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1 LexisNexis Personal Injury A LexisNexis mini-mag helping personal injury lawyers stay up to date. Autumn 2014 October CPR Changes Group litigation orders David Body, Irwin Mitchell Too high a risk - is being an expert witness worth it Mark Solon, Bond Solon Terminating Retainers and Assignment of CFAs Sue Brown, Prolegal Cut out guidance: Issues to consider when completing a costs budget Practice Notes: Road Traffic Accidents in the EU Applicable Law for RTAs in the EU Andrew Wilson

2 From the Editor Contents Welcome to Lexis Nexis personal injury mini-magazine. In this edition we have included helpful guidance on terminating retainers and assigning CFAs as well as a checklist on the issues to consider when completing an estimated costs budget. We have also highlighted interesting articles from our key publications including PSL personal injury and New Law Journal. There has been huge reform of the personal injury market in recent years and the uncertainty continues with the introduction of changes to whiplash claims in October. Now, more than ever, it is crucial for personal injury practitioners to keep abreast of the latest developments and ensure they run their case loads as efficiently as possible. The extensive personal injury products available from Lexis Nexis are here to help you do that. We hope you enjoy the magazine Best wishes Karen O Sullivan Solicitor and Head of LexisPSL Personal Injury LexisNexis Free Content 3 News, Views and Interviews: LexisNexis Personal Injury blog 4 Blog: Does claimant s right to recover any success fee and ATE premium infringe ECHR? Janna Purdie 5 Blog: Group Litigation orders unity is strength Jon Robins LexisNexis Quantum Cases 6 The Quantum Database Lexis Learning 7 Personal Injury webinars Butterworths Personal Injury Litigation Service 8 Medical Diagrams Lexis Library 9 Lexis Library Menu Card New Law Journal 11 New Law Journal: Too High a Risk? Mark Solon Lexis PSL Personal Injury Editorial Editor: Karen O Sullivan Production Editor: Rachel Buchanan Design: Creative Solutions Offices: Lexis House, 30 Farringdon Street, London, EC4A 4HH Tel: Reproduction, copying or extracting by any means of the whole or part of this publication must not be undertaken without the written permission of the publishers. This publication is intended to be a general guide and cannot be a substitute for professional advice. Neither the authors nor the publisher accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this publication. 12 Meet the team 13 Personal Injury CPR changes October Terminating retainers and assignment of CFAs 19 Cut out Guidance: Issues to consider when completing costs budget 25 An introduction to road accident claims in the EU Andrew Wilson 28 Applicable law for road accidents claims in the EU Andrew Wilson Lexis Calculate 16 Fixed Costs Calculator 2

3 News & Views: LexisNexis Free Content There is no escaping the fundamental changes that personal injury law is undergoing. To assist personal injury practitioners coping with this change, we provide freely available material, including the personal injury content on LexisNexis Dispute Resolution blog, Personal Injury Twitter feed and the LexisNexis hosted think tank, Halsbury s Law Exchange. LexisNexis Free Content Our free Personal Injury content sits within the Dispute Resolution blog in its own category, PI. Other parts of the Dispute Resolution blog may also be of interest to personal injury practitioners, especially the Jackson Reforms material and comment. Sign up to receive exclusive content sent to our subscribers on a monthly basis including access to a piece of bespoke content such as a practice note or checklist from LexisPSL The blog is a space for news and views on the latest developments, whether they are changes to the law or tips on building a thriving legal practice. We cover all CPR updates and include news and case analysis to keep our readers up to speed. We also post practical guidance, checklists and send our subscribers exclusive content in a monthly . The Dispute Resolution blog includes Personal Injury and Arbitration content as well as all aspects of Dispute Resolution. We write in-house with comments and guest posts from leading practitioners. To find out more, visit lexisnexis.co.uk/pimag/blog 3

4 Does claimant s right to recover any success fee and ATE premium infringe ECHR? By Janna Purdie Lexis Free Content Just when we thought we were moving in the right direction, with the new Jackson Reforms and the Court of Appeal decision in Denton, up pops an issue in the Supreme Court throwing up uncertainty, confusion and the possibility of satellite litigation and compensation claims. The Supreme Court handed down judgment in Coventry v Lawrence [2014] UKSC 46, a nuisance claim, on 23 July The ramifications for those involved with the old costs regime (success fees and ATE premiums) became apparent to those who had embarked on reading the 60 page judgment quite early on, at para [32]. The issue before the Supreme Court was whether the provisions not only in the CPR and Practice Directions but also the primary legislation being, Legal Services Act 1990, Part II, as amended by the Access to Justice Act 1999, infringed the defendant s right to a fair trial under art 6 of the EU Human Rights Convention. Some may recall the decision of the House of Lords in Callery v Gray [2002] UKHL 28, some time ago, which determined that the old costs regime, as it is now known, did not breach art 10 of the convention ie freedom of expression. However, the European Court took a different view three years later in MGN. It was this decision which the Supreme Court considered meant it was able to reconsider the position. The debate has been adjourned, the Government informed, potential interveners will be considering their positions and in due course the issue may be debated in the Supreme Court or perhaps the Court of Appeal; the Supreme Court noting that was the court with the experience in costs matters. Would Jackson LJ, whose report lead to the abolition of the old costs regime, sit in judgment? This leaves many in a state of limbo and, given the area of costs under the microscope, will have a disproportionate impact on the more vulnerable within the justice system Many cases are still subject to the old costs regime. If a decision is made that the old costs regime breaches the right to a fair trial this could leave claimants in a very difficult position in so far as the costs of success fees and ATE premiums are concerned. Will they have to pay them, having worked on the basis these costs would be paid by the defendant if the claimant wins or will not be due if the claimant loses? What position will the lawyers acting in such cases take pending the determination of the issues raised in this case? How will this impact on the insurance providers who have provided the ATE insurance policies and deferred payment of the policies? 2. What about those who have already paid the claimants costs for success fees and ATE premiums? Would a finding that the rights under the Convention had been infringed lead to a stampede of compensation claims? Whilst there is no immediate impact for these defendant parties, they or their lawyers will no doubt follow the next stages with interest. For those claimants that won and had such fees paid by the defendants, the time taken for the courts to determine this issue will be a long one and a decision that there was no infringement will be only outcome they will want to see. One thing is for certain, this is a debate which will raise a lot of issues for a wide range of people, parties, lawyers, insurers, human rights campaigners. We await the decision with interest. First published on the DR blog on 24 July 2014 To find out more, visit lexisnexis.co.uk/pimag/blog

5 Group litigation orders unity is strength Interview by Jon Robins What are the challenges and pitfalls of group litigation orders (GLOs)? David Body, national head of the product liability team at Irwin Mitchell, offers his advice for those considering applying for a GLO. What will a judge look at when considering an application for a GLO? The key issue for any GLO is that, in order to justify the effort of putting together an action, the cases are sufficiently similar so as to make a finding about one or a set of them dispositive of a whole group of them. For example, if there are 100 cases in total and 10 test cases are selected, on the basis of findings for those 10 cases, we aim to make findings that are sufficiently robust to decide the others on the basis of those test cases so that the findings in the few are dispositive of the many. Traditionally, it is also a way of assembling a series of cases which are relatively low in value but in which you achieve economies of scale. A single claim might not be worth the powder and shot of assembling a large complex action. For example, in the Poly Implant Prothèses (PIP) breast implant litigation, the claims have a relatively modest value as individual personal injury claims but when there are, say, a 1,000 plus cases the economics make sense. There is a cost saving to be had, as simple as that. What are your thoughts on the recent ruling concerning an application for a GLO in relation to patients who alleged they suffered at the hands of a systemic failure of management in nursing care? The case of Various v Barking, Havering & Redbridge University hospitals Nhs Trust [2014] Lexis Citation 119 concerned an application for a GLO where there was not a unity of clinical issue. When you talk about group actions on behalf of disappointed rail passengers, people who bought soccer shirts and were appalled at their cost (as in the collective action brought by the consumer group Which? against JJB Sports in 2008), or people who have been affected by the same medical device or pharmaceutical, then the unity is clear: I have been affected by this drug. I was on that train. This is the shirt, here is my receipt. Are there any particular examples when a GLO have been made? I mentioned the PIP litigation and many of the examples in this country are in the area of personal injury claims whether medical negligence or product claims. There are shareholder actions being brought against the Royal Bank of Scotland. Historically there have been group actions on behalf of disgruntled rail commuters but not yet, as in the United States, where creativity is unbounded, claims on behalf of people whose flight had been delayed at O Hare airport in Chicago. The claims were so trivial that people were paid off in vouchers from Amazon. What are the advantages/disadvantages to clients and defendants? From the claimant s point of view, the advantage is that unity is strength. A claim that would have been difficult to bring yourself, is not if you are one of 10, 100 or 500 people because there is someone there to help with the heavy-lifting. You may or may not be a test case claimant but you are likely to be represented by a team of lawyers and so the claim will have to be well organised, properly investigated and persuasively evidenced in order for it to go forward. That was certainly the case when we used to act in these cases on legal aid. The process is even more stringent when a claim is brought on a conditional fee agreement and backed by after-the-event insurance where we have to show that the prospects of success are at least 60% before we go forward with a claim. On the defendant s side, there is an advantage in the way that a GLO is managed, particularly by the setting of cut-off dates and budgets. These actions contain costs and define the scope of risk for defendants. Although the corollary to that is that, if they re not careful, they find that the set of cases that they thought was 500-strong is, in fact, 1500-strong. It is a judgement call that they make with their underwriters and the defendant company s risk assessment team. Lexis Free Content In this case, the claimant lawyers argued on behalf of patients that there were concerns about the unit because of a diverse set of claims in different areas of clinical practice rather than in one defined area. The aim being, I assume, to point to a failing culture perhaps because of the calibre or ethics of the management perhaps because it had prioritised financial management as against clinical care, rather than pointing to a single set of clinical failures with a unity of time or (clinical) place within the hospital. In other words, when you look at the different issues concerning different patients that have arisen in this hospital over a period of time, you can see that what they reflect, in terms of unity, is not a single category of claim but rather the absence of an appropriate risk avoidance culture. The logic applied by Master Leslie is internally consistent and the decision you might have got from most first instance judges. It is a measured and thoughtful decision but I wonder if in a few years time we might see such group claims being waved through by judges eager to understand as the Chief Inspector of Hospitals now tries to understand why some units have a much better developed safety culture than others. Do you have any hints/tips to practitioners when applying for a GLO? Yes, recognise that you will need specialist counsel. Also, you need to recognise that unity is strength. That is the motto for claimants but it is also for solicitors. There has to be a collaborative approach on the claimant s side. If you are suing some big company with the resources of a small nation state then, in terms of wanting to spread risk or involve people with appropriate skills, you should be looking for skilled friends to help you. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor. This article was first published by Lexis PSL Personal Injury. First published on LexisPSL and republished on the DR blog on 1 July 2014 To find out more, visit lexisnexis.co.uk/pimag/blog 5

6 25 YEARS OF PERSONAL INJURY CLAIMS THE LEXISNEXIS QUANTUM DATABASE VISUALISED The nature of RTAs 1990 S 2000 S Other 27% Neck & Shoulder 42% Psychiatric 14% Back 9% Leg 8% Other 22% Neck & Shoulder 52% Psychiatric 13% Back 7% Leg 6% Top 5 areas of injury Neck & Shoulder Leg & foot Psychiatric Back Head Highest average PSLA per claim in the database Brain Skeletal Respiratory Sight Other Search a wide cross-section of personal injury cases with up-to-date quantum summaries 6 Submit your quantum cases and get paid 50 for each case we publish with a credit for authoring the Quantum case report Find out more at lexisnexis.co.uk/pimag/quantum

7 Personal Injury Law Reform The Butterworths Personal Injury Law Webinars programme offers you the opportunity to hear about the latest developments from the leading experts in the field without leaving your desk, bringing you up-to-date whilst saving you the most valuable commodity time. Lexis LexisPSL Learning Personal Injury Law Employers liability update Discussing the likely implications of the Enterprise and Regulatory Reform Act, as well as providing a focus on the Employers Liability Tracing Office. 10/09/2014 Eloise Power Barrister, Doughty Street Chambers Stephen Glynn Barrister, 9 Gough Square David Rivers Barrister, Old Square Chambers The CPD countdown begins Update on industrial disease This webinar will assess the ways in which historic cases can be dealt with. Also looking at the latest developments in work related dermatitis and occupational hearing loss. 07/10/2014 Daniel Easton Partner, Leigh Day Patrick Walsh Partner, Pannone Andrew Hogarth QC 12 Kings Bench Walk Niall Maclean Barrister, 12 King s Bench Walk Via Graham Johnson For more details on LexisNexis webinars, visit lexisnexis.co.uk/pimag/webinars 7

8 Butterworths Personal Injury Litigation Service Butterworths Personal Injury Litigation Service When assessing a client s injuries it is crucial for a personal injury lawyer to fully understand the medical terms used in medical reports and records. Butterworths Personal Injury Litigation Service provides practical and comprehensive coverage of every aspect of personal injury litigation. Edited by some of the UK s most senior and respected personal injury lawyers, it offers expert guidance on a whole range of topics from costs, RTAs, fatal accidents, clinical negligence, psychiatric injury and limitation, to highways, children and criminal injuries compensation. It also incorporates the Personal Injuries Damages Statistics book (including the Ogden Tables), Judicial College Guidelines, quantum summaries, case digests and key cases, anatomical drawings and a glossary of medical terms. Quarterly bulletins feature articles of topical interest, notes on recent cases, and information on legislation mean that subscribers have the latest information to hand. An updated CD-ROM provides you with draft letters, practitioners forms, precedents and pleadings. The subscription consists of six looseleaf volumes plus approximately seven service issues per year (invoiced separately on publication), Letters, Forms, and Pleadings CDROM and quarterly Bulletins. Butterworths Personal Injury Litigation Service is also available online. The diagram above provides a quick guide to the main muscle groups. This diagram provides a quick guide to the location of the thirtytwo permanent teeth, consisting of six maxillary (upper jaw) and six mandibular (lower jaw) molars, four maxillary and four mandibular premolars, two maxillary and two mandibular canines, four maxillary and four mandibular incisors. 8 To find out more or to buy Butterworths Personal Injury Litigation Service, visit lexisnexis.co.uk/pimag/bpils

9 Lexis Library Personal Injury Lexis Library The comprehensive and acclaimed online collection of personal injury sources dating back to Personal Injury from LexisNexis provides you with access to a wide range of medical related law information such as medical negligence, personal injury litigation, damages for personal injury, and National Health administrative and employment law, including access to the all important damages calculator. Key Personal Injury sources EXCLUSIVE to LexisLibrary: Butterworths Personal Injury Litigation Service Relied upon by personal injury professionals and edited by some of the UK s most senior and respected personal injury lawyers, this source provides comprehensive coverage of all aspects of personal injury litigation Includes questionnaires, worked examples, sample letters, precedents, model pleadings, checklists, tables of costs, anatomical drawings, and a glossary of medical terms Practical advice clearly showing how the law applies in a wide range of situations Also includes quantum summaries, and judgments Bingham & Berrymans Personal Injury and Motor Claims Cases Written by experts in the field of personal injury and insurance law, this title is the leading work in this field and provides practical guidance and information to all practitioners involved with motor and personal injury insurance litigation. Covering all reported cases relevant to claims arising out of road traffic accidents, it is a unique combination of practical procedural advice, legal background and diversity of case summaries within, but not exclusive to, the context of motor claims. It clearly explains the principles behind the assessment of damages and offers advice on practice and procedure in the conduct of claims. Redgrave s Health and Safety Unrivalled in providing complete up-to-date coverage of health and safety legislation and case developments Provides all relevant key cases, fully annotated, with helpful guidance notes by the editors Contains the full published text The only work of its kind that sets out all the legislation, with crossreferences to the definitions 9

10 Personal Injury gives you access to ALL of the following. All sources in red are exclusive to LexisLibrary. Bulletins Butterworths PI Litigation Service Bulletin Cases All England Law Reports (PI) Butterworths Medico-Legal Reports Case Overview General Case Digest Judgments ( Present) Judgments Alerter Personal Injuries Quantum Database Specialist Case Digests Citators & Digests LexisNavigator LexisNavigator Key Definitions Commentary Bingham & Berrymans Personal Injury and Motor Claims Cases Butterworths Personal Injury Litigation Service Munkman on Damages for Personal Injuries and Death Munkman: Employer s Liability Personal Injury Series - Asbestos Disease Claims (Butterworths Personal Injury Litigation Service) Personal Injury Series - Stress Claims (Butterworths Personal Injury Litigation Service) Redgrave s Health and Safety Specialist News Analysis UK Legal News Analysis UK Legal Newspapers Index Current Awareness Appeal Tracker, Practice Directions and Court Information Bulletins Index Events Key OJ Material Lexis News Bites Forms & Precedents BPILS Personal Injury Precedents Legal Journals Journals Index *PLUS* Medical Law Review Legislation Bill Tracker UK Act Summaries UK Legislation Status Snapshots UK Parliament Acts (PI) UK Parliament SIs (PI) UK SI Summaries Materials The Judicial College Guidelines (formerly JSB Guidelines) UK Regulatory Materials Summaries Lexis Library User Benefits: Easy to search and compare cases with the Quantum Database. The database is updated monthly with the latest UK Retail Price Index figure, enabling you to access damages as at today s value. Save time and be up-to-date with the latest developments with hyperlinks. For example when viewing cases in Butterworths Medico-Legal Reports you can link to related cases in The All England Law Reports or to legislation in the UK Parliament Acts. Stay up-to-date with personalised onscreen and alerts which can be set up using the Key Official Journal Material and other current awareness sources found in this menu. For more information as to how LexisNexis can help your organisation work faster, work smarter, speak to your Account Manager, call us on or visit www. lexisnexis.co.uk/lexislibrary 10

11 Too high a Risk Is being an expert witness still worth it, asks Mark Solon Being an expert witness has become much more of an exacting career path in recent years. No longer the cushy number some might have considered it 30 years ago, giving expert evidence in court is now fraught with new legislation. In particular, with the introduction of Lord Justice Jackson s reforms last April, the focus has moved to cost, speed and narrowing down evidence to what is strictly relevant. Experts must now look much more carefully at their fees and what they can achieve within stricter timescales. In addition, when, three years ago, the Supreme Court overturned centuries of established legal wisdom, expert witnesses could no longer enjoy protection from liability for negligence. Experts can now be sued if their work is found to be deficient. So one may well ask is it still worth it? Is it safer to stick with the day job? Change for the better? Some experts admit they are now much more risk averse in the light of recent legislation. Others believe the pressure on costs is a negative development, leading to grossly inflated estimates, while others have felt under pressure to retrain in order to keep on top of the new demands. Most agree, however, that greater liability is a positive development in the field. Philip Collier, of Collier Knight Watts, a consulting forensic engineer and an expert witness for 22 years, says: The major difference now since Jackson is stricter ideas of timescale and cost budgeting. With costs, I find I am being asked for the worst possible option, because solicitors don t want to go to court and have the final bill much more than anticipated. So we find ourselves over-estimating and being encouraged to do so because solicitors don t want to be caught out. I am happy to cap or fix my fee. Because, after all, we don t want to price ourselves out of the market. But really I don t feel that this approach is actually working. Mike Flannery, a health and safety consultant specialising in accident investigation and safety management systems, also feels that the pressure on costs is a negative. If you have spent 40 years getting to the top of your profession there will be a price for your services. It s the same as with a barrister who has been working for 40 years. He is not going to charge you an hour is he? He added: I think experts nowadays tend to be a little more risk averse which is a poor thing. If experts become risk averse, society is diminished. Is he more risk averse? No. As long as you can deliver to the brief and you don t wander off, in general you can be sure that your work as an expert witness will be well regarded and withstand scrutiny. But it certainly isn t the cushy thing it was 30 years ago. She says: The Jackson Reforms have resulted in changes to cost and case management rules. This has meant that the need to retrain as an expert witness has been imperative, as the demands of the report are much higher for such cases rather than the more simple personal injury cases that were rampant several years ago. But she is fully supportive of the tighter rules governing liability of expert witnesses. I feel that this is in some ways a positive move forward, as professionals should be held accountable for work that is below the expected standards. It is ultimately the responsibility of an expert witness to provide the court with the correct information to the expected standards in the interests of assisting the court for justice to be served. An expert witness that falls short of the expected standards is inevitably a hindrance to the justice system, and it is important that these laws are in place to protect these justice systems. Philip Collier agrees, saying that expert witnesses are walking on thick ice. As long as you don t start giving bizarre opinions or allow yourself to be seen as some hired gun, or only give half an opinion because you want to please the people who are paying you, you would have to really cock it up to face legal action. Today I will say no to things I don t feel I can do. Previously expert witnesses might have said I am not an expert but I can give you my opinion. These days that s not good enough. However, Dr Ganesh Bavikatte, an expert witness for the last two years and a consultant in rehabilitation medicine at the Walton Centre in Liverpool, felt the recent raft of legislation affecting expert witnesses was too burdensome. It is extremely disappointing that there is increased risk of being an expert and also not being adequately compensated for this hard work. I will be accepting fewer cases in the future. He added: Stick with the day job 100% better and less worrying. Mark Solon, managing director of Bond Solon Training & solicitor New Law Journal, the leading weekly legal magazine, keeps you up-todate with news and change across case law, legislation and changes in procedure across core civil practice areas. Key developments are presented in an easily digestible format, together with analysis of their implications and practical advice for busy practitioners. Subscribers receive 48 issues per year, plus unlimited access to exclusive online and archived content at www. newlawjournal.co.uk. New Law Journal Training needs? Dr Ravinder Varaich, a dental expert witness, feels the need for further training in the wake of legal reforms. First published in New Law Journal on 6 June 2014 in edition 164 NLJ 20 To find our more about New Law Journal or to have a free trial, visit lexisnexis.co.uk/pimag/nlj 11

12 Lexis PSL Personal Injury LexisPSL Half the battle is keeping on top of the latest case law, legislation, precedents and forms. Lexis PSL Personal Injury brings everything together for you online, in one place. So you can get up to speed faster, with more time to spend on your clients. Our succinct practice notes and layered approach gives you more control over accessing the level of information you need. Short, concise practice notes help you find what you need more quickly, and provide direct links to relevant cases and legislation, including the All England Law Reports. A wide portfolio of expert commentary, includes Butterworths Personal Injury Litigation Service, Bingham & Berrymans Personal Injury and Motor Claims Cases, Munkman Employer s Liability, Redgrave s Health and Safety, and Munkman on damages. LexisPSL Personal Injury precedents include suites of precedents with detailed drafting notes, and direct links through to cases, legislation and relevant commentary. Lexis Smart Precedents also allow documents to be created from a single questionnaire, saving huge amounts of time in drafting and crosschecking, and reducing the risk of error. So you can be confident you re giving the right advice, even when you re outside your comfort zone. And you re free to spend more time focusing on rewarding work that makes a real difference. LexisPSL Personal Injury has thousands of quantum cases in one easy-to search database, with new cases added every week. Plus over 20 quantum calculators that can run highly complex calculations for you in minutes (not hours). Meet the team Karen O Sullivan Karen has 15 years of experience in all types of personal injury litigation and specialises in employer liability claims from union-funded claimants, occupational disease claims, and group actions as well as representing defendants. Karen trained at Nelsons solicitors before moving to Thompsons upon qualification (by client request) where she acted primarily for union GMB. Karen then became Head of Department at RSA Legal South managing and supervising a team handling over 2000 litigated cases on behalf of defendant companies. Karen joined the LexisNexis PSL Team in 2009 as the in-house expert and spokesperson for personal injury. She is also a regular contributor to the New Law Journal. Elizabeth Milbourn Elizabeth has ten years of experience in personal injury litigation. She studied science and law at the University of Adelaide in Australia and practised there for several years before relocating to London. She initially practised in insurance litigation dealing with product and public liability claims and then specialised in clinical negligence. She worked at Lovells and then at US Firm Howrey. Following that she transferred to Nabarro with her team to help establish the healthcare practice. Elizabeth managed a significant case load dealing with large and small value claims and several large scale group actions. Elizabeth joined the Lexis PSL team in January Consulting Editorial Board Robin de Wilde QC Clerksroom Simon Taylor QC Cloisters Professor Dominic Regan Legal Consultant Andrew Wilson Legal Consultant Mark Havenhand Irwin Mitchell Judith Inghami Nabarro Susan Brown Prolegal Sarah Padmore RSA Legal Sue Bright RSA Legal Stephen Garner Old Square Robert Hunter Devereux Chambers Theo Huckle QC Civitas Chambers Marcus Weatherby Pattinson & Brewer Contributing authors Andrew Ritchie QC 9 Gough Square James Sullivan 12 Kings Bench Walk Tom Pacey 12 Kings Bench Walk Louise Thomson 12 Kings Bench Walk Stephen Innes 4 New Square George McDonald 4 New Square Robert Hunter Devereux Chambers Alistair Hill Dundas & Wilson Marcus Weatherby Pattinson & Brewer Joel Donovan QC Cloisters Sarah Fraser Butlin Cloisters Catriona Stirling Cloisters Mike Hill Trinity 12

13 Personal Injury CPR changes October 2014 This Practice Note sets out a summary of the personal injury CPR changes which are coming into force on Wednesday 1 October The changes introduce, for the first time, specific rules for low value soft tissue injury (whiplash) claims. This reform of the low value protocol for road traffic accident claims is designed to (1) fix the cost of medical reports; (2) restrict the application of Part 36 costs consequences where the defendant has made an offer before receiving a medical report and (3) prevent medical experts being paid a fee for producing a medical report where they have previously provided treatment to the claimant, or are associated with an expert who has provided treatment. This Practice Note sets out a summary of the upcoming personal injury specific CPR changes. The new provisions come into force on 1 October 2014 and apply to soft tissue injury claims where the Claim Notification Form is sent on or after this date. The changes are as a consequence of the The Civil Procedure (Amendment No 6) Rules 2014, SI 2014/2044, and the 75th Update Practice Direction Amendments. Soft tissue injury claims New rules for handing soft tissue injury (whiplash) claims under the RTA protocol have been introduced. The new rules only apply to cases where the Claim Notification Form is submitted on or after 1 October The changes aim to: Fixed cost medical reports Fixed costs apply to the first and subsequent medical reports and also to the cost of obtaining medical records. Generally only one expert s report should be required and a further medical report (whether from the same expert or one from another medical discipline) will only be justified where it has been recommended by the first expert and that report has been disclosed to the defendant. Whether the soft tissue injury claim settles in or out of the RTA protocol the following sums (exclusive of VAT) are recoverable in respect of the cost of obtaining a fixed cost medical report: first report from an expert 180 a further report (where justified) from -- Consultant Orthopaedic Surgeon 420 (includes a review of medical records, where appropriate) -- Consultant in A&E medicine General Practitioner Physiotherapist 180 The cost of obtaining a further report from an expert not listed above is not fixed but any cost incurred must be justified. LexisPSL control the use of medical reports ensure that in most cases only one medical report is obtained ensure the expert is independent of any medical treatment; and limit offers until after a fixed cost medical report has been obtained and disclosed The changes introduce the following definitions into the RTA protocol: soft tissue injury claims : -- a claim brought by an occupant of a motor vehicle where the significant physical injury caused is a soft tissue injury and includes claims where there is a minor psychological injury secondary in significance to the physical injury a fixed cost medical report : -- a report in a soft tissue injury claim which is from a medical expert who, save in exceptional circumstances (a) has not provided treatment to the claimant; (b) is not associated with any person who has provided treatment; and (c) does not propose or recommend that they or an associate provide treatment an associate : -- in respect of a medical expert, any person whose business is linked to that expert or to any intermediary who commissions either the expert s report or any proposed medical treatment and associated with has the equivalent meaning Part 36 cost consequences This changes relates to soft tissue injury claims which have dropped out of the RTA protocol and have either: settled and the costs consequences of section IIIA CPR 45 apply; or had judgement awarded and the costs consequences of section IIIA CPR 45 apply In either of these circumstances if the defendant made a Part 36 or Protocol offer before receiving a fixed cost medical report then where: the claim settled before trial, the Part 36 costs consequences will not apply unless the offer was accepted more than 21 days after the defendant received the medical report; or judgment has been awarded the costs consequences will only have effect in respect of costs incurred by either party more than 21 days after the defendant received the medical report Associated medical experts Except in exceptional circumstances, medical experts who provide fixed cost reports for soft tissue injury claims should not: have provided treatment to the claimant; or be associated with any person who has provided treatment; and has not recommend that they or an associate provide treatment For more information on LexisPSL Personal Injury, or to have a free trial, please see 13 lexisnexis.co.uk/pimag/psl Text in red indicates where subscribers to LexisPSL can access further content.

14 Lexis Calculate: Fixed Costs Calculator LexisPSL Our suite of 22 quantum calculators all accessible from this left hand menu. 14

15 The new tool applies to Road Traffic Accident and Employers Liability / Public Liability cases settled under 25,000 and will calculate: Fixed costs for cases which settled within the portal Fixed costs for cases which dropped out of the portal and subsequently settled / went to trial Fixed costs for RTA cases under 10,000 which never entered the portal LexisPSL Guides you through key implemantation dates different for Road Traffic Accident and Employer Liability /Public Liability Within these calculations customers can add in: London weighting costs Infant approval costs A payment percentage calculation under a DBA 15

16 Terminating retainers and assignment of CFAs Produced in partnership with Sue Brown of Prolegal LexisPSL This Practice Note considers issues around claims where the claimant entered into a conditional fee agreement (CFA) prior to 1 April 2013, and after 1 April 2013, either that retainer is terminated or the claimant instructs another firm of solicitors. 1 Pre-LASPO CFAs The significant factor is that, under the new costs regime, a claimant proceeding under a pre-april 2013 CFA with pre-april 2013 ATE insurance (pre-laspo CFA) can recover the success fee and ATE premium from the defendant on the successful conclusion of the claim. However, the question of whether the old costs regime is incompatible with the paying party s Article 6 Right (the right to a fair trial) under the European Convention of Human Rights was considered in the Supreme Court in Coventry v Lawrence. The Supreme Court, on 23 July 2014, declined to rule on the issue of whether to order payment of a recoverable success fee and ATE insurance premium against the losing party but adjourned the matter to give an opportunity for the Attorney General and Secretary of State for Justice to make representations. Pending that further hearing, paying parties and those representing them may seek to state or adjourn detailed assessments proceedings where this issue arises until after Coventry is decided. For personal injury and clinical negligence claims (except mesothelioma claims), if the pre-laspo retainer is terminated, the claimant is caught by the Transitional Provision at CPR This states that qualified oneway costs shifting (QOCS) does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement. The claimant therefore loses the recoverability advantages of the old regime without gaining the QOCS advantage of the new one. The claimant probably is still entitled to the 10% uplift on general damages, because Simmons v Castle appears to except only claimants who fall within LASPO, s 44(6) (ie those eligible to recover a success fee from the losing defendant), but overall most claimants are likely to be worse off if they lose their pre-laspo CFA. Mesothelioma claims For diffuse mesothelioma proceedings, the implementation of ss 44 and 46 of LASPO was deferred until the Lord Chancellor has carried out a review of the likely effect of those sections and published a report. On 1 August 2014, the Justice Select Committee recommended that a further review and additional consultation take place before LASPO is extended to mesothelioma claims. So, at present the pre-laspo costs regime applies and recoverability is preserved for these claims. See also Coventry above. 2 1 LexisPSL Personal Injury customers can find more detail in Practice Note: Conditional fee agreements after 1 April 2013 (personal injury and clinical negligence) and our sub-topic: PI specific Jackson Reforms. 2 LexisPSL Personal Injury customers can find more information in Practice Note: Mesothelioma claims procedure 16

17 Termination of retainer Termination arises in a variety of situations including where: the claimant wishes to change solicitor, either because the person dealing with their claim moves to a new firm or because they are no longer happy with the way the claim is being handled the firm representing the claimant closes or moves out of the relevant practice area (eg personal injury) the firm representing the claimant advises the claimant it is no longer willing to act under a CFA, as its view on the prospects of success with the claim has changed If the claimant can find a new firm willing to take over the conduct of their claim, pre-laspo it would normally have been relatively straightforward; the new firm would provide an undertaking to preserve the old firm s lien for costs if appropriate, and enter into a new retainer with the client. For retainers straddling the LASPO changes, it is more complicated and it is important to consider the status of the pre-laspo CFA and whether it can remain in place. If the old CFA has been terminated, recoverability of success fees cannot be preserved. Any new CFA entered into is governed by the post- LASPO regime. Entitlement of old firm to costs The question of whether the previous firm remains entitled to costs following termination of the retainer depends on the wording of the CFA. Most firms use the Law Society model CFA as the basis for their own CFA. An updated version was published in June 2014 incorporating changes in accordance with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134). Clients must be advised that they have 14 days to exercise their right to cancel the agreement in certain circumstances. The model CFA provides as follows: Client termination Client ends agreement (after expiry of cancellation period): 1. client pays base costs, counsel s fees and disbursements, or 2. if client goes on to win case, client pays base costs, counsel s fees, disbursements and success fee Death Client dies before claim is concluded: 1. client s estate is liable for base costs, counsel s fees and disbursements, or 2. if personal representatives wish to continue the claim, solicitors may enter into a new CFA with them on the basis they agree to pay the success fee on base costs from the beginning of the agreement with the client Solicitors end agreement Client not cooperating If client does not keep to their responsibilities, or client rejects solicitor s advice about settlement (in practice, this generally means acceptance of a Part 36 offer) solicitors have right to decide whether client must: 1. pay base costs, counsel s fees and disbursements but not success fee on request, or 2. pay costs, counsel s fees, disbursements and success fee if client goes on to win claim Poor prospects If solicitors believe client is unlikely to win, the model CFA requires selection of one of the following options. Client either: 1. pays nothing, or 2. pays only disbursements and counsel s fees if counsel not on CFA Legal Ombudsman While there are, under some of the above circumstances, contractual rights to seek payments from clients, the Legal Ombudsman has taken the view that the following scenario amounts to exploiting loopholes in the contracts : 1. the term no win, no fee has been used to describe CFAs and 2. clients have pursued claims in the belief that they would not have to pay anything if they did not recover compensation and 3. the solicitor seeks payment from clients who have not won their case, 4. even where the client becomes liable for costs because they failed to cooperate or because their ATE insurers refuse indemnity Assignment of CFA If it is possible, the best option for a client who is currently represented under a pre-laspo CFA is likely to be for the previous firm to assign its CFA to the new firm. The question of whether assignment of a CFA from one firm to another is a genuine assignment of the benefits and burdens of the agreement, or a novation whereby the first CFA ends and a new one is entered into with the new firm, was considered in Jenkins v Young Brothers Transport Ltd, a Supreme Court Costs Office decision in a case where the claimant had followed his solicitor as she moved from one firm to another over the course of the claim, and the defendant ran the argument that the second and third firms did not have valid retainers because they did not themselves enter into CFAs with the client. The defendant was unsuccessful, and the CFA was held to have been validly assigned. It is important to ensure that assignment is done effectively, and the points highlighted in Jenkins included the following: Assignment For an assignment to be valid, four requirements must be satisfied (from Treitel on The Law of Contract (not available in Library, see further reading links 3 ): 1. the assignment must be in writing under the hand of the assignor 2. there must be an intention to assign 3. the assignment must be communicated to the assignee by the assignor 4. notice of the assignment must be given to the debtor [here, the client] In Jenkins, all requirements were met. The argument put forward on behalf of the defendant was that the general rule of assignment is that only rights, not obligations, can be assigned; the assignee cannot take on the assignor s burdens under the contract. Treitel sets out exceptions to this rule, including where the obligation to perform a contract in place of the assignor is annexed to the assignment of the benefit of the contract (the conditional benefit principle ), and the master held that the arrangements between the firms of solicitors fell with the exceptions and were valid assignments. 3 LexisLibrary Customers can see Butterworths Personal Injury Litigation Service > Division V Costs, Funding and Referral Fees > Part 3 Reform of Civil Costs and Funding > A Implementation of the Jackson Report > 1 Introduction to Jackson Reforms > (iv) Assignment of conditional fee agreements [3002.1] in the Related documents. LexisPSL 17

18 No changes to retainer To prevent the risk of an assignment becoming a novation, it is important that it should stand as a straight assignment of the existing retainer, and not introduce any changes or new terms. Compliance with CFA Regulations LexisPSL Master Campbell in Jenkins also considered whether the new solicitors were required to comply with the requirements under the Courts and Legal Services Act 1990 s 58 and the Regulation 4 information required under the Conditional Fee Agreements Regulations It was held that s 58 was complied with but Regulation 4 was not. Although, in that case, this was not material, in circumstances where there is a change in the individual solicitor dealing, as well as a change in firm, it is probably essential to ensure that both s 58 and Regulation 4 are complied with on the assignment, and that full consideration is given to all funding alternatives. Application of Jenkins post LASPO Jenkins was decided on its own facts and has been criticised by some commentators. It would not preclude a paying party from challenging the validity of a post-laspo assignment, particularly if the circumstances were different, eg the client had changed solicitors for reasons other than to follow the solicitor with conduct of their claim to a new firm. Second CFA If an assignment is made, consideration needs to be given to what the position would be if it were held that assignment was ineffective. The new solicitor needs to discuss this with the client and, firstly, ensure that there is a valid fall-back retainer, and secondly, agree with the client either that the client will pay the post-laspo success fee or that the solicitor will waive that success fee. It appears the safest way to cover this is for the client to sign a second CFA with the new solicitor, to be relied on only if the assignment proves ineffective. ATE This should be straightforward, provided the ATE policy has not been cancelled. Although the ATE insurer will generally have been selected by the old law firm rather than the client, the ATE policy is the client s and if the client moves to a new firm, they should be able to take the pre- LASPO ATE policy with them. It is important to check the wording of the policy, as some ATE policies state that cover will end if the solicitor ceases to act. The new solicitor will need the ATE insurer to confirm that it agrees to maintain cover following the change of solicitor. In practice, the ATE insurer is unlikely to create any difficulties, although may wish to maintain closer scrutiny of the conduct of the claim than may be their normal practice if the new firm is unknown to them. Notice of funding It is not entirely clear whether it is necessary to serve a new Notice of Funding since, technically, the funding remains the same if the retainer has been validly assigned, but it is certainly prudent to do so, particularly as otherwise the defendant would be completely in the dark as to whether they were liable for a success fee and ATE premium following the change of solicitor, or whether the new solicitor was acting on a post- LASPOretainer, and would be entitled to argue that it may have acted to its detriment as a result of the failure to give notice. Special cases impact on pre-laspo CFA Child reaching majority no impact on CFA Where a CFA was signed by a litigation friend on a child s behalf, and the child reaches the age of 18 before the claim is concluded, it is not necessary for the client to enter into a new CFA. The child was the client throughout and remains the client, the litigation friend having signed the CFA as the child client s agent. For the sake of clarity and to avoid dispute either with the client or with the other side, the client should be asked to sign a statement confirming that they wish the solicitor to continue to act and, as far as necessary, ratify the agreement. Death of client terminates CFA Since it is clear that death terminates the CFA, it is unlikely that assignment would be effective, although an attempt could be made to preserve recoverability by the personal representatives adopting the original CFA. However, to cover the situation in the event that this is ineffective, the personal representatives should enter into a post- LASPO CFA. Bankruptcy of client CFA remains in place Neither the CFA nor the ATE policy is terminated in the event of the client s bankruptcy. If the claim is for general damages only, the claim remains the client s and can continue in their name, but clearly most claims include a claim for loss of earnings, in which case, the action vests in the trustee in bankruptcy, and it seems likely, although there is no case law on the issue, that the original CFA can be assigned to the trustee. 18 For more information on LexisPSL Personal Injury, or to have a free trial, please see lexisnexis.co.uk/pimag/psl

19 Cut out Guidance: Issues to consider when completing costs budget This Checklist provides a range of questions which may arise when completing the costs budget and provides responses to assist you. General comments Question Do I have to complete a costs budget? What if I fail to complete a costs budget? Can anyone complete the budget? Response You will need to complete a costs budget unless proceedings fall within one of the current costs budgeting exemptions. If one of the exemptions apply you do not need to complete a costs budget. For information on the exemptions see Costs budgets Do I have to produce a costs budget? If you fail to complete a costs budget when one is required under the CPR provisions, CPR 3.14 will apply and you will be taken as having filed a costs budget for court fees only. This will have a dramatic impact on the costs your client will be able to recover if when the matter is resolved your client is considered to be the 'winning party'. This draconian sanction was applied in Mitchell, see Costs budgeting the ultimate sanction (Mitchell v NGN). Note: this judgment is currently being appealed, through the leap frog process, to the Court of Appeal. During the pilot scheme many responses considered that a senior litigator should be involved in producing the budget due to the seriousness of the sanctions of underestimating the budget and the need for experience in being able to estimate the costs that would be incurred at certain stages of the proceedings, especially e-disclosure. LexisPSL Is there a specific form I have to use for the budget? Precedent H is a long form, do I need to complete all of it? My case is complex, I cannot work out what the costs will be for the entire proceedings. What can I do? I have no idea where to start. How do I determine the costs already incurred? Is there a time limit for completing the budget? Many solicitors instructed costs draftsmen to assist in producing the budget. Note: whilst using senior litigators and costs draftsmen will increase the costs of producing the costs budget, some of which will be recoverable if a CMO is made, they are more likely to provide more accurate assessments of the budgets required. Yes. This is precedent H. It must be in landscape format with an easily legible typeface (CPR PD 3E, para 1). There is no requirement for specific font or font size. Warning: the form has been updated so make sure you use the one updated in September 2013, which includes court fees and refers to 'statement of case' rather than 'pleadings'. If the budgeted costs do not exceed 25,000 there is no obligation to complete more than the first page of Precedent H (CPR PD 3E, para 1). Otherwise you need to complete the entire form. What is not clear is what happens if the budget subsequently exceeds 25,000 eg if there is a requirement for expert evidence after disclosure when there had been an assumption that no expert evidence was required. Whether a party will then need to complete a long form budget has not been addressed. Note: if the costs are around 25,000, such that one party's costs are slightly under whilst another are slightly over, there would seem to be a discrepancy in that only one party can see a breakdown of the other party's costs. When dealing with a substantial case, CPR PD 3E, para 1 provides that the court may direct that a budget is initially limited to specific part of the proceedings eg budget up to the end of disclosure. The budget will then be required to be extended to cover the all the stages of the proceedings over time. There is currently no indication as to when the court will give such direction. Given the limited time parties have to be able to complete a costs budget and file and serve it is difficult to see how an application could be listed and heard whilst still allowing time for completion to the extent required. Practical point: seek to agree with the other party the extent to which the costs budget should be completed and enter into a consent order as to what phases of the litigation the budget should cover in the first instance. See: Checklist completing costs budget for incurred costs. It is important to ensure that there is no overlap between the costs incurred and the estimated costs, as this will result in double counting. You therefore need to ensure that you provide a break down of the costs to make it plain, for the other party and the court, which aspect of the costs for a phase have already been incurred and what the estimated costs are intended to cover. This issue was considered by Coulson J in Willis see: An insight into costs budgeting and proportionality (Willis v MRJ Rundell). Yes. It must be served and filed by the date stated in the courts notice following the Directions Questionnaires or if no time period is given not less than seven days before the first CMC (CPR 3.13). There have been differing cases considering this issue, see Jackson reforms on costs budgeting one year on What we have learnt filing and exchanging the costs budget. 19 " Text in red indicates where subscribers to LexisPSL can access further content.

20 LexisPSL Does the budget need to be signed and dated? The budget must be dated. In addition it needs to be verified by a statement of truth. There are a number of issues to consider: (1) This must be given by a senior legal representative of the party (CPR PD 3E, para 1). In Americhem, Stuart-Smith J held that whilst a costs draftsman could not be properly categorised as a senior legal representative, the signed Precedent H was not void as to hold otherwise would lack in any form of reality or justification, see: Precedent H signed by costs draftsman not a nullity even though draftsman not a senior legal representative (Americhem v Rakem) (2) The wording for the statement of truth will depend on the date on which proceedings were commenced. Do I need to show it to the other parties? (a) If commenced prior to 22 April: The costs stated to have been incurred do not exceed the costs which my client is liable to pay in respect of such work. The future costs stated in this budget are a proper estimate of the reasonable and proportionate costs which my client will incur in this litigation. (b) if commenced on or after 22 April: This budget is a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation. See Practice Note: Statements of truth. Parties are encouraged to co-operate and seek to agree their budgets prior to the CMC at which they are put before the court. If the court makes a Costs Management Order and the parties have not agreed their respective budgets the court can review the budgets and make any appropriate revisions before recording its approval of those budgets. If the parties have agreed the budgets beforehand the court cannot make any revisions and will simply record the extent of the agreement. Dealing with different parts of precedent H Assumptions Contingencies purpose What is the purpose of the assumptions section in Precedent H? What is the purpose of the contingency section in Precedent H? This is an important part of the budget. It explains to the other side and the court the assumptions on which you have based your estimates. If there is a later departure from the costs budget and approval of the court is required you can draw the court s attention to the assumptions to show that the additional costs to be incurred would have fallen within the assumptions made at the time of the budget. However, such assumptions must be reasonable eg in the defamation pilot scheme an approved budget provided for a junior counsel. Later senior counsel was considered necessary. An application to revise the budget was refused by the court and the client could not recover the additional costs of instructing a QC. This part of the budget should be considered in conjunction with contingent costs. This section should be used for anticipated costs which do not fall within the main categories set out in Precedent H. Costs which are not anticipated but which become necessary later are dealt with in paragraph 4.7 of the Practice Direction. Setting out costs as a contingency will assist if later seeking to claim those contingent costs. In response to the Pilot Scheme two judges pointed out how important it is to flag up the contingencies in Precedent H and that flagging up contingencies also shows flexibility. Note: the court if asked to make a costs capping order can take into account contingencies when determining the rate at which to set the cap. If the proceedings are subject to costs budgeting and there are no contingencies within the budget it will be much harder to argue for them to obtain as a high a cap as possible. 20 Text in red indicates where subscribers to LexisPSL can access further content. "

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