Tuesday, 22 October 2013

Cracking the whip

We are all, or should be, fascinated by the resurgence of interest and activity in the now infamous Plebgate saga.

For anyone who doesn’t recall, former government chief whip Andrew Mitchell MP was reported by The Sun newspaper to have been extremely rude to officers of the law who required that he dismount from his bicycle on leaving Downing Street one day last September.  Mr Mitchell has always denied the allegation that he called the police “plebs” and accordingly began a libel action against News Group Newspapers Limited publisher of The Sun

The proceedings have taken on a significance of their own because of actions, not by the police, but by judges. 

One of the new rules introduced in the course of the Jackson reforms, most of which were implemented on April 1 (yes, if only) was the requirement for parties to higher-value multitrack litigation to file and exchange costs budgets at an early stage of the proceedings. 

The process is one of the most important ‘reforms’ aimed at controlling the amount of costs that litigants are able to recover from an opponent, irrespective of how much they might independently be liable to and entirely willing to pay their own lawyers.

To give the provision real teeth, somebody came up with the idea of a swingeing sanction that if you don’t file your budget on time then even if you win the litigation, you are not allowed to recover from the losing party anything but fees paid to the court at various stages of the litigation. 

In other words, the winner can’t pursue a claim at the end for the costs of his solicitors, barrister(s), expert witness(es) or other expenses of litigating the case.

The lawyers amongst us don’t need any explanation beyond that to start shuddering but for others let’s put it in context.  One estimate I have heard, gauged by reference to the interim costs order made in favour of Peter Cruddas after winning his libel action against The Sunday Times earlier this year, is of a minimum of £500,000. 

So, Andrew Mitchell’s solicitors failed to file the cost budget in time and Master Victoria McCloud refused their application for relief from sanctions.  An initial appeal was dismissed, the High Court Judge having no difficulty in upholding Master McCloud’s decision.

Little wonder when you read one or two extracts from her judgment, notably:-

          ‘It is a helpful illustration in this case to consider that, in order to find time in my diary to list this application for relief within any reasonable time, there being objections from Mr Mitchell’s side to a long wait, I needed to vacate a half day in my list which had been pre-allocated to deal with claims of persons affected by asbestos-related diseases.  There is an expedited list for such claims for because life expectancies are often very short.  The impact, therefore, of the admitted breaches in this case was that the claims of those litigants which could have been listed in my diary were not listed, and in their place we have an argument about non-compliance with rules in this defamation claim.’

She went on to explain that it is quite simply ‘the right of other litigants  to have a fair crack of the whip where judicial and court resources are very limited, and the right not to be delayed while the courts dispose of matters which ought not to arise in the first place if rules are compiled with’.

Master McCloud made it clear that she wasn’t saying that prejudice of this nature was a pre-requisite to enforcement of the rules but it is a compelling illustration of the practical need for litigants not to waste valuable time and resources by failing to comply with the rules.

All that said, this irresistibly noble approach doesn’t address the fact that this is an incredibly harsh sanction, irrespective of where the pain is felt.

Because, whilst Mr Mitchell may win his case and otherwise have the prospect of recovering from a company well able to pay costs in excess of half a million pounds, the current effect of this decision is that he will in no circumstances get no more than about £2,000 towards his costs.

Little wonder that there is a second appeal pending and booked in to the Court of Appeal for next month before a bench that will be presided over by  Master of the Rolls, Lord Dyson, himself.

On the one hand you have a man who has been vilified – he is entitled to say quite incorrectly – running an appeal because he says he has again been harshly treated notwithstanding an undeniable breach of the rules.

From another perspective you have the first hearing of an appeal against one of the most draconian sanctions that has ever appeared within the rules governing civil procedure in English law.  

Some may say that Mr Mitchell is appealing, but then again that he is anything but. Seriously, there is a risk that (quite possibly very unjustly) this man enjoys no sympathy inside or outside the court.  That is a worry, in case it in any way influences the decision on the appeal.

It is a concern because this sanction is utterly disproportionate.  I don’t say that as a lawyer who is fearful of being in the same position – though naturally I am.  I say it as an ordinary citizen who sees this penalty as a sledgehammer to crack a nut.

The application of the sanction is surely correct but the sanction itself is wrong.  I don’t immediately understand how anybody but the Rules Committee can deal with that fundamental problem.

It may save some people embarrassment if meanwhile Mr Mitchell is no longer seen as an out-and-out bad guy, or even if The Sun should happen to settle his claim in the face of a mounting impression that the police have misbehaved themselves - although that would do nothing to fix the mess that Grayling and other zealots have created.

Watch this space.

Saturday, 12 October 2013

De minimis

Most lawyers are familiar with the maxim de minimis non curat lex and the principle that courts should not focus on trivia when applying the law.

Our present government, with its many-pronged attack on accessibility to the law, mainly by removing means of funding, has brought a new and sinister significance to the Latin phrase that translates literally as the law does not care about little things.

As law centres close, barristers chambers and solicitors firms go bust, we wait for the next civil litigation costs announcement from the Ministry of Justice following the Prime Minister’s shuffle earlier this week.

Helen Grant has left after thirteen months as Djanogly’s successor, headed for the Department of Culture, Media and Sport  (work that one out) and is replaced by Shailesh Vara who, unlike our esteemed Lord Chancellor, is a lawyer.  Formerly a solicitor with CMS Cameron McKenna, Mr Vara practised in London and Hong Kong.

Is he to face the challenge of presenting the government’s response to what is no doubt perceived as the extremely unhelpful report from the House of Commons Transport Select Committee as part of Grayling’s attack on - sorry enquiry into - the “compensation culture” which as one of its products has us branded “the whiplash capital of Europe”?

Regular readers and avid followers of the debate will recall that the committee chaired by Louise Ellman MP made some thoroughly uppity findings about the unreliability of information promulgated by insurers and the government as well as their unhealthy collusion to the exclusion of claimant representatives.

For a reminder of the select committee’s key findings, and extracts from an revealing roasting of the top boys fielded by the insurance industry, see Hey diddle diddle.

The so called “whiplash epidemic” was confidently regarded by liability insurers and their chums in Whitehall as the cast-iron excuse to crank up the financial limit of the small claims track to at least £5,000.  This is a level at which, everybody within the industry knows, a very substantial number of personal injury claims – the vast majority of them genuine – would become litigation within which recovery of legal representatives’ costs is virtually impossible.

Naturally, this suits liability insurers because they save not only on costs but also on damages where they are dealing with unrepresented, uninformed people.  I considered that landscape in some detail in an article last month – Crash and Capture - reproduced at the link with the kind permission of Solicitors Journal

The transport committee report was not well received in the summer.  It’s been left to gather some dust, probably in the hope that people will forget key findings that there isn’t a whiplash crisis and that in fact an increase in the small claims track limit for personal injury cases would probably lead to more fraudulent claims and a resurgence of the claims management companies that the government has been working so hard to stamp out in recent years.

The latest signs are worrying for the claimant lobby. Yesterday we were hearing and reading a lot of publicity about raising the age for learner drivers, all ‘in the interests of saving many lives’.  There is also a mention about savings in insurance premia for society generally.

Undoubtedly what the government is primarily concerned with here is a saving for insurers in operating costs.  Whether or not that leads to any saving in premia is a moot question – the Transport Committee did not seem convinced and we have yet to see any explanation from government of how it will monitor cost reduction.

The truth is the government is not interested as long as the insurance industry can maintain a swell of popular support from those who want the cheapest now, don’t notice the plight of innocent victims and above all fail to recognize that they could be next.

As long as a portion of our largely shamed financial industry continues to generate revenue for the Treasury, and there is no silly talk about ending agreements to fund claims against uninsured drivers or to continue cover to householders in flood risk areas, then this administration seems likely to stand by.

Can we guess what view a former City and Hong Kong lawyer, acknowledged rising star of his party – a former assistant whip indeed - will take of Five grand in the overall scheme of things?

Is he about to show us that the law does still care about little things – and people?