 30 pages, so a maximum of 60 pages for both parties.

Expert evidence

Oral expert evidence is limited to two witnesses per party, but the court should aim to have only one per party. Each expert’s report is limited to 20 pages plus photographs, plans, and academic and technical articles.

Trial

The court will set time limits for oral evidence and submissions.

Applications

In so far as possible, all applications should be made at the case management conference and after that:

  • All applications and documents filed in support must be concise.

 

  • The respondent must answer in writing within seven days of service of the application notice. The response must be concise.

 

  • Any reply from the applicant must be provided within two business days of service of the response and be concise.

 

  • The court will deal with an application without a hearing unless it considers it necessary to hold them. The hearing may be by telephone.

 

  • The court will decide who shall pay the costs of any interim application and summarily assess them and such costs orders will be in addition to fixed recoverable costs.

 

Hand down of judgment

If judgment is reserved then there needs to be a separate hand down hearing, but the parties or advocates will not need to attend if all consequential matters have been agreed.

Written by kerryunderwood

September 21, 2017 at 3:18 pm

Posted in Uncategorized

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