LECTURE FOR SYMPOSIUM AT 7 BEDFORD ROW. MALCOLM JOHNSON OF MALCOLM JOHNSON & Co.

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1 LECTURE FOR SYMPOSIUM AT 7 BEDFORD ROW 1 ST FEBRUARY 2011 MALCOLM JOHNSON OF MALCOLM JOHNSON & Co. 1. INTRODUCTION - MY BACKGROUND I qualified as a solicitor in In 2002, I began my own firm, Malcolm Johnson & Co. specializing in child abuse compensation claims. My firm has a contract from the Legal Services Commission to offer publicly funded services in the two areas of Actions against the Police Abuse in Care and Personal Injury. It also holds LEXCEL and Investors in People. Around 90% of our gross incomes come from child abuse cases. We also set up special needs trusts for those of our clients who obtain compensation, and I often act as their professional trustee. My website has a database containing summaries of all the major cases in child abuse compensation law as well as all the major child protection statutes. It also contains a number of the articles that I have written on this subject and a blog which comments on press reports. We are always happy to speak to other lawyers (whether from Claimant or Defendant organisations) or anyone who needs advice, providing there is no obvious conflict. I am a member of the Law Society s Personal Injury Panel, a Fellow of the Association of Personal Injury Lawyers and the Co-ordinator of the Association of Child Abuse Lawyers. I have lectured and written a number of articles about the work that I do, as well as being a co-author Claims against the Motor Insurers Bureau published by the Law Society. I also regularly contribute to Sweet and Maxwell s Encyclopaedia of Insurance Law and APIL s Personal Injury Law and Practice. I am a registered Trust and Estate Practitioner as well as a Solicitor Advocate. Finally I am a co-author of Guide to Child Abuse Compensation Claims published by Jordans which should be available in a matter of weeks as at the date of this lecture. I commend this to all delegates, quite simply because it contains a great deal of useful information that is necessarily available to those who have to meet these claims. I began undertaking child abuse compensation claims in around 1998, when I acted for a man placed in an approved school from 1967 to From there, I have acted for Claimants in a number of different settings, including the church and other voluntary organizations. In 2002 I was the lead solicitor in the group action involving St Leonard s Cottage Homes, which resulted in a recovery of around 1.5 million for some 60 1

2 Claimants. More recently I acted for a group of Claimants, who successfully sued a local authority after being abused by a man working in a community leisure facility. 2. CHILD ABUSE COMPENSATION CLAIMS THE PRACTICALITIES Following the landmark case of A v Hoare [2008] UKHL 6, there were fears on the part of local authorities that a flood of claims would be unleashed. In the writer s view (based as it is on conversations with colleagues working in the same field) this has not happened. The effect of A v Hoare has quite simply allowed Claimant lawyers to pick out those cases that are likely to succeed with more certainty. The writer believes that in reality only a very small proportion of child abuse cases occurring in the care of local authorities or voluntary organizations lead to successful recoveries of compensation from public or private bodies. By way of example, Malcolm Johnson & Co. receives something like twenty enquiries of a child abuse nature every month. Only one out of those twenty enquiries is actually taken on as fully fledged litigation cases, and I would estimate our success rate (at most) at around 80%. The Legal Services Commission has a number of informal factors that go into their decision as to whether to grant public funding to a child abuse litigation case, and our own risk assessment factors are very similar. These factors are as follows:- 1) The who, what, when, where and the effect. The nature of the acts of the abuse, the frequency and specific instances of abuse, the name of the abuser and the place and time of abuse and indicators that there have been serious psychological consequences. 2) Corroboration there should be good direct and corroborative evidence to confirm the allegations of abuse to this particular client. This could be a criminal conviction of the abuser, an investigation by the police or social services, or in a group action corroborative evidence from other Claimants. 3) Causation evidence of significant harm and potential value of the claim. We are looking for indicators of psychological damage or a recognised psychological disorder, history of treatment, time unemployed, and difficulties sustaining relationships. 4) Limitation this is invariably a risk issue in historic abuse cases. Put very simply, an unsubstantiated set of allegations that comes out of the blue without any kind of substantial corroboration is going to run into problems. Likewise a failure to take into care case that concerns events occurring back in the 1970 s and 1980 s is going to be difficult. 5) Costs this is less important in privately funded cases than in those that are publicly funded. The Legal Services Commission has a series of rules, which set costs/damages ratios in particular types of cases. Very briefly a 10,000 case that is going to cost 20,000 to settle is highly unlikely to obtain public funding, unless it is part of a group action. The prime cases that my firm tends to take on are as follows:- 2

3 A child abused in a care home/school by a care worker/teacher, who has either been convicted or who is being prosecuted. Limitation issues tend to be far less important in such cases. A child abused or sometimes killed in a situation where it is alleged that social services should have acted. A Serious Case Review or Independent Investigator s report indicates fault on the part of various agencies including social services. A child abused by a person with substantial assets (most commonly an unmortgaged house) who is about to be convicted of the abuse. Claims to the Criminal Injuries Compensation Authority are less attractive to my firm because they can take far longer than any litigation and costs can only be deducted from the damages. On the other hand, my firm does have a policy of running both civil litigation claims and CICA claims at the same time, and in at least four cases, has achieved a situation where we have secured higher compensation from the CICA than we did in the litigation. The local authority internal scheme available to complainants, which ends with the Ombudsman is also less attractive than the civil litigation route, quite simply because civil litigation cannot be delayed and once it is initiated, the complaints system cannot be run in parallel. However it can produce a very useful indicator on liability. 3. HOW CAN LOCAL AUTHORITIES AND OTHER ORGANISATIONS MINIMISE THEIR LIABILITY IN THESE CASES? The writer does not seriously expect that those who have the stewardship of public or charitable funds, should make immediate offers on every case presented by his firm. In reality, these cases (particularly those involving failure to take into care) can prove very difficult in the long run and it may well be in the interests of the Defendant to fight the case. At the same time, the writer is aware that Defendants find that different Claimant solicitors have different approaches. Consequently the views expressed below are those of the writer only. Once the Claimant lawyer has conduct of a case, one of the main issues is going to be maximizing the Claimant s recovery. The writer is aware of child abuse compensation cases where Claimant lawyers have been sued for professional negligence in failing to obtain enough compensation for their clients. Consequently an early offer is not necessarily going to put the Claimant under much pressure, if he or she is told by his lawyer that the case could be worth ten times as much money. At the same time, a full and proper investigation has to be carried out by the Claimant s solicitor which includes:- A psychiatric report and possibly some other kind of medical report, such as a gynaecological report. 3

4 An investigation into the Claimant s social services, medical, educational, employment, benefits records. It is not unusual to write to some thirty different sources of information. Taking the Claimant s statement. This can take two or three days in a substantial case. Taking statements from family, friends or other witnesses On the other hand, it may be possible to put a stop to these lengthy investigations in appropriate cases. There are many child abuse compensation claims, where the recovery is always going to be small, perhaps 5,000 or 10,000. By way of example, the writer recently had two cases, worth 5,000 and 7,500. Costs were 15,000 and 30,000 respectively. The abuse had been unpleasant, but it became very clear that both Claimants had many other problems in their lives that could not be laid at the door of their abuser or his employer, the local authority. The following may be helpful. 1) Pre-action disclosure the writer has had to issue at least two actions for contempt against a local authority and a voluntary organization where pre-action disclosure was not given. The writer is aware that this is a process fraught with difficulty for Defendant organisations, but failure to comply means an adverse costs order. 2) Issue of proceedings - child abuse cases often have to be issued as soon as possible because of the ticking limitation clock. The writer prefers to be in a situation where proceedings are issued as soon as possible, quite simply because it means that the case is likely to conclude faster and more pressure is piled on the Defendant. At the same time, costs on an issued case increase astronomically because of the work that needs to be done, pleading the case and complying with court directions. The writer has one case involving the death of a child, where proceedings had to be issued very quickly. The claim is worth around 15,000, but one year on, the costs are already 80,000 (which does not include the success fee). Prior to issue, costs were only around 10,000 and the case might have been settled at that point. The answer is a limitation moratorium followed by early settlement if appropriate. In the writer s view, a limitation moratorium is a temporary measure only and it only really works if there is going to be compliance by both sides with the pre-action protocol. Most Defendant solicitors firms are well aware of the value of the limitation moratorium in appropriate cases, and use it to great effect. 3) Identify small cases many Claimants are highly self aware. Once it is explained to them that three incidents of indecent assault may only result in a 5,000 recovery, and further that there are going to be serious questions about whether those indecent assaults shaped the remainder of their natural lives (quite apart from any limitation problems), they are far more likely to take the money on offer. One suggested approach is to look at the Letter of Claim, value the claim on the basis of pain and suffering only, and then build in a discount for limitation and liability risks. Defendant firms have become quite adept at locating those cases, where really a small offer needs to be made quickly. However the writer has experienced others let the cases drag on, allow proceedings to be issued and costs to increase. 4

5 4) Have a full and frank without prejudice conversation it should not be thought that an early offer to settle a case is somehow an encouragement to the Claimant s solicitor to press forward. A Claimant who is offered 25,000 on a claim that might obtain 50,000 at trial, is bound to think long and carefully if he/she is told that trial is 18 months away, and there is no guarantee of success. Again many Defendant firms of solicitors are adept at making early offers in appropriate cases. 5) Joint experts I frequently use the argument that a joint psychiatric expert is appropriate because it would be distressing for a Claimant to be examined twice. However the reality is that a Claimant who is examined by one of my firm s experts is highly unlikely to be allowed to instruct an alternative expert. It is simply too expensive and there has to be a very good reason to discard a report. Defendant organizations should consider taking up the option of the joint expert, and very often they do. 6) Assess the claim quickly - the Defendant needs to assess the claim quickly, using the time given under the pre-action protocol to identify whether this is a claim to fight. This means that there needs to be a high degree of cooperation between the local authority/voluntary organization, the solicitor and the insurer (if any). There needs to be a full and frank discussion as to precisely what may have gone wrong. 7) Look at the economics and the legalities the writer is a District Councillor, a former trustee of a charity as well as being a former governor of a community school. He is aware that in some organizations, issues of pride and personality may override economic or legal decisions. There is a sense in a small number of cases that sometimes a Defendant organization is not heeding the advice of its own lawyers. This can be ruinous. 4. MY BEST RUN CASE In the two cases below, certain details have been changed to protect my clients identity. The Claimant was born in 1976 and was abused by a neighbour and his friends during the late eighties. In August 2005 she instructed Malcolm Johnson & Co. to run a civil claim against the local authority (in whose area she had resided as a child) for failure to protect her from abuse. Protective proceedings were issued on the 30 th August A pre action protocol letter was sent to the Defendant local authority on the 23 rd September 2005, the Defendant subsequently referred the matter to their solicitors in November We obtained an Order from the court dated 21 st November 2005, which allowed us to serve the Particulars of Claim and the Claim Form without medical evidence. These documents were later served on the Defendant and the Defendant filed an acknowledgment of service on the 14 th December A Defence was filed and served on the 30 th January

6 The allocation questionnaire was filed by the Claimant and served on the 14 th February The Claimant s List for Disclosure was filed and served in May The defendants List of documents was served on the 6 th June An Application for non party disclosure from the police was made on the 4 th December This was in respect of the criminal convictions of the alleged abusers in this case. An Order dated 29 th January 2007 was made stating that the requested disclosure be given. Anthony Maden, Professor of Forensic Psychiatry was instructed by the Claimant s solicitors in June 2006 to examine the Claimant. His subsequent report dated 18 th September 2006 was disclosed to the Defendant s solicitors. In February 2007 the Defendant agreed to pay the Claimant 25,000 in full and final settlement of her matter, together with her costs to be assessed. In 2005, the Claimant also made an application to the CICA. This was refused initially and then proceeded to review where again it was refused. The application then proceeded on appeal to the CICAP and in June 2009 (the Applicant was aged 39), the CICAP made an award as follows:- 24,460 for tariff injuries 87,500 for past and future loss of earning capacity ( 50,000 was for past loss of earnings, and 37,500 for future loss of earnings) The psychiatrist instructed jointly in the civil action, confirmed that the majority of the Claimant s employment problems were caused by abuse. Total - 111,960 This was reduced by the 25,000 received in the civil action, bringing the net award to 86,960. There were a number of features about this case that were essentially positive:- There was substantial corroboration for the Claimant s account of events, which included a report from a court official, when she was taken into care as a child and the account of her four younger siblings, who had also been abused by the same neighbour and his friends. Issue of proceedings within a few days of taking on the case Swift progression through litigation Use of a joint expert (Professor Maden) who was supportive 6

7 Use of non party disclosure application to obtain crucial information, in this case the abuser s criminal record Use of CICA procedure to maximize damages Costs were kept low the total bill for the civil litigation was just over 28,000. There was a NIL success fee. 5. MY NIGHTMARE CASE In these proceedings the Claimant sought compensation for personal injuries and other losses suffered arising out of psychological and physical abuse which she suffered as a child while in the care (at varying times) of three separate Defendants. The abuse occurred between 1975 and The case was initially handled by other solicitors, and proceedings were issued on the 3 rd May Defences were filed by all three Defendants in September Malcolm Johnson & Co. took over the handling of the Claimant s case in early December There was an initial case management conference on the 20 th December 2005, followed by another case management conference on the 18 th April At that point the case was stayed whilst the decision in the case of A versus Ioworth Hoare, H Versus Suffolk County Council and The Secretary of State for Constitutional Affairs, X & Y Versus London Borough Of Wandsworth [2006] EWCA Civ 395 was appealed to the House of Lords. That decision was published at the end of January 2008 and a case management conference set for the 15 th April Proceedings as against the Second Defendant were discontinued. The case was set down for a trial on the preliminary issue of limitation and vicarious liability for the 22 nd December The Claimant s consultant psychiatrist had been initially instructed in early He later saw the Claimant and produced a report dated 30 th March An updated report was obtained in September The Defendants solicitors obtained a report from their own psychiatrist, which was adverse to the Claimant. Following consultation and advice, the Claimant decided to discontinue her case in November 2008, and a final order was made by the court on the 1 st December A parallel CICA claim later failed. I should comment that there was never any doubt in my mind that the Claimant s allegations were true, and that there were failings on the part of all those who had been entrusted with her care. Regrettably various legal and evidential issues made it impossible to continue. There were a number of features about this case that caused problems:- No successful criminal prosecution in relation to the Claimant s allegations although there was some corroboration in the form of supportive witness evidence from various persons who had known the Claimant as a child. 7

8 No use of joint psychiatric experts Difficulties in establishing liability in relation to three separate Defendants, all of whom had been responsible for the Claimant during her childhood. This caused costs/benefits problems for the Legal Services Commission, insofar as they had to assess the costs/benefits in relation to each Defendant. The strength of the Claimant s case against each differed. Delay caused by the stay of proceedings this never assists a case particularly on the issue of limitation. Trial on the preliminary issue of limitation there were weaknesses in the Claimant s case on limitation, and the trial on the preliminary issue would have brought those weaknesses to the fore. I am not sure that this case could have been run in any way that was different. Determination is required, if cases are to be properly run. They cannot be abandoned at the first sign of trouble. There were also further delays caused by the change in limitation laws. Essentially this was a case where there were certain complexities, which only became apparent after much investigation and after the law had changed. It is doubtful that such my firm would feel able to take on such a claim now. 6. SUCCESS FEES The following is a short word about success fees. Child abuse claims do lend themselves relatively well to high success fees because of the various problems on limitation and liability. This makes them costs heavy. The following is an edited extract of a risk assessment from a recent child abuse case. BRIEF FACTS OF CASE:- Client abused by neighbour, who has been recently convicted of various charges of indecent assault. He owns unencumbered house worth in the region of 500K. She alleges a series of more serious allegations. 1. IS THIS WORK WE WOULD NORMALLY CONDUCT AND DO WE HAVE ADEQUATE EXPERTISE TO ACT? Yes. 2. IS THERE ENOUGH CAPACITY TO DO THE WORK? Yes. 3. WHAT ARE THE PROSPECTS OF THE CASE SUCCEEDING ON LIMITATION? 75% 8

9 4. WHAT ARE THE PROSPECTS OF THE DEFENDANT BEING ABLE TO SATISFY A JUDGMENT? 70 80%. 5. WHAT ARE THE PROSPECTS OF OUR BEING ABLE TO ESTABLISH THAT THE ASSAULTS OCCURRED? 80% 6. WHAT ARE THE PROSPECTS OF OUR BEING ABLE TO ESTABLISH CAUSATION AND DAMAGE? 70 80%. 7. WHAT ARE THE PROSPECTS OF SUCCESS IN RESPECT OF ANY OTHER APPROPRIATE MATTERS? - 8. WHEN IS THE CASE LIKELY TO SETTLE OR GO TO TRIAL? Please see client care letter dated 5 August ESTIMATED PROFIT COSTS (INCLUDING VAT) TO SETTLEMENT/TRIAL Please see client care letter dated 5 August ESTIMATED DISBURSEMENTS (INCLUDING VAT) PAID BY FIRM TO SETTLEMENT/TRIAL Please see client care letter dated 5 August Success fee attributable to the risks of the case: - 65% In this particular case, the success fee allowed at detailed assessment was 43%. 7. THE INVOLVEMENT OF ALLEGED ABUSERS IN LITIGATION This is an area, which my firm has sought to develop over the years. Following the decision in A v Hoare claims for assault are no longer necessarily time barred and this has led to more claims against abusers. 9

10 We began with a client who approached us in February She sought compensation for sexual abuse that she sustained as a child at the hands of the Defendant, a neighbour who had been convicted and was in prison. We proceeded to obtained public funding for her case from the Legal Services Commission. We established that her abuser owned a house, and so we sent out a letter of claim in March When we received no reply we issued proceedings in the High Court in August 2007 and obtained judgement in default. At the same time, we obtaining a freezing injunction for our client, which effectively stopped the Defendant from trying to sell his house and dissipate his assets. We then proceeded to trial. The Defendant appointed solicitors to act for him and just a few days before trial, we settled our client s case for 30,000, which sum was paid by cheque shortly thereafter. Two further victims of the Defendant then came forward. We were able (by agreement) to sell his property and recover substantial compensation for them also, and recover our own costs. More recently we recovered nearly 120,000 from a Defendant, part of which sum stands charged on his property. Our costs in that case in the region of 135,000 and the equity in the property should be sufficient to cover those sums. We also sued the estate of a man who abused children whilst working for two local authorities. Again his property should be sufficient to cover those damages and costs, but if it is not, we can proceed against the local authorities. The writer is aware that Defendant organizations do sometimes join in the abuser, but he is surprised that this is not done more often. The process of enforcement has a considerable number of pitfalls, not least the possibility that the process of enforcement secures a limited or nil recovery or that the additional costs exceed those incurred in securing a judgment against the Defendant, or that it will take a great deal of time to liquidate any judgment. However, when assessing the means of an abuser, it is important to ask the practical question how was the abuser able to target the child in the first place? The answer may provide a clue to the very means by which the abuser will satisfy any judgment. Numerous enquiries and investigations have shown that a great many abusers possess substantial capital. They occupy positions of responsibility that give them access to children; they own houses where they can perpetrate abuse and cars to transport children to and fro. They may possess enough disposable income to pay for presents and holidays and above all they have the means to maintain the outward impression of trust and respectability. At the same time, it is also important to realise that the behaviour of an individual is unlikely to mirror that of a local authority or an insurer faced with a claim. On the contrary, they may behave in an unpredictable and bizarre manner. This is an additional reason for proceeding to enforcement as soon as possible. Some Defendants may instruct solicitors, but that is no guarantee that those solicitors will actually have the expertise to represent them effectively. Moreover, the Defendant may not even cooperate with his own solicitors. On the one hand, a Defendant who does not engage with the legal process 10

11 will end up with a default judgment. On the other hand, they may instruct lawyers and the net result is no recovery for the client, because the legal costs of the action subsume the assets. There is an additional reason for joining an alleged abuser to the action, from the point of view of a Defendant who is the employer of that individual. Not all civil litigation claims rest on a successful prosecution, and even where there is a successful prosecution, the Claimant may say that the abuse by the Defendant is far wider than that described on the list of convictions. For this reason, an alleged abuser may well a) deny the abuse, b) admit some abuse but not all of it. This may give the employer Defendant a useful means of defending the claim. The problem is that a Defendant who is an individual will need separate representation. Some Defendants can actually obtain public funding for their Defence. The writer has acted for at least one Defendant who was joined in as Part 20 Defendant on legal aid. Very broadly if the equity in their main dwelling their assets exceeds 100,000, then any capital over that amount will be taken into account. Otherwise they will be left to pay their solicitors themselves. In cases involving the Motor Insurers Bureau, the writer has seen the use of mandates to enable an unrepresented Defendant to be represented by the Bureau. This may be an option for Defendant organizations. Malcolm Johnson of Malcolm Johnson & Co. 1 st February

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