Who Needs Failed Conveyancing Insurance?

Robin Selley

MoveSafe Abortive Insurance

Most conveyancing transactions will go ahead without any problems with some straightforward completions taking place within a matter of weeks often being achieved. There are weekly news stories of difficulties in the housing market, for first time buyers struggling to get on the housing ladder, to those being priced out of London. It can be a bit of a minefield when trying to buy or sell a home.

But what happens if you do have conveyancing problems and what can you do to protect yourself?

Delays with conveyancing can be extremely frustrating for all parties but that frustration can be intensely annoying and, not to forget expensive if those problems cause a conveyancing transaction to fall through.

It may be more likely that problems will occur where there is a long chain and sometime you will have no control over any obstacles which are elsewhere in the chain. It follows that you have much more control over conveyancing problems with your own sale/purchase.

Some failures on transactions may well turn out to be a breach of contract between you and the Solicitor acting for you. An innocent party may be entitled to damages for loss as per Special Condition 7.2 of the Standard Conditions of Sale (5th Edition).

But as a conveyancer, can you afford to offer your residential property clients a full No-Transaction, No-Fee service?

As a conveyancer you have to remain competitive and may often have to write-off your charges if a transaction does not go ahead but with your client still having to pay for any wasted survey and searches. So both conveyancer and the purchaser / seller lose out financially.

Our MoveSafe Abortive Insurance, designed to take the strain should your purchase fall through, is available to both residential sellers and purchasers and applies to all Freehold and Leasehold transactions.

The MoveSafe Abortive Insurance policy provides protection against loss of legal and survey fees should the sale or purchase not go through. Moving house is stressful enough without the threat of wasted expenditure.

Can you and your client’s afford not to have Abortive Conveyancing Insurance in place? If not, take a look here http://www.boxlegal.co.uk/movesafe/ and get in touch with us to discuss our MoveSafe Abortive Insurance product.

Posted in MoveSafe - Abortive Transaction Insurance

A note of caution from your friendly After the Event Insurance provider about signing Statements of Truth?

Robin Selley

There have been a number of reported cases over the years highlighting failures when Statements of Truth have been signed on behalf of a client, but it is always worth giving a word of caution to practitioners, this time following a disciplinary action from the SDT.

An experienced solicitor, who was admitted to the roll in 1983, used old signatures on a revised Particulars of Claim. The Tribunal heard that the solicitor has issued proceedings for a claim following an RTA, but with a document that he had manually altered.

The claim was originally on behalf of three Claimant’s and each had signed a Statement of Truth, sent to the Defendant’s solicitor in June 2013. However, after one of the Claimants withdrew, new proceedings were issued in October 2013. But the solicitor had amended the Particulars of Claim, using Tipp-Ex and hand writing other changes to the Statement of Truth.

The Defendant’s applied to strike the claims out on the basis that the new Particulars of Claim were not properly signed by the Claimants. That application was resisted on the basis that it was ‘quite common’ for signatures to be taken at an early stage and used later on, also claiming that consent had been given by the Claimants’ to amend the Particulars.

The case was struck out and the Claimant’s solicitor was reported to the Solicitors Regulation Authority.

The Solicitors Disciplinary Tribunal found that he had attempted to mislead the Court and Defendant into believing the contents of the Particulars had in fact been verified by the Claimants when that was not the case.

Jackson was fined £7,000 and also had to pay costs.

Outside the coverage of an After the Event insurance policy

A cautionary tale then as one must also remember that the Claimants actions were Struck Out and that would no doubt have led to a claim against the firms Professional Indemnity insurer as an After the Event insurance provider would be unlikely to cover such a case.

Anyone signing a statement of truth on behalf of a client should read Practice Direction 22 (https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part22/pd_part22) periodically. In relation to the lawyer signing the statement of truth the rules are clear so do make sure that you can and do comply, entirely, with the Practice Direction.

Posted in After The Event Insurance, After The Event Insurance Products

Fixed costs: The future for personal injury litigation and After The Event insurance

Jon Gouldsmith

Earlier this month Lord Justice Jackson was calling again for the extension of the fixed cost regime to all civil litigation cases with a value of less than £250,000. The government has not given a clear response to this proposal, but has been somewhat clearer on its position in relation to personal injury claims.

A clinical negligence fixed costs regime is actively being worked on together with a new streamlined process for personal injury claims with a value of less than £25,000. An announcement is due imminently. Following clinical negligence there has been a clear suggestion that noise induced hearing loss claims are the next to receive the same treatment.

So how will this affect personal injury litigation?

On the bright side, it will see an end for the need for cost budgeting and cost assessments but this comes at a heavy price. In a qualified one way costs shifting environment, defendants i.e. insurers, and their solicitors are not expecting to recover costs and therefore their litigation budget will remain unaltered. Claimants, however, will invariably be instructing their solicitors by way of CFA where only a maximum of 25% of their damages can be deducted for solicitors costs. Remember, this success fee deduction is allowed to help the solicitor cover the costs of those cases which fail, not to make up the shortfall of costs on those cases that succeed.

In a fixed cost regime the claimant solicitor will not be paid for the work they carried out but will be paid costs “proportionate” to the value of the claim. Unfortunately however, clinical negligence and noise induced hearing loss claims are equally complex and time-consuming whether the claim is valued at £1000 or £10,000. Meaning that defendants will be at an even greater advantage in defending claims because claimant solicitors will be handcuffed in the time they can spend in dealing with a file, particularly in lower value cases.

The introduction of the fixed costs regime in RTA and non-RTA personal injury claims has already led to an observable inequality of arms, but in these less complex cases, the disadvantage has not been so stark.

After The Event Insurance

Personal injury After The Event insurance policies will themselves be little affected, because qualified one way shifting is in place. The real risk of an adverse costs award in a QOCS protected claim is when a part 36 offer is not beaten or if an interim or pre-action application is unsuccessful, neither of which will be affected by the fixed costs regime.

If, however, the fixed costs regime is extended to general litigation, this might lead to a reduction in ATE insurance premiums for cases which do not have the protection of QOCS where the costs risk should in theory reduce.  Unfortunately this comes at a heavy price and one that claimants might prefer not to pay.

Posted in After The Event Insurance

PI reforms ‘put on hold’. Good news for ATE Insurance market

Linsey Carroll

In November 2015, the then Chancellor George Osbourne proposed plans for further reform to the Personal Injury sector, including plans to raise the small claims limit to £5,000 and  to scrap compensation for soft tissue injuries entirely.

The personal injury sector and after the event issuers have waited with baited breath since then for news on these proposals, and it has now been announced that Justice secretary Liz Truss is rethinking plans for the major overhaul of the personal injury sector.  It is understood that the secretary of state has decided not to go ahead with reforms ‘at the moment’.

Law Society Chief executive Catherine Dixon said: ‘We’re delighted government has recognised that its proposed changes to personal injury claims would hamper access to justice, particularly for those on lower incomes. Anyone who suffers injury through no fault of their own should be entitled to claim the compensation they need to help them recover and get on with their lives.’

Of course not all parties are happy with the apparent moratorium on such reforms, with the Associate of British Insurers (ABI) saying that the decision will see ‘ambulance-chasers laughing all the way to the bank’.  The Ministry of Justice have since commented that ‘The number and cost of whiplash claims remains too high, increasing premiums for ordinary motorists.  We remain committed to tackling this issue, and will set out our plans in due course.’

ATE Insurance

Over the years, the personal injury sector and the after the event Insurance market have seen the industry weather many storms, but these particular reforms may have been a step too far. It is clear however that the industry needs work to continue to help genuine claimants and to remain transparent.  In particular, work still needs to be done in regulating CMC’s specifically working to end cold calling.

As ATE Insurers, we are of course keen to insure Claimants are as fairly represented as possible.  Hopefully this pause in reform is a shift away from the unnecessary hostility between the two sectors, and will allow time for sensible discussion and progress, rather than a one way implementation of further onerous legislation.

Posted in After The Event Insurance, Personal Injury Claims & ATE Insurance

After The Event Insurance Product Spotlight: Bespoke ATE Insurance

ate_product_spotlight

Bespoke ATE Insurance

As well as a range of ‘off the peg’ solutions, we also offer Bespoke After The Event Insurance policies for all types of Personal Injury Claims.

We pride ourselves on our understanding of the needs of both the solicitor and the modern law firm and it was with this in mind that we decided to offer a bespoke solution for those occasions when a standard ATE policy just doesn’t fit the bill. We understand that from time to time the necessity for an ATE policy on a particular claim may not seem apparent at the outset or simply gets overlooked.

However, you may then have found yourself regretting this decision at a later date when proceedings are issued and concerns regarding adverse costs and risk of disbursements crop up. Of course there are also cases that crop up from time to time that are complex in nature and are clearly a multitrack matter from the outset. It is for use in circumstances like these that we created our bespoke ATE policies.

To apply for a bespoke policy, all we require from our panel members is that you complete a simple on line form. We’ll be able to provide with a quote within 24hrs.

We look to provide our clients with After The Event Insurance products that both cost effective and require minimal administration.

Main benefits of Bespoke After The Event Insurance

  • Appropriate level of Indemnity to fit the case
  • Lowest simple non staged premiums available on the market
  • Quick and easy online application
  • Application assessed and decision made with 24hrs
  • No application fees required
  • Assessment of file not necessary
  • No prospects of success test
  • Claims paid in full and within 7 days on all After The Event Insurance policies
  • Cancellation allowed
  • ATE Insurance Premiums are deferred to end of case
  • All After The Event insurance policies have Part 36 cover as standard
  • Minimal Reporting on all ATE Insurance policies
Posted in After The Event Insurance, After The Event Insurance Products

“Exaggeration won’t matter – will it?”

Robin Selley

After a few helpful recent cases for Claimant’s on the issue of “fundamental dishonesty” the Supreme Court recently gave its decision in the case of Hayward v Zurich Insurance plc [2016] UKSC 48.

The Claimant had suffered injury during the course of his employment and took the opportunity to grossly overstate the extent of his disability, claiming more than £400,000 from his employer’s insurers.

Zurich, having admitted primary liability for the accident, suspected that the Claimant might be trying to pull a fast one and did plead that to be the case in terms of the extent of injury and subsequent loss. However, the insurer chose to settle the claim for a fraction short of £135,000 even though they had surveillance evidence at that time.

That was not the end of the case as we know.

The insurer was made aware that the Claimant had been lying all along and had fully recovered from his injuries a year before settlement was agreed. As such they sought to undo the settlement on the basis of fraud and have the award repaid to them. At trial, the Judge decided that the settlement should be set aside and repaid, awarding Mr Hayward £14,720.  However, the Court of Appeal overturned that decision and held that, given Zurich was aware of the fraud at the time of settlement; it could not be set aside once proof of the fraud was obtained.

Zurich appealed to the Supreme Court and in a landmark judgment for Defendants, the Supreme Court unanimously decided that where an insurer suspects fraud but has still chosen to settle a claim, they would be entitled to set aside the settlement under the tort of deceit, if they subsequently obtained proof that it was in fact fraudulent.

This follows hot on the heels of the decision in Versloot Dredging BV & Anor v HDI Gerling Industrie Versicherung AG & Ors [2016] UKSC 45 of the ability to decline payment on the basis of collateral lies told by the assured, although the lie in the Versloot Dredging case didn’t affect the value of the claim, so one not to be confused with Hayward.

Yes this case opens for the door for Defendant’s to revisit old settled cases that they may have had strong suspicions about. But could that door not open both ways, where Claimants have had strong suspicions that Defendants have acted fraudulently? The difficulty there of course is that one camp has much deeper pockets and can afford to take the point further, the other most probably can’t.

Posted in After The Event Insurance, Personal Injury Claims & ATE Insurance

‘Fightback’ in Fundamental Dishonesty Claims: An After The Event Insurers View

Linsey Carroll

Fundamental Dishonesty and ATE Insurance

The definition of ‘Fundamental Dishonesty’ is a term which has caused difficulty for both claimants and defendants since the advent of s.57 of the Criminal Justice and Courts Act 2015.  In the past year, both claimants and defendants have seen rulings from the Court in their favour, leading to increased confusion as apposed to clarity.

However, the Court of Appeal has recently assisted the Claimant’s cause, by providing support to a previous ruling in a lower Court, which held that the failure of a claimant to prove their case does not automatically mean that the claim was Fundamentally Dishonest, stripping the Claimant of its QOCS protection.

Whilst the initial case of Da Costa in the County Court did not directly deal with the finding of Fundamental Dishonestly and the loss of QOCS protection and After The Event Insurance, it still had relevance in relation to the argument.

In Da Costa, Lady Justice Black said: “The first thing to say is that a finding of fraud does not inevitably follow from a rejection of an accident claim as not proved. There may be many reasons why the claim is not proved other than that it has been fraudulently manufactured.

The words of Lady Justice Black have now been expanded upon in the Court of Appeal Case of Meadows v La Tasca (as yet unreported).

The claimant in the matter was initially unsuccessful in her tripping claim against the Defendant.  The defendant made an application asking the Court to find the claimant Fundamentally Dishonest, and upon reviewing the application and evidence, District Judge Khan concurred with the defendant and made a finding of dishonestly against the claimant.  As a result, QOCS protection was removed and the Claimant was ordered to pay the defendant’s costs in the sum of £7,210.00.

District Judge Khan ruled that he had not believed what the claimant or her witness had said had happened, describing their evidence as “riddled with inconsistencies”.

He said: “In those circumstances, it is difficult to see how this is not a dishonest claim. This is not, for example, a claim where there has been a misremembering of key events, or some confusion or lack of clarity in relation to dates, events, premises or the like. The effect of the inconsistencies… was such that I simply did not believe what Miss Meadows said to me or Mrs McGrath said to me.”

The claimant appealed this ruling, and after hearing evidence on behalf of the claimant, His Honour Judge Hodge QC overturned the finding of Fundamental Dishonesty made by Deputy District Judge Khan..  He said that;

‘It was not appropriate for the district judge to find that the accident had not happened in the circumstances described. He should have limited his decision… to a decision simply that the claimant had not made out her case on the evidence before him.’,  and went on to say that: ‘The inconsistencies and curiosities highlighted by the judge did not entitle him to go further and to find that the claim had been fabricated, and thus was fundamentally dishonest.’

The costs order against the claimant was reversed and the defendant ordered to pay an additional £12,500 for the costs of the appeal.

Claimant solicitors and After The Event Insurance providers have indicated that they are seeing a worrying trend of defendants alleging Fundamental Dishonesty where a claimant simply fails to prove their claim at trial, and this may lead to increased costs if claimants seek to appeal these findings.  Reducing the costs of litigation was of course something which the reforms of Lord Justice Jackson and the introduction of QOCS had hoped to achieve.

Given the latest Judgment in Meadows, we as ATE Insurance providers feel that there appears to be some respite afforded to the claimant, from what seemed like the latest line of attack from the defendant.  The battle may have been won by the claimant for now at least, but the war continues…

Posted in After The Event Insurance, Personal Injury Claims & ATE Insurance

“Whiplash” Numbers in decline

Robin Selley

It has been reported recently in the legal press that the number of personal injury claims being made is starting to decline, or as one report put it, they are in “freefall”. If taken at face value, these reports would suggest that the end of the PI market is nigh (to the huge joy of the insurers and government) but is it right to take such a pessimistic view at this stage?

First off, the National Accident Helpline Group reported to the London Stock Exchange that falling case numbers in its PI unit were ‘in line’ with the company’s predictions.

Meanwhile, new figures obtained by the Association of Personal Injury Lawyers (APIL) reveals that the government’s compensation recovery unit recorded 335,365 claims in 2015/16 where the compensator had used the term ‘whiplash’ to describe the injury, a fall of 11% in the number of “whiplash” claims recorded for the previous year. The figures obtained show a steady decline in numbers from 2012/13 but is that not surprising, given the rush to acquire claims prior to the 1st April 2013 in any event?

So is it really surprising that these figures are now starting to show a drop in the numbers as the Personal Injury sector still await the publication of a consultation on further reforms to low value “whiplash” claims, or is this just a natural correction post Jackson?

Statistics released by the HSE show that the number of workers fatally injured in 2015/16 (144) is 7% lower than the average for the past five years (155). Over the latest 20-years there has been a downward trend in the rate of fatal injury, although in recent years this shows signs of levelling off.

There was bound to be a large increase in the number of claims recorded in the run up to the Jackson reforms and perhaps now we are seeing a levelling off across the personal injury sector, against a constant bombardment from insurers and Government seeking to prevent those genuinely injured,  having access to justice and redress.

Posted in After The Event Insurance, Personal Injury Claims & ATE Insurance

So, “When is it OK to tell a ‘collateral’ lie?”, asks an After the Event Insurance provider.

Robin Selley

A collateral lie, what exactly is it? It is an untruth, but one which does not affect the overall validity of the claim made, so said the Supreme Court in a case involved a Dutch cargo ship, which ran into difficulty after its engine room was flooded. The crew falsely said they could not investigate an alarm, because the ship was rolling in heavy seas. However, the accident was caused by bad weather, so this lie was irrelevant, it was ruled.

The judge at first instance found that the lies from the ships crew amounted to a “fraudulent device” and thus invalidated the claim. The Court of Appeal upheld the initial judgement, but that has now been overturned by the Supreme Court who found that it is OK to tell a “collateral” lie on an insurance claim. All interesting stuff to those who provide After the Event insurance.

In giving Judgment, Lord Mance said: “The critical point is that, in the case of a collateral lie….the insured is trying to obtain no more than the law regards as his entitlement, and the lie is irrelevant to the existence of that entitlement. Such a lie is immaterial to the claim.”

The implications of this ruling could be far reaching, affecting household, travel and motor policy claims.

On the subject of telling “lies” the thorny subject of “fundamental dishonesty” rumbles on. It would seem that Claimant PI practitioners are receiving correspondence from Defendant lawyers on a regular basis where this is raised, even in claims where liability has been conceded. Perhaps Defendants are raising “fundamental dishonesty” as a matter of routine, in the hope of capturing the minority of claims which are deemed to be “fundamental dishonesty”? Cast the net wide in the hope of capturing a dishonest claim. Maybe that approach is justified.

From an ATE insurance perspective, Defendants have been reluctant in the past to actively pursue such allegations as they know perfectly well that if such a finding of fraud is made, the Claimant will lose the benefit of ATE cover and the Defendant would be unlikely to recover any costs in any event. Instead, they tend to raise the argument, indirectly.

But disbelieving the Claimant does not mean a claim was fundamentally dishonest. Who says so? His Honour Judge Freedman does!

In the original fast-track trial of Nesham v Sunrich Clothing, the District Judge ruled that on the balance of probabilities the Claimant could not prove that the Defendant had breached the duty of care that was owed to him so the claim failed. QOCS should have applied but the Defendant then sought to accuse the Claimant of being a liar and that he was fundamentally dishonest.

It could be suggested that a losing party in a PI claim must have been lying. Lawyers will often find that parties give varying accounts of how an accident may have occurred. However, HHJ Freedman held on appeal that “merely because an account of an accident has been rejected does not, to my mind, equate to fundamental dishonesty”.

HHJ Freeman added “Up and down the country on a daily basis, judges are being asked to decide whose account of a road traffic accident is more reliable ….And it is the experience of everybody who litigates in this field that drivers involved in an accident will give different and contrary versions of accidents to the extent of not just which lane they were in, but where they came from, the route they had taken and so forth… which may not constitute dishonesty, far less fundamental dishonesty.”

The Defendant was ordered to pay the Claimant’s costs of the appeal! A few more of these sensible decisions and hopefully Defendants will start to pick and choose the cases to run these arguments on with a little more thought. By all means go after those Claimants who grossly falsify and exaggerate their evidence for personal gain, but if a lie has no material effect to the overall validity of the claim made, is it worth pursuing the argument?

Sadly it still remains the case that Defendants can be reluctant to specifically plead fundamental dishonesty as they are well aware that an After the Event Insurance policy will not cover such findings. Sometimes they want to have their cake and eat it!

Posted in After The Event Insurance, Personal Injury Claims & ATE Insurance

European General Data Protection Regulation (GDPR)

Robin Selley

It seems that big changes to data protection as we know it are on their way to the UK as after several years of preparation and lobbying, the European Parliament has finally adopted the new European General Data Protection Regulation (GDPR) [Directive 95/46/EC].

So what is the GDPR you ask?

Well it will officially replace the basis behind the Data Protection Act 1998 and will become law in all EU member states from May 2018. The GDPR will also affect any businesses who process the personal data of EU citizens, even if they are based outside of the EU.

The document lays out compliance measures that each member state will need to meet before they take over for good in the summer of 2018 but what are the main changes we can expect from the GDPR?

One of the biggest relates to data responsibility as under the GDPR, both Data Controllers and Data Processors will be responsible for protecting their data.

All organisations will be obligated to have a full and firm understanding of what data they acquire, hold and process – and the legal basis for that data. Data protection measures must be integrated into business processes, in order to respect the rights of data subjects.

Most organisations will have to appoint a data protection officer, particularly those which process large amounts of sensitive personal data.

Additionally, the GDPR introduces a new obligation to notify data breaches to the relevant authorities within 72 hours of their first discovery.

At present the Information Commissioner can, in certain circumstances, impose financial penalties of up to £500,000. Under the new rules, non-compliance fines for failures to report breaches will be tiered – with a top tier fine up to a staggering 4 per cent of global annual turnover from late-reporting firms.

Firms may need to increase their privacy, in particular given the cyber-threats that exist at present. Policies and procedures for handling security breaches may need to be reconsidered and updated with all of this completed before the implementation date.

This news comes at a time when a London HIV clinic that leaked data on 781 of its patients has been fined £180,000.

The Information Commissioner’s Office (ICO) said the breach was “likely to have caused substantial distress” to those affected by the leak. Under data protection rules, the breach was deemed as sensitive and the organisation issued such a hefty fine as a result. Under the new regulations, could the fine have been even higher?

Organisations may require a data protection officer if they don’t have one already, and assess how and for what purpose they currently hold and/or process data. It may also be worth starting to review and update existing contracts in respect of parties’ data protection obligations.

Processing personal data is fundamental to the work of a solicitor. The Data Protection Act 1998 (DPA) regulates the processing of information relating to individuals at present. Solicitors should already be well versed with the DPA but the clock is ticking on preparing for the GDPR.

Posted in After The Event Insurance, Personal Injury Claims & ATE Insurance
Welcome to the After The Event Insurance Blog
This blog is produced by Box Legal Limited, providers of After The Event Insurance to the legal profession. Our aim is to provide news, advice and guidance on all issues around ATE Insurance and making personal injury claims. We welcome your comments and questions both on the blog and by contacting us direct on 0870 766 9997 or by emailing daniel@boxlegal.co.uk