QOCS – Uncertainty, Unfairness and Satellite litigation

1. QOCS –Uncertainty, Unfairness and Satellite litigation Martin Coyne Managing Partner Ralli Solicitors LLP

2. The Present System v QOCS • White Paper – will only apply to PI • Costs shifting – Loser Pays - D or C • One Way Costs Shifting – D always pays • “Qualified” One Way Costs shifting – D generally pays unless exceptions apply then C pays. • QOCS encourages claims repudiation • QOCS Access to Justice reduced • Government income reduced

3. QOCS Exceptions– When C Pays Costs • If C’s case is fraudulent • If C’s case is frivolous • If C’s case is unreasonable • On financial means grounds – where C is very wealthy • If D is uninsured – how can C know this? • Speculative claims – losing C pays minimum payment towards D’s costs

4. Effects of Current QOCS proposals • Rules require full costs advice to C – scare Claimant’s with no ATE • AJAG Consumer Survey – 77% would not claim if risk of paying costs • Without proper ATE cover 25% drop in legitimate cases (206,000) • MINELAS – C to reveal income, liabilities and assets – D will enquire

5. QOCS needs ATE • ATE companies said non recoverability of additional liabilities will kill ATE business • Pernicious exceptions will encourage ATE to live on? • RTA Portal cases – no ATE? • Non portal RTA – need ATE • EL / PL – less predictable – need ATE • Lower policy volume = higher premiums paid by C • ATE policy mayneutralise D’s costs threats to C – but maybe not

6. Alternatives - Solicitor Indemnity • Sibthorpe & Morris v London Borough of Southwark [2011] ECWA Civ 25 • Code requires best cost advice to C • Indemnity to be disclosed N251 • C needs to know Sols bank will meet cheque – full disclosure of Sol’s private borrowing to C • SI will not work in tricky volume matters • A non – starter except for the odd case?

7. Satellite Litigation – The Good Old Days • Fraud – satellite litigation • Frivolous = satellite litigation • Unreasonable = satellite litigation • Wealthy C definition? = satellite litigation • Interlocutory Orders exceptions apply? = satellite litigation • Part 36 = satellite litigation • Proportionality= satellite litigation increases costs • D uninsured = satellite litigation • ATE policy will probably not negate SL • LI and D sols think they are untouchable • Pre issue conduct enquiries from D to soften up C • Subjective tests before the courts • Tsunami of interlocutory applications

8. Practical Considerations • QOCS create asymmetric positions for C & D • ATE is needed with QOCS by C for certainty • CMC’s / sols require ATE commissions NB will ATE cover be needed in RTA Stage 3 portals? • Deferred ATE disbursement paid by client from compensation • ATE premium to be self insured in abandoned and lost cases • ATE Co’s will sieve unmeritorious/ fraudulent cases • ATE Co’s need to means test C –wealthy • ATE policies to be re-written • C’s disbursements to be covered • Will “Shameless” clients need ATE? yes • BTE checks still needed – uneconomic / regulation?

9. Practical Considerations • QOCS - predicted fraud increase? • If no ATE – psychological intimidation of C by D to withdraw or under settle at every stage • If no ATE – no staged case review • ATE premiums not subject to 25% cap • Clients may pay out over 25% of compensation in costs • Barristers will do CFA’s with zero success fees for volume • MINELAS could be means tested by D or ATE provider – soften up C • Sign up agents needed to secure cheque payment authorities at outset. • No ATE massive reduction in actionable cases • Minimum contribution to D’s costs – how much?

10. What Must We Do ? • Join AJAG to influence reform for future Claimant’s • Contribute financially to AJAG c/o Ralli Solicitors LLP • Effective lobbying buys more time • Lobby and meet your MP – all of your staff • Provide anecdotal evidence of potential injustice • Read the recent AJAG response to the White Paper www.ajag.co.uk

11. Now is the Time to Act • Contact tom.lavelle@ajag.co.uk – join AJAG • Email martin.coyne@ralli.co.uk with AJAG contributions and pledges • Contribute financially to AJAG c/o Ralli Solicitors LLP - money held in clients account. • 1 year at least of future lobbying MP’s and the MoJ • Make a difference

12. Please Do it Now !!