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Source: http://www.lawgazette.co.uk/news/society-seeks-civil-litigation-compromise

The Law Society has joined forces with two claimant lawyer groups to offer a compromise on civil litigation reforms.

The Society, which has campaigned against the government’s changes, has agreed new proposals with the Association of Personal Injury Lawyers (APIL) and the Motor Accident Solicitors Association (MASS), which involve:

• Fixed and limited claimant lawyer success fees at a lower level, recoverable from the losing defendant;
• Claimants to fund their own after-the-event insurance premiums, either up front or from their damages;
• A workable method of qualified one-way costs shifting to ensure claimants can take on cases; and
• Putting into legislation the automatic 10% uplift in damages proposed in the Jackson reforms.

Desmond Hudson, chief executive of the Law Society, said while the Society remains opposed to reforms included in part 2 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill, it also recognises that the government is determined to review the system.

‘We have joined forces with APIL and MASS to present to the government an alternative set of proposals which address their concerns but which will cause less damage to the interests of justice,’ he added.

APIL told its members earlier this month that it had worked on a compromise plan.

The group’s president David Bott admitted it is not the ‘ideal solution’, but said the claimant community had ‘worked hard to formulate a compromise which is balanced enough to suit all parties’.

The proposals are backed by two charities that support injured people: Action against Medical Accidents (AvMA) and the Spinal Injuries Association.

A spokesman for AvMA said: ‘We expect there to be widespread support from peers of all parties when this is voted on in the Lords.’

The present proposals by the Ministry of Justice to abolish the recovery by successful claimants of the success fees on “no win no fee” libel and privacy cases and the recovery of “after the event” (ATE) insurance premiums represents a damaging and dangerous attack on access to justice for ordinary citizens of modest means.

Inevitably these reforms will irrevocably shift the balance of power to an even greater extent in favour of large media corporations (often foreign owned) as against the individual. Fewer lawyers will be able to take the risk of acting on “no win no fee” agreements. The ATE insurance market in this area of the law will disappear.

These reforms are contained in the legal aid, sentencing and punishment of offenders bill 2011, which has already had a second reading in the House of Commons and is in danger of being passed without proper scrutiny or debate. MPs may not fully appreciate the implications of these changes for their constituents, conditioned as they are by the incessant media contention that the libel and privacy laws are the plaything of undeserving celebrities and footballers.

Instead of the loser paying as now, the successful claimant will have to fund a significant proportion of his or her own costs out of any damages – and contrary to common perception damages in libel and privacy cases are generally very modest. The absence of ATE insurance will prevent most claimants from taking action against the media, unless they are willing to risk their home and face bankruptcy, in the event the case is lost. That suits the tabloid press, because there will be no remedy for the ordinary individual – a great saving to media corporations but at great cost and a terrible injustice to the public. Libel and privacy claims will once again become the preserve of the very rich.

These changes are being pushed through at a time when the behaviour of the tabloid press is under unprecedented scrutiny focusing on allegations of phone-hacking and the devastation caused to many individuals’ lives by privacy invasions and fabricated stories. Many are concerned that what is presented as a battle for freedom of speech is really about preserving the profits of large media organisations.

The events of the last few days have changed the landscape and matters have been reported which parts of the press would prefer to have remained buried.

With all the furore generated, parliament will be debating a number of issues in the near future, including:

â The phone hacking scandal

â Libel law reform

â Privacy law reform

â The use of so-called superinjunctions

â Civil court funding and conditional fee agreements

Of all these issues, the last (which looks the most dull) is in fact the most urgent and serious and reforms will have the most dramatic effect if parliament gets things wrong – by taking the media campaign line –and following the Jackson proposals.

For many years now, ordinary individuals have had access to the courts (free of charge, and at no cost to the state) in publication proceedings, through the use of conditional fee agreements (CFAs).

There are many examples of individuals who have benefited from using CFAs. These include:

â The parents of murdered schoolgirl Milly Dowler

â Most of the claimants in the phone-hacking litigation

â Kate and Gerry McCann

â A Muslim bus driver, falsely accused by The Sun of forcing his passengers off his bus so that he could pray and which implied that he might be a terrorist. Included grossly intrusive photographs and (online) video footage of him at prayer

â The senior social worker in the Baby P case falsely accused in The Sun newspaper in 80 articles of being “criminally negligent” with regard to her care for Baby P

â A Danish radiologist sued by US conglomerate GE Healthcare over allegations concerning one of its products

â A comprehensive school teacher, falsely accused in an internal memorandum of inappropriate contact with female pupils

â A taxi driver whose photograph appeared in The Sun newspaper, falsely depicting him as a convicted paedophile

â A charity falsely accused by the Daily Express of improper use of charitable donations

â An unemployed woman falsely accused by a regional newspaper of attempted murder

â A local councillor (disabled and on incapacity benefits) who suffered serial libel and harassment over several years by a multi-millionaire businessman who accused her of theft and corruption

â A management consultant whom a local newspaper falsely alleged had been accused of raping a child

â A junior PR worker whose privacy was grossly infringed when the Evening Standard published a photograph of and named her, wrongly stating that she had been raped

â An unemployed man who was the subject of false statements on ITV concerning a medical condition

â An army officer falsely accused by The Guardian of being responsible for the abuse of prisoners

â Elaine Chase, a community nurse falsely accused by The Sun of hastening the deaths of 17 terminally ill children by over-administering morphine

â A family whose son’s suicide was invasively reported in a national tabloid

â Families of soldiers killed on active service, whose phones may have been hacked at a time when they were grieving for their loss

None of these individuals would have had access to the courts before the reforms of the Access to Justice Act 1999 which encouraged the use of CFAs to relieve the state of the burden of providing legal aid funding.

Until the last week or so, the press has been getting away with claims that our privacy laws are simply made up by judges against the will of parliament and our libel laws are a joke. Recent developments mean that few now hold those views or at any rate are prepared to print them.

Recently, three costs judges in the senior court costs office commented: “…The CFA has undergone many changes and improvements since implementation. Having taken a decade for these to have been achieved, now is not the time to make radical changes which give no guarantee that access to justice at reduced cost will be delivered” and said many of Jackson’s proposals – most of which have been adopted by the MoJ were “inappropriate”.

Other opposition from the Law Society and Bar Council has been ignored by the MoJ.

CFA costs have, of course, been a big press target. A CFA enables a lawyer to conduct a case without charging their client any fees, recovering their costs from the losing party only if they are successful. According to the usual rule the loser pays, and must pay the success fee. The lawyer takes the risk (which can be substantial) that if his or her client does not win, then he or she will not be paid. This imposes a natural filter on the claims which are pursued. They tend to be cases with good merits and prospects of success.

But for CFAs many cases of media abuse (the recent phone-hacking scandal being the major and current example) would not have been exposed. Some newspapers have a habit of dragging out cases for years to deter individuals from pursuing claims, taking advantage of the vast disparity in resources between the press and the claimant. In the phone-hacking scandal it took the News of the World four years to admit the scandal was not limited to just one rogue reporter. It did so only when it was faced with overwhelming evidence obtained through civil court action largely funded by lawyers acting for clients under CFAs.

There are already strict controls on costs through the courts (as the costs judges have rightly said) and there is no justification for implementing the government’s interpretation of the Jackson costs proposals in publication cases, as these will have devastating impact on access to justice.

There is now common agreement that the Press Complaints Commission in its present form has failed, some regard it as a “toothless poodle”. It will be some time before the PCC is replaced with a body which can address any of these issues.

Lawyers acting under CFAs currently provide the only effective form of regulation against press abuses for the individual of modest means, ie for holding to account serious abuses by the press of their considerable power.

Unless and until there is proper independent press regulation in place, CFAs and the availability ofATE insurance must be preserved and the legal aid bill must be amended.

Steven Heffer is chair of Lawyers for Media Standards and head of the defamation and reputation management team at Collyer Bristow LLP

Original Article: The Guardian

Following the Jackson review of costs in England and Wales, the Scottish government has launched its own review of expenses and funding of civil litigation north of the border. This review was one of the measures recommended by Lord Gill’s Report of the Scottish Civil Courts Review, which was published in September 2009.

It began in May 2011 and will be headed up by former Sheriff Principal of Glasgow & Strathkelvin, James Taylor. It is anticipated the review will last for approximately 18 months.

The intention is that this should compare the Scottish expenses regime with those of other jurisdictions. It is anticipated that many of the issues that arose in the Jackson review will be considered. In particular, the review will consider issues in relation to the affordability of litigation, the barriers that prevent access to the courts for some, the recoverability and assessment of expenses and different models of funding litigation.

The latter topic will include discussion of contingency, speculative and conditional fees. It will also address before and after-the-event insurance plus referral fees from case management companies. At the moment several of these issues â including conditional fee arrangements â do not exist in Scotland. However, the review will also consider whether it would be advantageous to introduce them.

It will also explore the extent to which alternatives to public funding may secure appropriate access to justice. In particular it will focus on the availability or otherwise of legal aid to those involved in civil disputes.

In addition, the review will investigate the reasons why, historically, parties have chosen not to litigate in Scotland and how, going forward, modernising the expenses regime there may assist in encouraging confidence in the Scottish judicial system.

In undertaking the review, Sheriff Principal Taylor intends to consult widely. A reference group including academics, solicitors, advocates, insurers and the legal services agency has been appointed to assist in formulating recommendations.

Speaking at Simpson & Marwick’s Glasgow conference on 2 June 2011, he actively encouraged anyone with an interest or a view on any of the matters to be discussed, to contact him with their views.

Duncan Batchelor is a partner in the Edinburgh office of Simpson and Marwick

Original Article: Post

The industry has responded to the government’s reforms to ‘no win no fee’ arrangements outlined as part of the Legal Aid, Sentencing and Punishment of Offenders Bill published today.

Nigel Muers-Raby, chairman of the Consumer Justice Alliance, said: “This government is pushing through sweeping and dangerous reforms with alarming speed. The government knows full well that by publishing such a wide-ranging bill, it is the controversial sentencing aspects that will grab the headlines. However, buried in the bill, you can see that thousands of injured people will suffer as a result of what is being proposed today – the door to justice is effectively being slammed in their faces.”

David Bott, president of the Association of Personal Injury Lawyers, added: “Cutting legal aid for medical injuries at the same time as restricting ‘no win, no fee’ is a savage blow for patients whose lives may have been shattered by their injuries. Obviously, this is an enabling Bill and we still need to see the detail, but the intent behind it is clearly just as brutal as we had been led to expect.

“The drive to cut costs by forcing injured people to give up part of their compensation to pay legal fees is unfair, unjust and unwarranted. People don’t choose to be injured, but when negligence happens, the guilty party – the losing defendant – must surely be held fully to account.”

Andrew Dismore, co-ordinator at The Access to Justice Action Group, said:“The government do not care about the ability of ordinary people to enforce their rights. Their view of justice is based on the interests of big business insurance companies, not the person in the street. The winners under the government’s plans are the insurance company major shareholders, the losers are ordinary people.”

John Spencer, director of CS2 Lawyers, said: “Instead of seizing the opportunity to tackle one of the most glaring deficiencies in the personal injury market, the government has instead demonstrated a total disregard for the groundswell of calls to tackle the issue of referral fees. This is a profoundly disappointing choice which I believe undermines the entire aim of proper reform.”

Original Article: Post

Insolvency experts have warned that civil litigation funding reforms could deter small businesses from trying to reclaim debts.

Provisions in the government’s forthcoming Justice Bill will prevent successful claimants from recouping their solicitors’ success fee from losing defendants, or recovering an after-the-event insurance premium.

Opponents argue that this will leave creditors struggling to recoup losses from debtor company directors.

The Law Society has claimed the reforms will let bad debtors ‘off the hook’, while HMRC, the biggest creditor in most situations, is in talks with the Ministry of Justice to negotiate an exemption for insolvency cases.

R3, the Association of Business Recovery Professionals, said it is hopeful of persuading the government to back down from a ‘one-size-fits-all’ policy.

’When the director of a company acts improperly, stripping value out of a company prior to insolvency, creditors are often left with nothing.

‘In these circumstances, it is important that creditors should be allowed to recover both their losses and the cost of recovering those losses from the director,’ said R3 president Frances Coulson.

‘In insolvency litigation, the recoverability of success fees and after-the-event insurance premiums is a real and tangible benefit to society and the business community.’

R3 analysed 23 case studies where insolvency practitioners undertook litigation against a director or third party using a conditional fee agreement and ATE.

It found that if the government’s proposals had been in place, there would have been a £3.6m reduction in the amount recouped by creditors.

Chief executive of the Law Society Desmond Hudson said: ‘In such a difficult economic climate, and at a time when we are trying to promote entrepreneurialism in the UK, we should be asking whether the government is really sending out the right sort of signals to small businesses, for which payment of legal fees just to get what they are owed could mean bankruptcy.’

The Ministry of Justice is currently considering the impact on creditors of abolishing CFAs.

It claims reform of ‘no win, no fee’ cases will save businesses millions of pounds in expensive and unnecessary litigation.

Original Article: Law Society Gazette

Campaign groups have pleaded with the government to climb down over ‘no fee, no fee’ changes after publishing new research.

A survey of recent claimants using the conditional fee arrangement (CFA) found that more half of respondents had an income below the national average of £25,000.

Nearly half of the cases involving CFAs had a compensation value below £5,000, with almost three-quarters winning a payout of up to £10,000.

The Access to Justice Group (AJAG) and Association of Personal Injury Lawyers (APIL), who jointly commissioned the research, say ‘huge numbers’ of the three million claimants in the last five years would have lost their right to compensation under government proposals.

The Ministry of Justice wants an overhaul of the civil justice system amidst fears of what it describes as a ‘compensation culture and an unwieldy justice system’.

AJAG co-ordinator Andrew Dismore said: ’The government must think again and not give in to the special pleading of the fat cat multinational insurance companies, who are the sole beneficiaries of their plans.

‘They will save millions of pounds at the expense of ordinary people who have been hurt on the roads or at work. The government’s plans are Draconian and will end access to justice for the less well off.

‘The system we have now works well and has huge satisfaction rates from those who use it.’

Both groups say they will ‘redouble efforts’ to fight proposals before they are formally debated in Parliament this summer.

The Ministry of Justice wants to raise the small claims limit and abolish the recoverability of success fees and associated costs in ‘no win no fee’ claims.

Claimants will have to pay their lawyer’s success fee, rather than the additional cost being charged to defendants, a move which opponents claim will restrict some people’s access to justice if they have been injured.

Original Article: Law Society Gazette

ATE Insurance protects the claimant on No Win, No Fee agreements (CFA’s) Case Funding are providers of ATE Insurance

The apparent banning of Marmite from Denmark’s supermarket shelves was a golden opportunity for marketing chiefs.

I’m pretty certain the reverberations of losing a few Krone will be more than offset by the presence of the Marmite brand in every news outlet for the last couple of days.

Start a Google search with ‘Denmark’ and Marmite is the second option down: apparently more people are interested in this innocuous story than, say, the weather in Copenhagen or how to fly to Legoland.

Even I’m falling for it here, having mentioned the Marmite name three times already. There, I just did it again.

Those marketing bods will be rubbing their hands in glee (once they’ve put down their Marmite-based snack presumably) as this is exactly what defines the product: love and hate.

Now for the record, I can’t stand the stuff, preferring a dollop of jam on my toast (my favourite is the Tiptree variety in case anyone from their marketing team is listening: Law Society, Chancery Lane is the address).

But put me in a room with a fan of the stuff and we’d disagree.

No middle ground, no compromise. I’m right, he’s wrong. I won’t listen to what he has to say, he’ll argue I’m an idiot. He may well be right.

You’ll find similarly polarised debate between the insurance lobby and the personal injury campaigners.

In the last two weeks I’ve felt like a floating voter in a marginal constituency, bombarded with material from both sides in a bid to win the propoganda war.

Both camps have eminently sensible arguments, at least until the counter-offer from their opponent.

Rising costs to the insurance industry cost us all dearly, whether it’s through steep car premiums or the burden on the NHS from clinical negligence claims.

The Medical Defence Union claims Conditional Fee Arrangements, the bÃte noire of the insurance brigade, have encouraged patients to chase a quick buck in recession-hit times.

The likes of the Association of Personal Injury Lawyers and the Access to Justice Action Group are a million miles away in viewpoint, saying they fight for justice for those who have suffered through no fault of their own.

They suggest that to cut the cost of litigation and compensation, the NHS needs to worry about reducing negligence before it appeals for changes to the law.

Lord Justice Jackson was the man required to wade into this sticky debate, a bit like asking a mediator to find common ground between the Thundercats and Mumm-ra.

His proposals included increasing the general damages and scrapping the referral fees, plus expecting claimants to pay towards legal fees.

But even that ruling ran into difficulty this week, with three costs judges revealed to have objected to large elements of his report.

And so the dispute rumbles on.

So what was the point in this largely incoherent rambling? Very little, to be honest, save for a shameless plea for free jam.

But I can say with completed certainty that the fight is not over, despite the coalition government accepting most of Jackson’s proposals.

The claimants’ lobby shows no signs of being silenced, whilst the insurers are in no mood to see reform watered down.

It promises to be a summer where the running battles continue and debate is as heated as ever. And that’s one thing we can all agree on.

Original Article: Law Gazette

Press Release: 26th May 2011

Andrew Dismore, co-ordinator of the Access to Justice Action Group has welcomed the criticisms of Lord Justice Jackson’s proposals by three costs judges (link to paper, selected quotes below)

Mr Dismore said:

“This submission by three senior costs judges confirms what most claimant side people have been saying, ignored by the government. Whilst we do not agree with all they have to say, their main points are extremely important.

We agree that while reform is needed, there is nothing to be gained by wholesale reform which will threaten access to justice for many people.

We agree that the proposed uplift in damages is nowhere near enough to compensate claimants being forced to pay their lawyers’ bills by the government

We agree that defendants’ conduct is a major factor in the amount of costs they have to pay, a serious problem overlooked by Jackson and not accepted by the government.

And we agree that the proportionally test is not needed, as the courts already have adequate powers to control costs on detailed assessments, without creating a rule of dole jeopardy.

We hope that the government will at least listen to these experienced judges who understand costs much better than Lord justice Jackson does”.

Extracts from  the judges’ paper:

Concluding remarks

For these reasons, we do not agree with the proposals set out in the Report about success fees. The CFA regime has undergone many changes and improvements since implementation.  Having taken a decade for these to have been achieved, now is not the time to made radical changes which give no guarantee that access to justice at reduced costs will be delivered under Jackson where it failed under Woolf. (p20)

10% Increase in General Damages

For the reasons given in paragraphs 2 and 3 above, the Costs Judges do not support the abolition of recoverable success fees and ATE premiums, in which case the proposal to increase general damages is otiose.  If, however, the increase is implemented, 10% will be inadequate to compensate a successful claimant for the additional amount he will lose from his damages to pay his lawyer’s success fee.  (p25)

Inept handling of claims by defendants

The Costs Judges deal with many bills in which the costs have been significantly but avoidably increased by the conduct of Defendants.    In some cases, the litigation is conducted with hostility, thereby requiring claimants to address each and every point.    In others, defendants delay, thereby causing unnecessary additional costs.    In others still, settlements are left to the last minute, thereby often triggering the third stage of a three stage success fee (always 100%) whereas had the defendants opened the negotiations earlier, the figure would have been significantly less.    Where this happens, the fact that success fees are claimed at 100% is not a reason to criticise the recoverability regime.    On the contrary, culpability lies with the defendants who, nonetheless, are always the first to complain on detailed assessment about having to pay   success fees at levels which they contend are unfair, disproportionate and impede their access to justice.  In reality, the fault lies with defendants such as these and not with the recoverability regime as a whole.” (p13)

proportionality

We disagree with this proposal [proportionality]  which was considered and rejected in Lownds, since its implementation would introduce an element of “double jeopardy”.   Where a court has  reached a figure for costs that are reasonable (viz reasonable costs reasonably incurred) following an item –by-item assessment, it should not then make a further reduction of an arbitrary amount if the costs still appear to be too high.  (p26)….. ….. the rules already provide the court with sufficient weapons on detailed assessment to ensure that on completion of the process, costs are reasonable and proportionate.     An additional test on the lines suggested is not needed.  (p27)

Independent research published today (Wednesday, 25 May) highlights the importance of ‘no win, no fee’ agreements to the general public, and throws a direct challenge to the Government’s proposed legislation to reduce access to justice by dramatically restricting ‘no win, no fee’ agreements.

The research, commissioned by the Access to Justice Action Group (AJAG) and the Association of Personal Injury Lawyers (APIL) calculates that almost three million people have used this method to make a legal claim in the last five years. The vast majority of those are people suffering from personal injury.

Proposed restrictions to ‘no win no fee’ will mean the facility will cease to be an option for many claimants, and the research reveals that, due to their income, most won’t be able to fund their claims any other way: more than half of respondents had an income below £25,000 per year and 82 per cent below £40,000. Eighty per cent of those who used ‘no win no fee’ expressed satisfaction with the current system, and the research shows that most cases were not substantial in value.

“This research proves, as we have previously stated, that the present system is vitally important for those seeking access to justice for injuries suffered as the result of the fault of another,” said Denise Kitchener, chief executive of APIL.

“Under the Government proposals for ‘no win, no fee’ a huge number of people will lose their right to the compensation to which they are entitled, and which they need and deserve, as they will not be able to afford the legal help they need to bring a claim.”

AJAG co-ordinator Andrew Dismore said: “The Government must think again and not give in to the special pleading of the fat cat multinational insurance companies, who are the sole beneficiaries of their plans.”

“They will save millions of pounds at the expense of ordinary people who have been hurt on the roads or at work. The Government’s plans are draconian and will end access to justice for the less well off. The system we have now works well and has huge satisfaction rates from those who use it.”

Over the next few weeks, campaign groups will redouble efforts to bring to the attention of parliamentarians the serious impact of these proposals on their constituents and to show how those who can now find a solicitor to fight their cases will be forced to rely on MPs’ advice surgeries to fill the access to justice gap.

And the impact of the proposals will not only be felt by personal injury victims, as ‘no win, no fee’ is not only used by those suffering injuries on the roads or in unsafe workplaces. It is also really important to those with, for example, serious consumer problems, small business disputes, those challenging the decisions of local councils through judicial review (especially at a time of cuts) and even those in the developing world with claims for environmental pollution.

Summary of key findings:

Almost three million people in England and Wales have used ‘no win no fee’ (conditional fee agreements, or CFAs) over the past five years.
Over half of people who have used CFAs earn under the national average wage of £25,948 a year.
80 per cent of respondents agreed they were satisfied with the ‘no win no fee’ outcome and process
Almost 80 per cent of people agreed they were satisfied with the amount of settlement.
Nearly 50 per cent of CFA cases have a compensation value below £5,000.
Almost three quarters of CFA cases have a compensation value of less than £10,000.

See the research

ATE Insurance protects the claimant on No Win, No Fee agreements (CFA’s) Case Funding are providers of ATE Insurance

Legal expenses insurers (LEI) have slammed the government for creating the myth that before the event (BTE) legal protection can fill the gap left by the changes which will result from Lord Justice Jackson’s recommendations.

The market has also reacted to a scathing report from watchdog Consumer Focus, In case of emergency, which argued that, while BTE needed to play a bigger role in widening access to justice, the current standard of products available fell way short of the mark.

There is unanimous agreement among insurers that Jackson’s proposals will kill off after the event insurance for personal injury. DAS CEO Paul Asplin has been venting his anger claiming the suggestion that BTE could simply step in has been neither substantiated nor elaborated on by Jackson or the government and it was certainly not something that anyone who actually understood LEI had ever agreed with.

On Consumer Focus’ report, Mr Asplin said: “It is clear the authors of the report have no better understanding of LEI than Lord Jackson did when he wrote his own report. All this has managed to do is demonstrate the hollowness of Lord Jackson’s assertion that BTE can get the government off the hook.”

Speaking at Insurance Age’s roundtable Legally Speaking, Graham Hollebon, managing director of FirstAssist Legal Protection (BTE), echoed Mr Asplin’s disappointment with the government. He said its silence on BTE was “a huge missed opportunity. If you are going to take something away then something needs to be introduced to replace it”.

Also in attendance, Rocco Pirozzolo, solicitor and legal expenses underwriter at QBE said that it had been left up to the main players in the LEI market to decide how best to respond going forward.

“The government seem to be on their knees praying that BTE will bridge the gap. It is very much half baked. All we have are assumptions and exaltations that BTE ought to respond but who knows?” he added.

Source : www.insuranceage.co.uk

Case Funding Limited are providers of ATE Insurance