With legal aid rates squeezed and the ‘threat’ of increased competition from the CPS and solicitor higher court advocates, the bar might reasonably be expected to be looking keenly at survival strategies.It’s surprising, therefore, that the bar has been so slow either to seize the opportunities presented by the Legal Services Act, or perhaps even to recognise them. The Bar Standards Board, after much pressing from the Gazette, revealed it will not be making a final decision until October on the rule changes necessary to enable barristers to join legal disciplinary practices. By then solicitors will have been able to benefit from the provisions in the act for six months. Some 61 firms have already chosen to operate as LDPs. Desmond Browne QC, chairman of the bar, gave an impassioned speech on the future of the publicly funded bar at Westminster this week, during which he criticised the unfairness of the general practice used by the Legal Services Commission in contracting with solicitors, not barristers. The Legal Services Act provides the opportunity for barristers and solicitors to be in business together. They could therefore provide advocacy services jointly, rather than in competition, and would both be involved in any contractual relationship entered into with the LSC. So why does the bar appear content with the glacial pace at which its regulator is moving? Is it lack of knowledge, fear of the unknown, lack of business acumen or just an unwillingness to move with the times?
A major negligence case that first brought third-party funding into the public eye was struck out by the House of Lords last week at a cost of around £2.5m to the litigation funder. IM Litigation Funding admitted that the cost of losing the case, which it had originally estimated to have a 70% chance of success, would be ‘substantial’. The Lords rejected the £89m negligence claim brought by the liquidators of insolvent grain trader Stone & Rolls against accountants Moore Stephens. In a majority verdict, the Lords found that the accountancy firm was not liable for failing to spot an extensive ‘letter of credit’ fraud by one individual who owned and controlled the firm. Tim Strong, litigation partner at City firm Barlow Lyde & Gilbert who acted for Moore Stephens, stressed that the case highlighted the risks of litigation funding, and could have ramifications for the third-party funding industry by potentially pushing up the price or deterring funders. Sam Eastwood, a partner at City firm Norton Rose who acted for Stone & Rolls, added: ‘This vindicates the price of litigation funding; the 25 to 40% [share of compensation which third-party funders normally take] does not seem so high.’ It is understood that IM Litigation Funding stood to gain more than £40m had the case succeeded. It did not take out after-the-event insurance to cover the legal costs of losing the case, which are understood to be around £2.5m. Peter Horrocks, legal director of IM Litigation Funding, said the case was the first one to ‘bring third-party funding to the public attention’. He added that the funder has a portfolio of 10 to 12 ongoing cases, with an 80% success rate. He said it was ‘not the end’ of third-party funding.
Two of the top three legal process outsourcing (LPO) providers are plotting aggressive growth in anticipation of a flood of mandates in 2010, the Gazette has learned. The news comes shortly after the third LPO provider in the trio, CPA Global, announced similarly ambitious plans for rapid expansion of its LPO workforce last month. Pangea3 co-chief executive David Perla told the Gazette that his company plans to boost its 350 LPO staff, who include 280 fee-earners, to 500 staff in total by the end of 2010 – and that he expects that number to ‘grow further’ from 2011 onwards. Integreon legal services vice-president Mark Ross said that his company plans to add to its 500 LPO staff, who include around 375 lawyers, throughout 2010. Ross said that Integreon is planning a stock market listing within the next three years, and is aiming to double its fourth quarter 2009 revenues in the last quarter of 2010. He said that LPO growth will be concentrated in South Africa, the Philippines and China, while its established centre in Mumbai, India, will also expand. Both Ross and Perla said that they are receiving mandates predominantly from corporate legal departments rather than law firms. Perla said that corporate and litigation LPO services are currently the most popular among in-house teams. ‘In the next six months, a lot of major corporates will begin talking publicly about LPO,’ Ross predicted. Integreon and CPA have both received financial injections from private equity investors since the start of 2010, and all three companies said they have strong relationships with interested external financiers. Pangea3 names multinationals General Electric, Sony and American Express among its LPO clients, while CPA names Microsoft and mining company Rio Tinto. Integreon works with magic circle firm Allen & Overy, and City firms Simmons & Simmons and Osborne Clarke on LPO. Integreon and CPA undertake LPO as part of a wider range of outsourcing work, while Pangea3 undertakes only LPO work.Indian research company Value Notes ranks CPA, Integreon and Pangea3 as the three ‘pacesetters’ in the global LPO market.
The Legal Services Commission has announced that financial sanctions will be imposed on defendants who fail to provide evidence of means when applying for criminal legal aid in the Crown court. The Crown court means-testing scheme was rolled out nationally earlier this year. The sanction for failure to provide evidence has been available to the LSC but has not yet been used. The LSC has confirmed it will now be applied in cases where ‘no satisfactory explanation’ has been provided for the failure to provide the requested evidence. If the sanctions are applied, defendants will be required to pay a contribution of £900 a month, or 100% of their ‘disposable income’, whichever is the greater. The Law Society has advised practitioners that if their clients are having real difficulties obtaining evidence, it is essential that an explanation is provided to the court, if there is to be any possibility of avoiding the sanctions. Chancery Lane is concerned that such harsh sanctions will punish those on low incomes who are unlikely to be able to pay such high amounts, since it is often the self-employed and those undertaking low-income casual work who have the most difficulty in obtaining such evidence.
The Institute of Chartered Accountants in England and Wales has confirmed it is applying to become a licensing authority for alternative business structures. Talks are ongoing with the Legal Services Board (LSB) about putting together a formal application, which is likely to be made in 2012. Felicity Banks, head of business law at the institute, said its members were already experts in various aspects of probate work and would welcome the chance to provide a complete service. Solicitors could be brought into accountancy firms to create multidisciplinary practices under the new regulatory regime. The confirmation came after the Solicitors Regulation Authority revealed it will start licensing applications for ABSs from 3 January. The authority was held back by parliamentary delays which prevented it from gaining a licence when the Legal Services Act came into force on 6 October. Chief executive Antony Townsend said: ‘This is a milestone that we have been working towards for nearly two years. It means the public can have confidence that an ABS providing reserved legal activities will be regulated according to the same rigorous professional standards as traditional law firms.’ The Council for Licensed Conveyancers became the first ABS licensing authority when its application was approved in October. A spokesman for the LSB said discussions are under way with a ‘number of other regulators’ about their future plans and it expects to receive further applications, although none has been made formally.
The report on assisted dying, produced by a ‘commission’ formed by thinktank Demos, and part-funded by author and campaigner Terry Pratchett, made headlines last week for stating that there were practical ways that the existing law on suicide could be changed to allow the terminally ill to choose an assisted death in the UK. There were few surprises in the responses from those who oppose change. Umbrella group Care Not Killing called the commission a ‘bent jury’, and said: ‘The current law exists to protect those who are sick, elderly, depressed or disabled from feeling obliged to end their lives.’ In media interviews last week disabled peer Baroness Campbell was eloquent in support of these points. The law has had a central role in this debate to date, not because it is a useful guide to our ethical, emotional or intellectual approach to the issues, but because of the practical difficulties it seemed to throw up. If section 2 of the 1961 Suicide Act is no longer wanted, what construction could replace it that did not allow badly supported people to feel ‘obliged’ to end their lives? The director of public prosecutions Keir Starmer QC is the lawyer on one faultline between two opposing camps, having issued guidance on the Crown Prosecution Service’s ‘policy’ on prosecutions in assisted dying cases. Starmer’s policy is held up by opponents of reform as evidence that the current approach works. Those campaigning for reform note that, as prosecutions were not, by the CPS’s own account, in the public interest, the law can be safely changed. Equality and human rights principles are also claimed by both sides. Major disability charities are opposed to a change in the law. In presentations to the commission, they argued that too often disabled patients’ rights around end-of-life decisions were not respected. Any change would leave them even more ‘vulnerable’. I sense these charities also have a wider point to make. With care, support and accommodation for disability falling short of need in our society, they are wary of allowing any change that seems to downgrade the argument that, with decent support, anyone with a disability can lead a full and worthwhile life. This is very much the ‘social model’ of disability, which includes some powerful arguments. But powerful testimony also comes from representatives of those who believe they have been discriminated against in their right to die. Bindmans partner Saimo Chahal noted her client Tony Nicklinson’s argument: ‘The current law disproportionately affects his right to personal autonomy as somebody who is too physically disabled to end his own life.’ (Paralysed from the neck down, Nicklinson’s condition is not terminal.) Supporters of Nicklinson’s right to die will be disappointed by the commission’s conclusion that any change to the law should cover terminal conditions only. From the perspective of people like Nicklinson, their rights are ‘sacrificed’ to bolster broader arguments for the ‘social model’ of disability. These debates are not for the faint-hearted. They involve, in effect, some people telling Campbell they want a change in the context of their death that will make her feel less safe and less valued; and Campbell in effect telling them that they must live on in a life they do not want, because a change in the law would signal that society had lowered the value of her own life. So the commission’s claim that it has found ‘safe’ ways to change the law – protecting Campbell, but allowing some others to make their choice – would remove a key practical obstacle to reform. For those opposed to reform, what obstacles remain? Well, the commission also calls for ‘better access to, and more uniform availability of, end-of-life care’. Here commission members make common cause with many who oppose reform. But for those hoping to see a change any time soon, this, not the challenges of law reform, is now the practical argument most likely to delay or prevent a change in the law. Eduardo Reyes is Gazette features editor
The Law Society has urged David Cameron to engage with the legal profession following his attack on the health and safety ‘monster’ and personal injury fees. In a speech last week, the prime minister proposed capping fees for personal injury claims at £25,000 and including public and employers’ liability claims in the restrictions. In line with the 2010 Young report, he plans to extend the current portal scheme for road traffic accidents to an upper limit of £25,000. Speaking to an audience of small businesses, Cameron described existing health and safety regulations as an ‘albatross around the neck’ of small firms and invited insurers to suggest possible reforms. He did not mention solicitors in his invitation. Solicitors have told the Gazette they feel sidelined in the debate over civil litigation. David Bott, president of the Association of Personal Injury Lawyers, expressed ‘grave concerns’ that the government was pushing through far-reaching changes without proper consideration. The Law Society has joined calls for consultation. In a letter sent this week to Downing Street, president John Wotton said it was ‘vital’ to use the legal sector’s experience. ‘It is essential that the progress over recent years in reducing injuries at work is not reversed, and that those injured as a result of another’s negligence can secure adequate compensation.’ He added: ‘I would like to meet with you on a similar basis to your planned meeting with the insurance industry next month, to discuss how this issue can most effectively be tackled.’ In his speech, Cameron declared that he is ‘waging war’ against what he called the ‘health and safety culture’, although he gave few details about how that war would be waged. Details are expected to emerge in the government’s response to last year’s consultation on solving disputes in the county courts. It was due for publication in October, but the Ministry of Justice said this week there is still no date set for its release. John Spencer, director of PI firm Spencers Solicitors, said Cameron had ‘put the cart before the horse’ in pre-empting the consultation response. ‘Either the government knows its response and has not published it, or it has made its mind up regardless of what the report says,’ he added. The proposed extension of the RTA Portal scheme comes as 2,000 claims are being notified through the portal to insurers every day, raising concerns about the scheme’s capacity to expand. Tim Wallis, chairman of RTA Portal Co, said the detail of extending the upper limit had to be ‘considered carefully’, and promised to work with the MoJ to avoid any ‘significant disruptions’.
Alarm has been raised at a move by the government that appears to give the Jackson reforms retrospective effect. Radical changes to the no win, no fee system are due to come into force in April 2013 as part of the Legal Aid, Sentencing and Punishment of Offenders bill. The reforms will remove the recoverability of success fees from defendants under conditional fee agreements (CFAs). However, in an amendment tabled last week to the bill, the government proposes to apply that change to cases preceding April 2013. In effect, that will mean where a costs order is made after the reforms come into effect, the success fee will not be recoverable, even if the CFA was signed before the provisions come into force. Claimant lawyers will be concerned that defendants will simply refuse to settle ongoing cases until after April 2013, on the basis that their costs will then be much lower. There are also questions about what advice firms can offer claimants about their potential compensation when there is such uncertainty about what fees they will be expected to cover. Iain Stark, chairman of the Association of Costs Lawyers, said: ‘Putting aside the rights and wrongs of the Jackson reforms, it is patently unfair to retrospectively change the terms of the agreement between solicitor and client. ‘Depending on the terms of the CFA, solicitors may suddenly find themselves unable to claim their budgeted success fee from either the other side or their own client. Barristers would be similarly affected.’ He said solicitors will now face the dilemma of whether to gamble on a case concluding before April 2013, knowing claimants’ compensation will be up to 25% lower after that date. He added: ‘Retrospective legislation is rarely a good idea and it is hard to see any justification for this change. ‘Success fees should cease being recoverable for agreements entered into after the commencement date – that is the simple, logical and fair approach.’ The amendment has been tabled by justice minister Lord McNally and will be debated on Wednesday at day four of the report stage of the bill in the House of Lords.
Dunn v Institute of Cemetery and Crematorium Management: EAT (Judge McMullen QC, Mrs R Chapman and Mr P Smith): 2 December 2011 Charles Millett of Morecrofts, Liverpool for the employee; Daniel Northall (instructed by Beachcroft, Leeds) for the employer. Sex discrimination – Employee married to husband – Tribunal dismissing claim In December 2007, the employee commenced employment for the employer as technical services manager (northern). The purpose of her appointment was that she could establish an office in the north of Britain. In February 2008, she was told that there would be changes to her entitlement to sick pay. During consultation on the matter, issues arose as to the employee’s responsibilities and performance which upset her. She registered grievances about changes to her contract which were rejected. In September 2008, she went off sick. Later that month, the employer decided to shelve the northern office project. In October, the employee was informed of the proposal to remove her role and a consultation was started. In February 2009, the employee resigned. She brought a claim in the employment tribunal for, inter alia, sex discrimination under section 3 of the Sex Discrimination Act 1975 in that the employer had treated her less favourably because she was married to D, her husband. The tribunal held that the employee was not discriminated against on the ground of her status as a married person, but because of her relationship to D and, accordingly, the claim of direct discrimination failed. The employee appealed to the Employment Appeal Tribunal (EAT). Before the EAT, documents were referred to including statements from the employer’s chief executive, M, to the effect, inter alia, that D had ‘relentlessly harassed’ him. Those statements further accused the employee of being aware of D’s ‘private commercial activities’. The principle issue that fell to be determined was whether the act applied to protect the employee, whose complaint was that she had been discriminated against on the ground of being married to D. In respect of that issue, consideration was given, inter alia, to the EAT decision in Chief Constable of the Bedfordshire Constabulary v Graham  IRLR 239. The employee further invoked article 8 of the European Convention on Human Rights, claiming that her right to respect for private and family life had been breached. In respect of the latter issue, consideration was given to articles 12 and 14 of the convention and the Human Rights Act 1998. The appeal would be allowed. (1) Graham was the authority for the proposition that a married person was protected by section 3 of the act by reason of her being married to her husband. It followed that any person who was married, or in a civil partnership, was protected against discrimination on the ground of that relationship and on the ground of their relationship to the other partner. Any less favourable treatment which was marriage-specific was unlawful (see ,  of the judgment). In the instant case, Graham was correct and applicable. There could have been no doubt as to the link in the employer’s conduct between the employee and D. It was clear that the employer’s officers had treated the employee the way they had, adversely, because of her relationship to D. She was treated as an adjunct to his family. There would have been no reason to raise, in the employee’s grievance proceedings, matters relating to D unless they were married. Accordingly, the construction adopted by the tribunal had been incorrect (see , ,  of the judgment). (2) In the instant case, article 8 of the convention was engaged. There was no reason for the employer’s attitude towards D’s involvement to adversely affect the employee’s treatment at work. Article 12 of the convention was probably only subsidiary (see  of the judgment). The case would be remitted to the original tribunal for determination of whether the employee had been unlawfully discriminated against on the construction of the act, applying articles 8, 12 and 14 of the convention (see  of the judgment). X v Y  IRLR 625 considered.
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