News Category 3
Personal injury solicitors urged to combat 'desperate' tactics of firms targeting success fee refunds in RTA claims...
12/03/20. Personal injury solicitors are being urged to combat the “desperate” tactics of firms targeting success fee refunds in RTA claims - by a Costs Lawyer specialising in the sector.
Reports in the national media suggest more than two million people could have valid claims against no-win, no-fee law firms.
Checkmylegalfees.com (recently acquired by Manchester practice Clear Legal Limited, which has a minority share in PI firm Clear Law LLP) purport to be the leading firm specialising in the area of solicitor overcharging. In particular, Checkmylegalfees.com has targeted the RTA fixed costs arena capitalising on the Court of Appeal’s so called “landmark” decision last April in Herbert v H H Law Ltd [2019] EWCA Civ 527.
Nick McDonnell, Director and Costs Lawyer at Kain Knight, says his practice has successfully repelled a significant number of challenges on behalf of personal injury law firms.
“The firms bringing these challenges are seeking to capitalise on the fact that most conditional fee agreements position success fees as being a function of the case’s risk - as opposed to a non-risk-based flat charge. Where the maximum success fee is charged these firms argue that there has been an overcharge,” explained Nick.
“Challenges are usually brought by way of detailed assessment proceedings pursuant to the Solicitors Act 1974 and it is crucial that, in order to defend such challenges, the defending firm has a detailed knowledge of this specialist area; both in respect of the legislation and the case law.
“The firms bringing these challenges are desperate as part of their business model to commence proceedings - either by way of an application for an order for delivery-up of the file of papers pursuant to Section 68 or detailed assessment pursuant to Section 70, or both often providing tight, unrealistic deadlines to firms before issuing proceedings. This is where they are making their money.
“By bringing such proceedings they can often obtain an order for their costs. On an assessment in particular, all a Claimant is required to do is achieve a reduction to the sum deducted by 20% or more to obtain not only a refund for their client reflecting any overcharge but also a costs order reflecting their client’s costs of assessment. The result can be very expensive for a firm on the receiving end of one of these challenges.
“By seeking expert assistance early, a firm’s exposure to such challenges can often be significantly reduced or even removed altogether in some cases. The tactics employed to achieve this objective does, however, require a solid understanding of the legal procedure as to the delivery of statute bills, the delivery-up of files and the detailed assessment process. Recognising early on where a firm may be on risk and making protective offers where applicable is crucial as well as offering to resolve any disputes by way of ADR including mediation.”
Nick goes on to say: “Above all, solicitor firms facing these challenges must do what they can to avoid being on the receiving end of proceedings; that is where their financial exposure can begin to increase rapidly.”
One of the many Jackson Reforms implemented in April 2013 saw the abolition of the recovery of success fees from a losing party in a successful claim (save in limited circumstances). To offset this, solicitors are permitted to charge their client’s a percentage increase of up to 100% of their basic charges. But where the solicitor’s charges arise out of a personal injury claim, legislation was introduced capping the chargeable success fee at 25% of the general damages and pecuniary losses with such sum to include VAT.
The Court of Appeal in Herbert identified the issue as being one which requires a solicitor to obtain “informed consent” from their client, something, it is argued, is not often done. The issue central to the case went as follows:
· Historically, a ‘success fee’ under a no-win-no-fee agreement has been a function of the risk faced by a firm of not being paid its fees in the event their client’s claim is unsuccessful.
· Assuming success fees continue to reflect the risks of a firm not being paid in the event of a lost claim, that risk is often very low in RTA claims where the majority of claims succeed.
· Notwithstanding those low risks, following April 2013 some firms have been routinely charging the maximum percentage increase of 100% (essentially reflecting a 50/50 risk) with the success fee in most cases reaching the 25% damages cap.
· The effect of this is that, in many cases, a solicitor’s client will have been overcharged.
The Court in Herbert helpfully clarified that, in effect, a solicitor firm can approach a success fee charge in one of two ways:
(i) A risk-based success fee – where the success fee is a function of the specific risks of each case. In such circumstances it is necessary to carry out a risk assessment to ensure an appropriate success fee is identified; or
(ii) A non-risk-based success fee – where the success fee is based on a flat percentage increase (which could be 100% of basic charges) but where the success fee bears no relationship to the risk of losing in each case. Whilst such a success fee is permitted, it is crucial that a solicitor provides very clear advice to their client in this regard.
In respect of a non-risk-based success fee, the Court of Appeal on the second appeal endorsed Mr Justice Soole’s views on the first appeal when he said:
“Putting the point another way, if and insofar as HH took no account of the risk in the individual case and provided for a 100% uplift (subject to the 25% cap) in all cases by reason of its particular post-LASPO business model, I consider that informed approval would require this to be clearly explained to the client before she entered the agreement.” [47] (emphasis added)
As the longest established independent firm of Costs Lawyers (over forty years) Kain Knight have an intimate knowledge of the Solicitors Act 1974 detailed assessment process. In particular, over recent years, Kain Knight have successfully acted for firms of solicitors in the low value RTA personal injury space assisting them significantly mitigating, and even removing entirely in some cases, their exposure to such challenges.
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Chaos surrounds launch of the consumer claims portal - Andrew Kay, Director of Operations, FIRST4LAWYERS
02/03/20. Just weeks to go until implementation of the Civil Liability Act (CLA) and the launch of the new consumer claims portal, or is it? For several months now the Ministry of Justice (MoJ) has been firm in its stance that the reforms will be implemented on 6 April. However, that stance seemed to be wavering at the recent Association of British Insurers (ABI) conference.
Why the lack of clarity for businesses to prepare? Well it seems that the MoJ are aware that there is a lot to do in an increasingly short timescale, not least a public awareness campaign, but continue to drag their heels in providing much needed details. Revealingly, they have acknowledged that an all-important public awareness campaign is needed but are unable to commit to when or how that will be agreed or the form that the campaign will take before the policy issues are dealt with. How can we be this close to such a major overhaul and still have unaddressed policy issues?
All along the rhetoric has been that the portal will be an effective method of handling whiplash claims so that access to justice is maintained. Yet at the ABI conference David Parkin, deputy director for civil justice and law at the MoJ, was quite clear that the new process will contain gaps. He even went as far as stating to the audience that you could try to get a system to deal with every possible eventuality but that would take years. Instead, they are aiming for the best, launching and seeing what happens. From there it will be monitored, tested and improved.
How can the MoJ disregard the interests of innocent claimants in being able to make valid claims against compensators and just push on regardless to launch something that they are aware is unable to deal with all eventualities? How does this fit in with the previous promises we have heard that the portal will not be allowed to launch until it is ready, that access to justice must be preserved? If the MoJ feels it will take years to deliver a fully capable system, then surely that is what it has to commit to doing? Isn’t that after all what was promised?
An insurer at the conference even talked about the need for a second tariff to deal with non-whiplash small claims. Their concern being that other small non-whiplash injuries will continue in a significant number of road traffic accident claims which will prevent them from delivering the savings promised to consumers through reduced premiums.
David Parkin clarified that there would be no tariffs for non-whiplash cases before the reforms are implemented. He stated that behaviours will have to be monitored but did not take any exception to an insurer openly suggesting that without further adjustment, the CLA is unlikely to deliver what it is supposed to. Why are the MoJ not concerned that the CLA is not going to deliver what it promised? Are they really that disinterested in consumers that they will simply press on regardless?
Section 11 of the CLA states that the report on the outcomes of the CLA are not due to be presented by the ABI and laid before Government until early 2024. So, we are very likely facing years of no savings being passed on to consumers despite the CLA being in place and access to justice and compensation awards being reduced throughout that period. Clearly another example of “we push on regardless” and yet, with no accountability within the CLA if insurers fail to deliver what is expected of them, the only likely losers in all this will be the innocent victims of RTA’s who now seemingly face no reduced premiums and being forced to try and pursue claims through a system which is acknowledged to be insufficiently developed to be able to deal with all possible eventualities.
This is not justice, this is chaos.
Andrew Kay
Director of Operations
FIRST4LAWYERS
Image ©iStockphoto.com/prizela_ning
Supreme Court refuses MIB permission to appeal in landmark case establishing liability for accidents on private land
21/02/20. On 13.2.20 the Supreme Court (Lord Reed (President), Lady Arden and Lord Hamblen JJSC) refused the MIB’s application for permission to appeal against a finding that it was directly liable under EU law for injuries sustained by a pedestrian who was struck by an uninsured vehicle on private land. At the same time, it concluded that it was not necessary to refer the case for any ruling by the Court of Justice of the European Union. As a result, David Knifton QC (who acted for the Claimant) explains, the MIB has exhausted all avenues of appeal, and will have to meet Mr Lewis’s claim for the catastrophic injuries he suffered.
In a landmark ruling in June 2019, the Court of Appeal in MIB v Lewis [2019] EWCA Civ 909 unanimously upheld a High Court decision ([2018] EWHC 2376 (QB), Soole J) that the MIB was liable for accidents involving uninsured vehicles on private land. The CA ruled that the provisions of Articles 3 and 10 of the Sixth EU Motor Insurance Directive (2009/103/EC) could be relied upon by an individual as having direct effect against the Motor Insurers’ Bureau, as an emanation of the State.
Despite being refused permission by the CA, the MIB sought permission to appeal to the Supreme Court, including a request for a referral to the CJEU, arguing that a point of law of public importance with far-reaching financial consequences was raised by the decision. They contended that both the CA and Soole J had been wrong to find that Articles 3 and 10 were capable of giving rise to directly-effective rights against a private body such as the MIB. Although Art 3 required member states to impose a compulsory insurance regime on the use of vehicles, including their use on private land (Vnuk v Zavarovalnica Triglav dd (Case C-162/13) [2016] RTR 10), the MIB argued that Art 3 was not “unconditional”, and thus lacked direct effect, as it allowed member states a discretion as to how the system of compulsory insurance would operate, enabling different regimes for use on roads and use in other circumstances, and did not define any rights which individuals could assert against the state. Further, Art 10, which required each member state to set up or authorise a body to provide compensation to victims of uninsured vehicles, had not been fully implemented in the UK, in that the MIB had only been delegated to provide compensation to victims of uninsured vehicles within the limits of the Road Traffic Act 1988 (i.e. where the accident occurred on a road or other public place). Since the task of compensating victims of uninsured vehicles on private land had not been delegated to the MIB, it could not be held liable as an emanation of the state for matters not delegated to it.
In a robust response, however, David Knifton QC argued that the MIB was seeking to re-open issues which had been extensively considered and unanimously rejected by both the High Court and the CA, following a consistent line of authority from the CJEU concerning the purpose and effect of the Motor Insurance Directives. The CJEU had repeatedly made clear that the Directives were designed to ensure the protection of victims of motor accidents, and had previously held that their provisions could be directly relied upon against private law bodies such as the Irish MIB (Farrell v Whitty (No 1) (Case C-356/05) and Farrell v Whitty (No 2) (Case C-413/15)). As a result, the grounds of appeal did not raise an arguable point of law, nor was there any doubt as to the correct application of EU law. The MIB’s attempt to invoke the “floodgates argument” overstated the importance of the point of law involved.
The Supreme Court accepted the Respondent’s arguments. Permission to appeal was refused “because the application does not raise an arguable point of law.” Nor was it necessary to request any ruling from the CJEU, since “the Court’s existing jurisprudence already provides a sufficient answer.”
The decision arose out of a tragic accident in June 2013, when Mr Lewis was pursued and run down in a field by an uninsured vehicle driven by a local farmer, Mr Tindale, causing a spinal cord injury which has left him tetraplegic and with permanent brain damage and reduced life expectancy. Since Mr Tindale had no funds to meet the claim for damages, the MIB was joined to the action. However, they denied that they had any liability to compensate Mr Lewis, as the accident occurred on private land, and was therefore not a “relevant liability” under the terms of the Uninsured Drivers Agreement 1999.
Commenting on the decision, David Knifton QC said: “I am delighted that the Supreme Court has decisively rejected the MIB’s attempts to deny compensation to Mr Lewis. The European Court has consistently endeavoured to ensure that innocent victims of motor vehicle accidents have a right to compensation, either from an insurer or from a body such as the MIB. Despite Brexit, the Directive rights recognised in previous CJEU decisions would have remained available in UK domestic law, but the decision of the Supreme Court lays to rest any lingering doubts there may have been. It is high time the Government amended the Road Traffic Act to bring it into line with EU law. In the meantime, victims of accidents caused by uninsured vehicles on private land are entitled to pursue a claim for damages against the MIB.”
David Gauler, Serious Injury Solicitor at Thompsons, Birmingham, added: “The Supreme Court’s decision is both emphatic and eminently sensible. Now it is up to the Government to make sure that the rights of UK citizens established in this case are not tossed aside in the rush for Brexit. The Government has made much of its promise that after we leave the EU no one will lose rights they previously enjoyed so here is a chance for them to show that it isn’t going to row back on fairness. They should as a priority commit to amending the Road Traffic Act 1998 to consolidate the decision in Mr Lewis’s case.”
For a link to the CA judgment on Bailii, click here: www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/2019/909.html&query=(lewis)+AND+(v)+AND+(motor)+AND+(insurers)+AND+(bureau)
David Knifton QC and Philip Moser QC acted for the Claimant, instructed by David Gauler of Thompsons Solicitors
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Surveillance Evidence: Trump Card or Joker? Grant v Newport City Council [2018] EWHC 3813 Ch - Vinesh Mistry, Barrister, DWF Advocacy Ltd
19//02/20. Grant v Newport City Council [2018] EWHC 3813 Ch (“Grant”) is a fairly typical multi-track 'slip and trip'. Over the course of litigation, the defendant covertly monitored the claimant. The defendant initially obtained footage of the claimant walking, and further surveillance then demonstrated her working. This was all contrary to the claimant's pleaded case. Approximately 4 weeks before trial, the defendant disclosed the surveillance evidence to the claimant and applied for permission to rely on the same and to amend its Defence to aver fraud.
At first instance, His Honour Judge Jarman QC dismissed the application as: (1) the trial would have been adjourned if permission was granted; and (2) the defendant was tardy in bringing its application. The defendant appealed this decision.
Issues and Judgment
The first issue considered by Birss J was the date on which the defendant should have disclosed the surveillance footage. The defendant monitored the claimant in February 2018 and then again in March 2018. The two pieces of footage were disclosed to the claimant in one tranche in June 2018. Birss J held that "the defendant could and should have disclosed the February footage at that stage … if it wanted to ensure there was no risk of procedural unfairness to the claimant…"
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Summary of Recent Cases, February 2020
15/02/20. Here is a summary of the recent notable court cases over the past month. You can also receive these for free by registering for our PI Brief Update newsletter. Just select "Free Newsletter" from the menu at the top of this page and fill in your email address.
Summary of Recent Cases - Substantive Law
James (On her own behalf & in her capacity as personal representative of the estate of Christopher James, deceased) v White Lion Hotel (a Partnership), QBD (Bristol) (Judge Cotter QC) 09/01/2020
The deceased had been staying at the Defendant's hotel. He returned to his hotel room at around 2.46am, having attended a wedding nearby. Sometime thereafter, he fell from the window of the room, and landed on the pavement approximately nine metres below the window. His body was later discovered by a passer-by.
Following this incident, the owners of the hotel...
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