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Thursday, 28 July 2016

If you think we're out of the woods today - you're in for a big surprise!

The Court of Appeal has just handed out a salutary reminder to anyone who thought that the horrors of Mitchell were a thing of the past.

The very mention of the name Mitchell can strike fear into the heart of most litigators. This was the decision that saw actions being struck out for the most minor breaches of directions orders. The nightmare lasted for several months until we had the more sensible approach in Denton v TH White which was designed to calm things down a bit. It is fair to say that, overall, this has been achieved  –

The good news continued with the decision in The Police v Abdulle where the conduct of lawyers was criticised to the point where the judge doubted that they understood ‘the rudimentary requirements of being a litigation solicitor’. The solicitors were guilty of breaching a whole series of court orders but were let off the hook because the failings of the lawyers had not actually prevented the timing of a trial. I did express surprise, at the time, and warned that this did not necessarily mean that we could safely revert to the old days when procedural breaches were broadly tolerated –

I warned that there could be no room for complacency. 

This has been borne out with a vengeance in the alarming case of Jamadar v Bradford Teaching Hospitals –

What started all of this off was the failure of Andrew Mitchell’s lawyers to serve a costs budget in time during his libel claim against the S*n. Under the Civil Practice Rules the consequence of such a breach is that the lawyer’s fees are limited to court fees only. So in effect the lawyers do not get paid for their hard work, and they also have to cover all other expenses. The Jamadar case involved allegations of Clinical Negligence and the value of the claim was about £3m. Liability was denied. The case was allocated to the multi track meaning that costs budgets were required. The NHS then admitted liability and judgment was entered for the claimant. The claimant’s solicitors decided that they did not need to file a budget. The Defendants lodged their budget and reminders were sent to the claimant's lawyers.

The matter proceeded to a Case Management Conference at which the solicitors costs were capped at court fees only. The judge also allowed 5 experts for each side and allowed for a 5 day trial to assess damages.  So the catastrophic outcome for the solicitors is that they are effectively funding the case to trial - for nothing! This would put many firms out of business. The decision has been upheld this week by the Court of Appeal with a judgment from Jackson LJ himself.

So the lesson is clear. We are not out of the woods, certainly as far as budgeting goes. You have to wonder what possessed the claimant’s solicitors to decide that no budget was required. But on the other hand it seems that this was a mistake on their part rather than a simple failure to comply. But the outcome is the same.

And the message is clear.

Any lawyer dealing with multi track cases must read and understand the rules on costs budgets. Read and digest this message from Gordon Exall –

One failure to comply could turn a high earning case into the end of the world as we know it..

Tuesday, 19 July 2016

What takes dishonesty into the realms of fundamentalism?

Two words have taken on great significance for lawyers and their clients, over the last few years – ‘fundamental’ and ‘dishonesty’. They are relevant to Personal Injury claims which can be struck out in full under s57 of the Criminal Justice and Courts Act 2015, where there has been fundamental dishonesty. In such a case the court must dismiss the primary claim unless the claimant would suffer substantial injustice as a result. So the default position is that the claim is dismissed. If a claimant is found to have exaggerated symptoms then the whole claim is at risk. The purpose of this provision is to deter fraudulent or exaggerated claims.

The words are also relevant in relation to costs, and this is main focus of this post. In 2013 the government imposed dramatic changes in the way personal injury claims are conducted. These changes reduced the levels of legal costs that can be claimed against insurers in successful cases. At the same time, we had the introduction of QOCS – qualified one way costs shifting. In simple terms this meant that a successful defendant cannot enforce an order for legal costs against a claimant. There are exceptions to this rule, one of which relates to ‘fundamental dishonesty’. A successful defendant can ask the court for permission to enforce an order for costs where a claim is found to be ‘fundamentally dishonest.’ That sounds quite reasonable on the face of it.

But there is a problem. Many of us have been concerned about what happens if a claimant takes their case to trial and loses. There is nothing unusual about that. It happens every day in one court or another. So you have two drivers whose cars collide. One driver gives one version the other a different version. The judge has to decide which one is preferred. This is the whole point of litigation. If it is clear cut either way you don’t end up at trial.

But does this mean that the loser is fundamentally dishonest and therefore at risk of shelling out thousands of pounds in costs? When does poor memory become dishonesty? What takes dishonesty into the realms of fundamentalism? Is there a liberal dishonesty?

One of my colleagues was recently faced with exactly this issue. The argument was about whether the defendant’s car had stopped short of our client’s vehicle. The other side were arguing that if their evidence prevailed then our client must be fundamentally dishonest and thus liable for the costs. In fact, our client won, but it was a genuine concern.

This has recently been considered by the County Court in the case of Nesham v Sunrich Clothing; reported in Legal Futures. There had been a car accident and the judge preferred the Defendant’s evidence.  The Defendant's lawyers asked for costs saying that the claimant must have been fundamentally dishonest because his version of events was rejected –

HHJ Freeman summarised the dilemma –

The claimant - “gave me his version of events. I have preferred not to accept that version, but it does not necessarily follow that he was fundamentally dishonest”

He went on - “And it is the experience of everybody who litigates in this field that drivers involved in an accident will give different and contrary versions of accidents to the extent of not just which lane they were in, but where they came from, the route they had taken and so forth… which may not constitute dishonesty, far less fundamental dishonesty.”

The judge criticised the defendants for using the threat of fundamental dishonesty as a tool to pressurise claimants to abandon claims. The judges analysis must be right. Otherwise any unsuccessful claimant is at risk of bankruptcy just because the court prefers the others side’s evidence. This would defeat the whole point of QOCS which is to enable ordinary people to pursue claims without worrying about costs. This is only a county court decision so is not binding on any other courts.

I hope the higher courts give us some clarification on this as soon as possible. The introduction of QOCS has seen a few problems but if we get this issue wrong, wipe out any benefits altogether.

Thursday, 14 July 2016

Clinical Negligence, Soap Operas and Fixed Fees

I recently settled a Clinical Negligence case that had more twists and turns than an episode of Eastenders.

Carol (not her real name) went to her GP, on a Friday morning, complaining on a lump on her shoulder. In fact it was an abscess. Her doctor took a blood test which was sent to the local hospital. There was a major issue about whether the test was sent before or after lunch. This was significant as it impacted on whether the sample was tested on the Friday or the Monday. The sample was in fact tested on the Monday and confirmed MRSA. The result was emailed to the surgery on the Monday afternoon an apparently seen by a different GP. There was a delay in acting on the result and Carol developed a serious epidural abscess which caused long term problems.

The facts seem straightforward but the litigation turned out to be anything but straightforward. It soon became clear that the two GPs, who had different insurers, were blaming each other. The criticism of the first one was that he should have ensured that the sample reached the hospital on the Friday. The criticism of the second one was that he had delayed acting on the result. Then the two doctors blamed the hospital for delay in communicating the result to the surgery. So we soon had three defendants who were all robustly defending the claim.

Then came another twist. As the claim was heading for trial, there was joint meeting of microbiology experts. They threw a spanner in the works by raising a completely new issue. They agreed that Carol had been hugely overdosed on powerful antibiotics by a second hospital. She had been prescribed them for more than twice the recommended number of days. They also agreed that this overdose had contributed to her symptoms. So the whole claim had to repleaded at this stage adding to the costs. Further expert evidence was needed to unravel which of the symptoms were caused by the delay and which were caused by the overdose.

We now had four defendants in a matter as hotly contested as the Labour Leadership!

Eventually we all trekked down to London for a settlement meeting which finally resulted in a six figure settlement.

This was an interesting if difficult case. But it also demonstrates how unpredictable clinical negligence cases can be. At first blush it was a simple case of a delayed MRSA diagnosis causing a nasty injury. It was only as it developed, that the issues became more and more complicated.

All of which raises a question mark over the merits of fixed fees in these cases. The Government proposes the introduction of fixed fees in Clinical Negligence claims with damages up to £250k. The reasoning is that they are lower value claims and the costs are disproportionate.  Carol’s case would come within that figure and is a classic example of how costs can quickly build up due to unpredictable hazards. 

The Bar council made this very point in its response the consultation paper of fixed fees –

‘The value of damages recovered is a very poor predictor of the extent of the legal and expert input required to establish liability and ensure that such patients receive proper compensation for injuries. The introduction of a FRC scheme, which does not allow for the factors individual to each case, risks making this highly complex and specialised area of litigation financially unviable for solicitors, counsel and medical experts.’

Concerns were also voiced by senior costs Judge Master Cook earlier this year –

He talked about conduct by the NHS which can cause costs to rise –

According to the Law society’s Gazette – ‘The judge pointed to a raft of behaviours by hospital trusts and the NHS’s litigation arm that drive up costs, including failure to disclose documents or respond properly to claimants, failure to admit liability early on, and ‘needless opposition’ to making payments on account of costs, or to embracing split trials.

I am not against fixed fees in principle. They certainly reward speed and efficiency and have a place in straightforward cases. But a broad brush application to all cases depending on the value will have a significant impact on access to justice. A case like Carol’s which presents new issues by the day could lead to recoverable costs which will ultimately raise questions over the viability of taking on such cases.

It is expected that the recent political turmoil will delay any proposed ‘reforms’ until next year. I think that some form of fixed costs is inevitable but would hope that the limit will be a more manageable £25k or possible £50k and with some flexibility in those cases which turn into a soap opera through nobody’s fault.

Tuesday, 12 July 2016

Now you have justice Now you don't

"I genuinely believe access to justice is the hallmark of a civilised society."

So said former Justice Minister, Ken Clarke, in the run up to the devastating cuts to the Legal Aid Scheme in 2013.

Nobody would disagree with that statement. What is the point of having a civil justice system if ordinary citizens are deprived of a means of accessing it?

I have mentioned legal aid many times, and will continue to do so. But one thing that has added insult to injury has been the huge hike in court fees and the introduction of fees for Tribunals –

Following the imposition of fees in Employment Tribunals there were reports of reductions of up to 80% in the number of cases being brought –

If ever there was a case of access to justice being limited to the wealthy then this is surely it.

The most recent development is the plan to impose a massive increase in the fees payable to immigration and asylum tribunals. Is there a more vulnerable group than those who lives are at risk? Is there any other group less likely to be in a position to afford them? This has led to 24 prominent lawyers writing an open letter to the government expressing ‘serious concerns’ that this will put justice beyond the reach of many. The increase in some cases is almost 600%

The lawyers explain that the cost will make justice prohibitive to the vast majority of claimants –

‘It would cost £4,000 for a family of five to appeal, clearly preventing the vast majority of immigrants from challenging unlawful decisions. The proposals exempt those in receipt of legal aid from paying; however, most immigration cases are out of scope for legal aid, therefore only a small minority will benefit from this.

They urge the government to hold back from imposing the fees.

All of our attention in the last few weeks has been on the euro referendum and its aftermath. We will soon have a new Prime Minister.

I would add my voice to the signatories to the letter and urge the new government to respect its duties to protect rather than block access to justice for those most at risk.

Monday, 4 July 2016

Brexit and Parliament - will it ever happen?

My last blog post looked at the impact of Brexit on proposed changes to personal injury claims. 

Things have, as we know, moved on again as Justice Minister Michael Gove has controversially thrown his hat into the ring in the conservative Leadership election. It has often been said that a week is a long time in politics. At the moment, half an hour and the world has changed again.

As we have all begun to recover from the shock of the exit vote, one thing has started to be discussed among lawyers - how will exit from the EU actually be achieved?

At first, it all seemed quite straightforward.  As and when the Prime Minister, whoever that might be, is ready then he or she will simply write an Article 50 letter to say we now want to leave and then two years later it is done. Easy. Or possibly not.

I first came across the likely battleground from an article by Geoffrey Robertson QC a leading constitutional lawyer. He advised that the referendum had no legal status and was merely ‘advisory’. He said that we would need a new Act of Parliament to repeal the European Communities Act 1972 which took us into the EU in the first place. That would require a vote in parliament. If MPs do not pass such an Act then Brexit cannot happen. He made the point that an MP in Scotland or London could say that they had a huge mandate to oppose such a move.

This appeared to be acknowledged by Cabinet member Theresa Villiers who was a leading supporter of Leave. In rejecting a suggestion from the SNP that they might veto any exit moves she said –

"But ultimately it is parliament's decision whether we repeal the 1972 European Communities Act or whether we don't."

Others argue that legislation would not be necessary; saying that the 1972 Act gives ministers the right exercise the Article 50 mechanism and so nothing more is needed.

The country is so divided on the issue that is seems inevitable that the Supreme Court will be called upon to decide the point. In fact the battle seems to have begun. Today we hear that top London firm Mishcon de Reya has already started legal action –

A spokesman has said –

“We must make sure this is done properly for the benefit of all UK citizens. Article 50 simply cannot be invoked without a full debate and vote in Parliament. Everyone in Britain needs the government to apply the correct constitutional process and allow Parliament to fulfil its democratic duty which is to take into account the results of the Referendum along with other factors and make the ultimate decision.”

The political impact of Brexit has seen led to one of the most dramatic political weeks that some of us can remember. It is clear that we are also going to see some landmark legal decisions as the dispute runs and runs. I would hesitate to predict the outcome but if Robertson and others are right then Brexit might never happen.

It is certainly going to be a busy time for public lawyers.