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A B C D E F G H I J K L M N O P R S T V W Y

Dispute Resolution

Civil Restraint Orders to stop vexatious claims
Friday 19th May 2017

Often, corporate entities can be seen as a target for spurious and ill-founded claims for modest sums by unscrupulous Claimants. Where that happens it is possible to apply to the Court for an order that no further claims can be issued unless the Court’s permission is obtained.  These types of orders are known as Civil Restraint Orders.

We have recently acted for an international bank in obtaining a Civil Restraint Order against a vexatious litigant who has issued several baseless claims.  That order restricts that Claimant’s ability to issue further claims without the permission of the Court.

The High Court has recently considered the terms of extended civil restraint orders in the case of Ashcroft and another v Webster [2017] EWHC 887 (Ch).

In this case the High Court heard an application to further extend an existing extended civil restraint order for a further period of 2 years.  The relevant test on an application of that type is whether the Court considers it ‘appropriate’ to do so.  The Court should not be tempted to go back to the beginning of the relevant factual background and decide whether to impose another extended civil restraint order.

In making its decision the Court should have regard to why the existing extended civil restraint order had been made and the respondent’s conduct since then should be ‘seen through the prism of the earlier conduct’. 

On the facts of this particular case the High Court considered that there was a serious risk of further claims being issued if the existing extended civil restraint was not extended and granted the application.
 


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New pre-action rules for debt claims
Monday 15th May 2017

A new Pre-Action Protocol for Debt Claims (“the Protocol”) will come into force on 1 October 2017. The Protocol, of which a final draft was published at the end of March 2017, contains provisions relating to the steps the court will expect business creditors to take before issuing proceedings against individuals for the recovery of debts.

 

Debt claims constitute a large proportion of UK court proceedings, and many such claims result in default judgment when debtors fail to file any defence to the proceedings.

 

The Protocol states that its purposes are to encourage communication between parties, to enable resolution without court proceedings, to encourage parties to act in a reasonable and proportionate manner, and to support the efficient management of proceedings where such proceedings cannot be avoided.

 

In practice, however, the Protocol may simply act as a safety net or buffer for debtors who are either struggling, or unwilling, to pay their debts.

 

The Protocol places a significant burden on creditors to provide extensive information to debtors (even in the simplest of cases), and to allow debtors increased time to respond to pre-action correspondence. Whilst compliance with the pre-action protocols is not mandatory, the courts are entitled (and indeed likely) to impose sanctions on parties that fail to comply with such provisions without good reason.

 

The additional time granted to debtors under the Protocol may be considered by some to be akin to an obligatory extended credit period.

 

The Protocol will apply to all businesses (including sole traders and public bodies) seeking to claim payment of debts from an individual (also including a sole trader). Therefore, with the exception of sole trader debtors, the Protocol will not apply to business-to-business debts.

 

The Protocol provides for a comprehensive Letter of Claim which should include, among other things, full details of the contract, debt, interest and any ongoing or proposed offers or payment plans. There are also a number of standard form enclosures to be attached to the Letter of Claim, such as a Reply Form and financial statements, which provide debtors with information to help them respond accordingly. The level of detail required in this initial correspondence is similar to that which the Court would expect upon the issue of a claim.

 

Under the Protocol, a creditor should allow at least 30 days for the debtor to reply to the Letter of Claim before commencing court proceedings. If the debtor does respond, the creditor should not commence proceedings until 30 days after receipt of the Reply Form.

 

A debtor, upon receipt of a letter of claim, may also request the disclosure of documents or information by the creditor. If such a request is made, the creditor should provide the documents or information (or an explanation as to why they are not being provided) within 30 days, and should not commence proceedings until 30 days after they have provided their response.

 

Further, if a debtor responds to the letter of claim, but no agreement is reached between the parties, the creditor should wait another 14 days before commencing proceedings.

 

On the one hand, these provisions could go a long way towards protecting individual consumers from rigorous debt collection by large companies. The Protocol will ensure that debtors are provided with all of the information they need about the relevant processes, and that they are given enough time to consider that information and make an informed decision about their next steps.

 

On the other hand, however, from October it will easily be possible for a debtor to delay payment by several months, simply by responding to correspondence at the latest possible date and requesting documents or information from the creditor. In the case of a simple contractual debt where there is no real justification for non-payment, this could prove harmful to some creditors – particularly small and start-up businesses, for which predictable cash flow may be vital.

 

It remains to be seen how well the Protocol will be received when it comes into force in October, and what impact it will have on small businesses. If you have concerns about the new provisions, or how they may affect your business, our commercial litigation team can advise you on dealing with debtors and guide you through the process.


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General Election 2017 – Defamation, Campaign Spending Limits, and Purdah
Wednesday 10th May 2017

As campaigning heats up for the 8 June 2017 snap General Election, candidates and others on the campaign trail would be wise to remind themselves of the law regarding making false statements, so as to avoid a civil and criminal claim.

Statements made during Parliamentary debates cannot be the subject of a defamation claim because statements made in the course of, or for the purposes of, or incidental to, any parliamentary debate or proceedings are protected by ‘absolute privilege’.  In the particular circumstances of a 2014 case this protection was extended to statements originally made during a House of Commons committee but repeated outside of the Committee.

However this protection does not otherwise apply to statements made outside of Parliament, where the usual laws of defamation apply.  A person defamed by false statements made during an election campaign can therefore pursue a civil claim for defamation.

However, such false statements may also constitute a criminal offence under section 106 of the Representation of the People Act 1983.  Section 106 provides that:-

"(1) A person who, or any director of any body or association corporate which –

(a) before or during an election,

(b) for the purpose of affecting the return of any candidate at the election,

makes or publishes any false statement of fact in relation to the candidate’s personal character  or conduct shall be guilty or an illegal practice, unless he can show that he had reasonable  grounds for believing, and did believe, the statement to be true”.

The potential sanction for breaching section 106 is an injunction restraining repetition of the false statement, or of a false statement of a similar character in relation to the candidate, and a fine of up to £5,000.

A defence to a section 106 claim is that the person making the statement believed that it was true and had reasonable grounds for that belief.

Those campaigning for candidates should remember that section 106 applies to anyone making such a false statement, and not only to candidates making statements about an opponent.  They should also note that the campaign period commenced, not when the Prime Minister announced the General Election on 18 April 2017, but on 9th June 2016, as confirmed by the Electoral Commission.  Therefore, over the period 9 June 2016 to 8 June 2017, any individual or business engaging in campaigning activities in England must not spend more than £20,000 without first registering with the Electoral Commission as a campaigner.  The limit is £10,000 in Scotland, Wales or Northern Ireland.

Finally, the Government has announced that the ‘purdah’ period took effect on 21 April 2017.  This means that government activity is now restricted to essential non-policy related activity until after polling day.
 


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Google - v - Uber: The battle for dominance of the automatous vehicle market
Tuesday 9th May 2017

A dispute has broken out between two of the most well-known tech companies in the world, Google and Uber, in relation to the development of automatous vehicles.

Waymo, which is now a subsidiary of Google Inc, has filed a claim in the United States of America asserting that Anthony Levandowski, a former Google engineer on the Waymo project (the name given the Google’s self-driving car development) and current vice president at Uber, stole up to 14,000 confidential documents (9.7 gigabytes of data) before leaving Google.

Waymo has claimed that Uber has stolen trade secrets and is infringing on its patents in connection with their development of autonomous vehicles.

Waymo originally asserted that Mr Levandowski used the data to entice Uber into buying his self-driving truck start-up, Otto, for $680,000,000 in August 2016 (only a matter of months after it launched). Waymo recently expanded upon this argument suggesting that Otto was actually a shell company used to facilitate Uber’s alleged infringement upon Waymo’s rights.

Waymo point out that the purchase of Otto by Uber was negotiated whilst Levandowski was still employed at Google. The company’s lawyers have produced documents that they say show that Levandowski was promised 5 million shares in Uber (amounting to roughly $250 million in stock) as early as January 2016.

Waymo have also requested that the Court order an injunction to prevent Uber using any of the data which it is alleged to have stolen, effectively a request that Uber ceases its automatous vehicle programme.

For the time being, Uber are asserting that, as the matter centres on Mr Levandowski’s actions, the claim should be subject to an arbitration agreement as per his employment contract and so, if the Court accepts such an argument, a trial may never take place.

The Court has not yet made any order but a ruling is expected in the coming days or weeks.

As the battle for dominance of the automatous vehicle market intensifies in Silicon Valley, and as the popularity of such technology increases elsewhere, it is likely that more and more tech companies will seek to recruit individuals well versed in automatous technology. If those companies adopt similar techniques to those allegedly used by Uber, we can expect to see an increase in the number of similar claims brought - including injunction proceedings.

In the UK, if it can be shown that a former employee is in breach of a restriction in his or her contract of employment, then it is possible to bring a claim seeking an injunction to prevent further infringement.  The former employer can seek such an injunction against the individual and against competitor businesses, but they must act quickly.

Please contact us for legal assistance in the event that you have any concerns that a former employee and/or competitor business may be infringing on your businesses rights.


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Statements of value MUST be accurate… except when they’re not!
Thursday 27th April 2017

Last month, the High Court issued a judgment which has sparked debate since its publication. The case in question is Harrath v Stand For Peace Ltd [2017] EWHC 653 (QB) - a defamation case where Mohamed Ali Harrath claimed against Stand For Peace Ltd, and its director Samuel Westrop, in respect of an article by the defendants which described Mr Harrath as a “convicted terrorist”.

The basis for the defendants’ assertion in their article seems to have been a French blog post, which referred to a 2005 conviction in Tunisia, and the existence of an Interpol warrant against Mr Harrath. The conviction was, according to Mr Harrath (and eventually conceded by the defendants), expunged, and it turned out that the Interpol warrant had been withdrawn in 2010. Mr Harrath eventually obtained judgment in his favour at a trial of the substantive case in 2016, and the trial held last month was to assess the appropriate level of compensatory damages.

Naturally, many cases involving allegations of terrorism – including this one – make it into the news. However, as interesting as the circumstances may be, this case has caught the attention of litigators and the legal press for an entirely different reason.

In his claim form, Mr Harrath had indicated that he expected to recover no more than £10,000. This meant that initially he would have had to have paid a court fee of less than £500.

In last month’s trial, the judge, Sir David Eady, concluded that the appropriate award for Mr Harrath was £140,000. Had Mr Harrath correctly estimated the potential award (or even come close) then his court fee would have amounted to £7,000 – more than 14 times the amount he actually paid.

Despite Mr Harrath’s vast underestimate of the recoverable compensation, the court awarded the sum it considered appropriate, noting that Mr Harrath made it clear that he was willing to pay any applicable increase in the court fee as necessary. The court also pointed out CPR 16.3(7), which states that “[the] statement of value in the claim form does not limit the power of the court to give judgment for the amount which it finds the claimant is entitled to.”

Whilst some may contend that it is fair and reasonable to award the ‘correct’ amount of compensation regardless of a claimant’s expectation, allowing a litigant to retrospectively pay a higher court fee to achieve a greater damages award is a slippery slope that could lead to a number of litigants abusing the process. With this case as a precedent, potential claimants may be inclined to undervalue their claim to avoid paying (and, of course, potentially losing) a higher court fee, on the assumption that if they win a greater amount they could simply pay the extra fee out of their award.

This is not the first time that this issue has come to light. With rising court fees, particularly since the significant increases in 2015, many litigants have found themselves in a position where they cannot afford issue fees, and have attempted to ‘get around the system’ by deliberately understating the value of their claims. The courts have not always been as accommodating in such situations as they have been to Mr Harrath.

In Lewis and others v Ward Hadaway [2015] EWHC 3503 (Ch) the court found that there had been an abuse of process where a similar tactic was used. In that case, the claimants had initially issued claim forms with low statements of value to set the wheels in motion and avoid being barred by limitation. By the time the claim forms were amended, and the correct court fees paid, the limitation period had expired.

The defendants applied to strike out the claims on the basis of the claimants’ deliberate circumvention of the rules, and alternatively for summary judgment on the basis of limitation. The claimants avoided having their claims struck out because the court decided it would be disproportionate to do so. However, the defendants were successful in obtaining summary judgment as the claimants had failed to pay the “appropriate court fee” within the limitation period.

The court found that the claimants had deliberately abused the court process; it was not simply a case of accidentally underestimating the claims. Lewis and others v Ward Hadaway therefore acted as a warning both against the practice of understating claim values and against teetering on the edge of limitation periods. However, as a result of Harrath v Stand For Peace, the position regarding the former is now less certain.

It seems likely that the distinction that will be drawn between the two cases will be based on the intentions of the claimant. Where a claimant innocently fails to appreciate the extent of damages that he could be entitled to, he may not lose out on his damages simply because of his statement of value on the claim form.

However, claimants and litigators alike should still heed the warning of Lewis and others v Ward Hadaway and do their best to accurately estimate claim values, as any indication of a deliberate attempt to abuse the process could lead to severe sanctions such as claims being struck out.


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New guideline issued on sentence reduction for early guilty plea
Wednesday 19th April 2017

The Sentencing Council has issued fresh guidance as to the ‘Reduction in Sentence for a Guilty Plea’ (the Guideline) at each stage of a prosecution. The update provides for greater accuracy with regards to the time limits applicable to each of the percentage discounts available.

The Guideline will apply to matters within the Crown and Magistrates’ court in which the first hearing is on or after the 1 June 2017. This is regardless of the date upon which the alleged offence was actually committed.

Under the 2007 guidelines, maximum credit was provided where a guilty plea was indicated at the ‘first reasonable opportunity’. Now, under the new guideline, maximum credit will be granted when a guilty pela is indicated at the ‘first stage’ of proceedings. A one third reduction will be given. This will usually be the first hearing at which a plea or indication of plea is sought and recorded by the court. If the offence is a triable either way offence, the guilty plea is to be provided at the first appearance in the Magistrates’ court in order to receive the one third reduction. 

Factors such as admissions at interview, cooperation with the investigation and evidence of remorse should only be taken into account in mitigation, once the reduction has been applied. They will not determine the reduction itself.

After the first stage of proceedings, the maximum level of reduction decreases to one quarter. After this, there is a sliding scale of reduction, decreasing from one quarter to one tenth (if the guilty plea is provided on the first day of trial, but this is relative to the progress of the case). The reduction may not be applied if the guilty plea is entered during the trial itself.

The Guideline does permit the court to achieve a reduction by replacing one type of sentence with another. For example, reducing a custodial sentence to a community sentence.

Exceptions will apply in cases where the Defendant’s ability to understand what was alleged made it difficult to expect them to indicate a guilty plea sooner than when he or she may have been done. In such cases, a reduction of one third should still be granted. This will apply to many health and safety and environmental offences which often involve many parties, complex information and expert evidence.


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Hey neighbour, where you going with that gun in your hand?
Monday 10th April 2017

“…I'm goin' down to shoot my old lady,
You know I caught her messin' 'round with another man…”


Such are the words of Jimi Hendrix’s classic hit, “Hey Joe”; sung passionately from a barn in Terry Simou’s back garden in 2014, before the 63-year-old acupuncturist emerged to find himself confronted by four policemen wielding automatic weapons.

The armed officers had been told that Mr Simou was shouting that he was going to kill his neighbours, Michael and Hazel Salliss, who had called to make the report.

For Mr Simou, this was the culmination of a 10 year long neighbour dispute that may have eventually reached its conclusion after a decision was made against Mr and Mrs Salliss in the Court of Appeal last month.

The Court ruled that Mr and Mrs Salliss had, for several years, led a campaign of harassment against their adjoining landowners in a bid to improve their own home, including several encroachments upon Mr Simou’s land.

Christie Greenfield, a local sheep farmer who also bore the misfortune of sharing a boundary with Mr and Mrs Salliss’s £600,000 home, suffered the same crusade of hectoring that saw Mr Salliss threaten Mrs Greenfield with a hay bale, held precariously over the farmer’s head on the bale spear of Mr Salliss’s tractor.

Mr Simou and Mrs Greenfield took Mr and Mrs Salliss to court in 2015 and obtained a successful judgment damning the actions of their neighbours. The Salliss’s appeal to the Court of Appeal was dismissed last month, with a written judgment still to be issued, leaving Mr and Mrs Salliss with a likely legal bill of around £500,000.

Another case of quarrelling neighbours, which also came before the courts last month, involved Peter Lane and Garry Prince from Dorset. 81-year-old Mr Lane had hit Mr Prince in the arm and leg with a rounders bat after Mr Prince made offensive remarks about his wife, Sally Lane.

Their disagreement began in 2007 over a concrete pillar between their respective properties, and Mr Lane initially succeeded against Mr Prince when the boundary dispute was taken to court.

However, the pair found themselves in front of a judge once again last month as a result of the fracas that occurred in May 2016, where Judge Jonathan Fuller QC criticised both men for their “disgraceful” behaviour and announced his frustration at being unable to impose an order requiring the neighbours to come to their senses. Both men were charged in relation to their actions but were given 12-month conditional discharges.

Increasing prices of property and land may explain why the number of boundary disputes being brought before the courts is on the rise.

Jeff Lewis, partner and head of litigation here at Brabners in Manchester, said: “A man’s home is his castle and this emotional connection is often the reason boundary disputes get out of hand.

“If someone is experiencing an infringement of their property rights, for example a disagreement over a right of way, this can be viewed as a personal attack and it often takes on a disproportionate significance to the actual issue.”

With the cost of taking issues like this to court pushing into the tens of thousands of pounds, and often much higher for more complicated cases, there is a clear advantage in settling such arguments without resorting to litigation.

There are a variety of methods for resolving disagreements outside of the courtroom, known as alternative dispute resolution. These range from informal negotiations to formal arbitration, which can impose a binding decision on the parties involved.

“Neighbours can avoid long and costly legal battles if early, reasonable action is taken, and this can even prevent the situation getting to the stage of involving a lawyer”, Mr Lewis continued.

“The ultimate objective is creating an open dialogue and this should always be your first objective. Yes, there may come a point where a visit to the solicitor is inevitable, but in our experience many disputes between neighbours could have been resolved over a cup of tea and an open conversation.”


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Pothole pay-out – triumph or tragic?
Thursday 30th March 2017

The owner of a Ferrari 458 Spider has successfully sued Peterborough City Council for £10,000 after hitting a pothole that caused damage to his beloved sports car, when the road would have cost a mere £53 to repair.

Scott Nicholas, 44, took the Council to the small claims court over the damage caused to his car - including £3,000 in respect of a damaged wheel and suspension, and £6,000 to replace the leather interior of the car that was torn up when the passenger side airbag deployed.

The story has divided opinions – is this a textbook example of the courts protecting the rights of a faultless driver, or an appalling waste of dwindling council resources? My colleagues, who are well versed in the law, tend to share the former opinion; but friends and family outside the legal industry are concerned that such a large sum could have been better spent on more pressing issues such as social care.

Thisismoney.co.uk reported in 2015 that, on average, a claim for pothole related damage was made every 11 minutes – but only 23% of those were successful. According to the Local Government Association last year, it would take local authorities 14 years (and almost £12 billion) to clear the backlog of potholes on our roads, despite councils fixing almost 2 million of them each year.

It is not only drivers that are affected by the condition of our roads: in 2011 a cyclist was killed in North Yorkshire after his bicycle hit a pothole and he was thrown into the path of an oncoming car. It is clear therefore that this is not just a matter of compensation for a man whose car collection is worth more than many of us earn in a decade – severely damaged road surfaces can pose a serious risk to the public, and councils owe a duty of care to ensure that our roads are safe for drivers, cyclists and pedestrians alike.

It is unclear yet what effect this case, which involves the largest such pay-out ever made by Peterborough City Council, will have on pothole-related claims across the country.

The prevalence of this recent story, and the fact that sites like MoneySavingExpert have recently published guides to assist people in making such claims, may lead to an increase in the number of claims made against local authorities. Mr Nicholas’s success in court may have also set a precedent that increases the likelihood of success in similar cases.

With many local authorities already struggling with diminished funds and government cuts, increased pay-outs for minor damage to vehicles may put an undue strain on other public services, and councils may not be able to justify spending more on road maintenance. However, common sense would seem to dictate that an increased investment in our road network is the savvy option – as Mr Nicholas is unlikely to be the last person to receive compensation 200 times greater than the amount it would have cost to repair the pothole in the first place.
 


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Supreme Court landmark Inheritance Act Maintenance claim ruling: Illott v The Blue Cross
Wednesday 15th March 2017

The Supreme Court has today handed down its long awaited landmark judgment in the case of Ilott v. The Blue Cross & others.

This is the first ever case to reach the UK’s highest court on this question. The appeal was heard by 7 members of the Supreme Court who reached a unanimous decision.

The case concerned claims for provision for maintenance from an estate under the Inheritance (Provision for Family and Dependants) Act 1975 where no provision or possibly inadequate provision was made by a will or by the effect of the intestacy rules.

Mrs Illott was estranged from her mother and had been disinherited by her mother in favour of a number of animal charities. She brought a claim for maintenance from her mother’s estate under the Inheritance (Provision for Family and Dependants) Act 1975. She was awarded £50,000 in the County Court.

Not satisfied with the County Court Award Mrs Illott appealed her claim to the Court of Appeal which awarded her £143,000 to buy the house she lived in and additional the option to receive £20,000 all from her mother’s estate. 

The beneficiaries of Mrs Illott’s estate were then deprived of charitable donations left in Mrs Illott’s mother’s will and appealed the case to the Supreme Court.

In delivering the lead judgment Lord Hughes reinstated the original award of £50,000 made in the County Court.

The judgment stressed that awards to adult children must be limited to maintenance and that the language used in the Act was a deliberate choice by Parliament. 

The judgment also gives guidance that the purpose of the Act is not to create legacies for adult children where a will did not provide for one. 

The standard of ‘maintenance’ is not as high as an award to address everything an adult child reasonably needs. 

The Act requires a single assessment by the Judge at trial and they are entitled to take a broad brush approach.  In this particular case the estrangement of Mrs Illott from her mother was a significant factor.

If you would like further information on wills, estates or probate please visit willsandprobateclaims.brabners.com


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The growth of litigation funding
Thursday 9th March 2017

According to recent research the use of litigation funding has grown more than 25% in the last year from £575m in 2015, to £723m in 2016. These figures are based on the balance sheets of the twenty largest independent litigation funders, whose businesses revolve around paying towards the legal costs for parties in litigation in exchange for a share of any damages recovered.

In terms of how litigation funders operate within a claim, they tend to defer to the claimant and their lawyers for the overall litigation strategy. It is this level of freedom, combined with the pressure on in-house legal budgets and fee income for law firms, that has led both to increasingly engage with litigation funders to better understand how they can fund litigation in their business, in the same way they have historically funded other aspects of their business.

Lord Justice Jackson’s reforms have also acted as a catalyst to the litigation funding sector. For example, in insolvency litigation the reforms have ended the insolvency profession’s exemption, meaning that conditional fee arrangements based on success fees and after the event insurance premiums will no longer be recoverable in proceedings brought by liquidators, administrators or trustees in bankruptcy. This has had the effect of insolvency lawyers engaging with litigation funders on a more frequent basis.

Litigation funding will still be used as a way to allow parties with limited financial resources to pursue claims against wealthier organisations, where the legal costs may have otherwise been too high. Yet, the litigation sector’s elevated awareness of the benefits of litigation funding, as well as regulatory changes to the litigation industry as a whole, mean that litigation funding is no longer used out of pure economic necessity alone, but as a commercially viable option for businesses and law firms alike. 


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