Ai Claims Solutions plc employs around 500 people and champions an “ethical” approach to claims management. It handles motor claims from the initial incident to final resolution for a growing number of leading insurance companies, brokers, bodyshops, motor manufacturers and fleet companies.

It had a turnover of £118m in the year to 30 June 2011, with profits of £3.8m. The share exchange which funded the acquisition valued Ai at £15.1m.

Quindell’s shares on junior market AIM, which had been as low as 1.875p last autumn, peaked at 7.75p on Tuesday, before falling back nearly 5% to 7.375p yesterday.

The investment continues the development of Quindell’s insurance business, following the agreement with Silverbeck Rymer and also the purchase of medical reporting agency Mobile Doctors as it positions itself to offer a fully integrated outsourced claims service to the insurance industry.

Rob Terry, the chairman and chief executive of Quindell, said: “We are delighted to be announcing this latest strategic investment. Ai Claims Solutions broadens our overall proposition in insurance, legal services and associated medical reports, and accident management. 

“We look forward to exploring with the board at Ai Claims Solutions, propositions to provide combined business offerings that will lower the cost of claims for the insurance industry.”

Source: Legal Futures – 26/1/12

The CDF, which is set to begin at the end of January, presents taxpayers with three options, according to new HMRC guidance – owning up to fraud, deciding not to own up, and not co-operating. Under the CDF route HMRC will ‘agree not to criminally investigate and prosecute’ the taxpayer.

‘This is a positive development,’ said Gary Ashford, who represents the CIOT on HMRC’s Compliance Reform Forum. ‘HMRC’s proposals would potentially provide greater clarity to those who have deliberately got their tax wrong and now want to engage with the taxman to regularise their affairs. It would also tighten the net on those who think they can carry on evading or seek to drag out HMRC enquiries without any intention of paying.’

McGrigors, the law firm, noted that taxpayers will lose the right to ‘automatic immunity’ under the new rules. Taxpayers under civil investigation under the current Civil Investigation of Fraud process had automatic immunity from criminal prosecution, it said.

If HMRC opted to bring a civil investigation, it could not then mount a criminal prosecution for the same offence. But taxpayers approached under the new rules who fail to admit to irregularities will not get immunity from prosecution for those offences.

McGrigors Director Phil Berwick added: ‘This new procedure represents a significant change in the way HMRC conducts investigations where fraud is suspected. The change will help facilitate a very substantial increase in criminal prosecutions in the next few years.

‘Taxpayers will be at greater risk of imprisonment and losing the family home. For the more determined tax evaders, the chances of getting off with a fine and a slap on the wrist are diminishing.’

Ashford said ‘a flurry of big tax investigations’ was likely to begin at the end of January. ‘Those pursued under the CDF can expect to have to pay the tax owed, interest and substantial penalties. HMRC’s “offer” is that in return for full disclosure and no procrastination, the penalties will be civil rather than criminal,’ he added.

Source: Tax Journal.com  18 January 2012

Blackfriars Crown Court heard that David Perrin, who had worked for the former Inland Revenue in the late 1980s and early 1990s, devised and operated the tax avoidance scheme which he sold to wealthy taxpayers between 2005 and 2006.

Perrin used a network of finance professionals to advise more than 600 clients to buy shares, worth a few pence each, in four new companies he had set up. He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares simply to inflate their price.

The share owners then donated 329m shares to various unsuspecting registered charities and tried to claim £70m tax relief on a total of £213m of income and company profits. This was based on the shares being worth up to £1 each, rather than the pennies they were originally bought for. Perrin also used the bogus scheme to claim money back.

As a result, the court was told, Perrin pocketed more than £2m in fees from the unsuspecting clients which he spent on expensive second homes, exotic holidays, works of art and luxury cars.

The scheme proved so popular that Vantis employees performed a celebration song at the firm’s annual conference to the tune of Gloria Gaynor’s hit disco single I will survive. It included the verse: ‘They should have changed that stupid law, they should have buggered charity, but they have left that lovely tax relief, for folks to pay to me.’

Jim Graham, HMRC criminal investigator, said: ‘With his knowledge of the tax system, Perrin thought that he was one step ahead of both HMRC and the law. This cynical fraud not only stole millions of pounds from taxpayers, but also conned innocent charities into accepting gifts of virtually worthless shares, just so Perrin could inflate his own criminal earnings.’

Perrin is due to be sentenced on 9 February 2012 and confiscation proceedings are underway. The court could not reach a verdict on whether another Vantis executive, Robert Faichney, was also involved and he may face a retrial.

Source – Accountancy Live – 16 January 2012

Syed Ahmed and Shakeel Ahmad have launched a legal bid from their cells to have the country’s largest ever confiscation order overturned. They got seven years each in 2007 and an extra 10 years each last year after refusing to surrender their assets.

The pair masterminded a £37million VAT sting which enabled them to make millions more investing in property at home and abroad. And now they have launched a High Court appeal against the Revenue & Customs order.

But a Whitehall source yesterday said the Government remained “absolutely determined” to seize “every penny” of the duo’s massive fortune. Ahmed and Ahmad, both 39, were ordered to pay back £92million each and would have been freed early last year if they had.

They screamed in protest when they were given another decade in jail and had to be restrained in the dock at Northampton magistrates court.

The pair ran a firm in Uxbridge, West London, and other fake companies operating a VAT scam involving the import and export of computer parts.

Source: The Daily Mirror – 20 December 2011

As Moor J noted, save for the existence of the pre-marital agreement, this would be an appropriate case for equal division of the assets. The central issue therefore was whether the agreement took the case out of ‘sharing’. If the judge decided that it did, it followed that the wife’s claims would be based upon her reasonable needs which should be assessed generously.

The case concerned a French couple who married in 1994 and relocated to England in 2007 soon before the marriage broke down. They have three children, aged 14, 12 and nine. Prior to entering into the marriage, they entered into a standard separation de biens agreement in France.

In France every married couple is subject to a default community of goods matrimonial property regime, unless they enter into an agreement providing for separation of goods. In this particular case, the judge noted that the parties’ parents and the majority of their friends entered into separation de biens agreements prior to their marriage. He therefore noted that it would have been very surprising if they had not entered into such an agreement.

The judge accepted the husband’s evidence that he would not have married the wife had she not entered into the agreement. By contrast, the wife stated that the only reason for the agreement was to protect her assets from creditors in the event that the husband went into business and the business failed. However, the judge did not accept that was the overriding reason for the agreement. The judge did accept that the husband and wife entered into the agreement freely and with full understanding of its implications; however, neither was given formal advice by the notaries prior to signing the agreement and no formal disclosure was given of financial circumstances. Neither of those points however affected the decision of Moor. It is worth noting that this reflects the facts of Radmacher. In that case, the husband had not sought financial disclosure nor had he taken independent legal advice prior to the signing of the agreement.

The wife’s position was that it would be unjust for her to be held to the agreement and she therefore sought an equal division of the total assets of the marriage which were worth in the region of £15m. By contrast, the husband stated that the separation de biens agreement excluded the sharing of the assets. Following the decision in Radmacher, it would therefore be fair to hold the wife to that agreement. However, the husband acknowledged that the agreement did not exclude maintenance claims which should be dealt with on the basis of a pre-White assessment of the wife’s needs. He quantified those needs at £5.28m, which equated to approximately 35% of the overall assets.

The husband also argued that this was fundamentally a French case and therefore the judge should take into account what the wife would have received in France, thereby relying upon the decision in Otobo v Otobo [2003] 1 FLR 192. The wife contended that the judge could not do so, thereby relying on the Court of Appeal’s decision in Dart v Dart [1997] 1 FCR 21. The judge preferred the wife’s position on this issue, stating that the court will normally apply English law, irrespective of the domicile of the parties, or any foreign connection. On a separate issue, the judgment in Radmacher makes it clear that issues of foreign law are relevant to the intentions of the parties, for example, whether or not they intended that the agreement should be binding upon them.

The application of English court as opposed to French law was relevant in assessing the appropriate level of spousal maintenance for the wife. The award which would have been made in France would have been lower than an award of the English court. In assessing the wife’s income needs, two further points are of note. Leading counsel for the wife questioned whether the Duxbury assumptions remained good in the current economic climate. Justice Moor did not propose to go behind the Duxbury figures as there was clear authority that it is appropriate to use the Duxbury Tables as a guide. Not only had the assumptions been revised downwards on a number of occasions, albeit not since 2003, but as the judge was looking at the life expectancy of over 38 years, during such a long period market fluctuations should iron themselves out.

The wife had also inherited assets which included properties and a share portfolio. The judge did not see why the wife should amortise the properties and therefore excluded them from the Duxbury calculation. By contrast, her share portfolio was included.

Although Moor J had decided that sharing was not appropriate in the present case, it was still appropriate to perform a cross-check against the overall assets, but in the present case only to make sure that the award was not in excess of one half of the assets. On the basis that the overall assets were £15m (there was an issue about tax liabilities), the award amounted to 40% of the assets which the judge held to be a suitable departure from equality to reflect the agreement.

The final evidential point was the relevance of a letter written by the husband shortly before the parties separated in which he had promised not to rely upon the separation de biens ‘if I start legal proceedings’. There was an earlier draft version of the letter which did not have the qualification and to which the wife had contributed towards its drafting. The judge rejected the wife’s argument that the earlier draft should be treated as more important than the final version. In any event, it was common ground that as a matter of French law, the separation de biens could only be altered by way of a further notarised agreement.

In summary, Moor J upheld the agreement insofar as it excluded sharing. This undoubtedly is the most important aspect of the judgment. The husband was not arguing that the pre-nuptial agreement quantified his wife’s claims – he was arguing that it excluded the sharing principle. This properly reflects the approach of the Supreme Court in Radmacher. The Supreme Court had taken the view that it would be easiest to show that a pre-nuptial agreement was not unfair if it excluded sharing, but that did not prevent the court from providing for the reasonable needs of an applicant. By contrast, a pre-nuptial agreement which did not meet the needs of an applicant would most readily render it unfair.

Source:            Law Gazette – 8 December 2011

HMRC and the Department for Work and Pensions (DWP) have agreed a twelve month contract with the agency, which will see Experian use data matching techniques to target £770m worth of overpayments which are currently lost due to undeclared partners and / or income.

All DWP means-tested benefits will fall under the scope of this work, including Jobseekers Allowance, Employment and Support Allowance, Income Support, Pension Credit and Housing Benefit.

The Government says a recent pilot of this approach has already protected more than £16m of anticipated losses in tax credits and the first cases identified by Experian are already with fraud investigators.

Using the Experian data, HMRC expects to save around £700m over life of the contract, while DWP anticipates savings of £100m.

Exchequer Secretary to the Treasury, David Gauke, said: “Working with Experian will allow HMRC to escalate the fight against tax credit fraudsters, helping to ensure that they are caught and punished.”

Source: Accountancy Live – 7 December 2011

The agreement, whilst not yet in force, is likely to take effect from 1 January 2013.

Once in effect, a one off levy of between 19% and 34% will be applied to the balance of any individual’s Swiss account open as at 31 December 2010 and that remains open on 31 May 2013.

This deduction will settle Income Tax, Capital Gains Tax, Inheritance Tax and VAT liabilities (but not, for example, corporation tax or stamp duty) in relation to the funds in the account.

The deduction will not be applied if the account holder instructs the bank to disclose details of the account to HMRC.  Following such a disclosure, HMRC will seek unpaid taxes with relevant interest and penalties.

From 2013, income and gains arising on investments held by individual UK taxpayers in Swiss banks will be subject to a new withholding tax of 40% on dividends, 48% on interest and other income and 27% on capital gains. 

Again, the withholding tax will not apply if the account holder authorises disclosure of details of income and gains to HMRC and pays any associated taxes here. 

The agreement will apply to UK tax residents but is also extended to account holders who have provided the Swiss bank with an address in the UK as their main residence.

There are a number of exclusions from the agreement whereby any person subject to the withholding tax will be treated as having made a payment on account rather than having full clearance.  These include taxpayers under enquiry by HMRC at the time the treaty comes into force.  This applies to all enquiries and is not, for example, only restricted to cases of suspected serious fraud, as in the case with the Liechtenstein Disclosure Facility (LDF).

The agreement does not provide a guaranteed immunity from prosecution.  In a side letter to the agreement, HMRC set out that a person is highly unlikely to be the subject of a criminal investigation by HMRC for a tax related offence for past tax liabilities, in respect of the Swiss assets, unless the assets represent the proceeds of crime (other than crime connected to a tax-related offence) or represent the proceeds of crime connected to criminal tax-related offences punishable by two or more years imprisonment. 

Cases of tax fraud (e.g. extraction of profits from a UK business that are deposited in Switzerland) would appear to come within this exclusion as such cases would normally carry a term of greater than two years.

We have recently successfully assisted clients with their LDF’s, achieving excellent results on these and would be delighted to provide any assistance relating to this new Tax Agreement.

Should you have any queries regarding this or require any assistance, please contact us on tax@forthsonline.co.uk

In a written ministerial statement today, justice secretary Kenneth Clarke said the government will push back a consultation on crime tendering from late-2011 until autumn 2013, taking account of changes such as the advent of alternative business structures, in addition to the legal aid reforms.

It is anticipated that the first tender will open in autumn 2014 with the first contracts going live in summer 2015.

Implementation of ‘all’ the highly controversial legal aid reforms currently going through parliament will be pushed back six months, from October 2012 to April 2013.

The elements to be postponed include:

• The abolition of the Legal Services Commission (LSC) and the establishment of an executive agency to replace it
• Introduction of new contracts for the delivery of civil legal aid reflecting the future scope of the scheme
• Implementation of a mandatory telephone gateway to access civil legal aid advice; and
• Introduction of revised eligibility criteria to access civil legal aid

The Gazette understands, however, that the Jackson reforms of civil litigation costs will not necessarily be delayed until April 2013, in the light of today’s announcement. Lord Justice Jackson, who is advising on their implementation, has said previously that the reforms he initiated and which are part of the Legal Aid, Sentencing and Punishment of Offenders bill will be held ‘in escrow’ until the legislation takes effect, expected next October.

Clarke’s statement said: ‘The government believes that competitive tendering is likely to be the best way to ensure long-term sustainability and value for money in the legal aid market. Pressure on legal aid expenditure is likely to continue, increasing the need for further reform of the current arrangements for administratively-set remuneration rates in the absence of competition.’

He added: ‘The government believes that tendering criminal defence work for competition, alongside regulatory changes, has the potential to significantly modernise legal aid provision, improve the service provided to legal aid clients, streamline the procurement process and deliver value for money for the taxpayer.’

But he said the development of a competition strategy is likely to have a substantial impact on the market for legally aided services, together with a number of other current developments, which will ‘require significant levels of engagement between the government and the profession.’

On legal aid, a Ministry of Justice spokesman said: ‘The government is committed to providing a legal aid scheme which targets resources at people who need legal support the most, and on the most serious cases.

‘In addition we are committed to ensuring lawyers compete for legal aid work, so that the taxpayer receives better value for money. This will ensure a more efficient, cost-effective and sustainable legal aid scheme for the future.’

He added: ‘New contracts to provide civil and family advice will be offered to lawyers in April 2013, which will give them sufficient time to consider the final details of the new legal aid scheme which parliament is expected to agree in spring 2012.

‘Once lawyers have adjusted to the new scheme and other regulatory changes, we will consult in autumn 2013 on introducing competition for criminal defence work, with a view to extending it to civil and family work at a later date.’

The Law Society welcomed the delay in implementing new rules governing civil and family legal aid.

Chief executive Desmond Hudson said: ‘We have repeatedly warned that implementation of the proposed changes to legal aid scope and provision by October 2012 was impractical.

‘The government has taken a sensible decision to defer this deadline. The new timetable is still challenging, given the work required to implement changes of this magnitude.’

He said the society has already started working with the LSC on the issues that must be resolved to produce a workable system from the proposals in the bill.

He added: ‘Like other small businesses, law firms need reasonable notice of changes affecting them. This announcement is a welcome recognition of that need. But even given a more workable implementation timetable, solicitors and their clients who rely upon legal aid to secure justice are not well served by the poorly-evidenced and ill-conceived measures in the bill.

‘The bill will not deliver the claimed financial savings and risks denying access to justice to all but the well-off. This delay to the implementation schedule offers a window of opportunity to work with stakeholders in improving [it].’

Commenting on the delayed tendering consultation, Hudson said: ‘Criminal defence firms will be grateful for the certainty that they have been given for the next three years; and in particular, firms that do both criminal and civil work will be glad only to have to consider changes in one part of the business over the next eighteen months.

‘This will also afford time for the LSC and government to discuss together with practitioner groups how best to improve the way criminal legal aid works.’

President of the London Criminal Courts Solicitors Association, Jim Meyer, also welcomed the moves.

He said: ‘It is our hope that this sensible decision is the start of a constructive engagement with the legal profession on the future of legal aid.

‘Overwhelmingly access to justice is provided by small, highly productive businesses located in the hearts of communities. There is an opportunity to rethink policy and rebuild legal services so damaged by the policies of the last decade.’

He added: ‘A start could be made by a reassessment of the LASPO bill currently before parliament which, in its current form, will further cut access to much-needed legal services for the most disadvantaged people in our society.’

Meyer said that given the complexities of the market, the timetable was always viewed as unrealistic.

But he added: ‘The sigh of relief by many will be tempered, however, with the knowledge that the sword of Damocles, otherwise known as price-competitive tendering, hangs over them for the next three years.

‘The delay will give time for the cuts in legal aid fees to be properly realised. Then maybe government will accept what the profession already knows: funding is already cut to the bone.’

Meyer added: ‘Now is the time for solicitors to compose themselves, regroup and consider how they wish to compete in the future.’

The chairman of the bar, Peter Lodder QC, said: ‘We welcome the MoJ’s decision to postpone the consultation on Criminal Defence Service price-based competition proposals until 2013, which also postpones the prospect of introducing a new regime until 2015 at the earliest.

‘This reflects the concerns that the Bar Council has raised for several years about the principles of price-based competition in the provision of these public services. The bar has repeatedly argued for the need to maintain high-quality advocacy, in the public interest, especially during this time of acute fiscal austerity and as significant changes in the provision of legal services are being made.

‘We also welcome the postponement in introducing changes in scope as an opportunity for the government to reflect further on the wisdom of what is proposed in the light of all the representations which have been made to both Houses of Parliament and the views of parliamentarians themselves.

‘However, we retain our principled opposition to, and will continue to lobby against, many of the proposals of the LASPO bill.

‘We note the delay in the abolition of the LSC but we remain very alarmed about the continuing and worsening problem of late payments of advocates’ fees. The Bar Council calls on the MoJ to ensure that the LSC is properly resourced to meet its continuing responsibilities. The government should honour its obligation to pay members of the bar for services they have provided – in some cases, very many years ago.’

Source: Law Gazette – 1 December 2011

Criminal charges against personal injury lawyer and doctor collapsed amid lack of evidence

A criminal prosecution involving an alleged £4m insurance fraud with a personal injury lawyer and doctor has collapsed because of a lack of evidence.

The acquitted defendants accuse the Insurance Fraud Bureau and City of London Police of being misguided in bringing the prosecution.

The case was first brought to the courts in 2009. Brian Barso, 39, a director at personal injury law firm McKeowns and Dr Lawrence Adler, 57, were charged with money laundering and fraud by false representation.

Frank Harrold, former director of BCR Legal Group, was charged with money laundering.

The investigation wrongly caused the FSA to withdraw BCR’s permissions in March 2009 but these were restored by the FSA on successful appeal in July 2009.

But the case collapsed after the CPS failed to produce enough evidence.

Ian Lewis, fraud partner at Lewis Hymanson Small, said  “This investigation has cost BCR millions in terms of loss of business and damage to their professional reputation. Despite regular requests we have never been shown any evidence of criminality.

“Rumours still circulate of fraud and bogus insurance policies yet the CPS has admitted to having no evidence of this. If those responsible for this prosecution had considered the allegations of criminality at the beginning of the case none of this would have happened.”

Mike Stubbs, partner of Mishcon de Reya, said: “We acted for BCR on their successful appeal against the FSA. The actions of the IFB and the COLP caused significant financial and reputational damage to BCR, forcing them into administration.

“I never had any doubt that the appeal would succeed as BCR conducted their business in an honest and ethical manner. I have never understand why the COLP and the CPS continued with their case for a further two years after the FSA had cleared BCR.”

Blake Weltman, managing director at BCR Legal Group, said: “The COLP and the CPS took their lead from the IFB and the insurance industry. At the outset documents seized by the COLP under search warrant and were passed to the IFB and to BCR’s commercial enemies.

“Yet three years later the CPS admitted there was simply no case. I am extremely proud that despite this unfair onslaught from the IFB and the COLP, BCR has survived, and continues to provide an excellent service to our growing client base.”

The IFB and MIB were unavailable for comment.

Source: Insurance Times – 2 December 2011

Aziz Rahman, partner at Rahman Ravelli solicitors in Halifax, acted for David Gale. Her said Gale and his former partner Teresa would be deprived of “all their worldly goods” if SOCA got its way.

Rahman said the Supreme Court had accused the ECtHR of “producing confusing case law” and effectively asked it to provide “authoritative and clear law on this important area”.

The Supreme Court rejected Gale’s argument that unlawful conduct had to be proved beyond reasonable doubt and failure to do so was a breach of the owner’s rights to a fair trial or hearing until article 6.

Giving the leading judgment in Gale v SOCA [2011] UKSC 49, Lord Philips said SOCA obtained an order for recovery of property worth £2m from David Gale and his former wife Teresa.

Gale had been tried for drugs trafficking in Portugal but was acquitted, and criminal proceedings brought against him in Spain were discontinued.

Lord Phillips said that, under part 5 of the Proceeds of Crime Act 2002 (POCA), SOCA had to prove that the property was obtained by unlawful conduct. Under section 241 of the Act, it must be proved on ‘a balance of probabilities’.

The Court of Appeal rejected Gale’s arguments and ruled that he should pay SOCA costs to cover the interim receiver’s investigation and report.

“The starting point in this case is the possession of property by the appellants for whose provenance they were unable to provide a legitimate explanation,” Lord Phillips said.

“There was an abundance of evidence, set out at length by the judge with great care, which implicated them in criminal activity that provided the explanation for the property that they owned.

“The Judge rightly applied the civil standard of proof, but on my reading of his judgment he would have been satisfied to the criminal standard of the appellant’s wrongdoing.”

Lord Phillips said some of the Strasbourg rulings dealing with the application of article 6 after a personal had been acquitted in criminal proceedings were “mutually inconsistent and it was not easy to identify the principle underlying others.”

He dismissed the appeal on the burden of proof, Lords Mance, Judge and Reed agreed. Lords Clarke, Brown and Dyson agreed for their own reasons.

On the issues of costs, Lord Clarke said the amount paid by SOCA to the interim receiver was said to be £1m.

Lord Clarke said “reasonable sums paid by SOCA to an interim receiver” said in principle be regarded as costs of the proceedings.

He dismissed the appeal on the issue of costs. Lords Phillips, Mance, Judge and Reed agreed, Lords Brown and Dyson agreed for their own reasons.

Source: Solicitors Journal – 1 November 2011