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Dispute Resolution

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. 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.


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


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. 


Can trustees seek costs protection in proceedings if they are beneficiaries too?
Friday 24th February 2017

Trustees have an expectation that legal costs they incur will be indemnified from the trust.  That expectation must be balanced with their duties to act in accordance with the interests of the trust’s beneficiaries.

If legal proceedings are commenced trustees should consult with beneficiaries about the legal costs being indemnified from the trust and the consent of beneficiaries to this should be sought. If all the beneficiaries do not agree to this the trustees can only get the protection they seek by making application to the Court for that protection and asking the Court to sanction their intended response to the claim. Applications of this type are known as Beddoe applications named after a leading case on the subject.

The High Court has recently clarified whether a trustee is entitled to the protection of a Beddoe order if they are also a beneficiary of the trust

In the case of Pettigrew and Others v Edwards [2017] EWHC 8 (Ch) two trustees faced a claim by a life tenant for income from the trust. The trustees sought protection from the Court for the approach they intended to take and the legal costs they would incur in response.

On the facts of the case the Court concluded that, after the life tenants’ death, the two trustees would effectively be the only beneficiaries of the trust. Once that finding was made the Court determined that the trustee beneficiaries were capable of deciding whether to pursue a claim or not.

On the specific facts of this case, it would be unjust to give the trustee beneficiaries the protection they had applied for against the possible adverse costs consequences of the claim. The approach that the trustee beneficiaries were intending to take towards the proceedings was determined primarily by their status as beneficiaries and not their status as trustees.  For that reason the making of a Beddoe order was deemed inappropriate.

For more information on the court’s Beddoe jurisdiction please visit:


Can estate beneficiaries benefit from the deceased’s Inheritance Act claims?
Tuesday 21st February 2017

Are other claims that were not pursued relevant to the value of reasonable financial provision claims?

Laurel Roberts and Francesca Milbour, the step-daughter and niece of Pauline Milbour have brought proceedings against her estate of approximately £25 million claiming reasonable financial provision.

Pauline Milbour was married Leonard Milbour and they both had children from previous relationships.  Pauline Milbour died before her husband aged 73 in 2014.  Her will which had been made in 1993 many years after her marriage left the majority of her wealth to her natural daughter, Luanne. 

Under his wife’s will Mr Milbour, received £150,000 absolutely and an interest in income from £75,000.

Although he would have had standing to bring a claim for reasonable financial provision against his wife’s estate Mr Milbour did not do so before he died shortly after her death.

Pauline Milbour’s step-daughter and niece have now brought claims against her estate pursuant to the Inheritance (provision for family and dependants) Act 1991.  The claims are for reasonable financial provision on the bases that they were treated as a ‘child of the family’ and financial dependency.  Those claims are defended.

At a preliminary hearing the Court had considered the novel argument that Mr Milbour could have made a successful claim for reasonable provision from Mrs Milbour’s estate if he had not died so soon after her death and that, had he done this, his estate would have been significantly more valuable and there would be more funds available in his estate to be distributed to beneficiaries or to be subject to claims for reasonable financial provision.

The court has rejected the argument that the ability of Mr Milbour to bring a claim against his wife’s estate should be a factor in deciding the merits or value of the claims by Laurel Roberts and Francesca Milbour against his wife’s estate. 

That issue having been determined the claims will proceed to trial where it will be for the claimants to show that on the facts they were treated as a child of Mrs Milbour’s family and that there was financial dependence on her during her lifetime.

For more information about financial provision claims please visit:


Worldwide freezing injunction upheld
Wednesday 8th February 2017

In a recent decision the High Court of Justice has determined that a post-judgment worldwide freezing order should continue indefinitely until payment of the judgment or a further order is made (Touton Far East Pte Ltd v Shri Lal Mahal Ltd (formerly Shivnath Rai Harnarain (India) Ltd), [2016] EWHC 1765 (Comm)).

The worldwide freezing injunction was granted in favour of the claimant, Touton Far East Private Limited against Shivnath Rai Harnarain Limited (‘SRH’), an Indian company in relation to a Grain and Feed Trade Association (GAFTA) arbitration award which was worth over $4 million.

SRH was originally given until March 2016 by the Court to apply to vary or discharge the order. SRH asked for an extension of time to appeal, and also argued that the freezing order should not be indefinite and suggested that an appropriate period of time would have been one month.

The Court refused SRH’s request for an extension and determined that the freezing order would remain in place until payment of the judgment debt or further order of the Court.

In concluding that the order should remain in place, the Court determined that the defendant was in a position to pay the judgment at any time (as it was clear that the defendant was a substantial company) and was therefore choosing not to pay the debt as opposed to being unable to pay. The Court also held that, if it was determined at a later date that the freezing order was being maintained by the claimant for an illegitimate purpose, the Court’s position could be reconsidered at that time.

Clearly, the Court in this instance was keen to ensure that the English judgment is given the opportunity to be enforced successfully and this case demonstrates the effectiveness of freezing injunctions even after an initial judgment has been obtained.


Interest Rate Swap Claims Update – Court hands down Judgment in Property Alliance Group Ltd v RBS
Thursday 12th January 2017

The High Court has now handed down the long-awaited judgment in Property Alliance Group Limited v The Royal Bank of Scotland PLC. The decision will be of particular interest to litigants pursuing or contemplating interest rate swap claims and also London Interbank Offered Rate (LIBOR) claims.

The Claimant is a property investment and development business and the Defendant provided them with commercial banking services. That included 4 interest rate swap products, entered into between 2004 and 2008.

In summary, the Claimant claimed that the swaps were mis-sold; that the bank moving them to their Global Restructuring Group (together with their management within the group) was a breach of contract; and that the swaps should be rescinded and/or that they should be awarded damages because of the bank’s alleged participation and knowledge of the manipulation of LIBOR rates.

Following a 38 day trial before Aspin J, Judgment has now been handed down and the Court has dismissed all three parts of the claim.

The Judgment includes important findings regarding the extent of the duty of care owed by the bank. In selling interest rate products the banks owed a duty to take reasonable care not to mis-state the facts. In this case the Claimant argued that the duty of the bank here was wider than that, and included a duty to fully, properly and accurately explain the transactions. The Judge held that any duty to advise had been expressly excluded in the terms of the contract between the parties.

The Judge also said that whether the duty of care is wider than a duty not to misstate the facts, is dependent on the facts of each case and that, where the bank was acting outside of an advisory relationship, she was not bound by previous authorities to find that there was a wider duty to “explain fully the products”. The Court also found that in this case there was no implied contract term of good faith or duty on the bank not to withhold important information.

The Judgment is also bad news for Claimants bringing claims related to alleged LIBOR mis-selling as the Judge found that here the offering of swaps that were referable to LIBOR rates was not in itself sufficient to give rise to implied representations regarding the setting of those LIBOR rates.

The Claimant has said that it is assessing the basis for an appeal.



Cuba Offers Rum in Payment of US$276 Million Debt
Friday 16th December 2016

Parties to disputes often discuss creative terms of settlement but one of the more unusual is the offer by Cuba to pay off its debt to the Czech Republic, with rum.

The debt arises from the Cold-War era when both countries were in the communist bloc, and amounts to US$276 Million, the equivalent of £222 Million.  The Czech Republic imports rum from Cuba and according to the Czech finance minister the Cuban authorities have offered to make payment of the outstanding debt by supplying rum to the country.

It has been reported that the Czechs would still prefer payment, at least partly, in cash.

The opportunity to propose different forms of payment is one of the attractions to parties of using alternative means of dispute resolution than the Courts.  Where a Judge can order a payment of damages in cash, alternative dispute resolution (ADR), such as mediation or a joint settlement meeting, enables the parties to discuss more creative forms of payment.

For example in disputes between businesses a settlement may be agreed whereby one party provides services to the other to the value of the settlement sum.  Sometimes that will not be appropriate where the business relationship has broken down, but assuming that the parties are prepared to deal with each other in future this sort of settlement can have cash-flow advantages for the ‘paying’ party.

A transfer of goods can also be offered as a form of payment, and if the Cuban offer is accepted the rum-drinkers of the Czech Republic will be very pleased with those settlement terms.


STAR LAWS - Probate implications of Star Wars Episode VII: The Force Awakens
Thursday 15th December 2016

To celebrate the coincidence of the release of the new Star Wars Film, Rogue One, and the launch of our new contentious probate website,, we have considered the probate implications of Star Wars Episode VII:  The Force Awakens.

As we are going to be discussing events after death obviously you should not read on if you have not seen (but plan to see) The Force Awakens.

For the purposes of this exercise we have assumed that the law of England and Wales will apply in a galaxy far, far away.



To our great disappointment The Force Awakens concluded with Han Solo being murdered by his estranged son and unceremoniously fell off a bridge.

Han was not married and, as far as we are aware, not co-habiting with anyone for any length of time.  The life of an intergalactic smuggler is probably inconsistent with that.  This rules out claims from a spouse or cohabitee to a reasonable financial provision from his estate under the Inheritance Act (Provision for Family and Dependants) Act 1975.  We should not discount the possibility that there may be unknown dependants.

As far as we are aware Han held no joint bank accounts or any jointly owned property which would pass automatically to any joint owner by way of survivorship. 

We suspect that Han’s only real asset will be the Millennium Falcon. 

Han may have made a will and, if so, the assets in the estate would pass according to the specific gifts and legacies in that will.  As Han was murdered by his son his son will not be permitted to benefit from the estate whether there is a will or not. We do hope that Han did make a will and left the Millennium Falcon to Chewbacca.

If Han did not make a will there are potentially alarming consequences.  As there is no other known family member then the conclusion must be that the Millennium Falcon and any other assets will be treated as what is known as ‘Bona Vacantia’ and will pass to the Crown estate.

For a more practical information on the real world application of these principles and for further information please visit


A step closer to defining the term ‘client’ for Legal Advice Privilege?
Wednesday 14th December 2016

In the recent case of RBS Rights Issue Litigation [2016] EWHC 3161 (Ch), at an interlocutory hearing, Mr Justice Hildyard was asked to consider RBS’s claim to privilege in relation to transcripts, attendance notes and other records of interviews conducted with employees and ex-employees.

The Judge in his ruling applied a narrow interpretation of who is a client for legal advice privilege purposes, as a client will consist only of those employees authorised to seek and receive legal advice from their lawyer. Furthermore, legal advice privilege does not extend to information provided by employees and ex-employees to or for the purposes of being placed before a lawyer. This reasoning was following the Court of Appeal’s decision in Three Rivers District Council and others v Governor and Company of the Bank of England (No 5) [2003] QB 1556, a judgment that has been the subject of much criticism for not sufficiently clarifying who is a lawyer’s ‘client’ for the purposes of legal advice privilege. Hildyard J himself alluded to such criticism by stating ‘there is, to my mind, force in these criticisms and attempts to confine the application of the decision in Three Rivers (No 5).

In CITIC Pacific Limited v Secretary for Justice and Commissioner of Police (unrep, 29/06/2015, CACV 7/2012), the Hong Kong Court of Appeal rejected the approach to legal advice privilege as established by Three Rivers (No5). Instead the Court adopted a broader test, which was based on deducing what is the dominant purpose of the document or communication. This test is more akin to the test that applies to litigation privilege, which appears more sensible, as it focuses on the substance rather than the form. Such an approach would also avoid the need for corporate clients to abide by unnecessary formalities in an attempt to obtain the protection of privilege for documents produced as part of the process of obtaining legal advice.

In the light of all these criticisms RBS has indicated that it will seek permission to appeal the decision. There is now hope that the Supreme Court will have the much awaited opportunity to revisit the law on privilege and answer the fundamental question as to whether the distinction between legal advice and litigation privilege is really appropriate.