PUBLIC. CIVIL JUSTICE COMMITTEE Minutes of the meeting on 3 July 2012 at in the Old Council Chamber, 113 Chancery Lane, London
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1 Posted on Corporate Business on 8 August 2012 as approved by the Chair CIVIL JUSTICE COMMITTEE Minutes of the meeting on 3 July 2012 at in the Old Council Chamber, 113 Chancery Lane, London Part 1 Present: Apologies In attendance Juliet Herzog (Chair), Patrick Allen, Peter Causton, Roohi Collins, Peter Ellis, Keith Etherington, Nichola Evans, Stuart Kightley, Paula Loughlin, David Marshall, Michelle Penn, Tim Smith, Phillip Tracey, Fraser Whitehead and Michael Williams David Greene, Tony Guise, Sophie Khan, Jaron Lewis, Stephen Mason, David Rogers, Richard Schaverien. Michael Birtwhistle, Policy Assistant (minute 118) Michael Curtis, Policy Assistant (minute 122) Zara Douglas, Events and Marketing Specialist (minute 116) Flick Heron, Council and Board Administrator Martin Heskins, Policy Officer Civil Litigation Glossary of Abbreviations ABS Alternative Business Structure APIL Association of Personal Injury Lawyers BIS Department for Business Innovation and Skills CJC Civil Justice Council CMC Case Management Conference GHR Guideline Hourly Rates HMCTS Her Majesty s Courts and Tribunals Service IPWP Intellectual Property Law Working Group IT Information Technology JSB Judicial Studies Board LASPO Legal Aid, Sentencing and Punishment of Offenders Act MASS Motor Accident Solicitors Society MoJ Ministry of Justice MR Master of the Rolls NAH National Accident Helpline OFT Office of Fair Trading QOCS Qualified One Way Costs Shifting RAB Regulatory Affairs Board SRA Solicitors Regulation Authority 112 ANNOUNCEMENTS AND DECLARATIONS OF INTERESTS Roohi Collins The Chair thanked Roohi, who was standing down from the Committee after nine years, for the valuable contribution she had made over this time. Committee membership As Roohi Collins departure would leave a vacancy on the Committee, the Chair asked for the Committee s views on Civil Justice Committee 3 July 2012 Part 1 51
2 recruiting someone with knowledge of diverging Welsh legislation. Members considered this was not crucial, but could be listed as one of the desirable qualities when a vacancy was advertised. It might be better to keep abreast of developments in Wales via more regular updates from the Wales Office. If it was believed important to recruit a member from Wales, co-option could be considered. Declarations of Interests No interests were declared. Equality and Diversity Training The Chair reminded all Committee members who had not undertaken the equality and diversity e-learning training to do so as this would soon become compulsory for committee members. Flick Heron would arrange for computers to be available prior to the 31 October meeting for use by members who had not done the training by then. The meeting would start at and be followed by the Committee dinner. Flick Heron 113 MINUTES OF 24 MAY 2012 MEETING The Committee approved the Part 1 minutes of the 24 May 2012 meeting. 114 MATTERS ARISING Minute 93.1: Matters Arising - Guideline Hourly Rates Fraser Whitehead said that his letter to the Master of the Rolls on GHRs had been drafted and he would circulate it to the Committee. Fraser Whitehead Minute 93.3: Matters Arising LASPO and 10% Damages Uplift Martin Heskins said that the MoJ had accepted that the uplift could not be enforced and was not intending to take any action in this respect. He would be meeting the MR later in the month and would ask how the judiciary intended to deal with the matter, but this would only address cases that reached trial. If the MR was unable to assist, Martin Heskins could raise it with the editor of the JSB guidance, although it was believed that the JSB had no plans to include the uplift in its guidance. A joint approach with APIL might assist. Martin Heskins Minute 94: Civil Justice Council Jackson Implementation Update Peter Farr was now the Chief Executive Officer of the Civil Justice Council, and also Private Secretary to the MR, and it was hoped this would lead to improved communications. A Law Society observer would be invited to CJC meetings. Alex Clark was now Secretary to the Family Justice Council. Civil Justice Committee 3 July 2012 Part 1 52
3 Minute 95: LASPO and Litigation Costs and Funding Update Martin Heskins said that the delay to application of the LASPO provisions to insolvency proceedings was a temporary measure; and that it was intended to increase the non-personal injury small claims limit to 10,000 initially and 15,000 at a later date, but the consultation document was still awaited. 115 CIVIL JUSTICE COUNCIL JACKSON IMPLEMENTATION UPDATE Martin Heskins said that the MoJ had issued a commissioning note to the CJC confirming that QOCS would apply to all personal injury claimants and there would be no means testing but asking for advice on whether there should be a minimum amount payable by a losing claimant. The MoJ was not seeking any advice on sanctions where a claimant failed to beat a defendant offer or on the proportionality test. David Marshall said that the CJC had advised the MoJ in 2011 on all of these issues but the MoJ had rejected the advice on sanctions and proportionality, particularly the recommendation for a practice direction on proportionality. David Marshall said that the CJC had recently given the following advice to the MoJ: The MoJ had asked whether, as QOCS did not apply to fraudulent claims, this should include cases of exaggeration or dishonest behaviour. The CJC had advised QOCS should only be disapplied where fraud had been proven. If a claimant failed to beat a defendant s offer made under Civil Procedure Rules Part 36, they should receive no more than damages plus pre-offer costs. QOCS should not apply to claims struck out for abuse of process. QOCS should apply to claims which were discontinued but this should not prevent an application to strike out the claim. QOCS should apply to appeals. In mixed claims, where there was personal injury and other elements, QOCS would apply to the personal injury and other elements which arose from the incident causing the injury. The CJC had advised against excluding credit hire claims as there would be cases where the QOCS would legitimately apply to them. A minimum payment from losing defendants would cost too much to collect and discriminate against poorer claimants. Civil Justice Committee 3 July 2012 Part 1 53
4 David Marshall would check whether the CJC s advice could be circulated. The MoJ s stance was expected to be set out in a ministerial statement on 17 July. David Marshall/ Martin Heskins A Committee member commented that the provision on fraud would probably have little practical effect as most cases did not reach trial, and for those that did the claimant might not have the means to pay the defendant s costs. The Chair commended the work done by the CJC and Martin Heskins to try to make LASPO s provisions clearer. The task now was to try to implement the provisions as smoothly as possible. 116 CIVIL JUSTICE EVENTS UPDATE Zara Douglas said that the Profiting from Costs Management event had been fully booked and received good feedback, although there had been some issues with the venue, sound and a late request for projection facilities. The brochure for the Annual Conference was being designed and would soon be distributed for marketing purposes. There were a few speakers yet to be confirmed. Marketing would take place over around three months. Martin Heskins said that he had done some roadshows on costs management including budgeting and the effects of LASPO. These had been well attended and had highlighted a lack of awareness among the profession of the changes ahead which would affect all multi-track cases from April 2013, requiring solicitors to agree a costs budget with the court and notify the court should it need to be raised. Practitioners who had experienced the new system in the Technology and Construction and Mercantile Courts were concerned that the judiciary was not properly engaging with the new system; this would be raised at the forthcoming meeting with the Association of District Judges. There was a need for more workshop training on costs budgeting and this could include the judiciary if the MR was agreeable. The Association of Costs Lawyers was compiling a training video for the judiciary which the Law Society might contribute to. There was concern about court delays in arranging CMCs to discuss budgets and that the system would not be able to cope; and that many district judges had little experience of multi-track cases. An experienced advocate would need to be involved in the CMC to consider what evidence would be needed. In some areas, CMCs rarely happened and instead solicitors for each side agreed directions. There seemed to be an unrealistic assumption by the courts that solicitors for the two sides would discuss budgets at an early stage. Budget setting would negate the need for a proportionality test later. There were plans for a Practice Note but this could not be done before the Annual Conference. Martin Heskins would circulate the slides used at the roadshows, the speech notes of District Judge Ramsey and the new Form H. Martin Heskins Civil Justice Committee 3 July 2012 Part 1 54
5 117 INTERPRETING AND TRANSLATION ISSUES The Committee noted the report on issues around interpreting and translation services used by courts, the police, the Crown Prosecution Service and Probation Service and the case being made for accredited training for interpreters. The Committee considered that it was a shame that better arrangements were not available for training and accrediting interpreters as this affected criminal, civil and family proceedings and suggested that the Legal Affairs and Policy Board should make representations on this as appropriate. Martin Heskins 118 COLLECTIVE REDRESS AND CONSUMER AFFAIRS CONSULTATION DRAFT RESPONSE Michael Birtwhistle said that the Competition Law Reference Group had been re-established to consider the BIS consultation on collective redress and consumer affairs. The Group was meeting on 12 July and Civil Justice Committee members were welcome to attend. The draft response would be circulated by to the Committee and the Legal Affairs and Policy Board for comment which would be required in a short timescale as the deadline for the response was 31 July, following an agreed extension. The four main proposals in the consultation were: Establishment of a Competition Appeals Tribunal using the expertise of the existing tribunal on a wider basis; An opt-out regime for collective actions; Promotion of alternative dispute resolution; Ensuring that private actions complemented the public enforcement regime, so that whistleblowers would not be deterred. Committee members were invited to send comments on the consultation to Michael Birtwhistle. 119 COSTS MANAGEMENT AND E-BILLING WORKING GROUP Tony Guise was not present to update the Committee but had advised by that he had heard no further since the E-Billing Working Group s meeting on 24 April and was chasing up progress. 120 IT AND THE CIVIL COURTS Tony Guise was not present to update the Committee but had advised by that the project to access court files online was moving forward and the working party would meet later that week. 121 OFT PRIVATE MOTOR INSURANCE REPORT The Chair said that the OFT had put forward an unanswerable case for a referral of the UK private motor insurance market to the Civil Justice Committee 3 July 2012 Part 1 55
6 Competition Commission for an investigation; and noted the contrast between the anti-competitive practices proliferating outside the solicitors profession, and the restrictions being placed on solicitors methods of gaining business. It was suggested that if insurers provided cover for car hire in all policies, the issue of credit hire and its effect on premiums would largely disappear, although claimants could not be forced to use the insurers providers; but that insurers profited from credit hire so were unlikely to introduce such arrangements. 122 REFERRAL FEES The SRA had issued a discussion paper, prior to consultation, indicating that it did not intend to issue detailed rules relating to the ban on referral fees in personal injury cases. It had limited resources to devote to the issue and was expected to take a light touch approach. Martin Heskins said that although LASPO did not exempt shared marketing arrangements from the referral fees ban, the MoJ had indicated that lawyers could use such arrangements as long as the payments made for them did not include any element of referral fee. The SRA would need to indicate whether fees paid for marketing could include a profit element, as external marketing providers would expect to make a profit. As well as small groups of firms banding together to share marketing costs without seeking to make a profit, there were two main shared marketing arrangements in use: National Accident Helpline, which was externally funded and profit making, and Injury Lawyers 4U, which was non-profit making. There was concern that NAH might expect to continue to operate under an exemption, and that the MoJ would leave it to the SRA to decide whether to grant one, although the new law made no provision for exemptions. Therefore, there could be reputational risks if the SRA granted an exemption. There was also concern that the SRA would not make clear rules, preferring to take an outcomes focussed regulation approach, and firms would need to take a decision on what they believed was allowable which would not be tested until a firm was prosecuted. There would be commercial pressure on firms to take a risk where there was uncertainty. The Law Society s policy was to support a ban on referral fees and that there should be a level playing field for all legal service providers. The Committee had not supported the policy on referral fees but it was too late to change this and it prevented the Committee lobbying for a change to LASPO; and firms could get around the ban by becoming an ABS, possibly with a Claims Management Company or other work supplier. Committee members were concerned about firms creating artificial structures to circumvent the legislation, which could lead to work suppliers taking over numerous firms to create ABSs; and that a lack of clear guidance from the SRA would encourage these structures. Civil Justice Committee 3 July 2012 Part 1 56
7 Michael Curtis asked for details of any types of referral fee arrangements known to the Committee members, other than those mentioned in a RAB Rules and Ethics Committee paper which had been circulated. Arrangements relating to motor insurance and credit hire were raised; these got around the ban by claiming that the referral fee related to the vehicle damage claim rather than the injury claim, although it was believed that the ban would still apply if the injured party owned the vehicle. The Committee believed that a ministerial assurance which appeared to conflict with the Act could not be relied upon. The Committee favoured pressing the SRA to set rules clarifying what arrangements were allowed, although this could result in a narrow definition, and it supported the objectives set out in the paper for the RAB Rules and Ethics Committee. Michael Curtis would circulate the draft response to the SRA s paper once drafted. Michael Curtis 123 CIVIL MEDIATION COUNCIL UPDATE The Civil Mediation Council had not met since the previous Committee meeting. However, Peter Causton reported that the HMCTS Salford Business Centre small claims pilot scheme had been delayed until October. It would be compulsory to refer all non-personal injury claims up to 5000 to mediation. There was concern that only 17 mediators were available to deal around 6,000 cases per month. Parties to the cases could decline mediation and those who went ahead with it would not be bound by the recommendation. The Committee asked for the Head Mediator, James Rustidge, to be invited to the Committee s meeting in Salford in September. Flick Heron It was suggested that less experienced solicitors interested in gaining mediation experience could contribute to the pilot for a low fee or pro bono. The Law Society s reputation would be enhanced by offering to help by promoting this and it would assist access to justice, which would face problems when the rise in the small claims limit led to a massive rise in the volume of cases in district courts. The mediation would be carried out by telephone and so could be conducted from anywhere. The Committee did not favour pro bono arrangements and proposed that an element of court fees should be set aside to pay for mediation as it would help to curb the influx of claims to the district courts, although the MoJ had said that no extra funding would be made available. It was the Law Society s role to promote access to justice, but not to provide it. The mediation would not lead to further work for firms, as was the case with other pro bono work; and might prove to be more expensive than leaving the courts to settle the cases, which was likely to be quicker. Peter Causton volunteered to write a Practice Note on mediation. Peter Causton Civil Justice Committee 3 July 2012 Part 1 57
8 124 INTELLECTUAL PROPERTY LAW WORKING PARTY UPDATE Peter Ellis said that the IPWP had been lobbying for the abolition of provision for groundless threats in relation to intellectual property rights infringements. The Law Commission was reviewing the law in this area and was sympathetic to IPWP s view. Claims were often against the solicitor rather than their client by way of a letter before action, and could be a particular problem for firms with limited experience of intellectual property. Peter Ellis asked Committee members to let him know of any such cases they were aware of. He would ask the Gazette to include an item on the issue. The Chair suggested that a Practice Note might help. Committee Members The IPWP had also been lobbying for the Unified Patent Court to be based in London but it appeared likely that only the pharmaceuticals aspect would be located in London with the main Court in Paris. The European Parliament had said that it would help small to medium size enterprises to have a single patent; but it would have the disadvantage that the final arbiter would be the European Court of Justice which was very slow and costly. The IPWP had been grateful for Law Society support on this issue. 125 ANY OTHER BUSINESS Joint Meeting with the Association of District Judges The Committee suggested raising the following issues at the meeting on 24 July: Flick Heron Costs Management and Budgeting Compulsory Referral of Small Claims to Mediators Court delays in issuing Orders and Judgements Committee members were invited to send any further suggestions to the Chair. Skeleton Arguments Peter Ellis raised the issue of who should be responsible for providing copies of skeleton arguments that had been read out in court, how this should be done and whether evidence should be attached to them. The Chair said that Part 5 covered documents that were accessible and the court had responsibility to provide them; if skeleton arguments were not covered by Part 5 they should not be provided. Court Delays on Orders and Judgements The Court Users Meeting had raised the issue of court delays in providing orders and judgements. Peter Ellis asked Committee members to send him details of delays they had encountered. This could also be raised with the Association of District Judges although it was probably not within their control. Committee Members Civil Justice Committee 3 July 2012 Part 1 58
9 Insurance Fraud Bureau Martin Heskins said that there had been a plan some time ago for a meeting with the Insurance Fraud Bureau which was to be pursued again now that the Bureau had a new Chief Executive. It was hoped that the Law Society could liaise with the Bureau to prevent fraud on the basis that information would be shared. The Chair said that she had met the Bureau at an earlier meeting organised by MASS and was concerned that the Bureau might not appreciate that much of the information it received would be hearsay rather than fact and that if selectively disclosed it could be used to try to deter solicitors from pursuing claims. A more welcome proposal was that a claimant s previous claims history could be disclosed to their solicitor by the Bureau to allow the solicitor to check it against the information given by the client. Martin Heskins said that the Law Society would wait to see what the Bureau had to say before considering the issue further. DATE OF NEXT MEETING 18 September 2012 Salford Business Centre The meeting finished at 14:54 Members could claim 2 hours CPD for the meeting. Civil Justice Committee 3 July 2012 Part 1 59
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