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Tuesday, 25 August 2015

The Day the QOCS stopped



The 1st April 2013 is a date which is ingrained in the memories of most litigation lawyers, especially those of us who act for victims of accidents, industrial diseases or medical negligence. It was the day that changed the world.

Almost all of these cases are dealt with on a no win no fee basis, so the claimant’s lawyers do not get paid if they do not win. Following implementation of the Jackson Report it was no longer possible to recover insurance premiums or success fees from defendants in successful cases, apart from a very limited exception in medical negligence cases. Recovery of these additional liabilities had been the foundation stone of the steps taken by the Labour Government in 2001 to remove Legal Aid for Personal injury work.

To mitigate the effect of this, the government introduced Qualified One Way Costs Shifting (QOCS). This meant that, in most cases, if a claimant lost a case they would not have to pay the other side’s legal costs. This in turn meant that there was no longer any need to take out insurance to cover those costs. So a claimant of limited means could pursue a claim with the comfort of knowing that they would not face a huge legal bill at the end if they failed.

The protection can be lost if there is evidence of fundamental dishonesty. It can also be lost in cases in relation to offers to settle under Part 36. I don’t propose to go into those detailed rules today. Kerry Underwood has written an excellent summary here –


The theory behind all this is to enable claimants to seek justice and sleep at night.

Sadly the theory and the reality are different. A claimant can be ordered to pay all of the other side’s costs if a claim is struck out because it shows no reasonable grounds for bringing the claim.

This is demonstrated by the tragic case of Wall v British Canoe Union. Mr. Wall was killed in a canoeing accident in January 2012. He was 49 years old. To make matters worse the accident was witnessed by his 16 year old daughter. The action was brought against the defendants as publishers of English White Water – The BCU Guidebook. The allegations were that the publication failed to give adequate warnings of the dangers at the particular waterway at which Mr Wall had his accident. Earlier this year Judge Lopez in the Birmingham County Court struck out the claim on the grounds that Mrs Wall had no reasonable grounds to pursue the claim. . It was found that the publishers owed no duty of care to readers of their guide. There was an insufficient relationship of proximity. The judgment is an interesting summary of the law of negligence and Gordon Exall has published a summary here –


So the unfortunate Mrs Wall, having lost her husband, also lost her claim. But the tragedy does not end there. She was also ordered to pay all of the Defendants’ legal costs. This is because the judge decided that she had no reasonable grounds to bring the claim. So she could now lose everything.

When I first read the judgment, I just thought that she must have been badly advised to have brought this case in the first place. But on reflection the judgment is disturbing. Here is an honest victim who has lost her husband and whose children have lost a father. The whole idea of QOCS is to enable such victims to bring their claims without the fear of costs and without the need for insurance. It was certainly not a spurious claim. The judgment runs to 38 pages. There were real arguments about the extent of a duty of care to readers of the guide.

Was it really the intention of the rules on QOCS, to deter victims from bringing such claims for fear of losing their homes? Where does this leave the development of the common law? Imagine where we would be if Mrs Donohue had been too scared to sue Mr Stevenson. Our legal system, which has been copied across the world, has been build on the basis of groundbreaking cases that have pushed the boundaries.

This is likely to grind to a halt following decisions like this.

That is not to criticise the judge who acknowledges that he is required to apply the law.

What we need is a revision of these rules on QOCS which were hastily introduced and help nobody.

Tuesday, 11 August 2015

Concerning fixed fees and more attacks on vicitms of medical blunders



The government is now consulting on the introduction of fixed recoverable fees in all Clinical Negligence cases with a value up to £250k. That will catch some very substantial cases involving severe disability.

It is no surprise that the move is justified on the basis of criticism of those law firms who represent victims. In a report mentioned by Litigation Futures the Department of Health says –

“in the experience of the [NHSLA], significant costs are often incurred by claimant lawyers in the pre-litigation and pre-notification period and are not subject to costs budgeting requirements. There is also evidence of claimant solicitors attempting to claim costs well in excess of the current guideline hourly rates, and considerably higher than the NHSLA pays its defence solicitors.”


I have mentioned before that it is inappropriate for the organization which represents the NHS to try and control the level of legal costs which they have to pay. They are clearly conflicted. Remember they are only paying anything in cases where liability is proven or admitted. A case involving awards up to £250k means life changing injuries.


Now I need to say that I am not particularly worried by the likelihood of fixed fees in straightforward cases.  I have long suspected that they were inevitable especially as costs budgeting seems to have been a shambolic and expensive experiment. Fixed fees are now widely used in commercial litigation and transactions. Payment by the hour is perceived as a reward for dragging cases out, particularly those which are not complex. But many cases up to £250k will be very complex.

What is clear, is that this is an attempt to reduce the number of genuine claims and the amounts payable to victims. If the NHS does not have to pay full legal costs in those cases where they are clearly at fault, it is the victims who will have to pick up any shortfall.

The NHSLA need to review their own conduct. I have started court proceedings in two cases, in  the last month, where the NHS failed to respond to a letter of claim within the four months set out in the pre action protocol. In both cases they have subsequently admitted liability. The legal costs are now much higher then they would have been. Why is that the victim’s fault?

It is also reported today that the NHSLA routinely fail to make interim payments to victims –


Many cases are aggressively contested and then settled late in the day for modest damages and huge legal costs. If these cases were resolved at an early stage there would be massive savings.

We have seen a developing pattern over the last few years where victims, and their representatives, are attacked as a prelude to the introduction of measures designed to shrink access to justice. I suspect that some form of fixed fees is inevitable across all civil litigation. But this has to be based on sensible and commercial discussions and not inflammatory rhetoric.



Friday, 31 July 2015

Litigation on planet Zarg!



The recent and brilliant judgment of Peter Smith J in Emerald Supplies Ltd v British Airways is a hilarious if disturbing read. It is certainly an insight into a world of litigation that most of us will never see.

The judgment itself is brief and deals with the judge’s reluctant decision to recuse himself –


It is part of the well publicised litigation involving thousands of claimants and BA who are represented by giant law firm Slaughter and May. The case concerns allegations relating to the conduct of BA and damages run to billions.

Peter Smith J was handed the responsibility of managing this huge and complex litigation. For reasons which are not apparent BA and their lawyers did not take to him and did all that they could to have him removed. At an early stage the lawyers for BA suggested that he did not have sufficient experience to deal with a case involving competition law, notwithstanding that he was an allocated judge in the Competition Appeals Tribunal – although he had not actually sat on a case.


But the powerful defendants and their lawyers were not deterred. 

By an unfortunate coincidence the learned judge flew to Florence with Mrs Peter Smith J. Yes you’ve guessed – it was a BA flight. And guess what? They lost his luggage on the return flight. In fact they lost all of the passengers’ luggage! The judge was rightly concerned –


He had hoped this was a matter that could be resolved. He was wrong.


They demanded that he remove himself from the case himself as he would now be biased.

‘Well, Slaughter and May wrote to me on Monday, requiring me to confirm immediately that I would recuse myself, failing which they would make an urgent application to the Court of Appeal.

The judge felt he had no alternative but to remove himself from the case and said so in robust terms!


So there we have it. If you don’t like your judge you lose his luggage!

Imagine if any of us tried that.

Most of us are more concerned about how our clients can access justice; or how we may might fight their corner and still earn a living. This is how the wealthy and powerful litigate –


This is a world unknown to any lawyer I have ever known.

This is in fact litigation on planet Zarg.


Wednesday, 15 July 2015

Tax The Lawyers for being Lawyers!



Moves are clearly afoot to transfer to burden of securing access to justice from the State to the Legal Profession.

This has been a live issue for a few years –


It also featured in Michael Gove’s first speech as Lord Chancellor in which he made no secret of his view that it was our responsibility –


This has been followed by a report from think tank ResPublica which takes the argument 'where no one has gone before'. They are calling for a compulsory pro bono ‘tax’ on practising lawyers requiring them to ensure that at least 10% of their work is done for no pay – with an exception for the beleaguered legal aid lawyers who only face a 5% tax.


The first problem with this proposal is that is completely ignores the work already done by the profession. In my blog from last year I referred to research by the Law Society which showed that Pro Bono work accounted for about 3% of turnover of all firms - £601m. This is rarely reported by the media.

The ResPublica Report then goes on to insult the entire profession by saying –

“A mandatory pro-bono obligation regulated by the professional bodies could help inculcate an understanding across the profession that the law is not just a business but also and most importantly a vocation.”

Now there may be some lawyers working in the City who have that attitude but I do not know any solicitor who not did go into the profession with an awareness of the need to secure justice for all. That is why many lawyers chose legal aid work, human and civil rights work or represent victims of accidents at work or medical negligence. Having regard to the relentless attacks of the last few years, nobody would choose that work simply as a means of getting rich.

But there is another more serious objection. Why should the legal profession pay an additional 10% tax by way of unpaid work? Tell me any other ‘vocational’ profession where that would even be considered. Lawyers pay tax like everyone else. How many journalists, doctors, teachers or politicians would consider sacrificing 10% of their income just for the privilege of working? The whole idea is misconceived as it is rooted in the myth of the ‘fat cat’ lawyers. More firms have gone bust in the last 5 years than in my previous 30 years as a solicitor. 

How dare this remote think tank in Wesminster question the vocation of those lawyers who cannot new accept criminal work as the new legal aid rates would be a road to oblivion?

It may be that ResPublica are directing their attacks at those wealthy commercial and banking lawyers who do earn huge salaries. But this assumes that all lawyers have the same skills and experience. A high flying solicitor who is a genius at mergers and acquisitions will have no experience of defending those threatened with homelessness of appealing against benefit sanctions. That is specialist and demanding work – not ‘cast off’ work that can be dome almost as a hobby.

Of course the real agenda here is that access to justice is in crisis. I have previously called it a waste land. Mr Gove acknowledged this in his speech. We all know that the answer to this is a properly funded legal aid scheme guaranteeing all citizens access to our justice system. The government has no intention of considering this and so they turn to the easy targets – the lawyers!

That approach is now getting a bit long in the tooth and I suspect that the public will begin to see it for what it is.

Thursday, 9 July 2015

The Budget - Legal aid, Motor Insurance and more bad news for students!



It seems that everyone is talking about the Conservatives’ first budget since 1996. There has been praise and criticism. The main headline grabber has been the National Living Wage – a renamed version of the minimum wage. It may not be pitched at a level that a person could actually live on, but it is an improvement and to that extent should be welcomed.

What does this budget have to say about legal matters? How does it affect lawyers, those who lawyers represent and those who aspire to be lawyers? To be honest there was not a lot but some things are worthy of comment.

Mr Osborne promised to spend more on the protection of victims of domestic violence. £3.2 million will be spent on refuges. These centres have experienced a funding crisis and this investment will clearly be welcome –


But the Chancellor seems to have no intention of making it easier for victims to gain access to justice. There is some legal aid available although this is not widely known or publicised. In order to get legal aid, victims have to gather evidence which is often time consuming or even prohibitive. By coincidence, one very disturbing rule was changed this week. This was the rule that said that you cannot get or continue to have legal aid if the incident of violence took place more than two years ago. This created the bizarre scenario where victims could get legal aid and then lose it once the two year mark was reached. That can no longer happen and this has been welcomed –


But if the Government really want to protect victims, they should reinstate a properly funded legal aid scheme allowing them free access to protection from the courts.

Osborne referred briefly to the need for further regulation of claims management companies. This is hardly new ground. They are already regulated and in some cases payment of referral fees has been banned. It is also true that many companies flout the rules. Cold calling is still widely prevalent. I have been the subject of one such call!


So anything that stops this kind of behaviour is welcome. What is more worrying is the link between compensation claims and high insurance premiums. This rhetoric has been around for years along with the myth that there is a compensation culture. All of the attacks on victims of motor accidents in recent years have been linked to the need to reduce premiums. It is a huge irony therefore, that in the same budget speech the chancellor has announced a massive increase in insurance premium tax which will of course be paid for by motorists!


The worst news from this budget, however, is for those unfortunate students who plan to pursue a legal career. They already face a huge, uphill struggle with eye watering debt and few job opportunities –


So it is a huge disappointment to hear that maintenance grants are to be abolished and replaced by even more loans. The average debt on qualification is about £50k. That figure is bound to rise and will certainly deter many. This will lead to a narrowing of the profession to those who can afford to pay. At a time when most observers agree that more diversity is needed, this is very bad news. Of course that particular nightmare is not limited to law students –
  

So that is the lawyer’s view. It was a budget with one or two crumbs. But there is little to cheer about for those who are concerned about justice or might, one day, plan to make this their career choice.






Thursday, 2 July 2015

Medical Negligence, Criminal Legal Aid - a government at war?



It has only taken a few weeks for the new Conservative Government to launch a full on war against the Legal Profession. 

We are all familiar with the shameful cut in fees for Criminal Legal Aid work which has seen action taken by firms across the country that are refusing to work at the new rates. I am not proposing to comment at length on that as it is not my area of work, save to say that these are some of the most dedicated lawyers around. They work long and often unsociable hours for a return that appears designed to grind them into the ground. Those lawyers deserve our credit and support.

In the meantime the expected attack on Clinical Negligence work has begun.

Earlier this week the Health Minister, Bun Gummer, announced an intention to cap fees paid to those who act for victims in cases where damages are less than £100k.


Why has this statement come from a Health Minister? The Department responsible for standard of treatment is seeking to control the fees payable to those who represent victims of their negligence. Is the Minister of Justice too busy battling with everyone else?

The speech is alarming to say the least. He talks about ‘unscrupulous’ behaviour from lawyers who run up huge costs. This suggests that anyone who has the effrontery to fight for their client is somehow unscrupulous. How dare they! If the NHS made early admissions then the costs would be lower. If they force a victim to fight every inch of the way then they should not complain about having to pay if the case succeeds or settles at the last minute.

He says that the fees should represent a percentage of the compensation. So a victim who is dragged through contested litigation to trial and gets an award of say £50k will only recover a percentage of that amount in legal costs. The Trial itself would cost more than that. It is his government that has increased court fees which would eat up 5% of a £100k claim. Are we taling about all costs including these court fees and expert fees? This sounds like back of an envelope rhetoric but that has not stopped this government in the past.

Mr Gummer then relies on the familiar phrase – ‘hard working taxpayers’. In my experience most victims of clinical negligence are hard working tax payers. Those victims will end up seeing further deductions from their damages if they cannot recover their legal costs in full, from the negligent medical practitioners.

If he wishes to save money for the NHS the focus should be on reducing the number incidents that occur such as queues of ambulances backed up outside hospitals. Or there could be a new streamlined process that will secure justice more quickly and efficiently. But that requires positive contribution from all sides rather than throwing insults victims’ lawyers.

Finally the Ministry of Health promise consultation with ‘stakeholders’. Will that include those who represent victims and who he says are unscrupulous? This is disturbingly reminiscent of the discussions between the government and insurers of road Traffic claims from which Claimant lawyers were excluded.


There are systems in place to ensure that costs are not unreasonably incurred in complex cases. Even though the budgeting experiment seems doomed in Clinical Negligence cases, the costs are still subject to assessment by the court. I would fully support the comments of Deborah  Evans of APIL - 

'As a defendant, the NHS Litigation Authority has the right to ask the court for justification of what it has to pay when it loses a case. The fees reflect the fact that clinical negligence cases are complicated and require a great deal of skill and investment of time and resources just to establish whether there is a valid claim,'
 


I suspect that this will ultimately lead to fixed fees. Provided those fees are reasonable they are probably inevitable in time and should hold ne fears for those who work efficiently.


Tuesday, 23 June 2015

The Word of Gove - The New Lord Chancellor Speaks (Updated)



Our new Lord Chancellor, Michael Gove will give his first major speech today since taking over from our dearly departed Mr Grayling. 

We are told that he will say that our justice system is failing ordinary people whilst looking after the rich.


You can imagine my excitement on reading some of his comments –

“While those with money can secure the finest legal provision in the world, the reality in our courts for many of our citizens is that the justice system is failing them. Badly.”

“There are two nations in our justice system at present. On the one hand, the wealthy, international class who can choose to settle cases in London with the gold standard of British justice. And then everyone else, who has to put up with a creaking, outdated system to see justice done in their own lives.”

Has he been reading this blog for the last three years.
 



Sadly the content is less exciting.

He does not mention the real injustices of our system such as –

The further cuts in fees to those who represent those charged with criminal offences.

The virtual elimination of civil legal aid since April 2013

Courts grinding to a halt as they try to cope with unrepresented litigants

£10,000.00 to issue a Claim Form for a severely injured victim

And so we could go on.

Mr Gove’s first priority seems to be improving technology – ‘to ensure that cases are dealt with efficiently, speedily and above all justly’

I’m afraid this a bit like tidying the deckchairs on the Titanic. But who knows? It could be a start. At least he seems to acknowledge that all is not well with our justice system. He even acknowledges that those with money get a better deal than anyone else.

The hope is that he will be less confrontational with the profession than his predecessor. Although my teacher friends wept with me when they learned that he was to take over at the helm!



Update

Mr Gove has now delivered his maiden speech. It was much a trailed above. He has thrown in one old chestnut, suggesting that lawyers should provide more pro bono advice –

When it comes to investing in access to justice then it is clear to me that it is fairer to ask our most successful legal professionals to contribute a little more rather than taking more in tax from someone on the minimum wage’


How much more would he like? Lawyers do huge amounts of free work from giving diagnostic advice, manning surgeries at advice centres, drafting letters etc. Does he seriously think that that well meaning free work can come close to filling the chasm left by the legal aid cuts? He was extremely unpopular with teachers but I don't ever recall him suggesting that they work for nothing.

Why does he choose to mention taking more in tax from someone on the lowest possible pay? Do they have to carry the burden of funding justice?

I’m afraid any glimmers of hope have now faded…