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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

Giving up on minimum living standards to save for access to justice
Thursday 29th March 2018

Last week the Law Society published a press release, saying that it has begun a campaign to change the rules on civil legal aid eligibility.

In summer 2017 the Supreme Court ruled that employment tribunal fees were unlawful because households on low incomes were expected to sacrifice an acceptable standard of living (R (Unison) v Lord Chancellor [2017] UKSC 51), this was a significant victory for Unison, and the Law Society looks to rely on the result.

Currently, the provision of civil legal aid is calculated on a means-tested basis. However, entitlement is not absolute and an incremental assessment means that some recipients still have to make a contribution towards their legal costs. Up to 2010, the levels that determine whether a household meets the standard of entitlement were up-scaled annually, taking account of inflation. However, since 2010 these levels have been frozen. 'The financial eligibility test for civil legal aid is disqualifying people from receiving badly-needed legal advice and representation, even though they are already below the poverty line,' said Law Society president Joe Egan, 'The position has been getting progressively worse, because the means test thresholds have been frozen since 2010, while the cost of living, of course, has not.'

A report commissioned by the Law Society, and produced by Professor Donald Hirsch of Loughborough University, found that households on incomes 10% to 30% below the “minimum income standard” were being made to contribute towards their legal aid provision.

The Joseph Rowntree association reported in 2016 that, to achieve the minimum income standard, single people need to earn at least £17,100 a year before tax, and couples with two children at least £18,900 each. Further, capital assessment means testing treats house values as funds available towards legal costs. As a result, households are being asked to contribute towards their legal costs when they are already below the minimum standards required to sensibly survive and participate in society. Mr Egan said: “The assumption that someone could sell their home to cover a legal bill is out of line with other forms of state means-testing – such as help with care costs, where the value of your home is ignored.”

Capital assessment now operates so that, in some cases, those with savings of over £8,000, and in other cases just £3,000, are required to make a contribution. This limits access to justice for some of the very poorest when disputes arise, for example, concerning domestic abuse, housing disputes or child access rights.

The Law Society is calling on the Ministry of Justice to review the means testing regime, establishing the pre-2010 real-terms test in accordance with the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). They are also asking that they exempt those on means-tested benefits from capital assessment.

Campbell Robb, chief executive of the Joseph Rowntree Foundation said: “As a country we believe in justice and compassion, but it is simply unacceptable that millions of people are unable to access legal support because they live on a low income.”

To find out more on the topic, please contact a member of our Litigation team or Howard Hartley on 0161 836 6847 or via email


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Unrepresented Court users do not need to be suspicious, solicitors are under a duty to assist the Court
Tuesday 27th March 2018

Following on from our recent blog dealing with a recent Supreme Court authority confirming Litigants in Person have no entitlement to special treatment when it comes to application of procedural rules the Court of Appeal has also made a determination affecting litigants without legal representation.

In the case of Kaur v Leeds Teaching Hospitals NHS Trust [2018] EWCA Civ 311 the Court of Appeal gave directions for the Respondent to the Appeal to prepare the Appeal Hearing Bundles.  That direction runs contrary to the usual rule that the person bringing the appeal (the appellant) is the person that must assume the task of preparing the hearing bundles.  However, there is a longstanding principle that where one party is not legally represented then the legally represented party assumes the responsibility for preparation of the Court hearing bundles.  The reasoning behind this is simple, solicitors will be more familiar with the Court rules on how the bundles should be put together and an effective bundle will enable the hearing to be dealt with more efficiently.

In this case the Appellant (who was acting in person, without legal representation) was not happy that her opponent had been directed to prepare the hearing bundles even though the Court had directed that she could file at Court a supplemental bundle if she felt the bundle prepared by her opponent omitted anything.  The Appellant was apparently suspicious that the Respondent would not prepare the bundles comprehensively and applied to request that the Court reconsider the directions given.

The application was not helped by the fact that the Appellant had prepared bundles used for her initial application for permission to appeal and the Court had found those bundles to be inadequate.  The Appellant had also refused to accept delivery of or consider the suitability of hearing bundles delivered to her by the Respondent’s solicitors and did not appear at her application hearing.

The Court of Appeal declined to reverse the directions.  In this case, quite righty, the Court made it clear that the Respondent should resend the hearing bundles they had prepared to the Appellant and that she should accept them.

Although civil court proceedings in this jurisdiction are adversarial, solicitors instructed by parties to a claim do have duties as Officers of the Court to assist the Court in the effective disposal of the claim in a just and fair manner.

For more information on the topic, please get in touch with a member of our Litigation team or with Simon Morris dirrectly via email or on 0151 600 3394.


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Internal Investigations and Litigation Privilege
Tuesday 20th March 2018

Organisations often have policies and procedures in place for conducting investigations, whether on matters of health and safety, employment, or other allegations of wrongdoing.  Those investigations will generate documents and there have been several recent cases on the question of whether those documents are disclosable in subsequent litigation.  A recent High Court Judgment gives further guidance on this issue.

In litigation the parties must conduct a search for documents as ordered by the Court and then disclose documents (including electronic documents) to their opponent.  This is an area of proceedings which is subject to reform, with consultation under way on proposed reforms as discussed in our previous blog here.

When considering which documents to disclose to its opponent, a party can object to the inspection of otherwise disclosable documents on the basis that they fall within one of two types of privilege:

  • Legal professional privilege, which covers confidential communications between a lawyer and their client for the purpose of giving or seeking legal advice.
  • Litigation privilege, which covers confidential communications between a client and their lawyer (or a third party) where adversarial litigation has started or is in reasonable contemplation, and the communication is for the sole or dominant purpose of litigation.

During internal investigations documents are always generated at the early fact-finding and interview stage, where litigation has not even been threatened.  If litigation is later commenced, the question is whether those documents are protected by one of the forms of privilege above.  The latest case to have considered this issue is Bilta (UK) (in liquidation) & others v Royal Bank of Scotland & another [2017].

HMRC had sent a letter to RBS making allegations about certain transactions which took place during 2009.  Later correspondence was sent by HMRC stating that the bank’s claim for VAT input tax might be at risk, and they invited the bank to set out its views.  The amount in dispute was some £86 million plus interest.  RBS instructed a firm of solicitors to lead the internal investigation.  That investigation generated interview transcripts and other documents.

The transactions involved the former directors of Bilta and the liquidators of that company later commenced Court proceedings against the bank, and they sought the disclosure of documents generated by the internal investigation, including the interview transcripts.  The Court considered whether those documents were protected from disclosure by litigation privilege.

Adversarial litigation was in reasonable contemplation at the time of the internal investigation, because of the letter received from RBS.  The issue here was over the dominant purpose of the documents – whether they had been generated for the purpose of conducting the contemplated litigation or for some other purpose such as trying to persuade HMRC not to issue a tax assessment.  Sir Geoffrey Vos took the view that the latter was at most a secondary purpose and held that the dominant purpose was litigation.

The Judgment refers to various facts including the letter from HMRC asserting that there might be grounds to deny input tax (which was consistent with a dispute arising), that RBS instructed an external tax litigation team to lead the internal investigation, that the solicitors’ letter of engagement described their work as “to provide legal advice in respect of a dispute with HMRC regarding the recoverability of income tax…” and that the letter of RBS to HMRC following the investigation, was comparable to a letter of response to a letter of claim.  On this basis the Judge determined that these documents were created for the sole or dominant purpose of litigation against HMRC (in the First Tier Tribunal (Tax Chamber)), and that RBS was entitled to refuse to disclose them to the liquidators of Bilta on the ground of litigation privilege.

Other recent decisions have gone the other way, and have found that (in the circumstances of those cases) documents generated by an internal investigation are not privileged.  So each case will be determined on its particular facts and all parties to litigation must properly consider their disclosure obligations in light of the statements of case and the disclosure direction from the Court.  However there are certain practical steps that a business can take to seek to improve the prospect of successfully arguing that internal investigation documents fall within litigation privilege.  They include the following:-

  • Properly understanding what documents are being created by the internal investigation and why they are being created.  In this case the Judge considered the contemporaneous evidence of the bank’s senior employees which set out their reasons for conducting their internal investigations;
  • Instructing specialist legal advisors at an early stage;
  • Considering to whom documents are disseminated, and why, and including legal advisors in correspondence; and
  • Marking correspondence and documents with confidentiality terms including that they are privileged and have been created and disseminated in contemplation of litigation.

These steps will not be determinative of the issue and so there will always be a risk that the documents generated by an internal investigation will be disclosable in subsequent litigation, and the recent cases should act as a reminder to businesses (and to their in-house legal advisors) of the risks involved when carrying out such investigations.

If you would like to find out more on the topic please contact Glym Lancefield on 0151 600 3060 or via email.


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Threat to disclose confidential information
Tuesday 27th February 2018

There can often be a dramatic fallout when a relationship comes to an end, and, in light of the decision in UK Mission Enterprise Limited v Peter Lendvai [Unreported], it would appear that the termination of an employment relationship is no different.

In this instance, the aggrieved departing individual was the subject of an interim injunction which prohibited the publication of confidential information regarding the company’s clients. The interim injunction was accompanied by a penal notice which meant that if the terms of the injunction were breached it would put the individual at risk of being found in contempt and facing a possible prison sentence.

The company provided support to members of the Dubai government and its royal family whilst they were in the UK. The individual was employed by the company and had signed a standard employment contract which prohibited him from using or disclosing confidential information either during, or after, his employment ended. Due to the nature of the job in question, the employee had access to confidential information regarding the company’s clients.

The individual was dismissed and a dispute arose which culminated with the individual writing to the company’s managing director threatening to disclose the confidential information he had obtained during his employment, most notably, publishing photos and recordings regarding the company’s esteemed clients on the internet.

The company proceeded with legal action but, by the date of the hearing, the individual had changed his position and confirmed that he no longer had an intention to carry out his threat and was concerned that if the injunction was granted then he could be held responsible for the actions of other aggrieved employees who did proceed to disclose the company’s confidential information.

Notwithstanding the individual’s change in position at the date of the hearing, the court decided that there was a real risk that the company’s confidential information would be disclosed if the individual was not restrained. The balance of convenience favoured protecting the company against the risk of disclosure and an interim injunction was granted.

In the event that the terms of the injunction were breached by a third party, it would be for the individual to prove that he was not responsible for the publication in order to avoid potential committal proceedings.

It would therefore be advisable for any employer to (a) review the provisions regarding confidential information in your employment contracts; (b) consider how securely your confidential information is kept and monitor those who have access to it; and (c) act swiftly, decisively and seek urgent legal advice should an aggrieved employee make threats against your company.


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No special rules for a Litigant in Person, the Supreme Court Rules
Wednesday 21st February 2018

Today the Supreme Court rejected a plea for relief from a Litigant in Person (LiP) who had failed to strictly adhere to the Civil Procedure Rules (CPR).

By way of background, the case involved Mr Barton who sought to bring a claim for professional negligence against Wright Halsall, his previous solicitors, which was issued on 25 February 2013. The Claim Form would have been served by the Court upon the Defendant, however, pursuant to the exception in CPR 6.4(b) Mr Barton elected to serve it himself.

On 26 March 2013 the Defendant’s solicitors informed Mr Barton that they were instructed and that they “await service of the Claim Form and Particulars of Claim”. On 24 June 2013, which was the last day of the 4 month time period before the expiry of the Claim Form, Mr Barton emailed the same to the solicitors. He received an automatic reply and a number to contact if the case was urgent, which he did not use. Later that day, the solicitors replied to Mr Barton stating that they had never confirmed that they would accept service by email and as such the claim form had expired unserved and was statute-barred.

The Court rules provide that service by email is only permitted where the opponent has indicated that he is willing to accept service by those means.

Mr Barton argued at Court that his service complied with the rules on the basis that the solicitor’s email of 24 June amounted to an indication that they would accept service by email. In the alternative he asked that service be validated pursuant to CPR 6.15(2). In the further alternative he asked for the validity of the claim form to be extended (CPR 7.6). Mr Barton failed on all three grounds and he was given leave to appeal in respect of the second ground only, leaving the question to be answered whether the service by email should be validated as “good service” after the event.

In the Supreme Court Lord Briggs in his judgment stated that “there cannot fairly be one attitude to compliance with rules for represented parties and another for litigants in person”. He did however note that “the answer is to make very different new rules (as is now planned) rather than to treat litigants in person as immune from their consequences”.

Whilst Mr Barton’s appeal was narrowly rejected by a majority of 3-2 in the Supreme Court, it has paved the way for reforms to the Civil Procedure Rules in the near future. In the meantime, the case highlights the importance of ensuring that consent is obtained prior to serving documents by email and, if you are in any doubt as to compliance with the Court rules, the importance of seeking legal advice.

Interested parties will also note our recent blog regarding service by email in arbitration proceedings: http://www.brabners.com/blogs/dispute-resolution/service-email-are-you-being-served.


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To repair or replace…?
Tuesday 20th February 2018

Disputes regarding the scope and application of repairing obligations in leases frequently arise and, given the financial implications for the parties involved, are significant.

The recent decision in De Havailland Studios Ltd v Peries v Voysey [2017] UKUT 322 (LC) Upper Tribunal (Lands Chamber) provides a useful reference on the question of choice of whether to repair or replace and whose choice it is.

The case concerned defective windows in a converted residential block of forty one flats.  One of the flats was let to two lessees on a long lease under which the landlord was obliged to repair the windows with the ability to recover the cost from the two lessees through a service charge. 

The landlord contended that the windows should be repaired whilst the tenants contended they should be replaced, on the basis that it would be a false economy to repair them.  The cost of replacement was considerable and would have financial implications for the landlord.

The tenants applied to the First Tier Tribunal for a determination of the method of repair to be invoked and the Tribunal, whilst finding that both methods were reasonable, gave judgment that the better method in that instance was replacement because it would be unreasonable to incur the costs of repair as against replacement.

The landlord appealed the decision on the ground that the First Tier Tribunal was wrong, where having found that both methods were reasonable, it then decided which method should be adopted based its view that the costs of repair were unreasonable. 

The landlord was successful on the appeal, with the Upper Tribunal stating that the key consideration was where the two courses of action were reasonable the decision on which to use lies with the landlord.  In making its decision, the Upper Tribunal referred to the decision in Waaler v Hounslow LBC [2017] EWCA Civ 45 which determined that when deciding whether cost were reasonable, it was necessary to consider the outcome to the tenants as opposed to merely whether or not the costs themselves were reasonable in amount.  Underlying the decision was the principle that where a contract confers discretion on a party to incur charges which the other party is liable to pay, the party exercising the discretion must act rationally. 

With particular benefit to residential landlords the moral of the story is that the choice of which method to use in terms of repair or replacement within the context of their repairing obligations should not be assessed on cost alone and, for example, on which method is cheaper, but on which method will yield a reasonable outcome, within the facts and context of each case. 


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Government launches new Office for Product Safety Standards
Tuesday 20th February 2018

On 21 January 2018 the Government announced the creation of a new Office for Product Safety Standards (“OPSS”) which is tasked with “identifying consumer risks and managing response to large-scale product recalls and repairs”.

The announcement comes as part the Government’s response to the Working Group on Product Recalls and Safety. The report, published in July 2017, recommended the “need for a centralised technical and scientific resource capability to support decision making and co-ordination of activity of Local Authorities and the businesses they regulate”

The OPSS is based within the department for Business, Energy and Industrial Strategy (“BEIS”) and covers general consumer product safety including white goods, toys, clothes and cosmetics. Outside its remit are products such as vehicles, medicines, medical devises or workplace equipment which are already covered by other agencies.

The primary function of the OPSS is to seek to ensure that UK consumers receive the highest possible levels of protection from unsafe goods, ensure that UK businesses are protected from unfair competition posed by sub-standard and unsafe products and help give businesses confidence in meeting their responsibilities to supply safe goods. In order to achieve this the OPSS will support the network of Local Authority trading standards teams by providing advice and support to ensure that manufacturers, importers and retailers meet their responsibilities to place safe products on the market. It will also co-ordinate rapid and effective action if and when national safety issues arise.

Currently the OPSS has been granted a budget of £12m per year. Whilst the OPSS has already been launched it is anticipated that its capabilities will develop over time and that not all of its aspects will be within its remit from day one. It is hoped that the implementation of the OPSS will result in a uniform approach to the enforcement of safety standards which thus in turn will reduce the number of faulty goods on the market.

Consumers who have purchased faulty goods have a number of legal remedies available to them pursuant to the existing breach of contract and consumer protection legislation.  The launch of this new Office for Product Safety Standards will hopefully lead to fewer consumers being placed in that position.


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A fatal break
Friday 16th February 2018

The recent decision in Sackville UK Property Select II (GP) No 1 (1) Sackville UK Property Select II Nominee (1) Ltd (2) v Robertson Taylor Insurance Brokers Ltd (1) Integro Insurance Brokers Ltd (2) [2018] EWHC 122 (Ch) serves as a reminder of the preparation and attention to detail that must be taken when serving break notices.

The case concerned the assignment of a lease from Robertson to Integro following Integro’s acquisition of Robertson.  The lease was for a term of ten years expiring on 23 March 2023, with a tenant’s option to break the lease on 14 March 2018 by the tenant giving not less than nine months’ prior written notice to the landlord.   The tenant was defined by the lease as “Tenant includes the successors in title of Robertson and any person in whom the Lease may from time to time be vested by whatever means”.

The licence to assign the lease took effect on 29 March 2017 and contained a covenant for Integro to apply for registration of the lease within ten business days of completion of the assignment.  Integro did not comply with the covenant and applied for registration just prior to 7 July 2017, with 7 July 2017 being the date of registration.   

Prior to registration, Integro exercised the break option by serving written notice on the landlord on 2 May 2017. 

The landlord contended that the break notice was invalid because as Integro was not the registered proprietor of the leasehold interest it was not the tenant and it could not, therefore, exercise the break option.  Until the lease was registered to Integro, Integro was the beneficial and not the legal owner of the leasehold interest, the result being that Integro had no standing to enforce the break covenant under the lease.   

The only basis then on which the break notice could be valid was if it could be proved that Integro had served it on behalf of Robertson but the court found that there was no evidence to that effect and determined that the break notice served by Integro was invalid and the lease was not terminated.

Points to take away from this decision are:

i.              identify who the parties are under the lease;

ii.             check the wording of the lease and all documents associated with it such as licences to assign and deeds of variation etc;

iii.            check the wording of the break clause to identify any specifications and conditions attached to it;

iv.            prepare as early as possible ahead of exercising a break option to ensure there is sufficient time to consider these technical aspects.  


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Creditors Going for Gold
Thursday 15th February 2018

The legendary Liverpool FC manager Bill Shankly once said “If you are first you are first.  If you are second, you are nothing”, and at the PyeongChang 2018 Olympic and Paralympic Winter Games the competitors strive for a Gold medal.  A recent case demonstrates that creditors enforcing a debt should also seek to be first across the finish line.

One of the enforcement options for a creditor is to seek a charging order, pursuant to the Charging Orders Act 1979.  A charging order secures a judgment debt by imposing a charge over a judgment debtor’s interest in land or in certain other assets.  When the asset is sold the creditor will hope that the sale will release sufficient funds to it in payment of or towards the debt.

The dispute between Midtown Acquisitions LP and Essar Global Fund Ltd concerns the guarantee of a US$450 million loan, and demonstrates various debt recovery issues including enforcement by an English Court of a foreign judgment.  At one point in the proceedings the creditor sought to seize control of a Boeing 737-700 jet and a 280-foot ‘super yacht’.

The latest chapter in the proceedings has involved the High Court determining the priority of two creditors who obtained charging orders over the same asset of the debtor.  The interim charging orders were made around 6 weeks apart.

The Charging Orders Act 1979 gives the Court a discretion as to whether to make an interim charging order final, and in January the Judge in this case held that applying a ‘first past the post’ principle to prioritise the earlier interim order as a rule would be inconsistent with that discretion.  The Court should look at all of the factors.  Here both creditors were large commercial entities and neither had delayed in obtaining their interim order.  The Judge held that it was not inequitable to prefer one over the other and the Court gave priority to the earlier order.

So, whilst bing first across the line will not guarantee priority against other creditors, all things being equal a creditor should still act quickly to give them the best opportunity of gaining priority and enforcing their debt.


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Paradise found?
Wednesday 31st January 2018

This week we learned from the High Court the details of exactly how the information that has become known as the ‘Paradise Papers’ found its way in to the public domain. The papers concern information deriving from law firm, Appleby.

According to court papers prepared by Appleby, the following is an account of how the Paradise papers came to be made public:

An investigation by a cyber forensics team established that during the period November 2015 to May 2016 the Appleby Server was subject to unauthorised access by one or more people referred to in the statement of case as the Hacker. Appleby allege that the Hacker provided several million documents taken from the Appleby Server covering the period from the 1950s to 2016 to a German newspaper Süddeutsche Zeitung. It appears that the German newspaper received a total of 13 million documents of which about 6.8 million came from Appleby. The documents were made available by the German newspaper to an American body called the International Consortium of Investigative Journalists which created a database onto which it placed the documents. The database was thereafter made available to a large number of media organisations across the world including the BBC and the Guardian.”

Incidents like this follow are becoming more regular (see, for example, the exploits of the Russian ‘Cuddly Bears’ group or the ‘Panama Papers’ leaks) and give risk to many different aspects of risk for business. In addition to up to date IT cybersecurity systems, robust and specific terms of business for all those that hold or process valuable or confidential data will go a long way towards protecting against these risks.


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