The Practical Lawyer


CFAs – insolvency

Insolvency litigation was exempted from LASPO 2012, but that exemption ended in April 2016. Thus, successful claimants with CFAs entered into after 6 April 2016 will no longer be able to recover success fees or ATE insurance premiums from the losing party. This is something that insolvency lawyers have fought against for some time. The expectation is that CFAs will still be used in higher-value cases (because success fee and ATE premium will be less of an issue), but there are suggestions that lower-value claims will suffer, with litigation purchasers taking assignments of claims from insolvency practitioners and then pursuing them on their own behalf. See note in [2016] NLJ 8 April 5.

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Part 36 – different heads of loss

What happens when an offer relates to more than one head of loss? The answer is that the offer will stand in the terms made; thus, even if it sets out figures for various heads of loss, this does not mean that the offeree has to beat the individual, component, parts.

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Costs budgets – BDRs

Two changes to the Costs Budget Rules came into force in April 2016: (i) the deadline for submitting budgets has been brought forward and is now 21 clear days before the case management conference; (ii) the parties must submit agreed budget discussion reports (BDRs) no later than seven days before the CMC.

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Denton – relief from sanctions

Mitchell [2013] was solved by the CA intervention in Denton [2014] for deciding when to grant relief from court-imposed sanctions (eg being struck out). In that case, the CA laid out a three-stage test: (i) the seriousness of the breach, (ii) whether there was a good reason for the breach, and (iii) the overall circumstances of the case.

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Negligence – mitigation

Solicitors acted on the purchase of a residential property. They forgot to tell the client there was a planning restriction. The client subsequently found the land was therefore worth £100,000 less. In response, the solicitors pointed out that the client immediately applied for planning permission and got the restriction lifted (the only cost being a planning fee of £250). Are the solicitors liable for £250 or £100,000?

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Fixed costs – Part 36 prevails

In an important decision, the CA has decided that Part 36 trumps the fixed costs regime (in Part 45). Previously, defendants had argued that claims begun in the portal should only get fixed costs, whatever the outcome. That approach is wrong.
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Part 36 – derisory offer?

A Part 36 offer is only valid if it is a ‘genuine attempt to settle the proceedings’. Is an offer to accept 95% of assessed damages (ie forego 5%) a ‘genuine’ offer or is it merely ‘derisory’? In AB [2011] Henderson J drew a distinction between a genuine offer, as opposed to a ‘likely disguised request for total capitulation’. Thus, a request for a defendant to agree to 100% of the damages sought was not an ‘offer to settle’ – since an offer has to contain some genuine element of concession. Thus, in the context of an RTA claim, a 95% offer was ‘derisory’.
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Tender before action – liquidated claims

The defence of tender before claim is common law based. In essence, the defendant has unconditionally offered the amount due to the claimant. For this defence to apply, the defendant must comply with CPR 37.2, which requires the defendant to pay into court the amount originally tendered (otherwise the defence cannot be relied on).

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Exclusive jurisdiction – drafting

 It is usually advisable to have an exclusive jurisdiction clause since this brings certainty and avoids potential disputes. If it is agreed that the courts of England and Wales are to have exclusive jurisdiction then consider:

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Costs – failure to mediate

We are all familiar with the concept of a successful party being penalised for costs because of a refusal to mediate. But, we now have a costs penalty being imposed on a losing party who failed to mediate.

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