The defendant costs specialists


ATE premiums – Single or staged?

By on Nov 26, 2012 | 1 comment

At this year’s White Paper Legal Costs Conference, Keith Hayward, from Victory Legal Costs Solicitors, gave a very interesting talk on ATE premiums in low value RTA claims. This talk was accompanied by excellent accompanying notes. I cheekily asked Keith whether he would mind me reproducing the notes and not only was he kind enough to agree but he has gone one further and updated the notes to include a commentary on the Liverpool Test Cases. This is essential reading for those involved in challenges to ATE premiums. These have now been added to the Costs Law Articles Archive: ATE premiums – single or staged Recovering ATE premiums – case...

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Access to Justice Action Group explains

By on Feb 8, 2012 | 0 comments

I recently commented on the apparent contradiction between Andrew Dismore’s, co-ordinator of the Access to Justice Action Group, letter to the Guardian newspaper predicting that “there will be at least 25% fewer claimants” as a result of the proposed changes to the no win, no fee system and his other prediction, in relation to clinical negligence matters, that the proposed changes would lead to “an increase in the number of cases of 1/3rd”. Andrew has kindly elaborated. The prediction that there will be a 25% drop in overall claim number is reached by two routes, firstly, by making a comparison with the number of claims pursued in Scotland. In Scotland, additional liabilities are not recoverable from the other side. There are 25% fewer claims reported to the CRU for Scotland, on a pro-rata basis given the size of the population, compared to the number of claims brought in England and Wales. Scottish Sherriff Court starts compared with county court case numbers produces a similar disparity. It is therefore assumed that if recovery of success fees and ATE premiums ends here, it will lead to claims numbers reducing to a similar level as seen in Scotland. Secondly, an analysis was undertaken of 69,000 claims pursued via a claims management company. New claims accepted by the claims management company are offered to different firms of solicitors unless and until one is prepared to take the case on a CFA basis. Of these claims, two-thirds were accepted by either the first, second or third firm to be offered the claim. The balance were accepted by the fourth to twenty-fourth firm offered the claim. AJAG predict that it is this one-third of cases that will be considerably less attractive once success fees and ATE premiums cease to be recoverable and therefore estimate that 25% of the total claims currently run will not be taken on. Different considerations are thought to apply to clinical negligence claims, which represent a tiny proportion of overall claim numbers. Currently a high proportion of claims are accepted by solicitors but then turned down by either the Legal Aid Board or by ATE insurers, and therefore do not proceed. ATE insurers apparently turn down two-thirds of cases presented to...

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The 100% succcess fee myth

By on Jan 16, 2012 | 10 comments

Three cheers for the National Accident Helpline. Those probably aren’t words you expected to read on the defendant friendly Legal Costs Blog, but credit where credits due. The National Accident Helpline (NAH) in their desperate lobbying to save their business model, as part of the consultation process into implementation of the Jackson Report, commissioned independent research by academics Professor John Peysner, Dr Angus Nurse and John Flynn from the University of Lincoln. Their report, Excessive & Disproportionate Costs in Litigation, “casts fresh doubt on current government proposals to reform the ‘no win no fee’ compensation regime”. (The strange thing about reports delivered by independent experts is that they almost always manage to say what those commissioning the report wanted. Have you ever noticed how medical experts instructed by claimants always conclude that the injuries suffered by the claimant are so life-changing that the claimant will never be able to work again or lift anything heavier than a tooth-pick? On the other hand, the medical experts instructed by defendants invariably conclude that there is nothing wrong with the claimant that a strong mug of tea wouldn’t sort out.) The corresponding press release stated: “The University of Lincoln researchers examined data on more than 20,000 civil litigation cases and concluded that in certain cases defendant delay can be a significant factor in increased litigation costs and can cost up to six times as much as other causes of delay. The findings suggest that defendant delays add unnecessary court costs to cases where there is a failure to reach settlement. If a case goes to court, claimants win 90 per cent of the time.” Traditional wisdom as to cases that go to trial can be found in Master Hurst’s comments in Designer Guild Ltd v Russell Williams (Textiles) Ltd (t/a Washington DC) (No 2) [2003] EWHC 9024 (Costs): “There is an argument for saying that in any case which reached trial a success fee of 100% is easily justified because both sides presumably believed that they had an arguable and winnable case.” The courts are not meant to apply the benefit of hindsight when determining the reasonableness of a success fee (“when the court is considering the factors to be taken into...

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Success fee cap plus uncapped ATE?

By on Jul 18, 2011 | 0 comments

We looked the other day at the problems that might arise post-Jackson trying to instruct counsel to act under a CFA if there is a 25% damages based cap on the success fee that must be split between the solicitors and counsel. This might create a market for ATE premiums to cover own counsels’ fees for the small number of cases that go to trial, to ensure representation. However, the ATE premium would now come out of the client’s final damages cheque, in addition to the 25% success fee cap. And, of course, there has been no suggestion that ATE premiums will be capped. This would create the situation whereby if both solicitor and counsel act under CFAs, 75% of the client’s damages are protected (assuming the cap applies to both). However, if the solicitor acts under a CFA and the client needs to instruct counsel to act using an ATE policy to cover counsel’s fees, there is no corresponding cap on the total that may be taken from damages. It would be 25% (for the solicitor’s fees) plus an uncapped amount for the ATE policy. We may see claimants losing much more than 25% of their damages with these funding...

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Defective ATE insurance certificates

By on Jul 30, 2010 | 2 comments

When After-the-Event insurance premiums became recoverable back in 2000, the Costs Practice Direction introduced the following rule as to what should be provided when serving a bill of costs: 32.5(2) – If the additional liability is an insurance premium: a copy of the insurance certificate showing whether the policy covers the receiving party’s own costs; his opponent’s costs; or his own costs and his opponent’s costs; and the maximum extent of that cover; and the amount of the premium paid or payable. Other than some subtle changes to the wording, to make this gender neutral, the rule remains the same today. So why is it that 10 years after this rule was introduced I still routinely see certificates served with bills of costs that do not comply? The most common defect is a certificate that fails to identify what it covers. Almost as common is a failure to serve any certificate at all but instead serve a consumer credit agreement in relation to the ATE policy that doesn’t itself come close to complying with the requirements of 32.5(2). Given the consequences of failing to serve a compliant certificate (see CPR 44.3B(1)(e)) you would think ATE insurers would make a bit more effort. How hard can it be?...

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