| 09/10/2008 | |
| Jack Straw Takes Lawyers to Task for Their Fees | 23/09/2008 |
| Success for Forth's Criminal Defence Department | 22/09/2008 |
| Manufacturer Entitled to Selling Price as Damages for Lost Goods | 10/09/2008 |
| Barristers Snub Major Trials in Row Over Fees | 11/09/2008 |
| New Manchester Office for Forths | 10/09/2008 |
| Medical Appeal Partly Successful | 28/08/2008 |
| Rugby Player was Employed | 21/08/2008 |
| Player in record PI Payout | 14/08/2008 |
| Zurich institutes crackdown on exaggerated PI claims | 11/08/2008 |
Handling Proceeds of Fraud
Times Online Tuesday 3rd October 2008
Court of Appeal, Criminal Division
Published October 3, 2008
Regina v Mehta
Regina v Sharman
Regina v Reardon
Regina v Ratcliff
Money-launderers who offered a service to numerous criminals via bureaux de change or hawala banking were often as culpable as the criminals generating the money, if not more so, and often more culpable than those who handled the proceeds of a particular fraud.
The Court of Appeal, Criminal Division (Lord Justice Hughes, Mr Justice Field and Judge Richard Brown) so stated in a reserved judgment on July 15, 2008, when allowing sentence appeals by Durgesh Mehta, Matthew Sharman, Gerald Reardon and Peter Ratcliff, who were convicted on October 25, 2006 at Canterbury Crown Court (Judge Williams and a jury) of conspiracy to launder the proceeds of a substantial carousel value-added tax fraud, and by Mehta, of additionally cheating the Revenue of a substantial carousel VAT fraud and reducing Mehta’s ten-year prison sentence to seven years and the others’ eight-year sentences to six.
Lord Justice Hughes said that while each case would depend on its own facts, general launderers were not merely as culpable as the criminals generating the money but sometimes more so and often more culpable than those who engaged in the handling of the proceeds of a particular fraud.
In cases such as the present, there was relatively little difference in culpability between the architects of the fraud and the architects of the specific money-laundering which was essential to its success.
Jack Straw Takes Lawyers to Task for Their Fees
Times Online Tuesday 23rd September 2008
Jack Straw has opened a “new front for reform” - as the Labour Party press release put it - with a blistering attack on the fees charged by lawyers under “no win, no fee” cases.
At the party conference this week the Justice Secretary outlined a series of measures to continue “the quiet revolution” of reforming criminal justice.
Forget the uncontentious stuff — online court records, so that sentences can be more visible to the public; and the scrapping of fees paid by the media for court lists. The main thrust of his speech was a “crackdown” on excessive fees charged by lawyers under the “no win, no fee” system, coupled with another attack on legal aid.
“It’s claimed,” Straw said, “that they have provided greater access to justice, but the behaviour of some lawyers in ramping up their fees in these cases is nothing short of scandalous.”
No win, no fee arrangements are a creature of government reform, brought in ten years ago to replace legal aid in accident cases. Lawyers can double their fees if they win to charge a “success” fee — making an hourly rate of as much as £600 in some cases. Straw wants to cap the uplift that lawyers can charge if they win.
The move comes just days after accusations from the British Medical Association that solicitors are encouraging a compensation culture on the basis that the annual bill paid out by the NHS Litigation Authority in compensation for claims had risen to £90 million a year — compared with nearly £41 million just four years ago.
Straw did not stop there. Turning his attention to legal aid, he said: “There are now three times as many lawyers in private practice but paid for by the taxpayer as there were three decades ago: the budget has grown faster than the health and education services.
“The challenge now is how better to spend these huge sums in the interests of the public and justice; something I want to do with the legal profession and local government.”
Legal aid spending per head in England and Wales is the highest in the world. “It’s as much as we spend on prisons.”
The comments have made a few headlines — and prompted a predictably angry response. Des Hudson, chief executive of the Law Society of England and Wales, has taken issue with the legal aid figures. ”An increase in the legal aid budget of £500 million since Labour came to power works out at about 3 per cent a year — a drop in real terms, taking inflation into account.
“Since the number of crimes for which offenders are brought to justice has increased from one million to more than 1.25 million, this means that lawyers are doing a lot more for less money.
“The costs of doing business and employing people have increased — so it is no wonder that the Government’s own research shows that solicitors’ firms doing legal aid are on the brink of financial collapse.”
As for the salvo over success fees, Hudson points out that people who have to pay lawyers’ charges are already entitled to challenge success fees, if they think that they are unjustified.
“The former Lord Chancellor [Lord Irvine of Lairg] agreed that the maximum success fee should be 100 per cent, because otherwise it would be uneconomical for lawyers to run cases that have a 50-50 chance of success — and people would be left without access to justice.”
Cutting the success fee will mean that lawyers are less willing to take a chance and bring a claim — and less access to justice, he said.
Giving back as good as Straw gave, Hudson added: “The Government removed legal aid from personal injury cases on the ground that conditional fees provided a satisfactory alternative. Restricting conditional fees in the ways suggested would be a fraud on Parliament and the public.”
To add grist to the mill, the Law Society has been asked to enter a pilot scheme for “virtual courts” — by which cases are dealt with in the police station, immediately after an arrest, via a video link to the court.
Sounds efficient? The only problem is that it means another squeeze on solicitors' legal aid fees. “Offering to take a pay cut to take part in a pilot scheme is completely unacceptable,” a society spokesperson said. “At best, solicitors will take part reluctantly and with no interest in working flexibly to make the system work. At worst, they will refuse to take part.”
Richard Miller, the Law Society official dealing with legal aid, said that solicitors taking part would suffer a large cut in the fees that they receive for those cases. That made it “highly unlikely” that they would reorganise their practices around virtual court hearings — and the pilot scheme would be scuppered from the outset.
Positions between ministers and the profession look set to become further entrenched. Lawyers’ fees are always a good target for politicians but if some success fees are excessive, the system is of ministers’ own making.
As with cuts to legal aid, ministers will have to make sure that in seeking to limit lawyers' fees, they don't throw the baby of "access to justice" out with the bathwater.
Success for Forth's Criminal Defence Department
Forths are delighted to announce another success in their Criminal Defence department.
Following investigations, by the Forths Team, a number of indictments of Theft against the Treasurer of a Masonic Hall have been dropped.
It was averred, by the Crown, that over the course of a two year period the Treasurer had transferred funds, from the bank accounts of the Masonic Hall, to bank accounts in his name and / or controlled by him for his own gain and that, accordingly, the Masonic Hall had lost the benefits of these funds and had indeed incurred additional bank charges / interest as a result of the actions of the Treasurer.
The team at Forths were able to prove that, whilst such amounts had been remitted to connected bank accounts, they had been subsequently repaid and indeed, the amounts that had been repaid were in excess of those originally claimed to have been stolen, such that overall the Masonic Hall had benefited from such activity (from a financial perspective).
Richard Forth, Managing Director at Forths stated that:
“This case highlights that it is imperative that all aspects of a set of related transactions are reviewed in the context of criminal cases in order that a full and proper picture of such can be presented to the Court.”
Manufacturer Entitled to Selling Price as Damages for Lost Goods
Times Online Thursday 10th September 2008
A manufacturer and seller of goods who lost them through the fault of another before he could make delivery and earn the price could recover that price as damages for their loss.
The Court of Appeal so stated in a reserved judgment when dismissing the appeal of Cinram Logistics UK Ltd Europe Ltd against a decision by Judge Knight, QC, sitting as a deputy judge in the Commercial Court ([2008] EWHC 14 (QB)) allowing the claim of Sony Computer Entertainment UK Ltd and Sony Computer Entertainment Europe Ltd in contract, bailment and negligence against Cinram.
An order of memory cards for computer games sent by Sony to Cinram’s warehouse for onward delivery to the purchaser was stolen and diverted into the possession of fraudsters. Cinram admitted liability for the losses and the trial assessed damages.
The judge found that on the balance of probabilities Sony had proved its claimed loss by showing that the sales in question had not been replaced and recovered the price at which the goods were sold to the purchaser, namely, the wholesale value of the lost goods.
Mr Timothy Marland for Sony; Mr Alexander Hill-Smith for Cinram.
LORD JUSTICE RIX said that the issue was: if a manufacturer and seller of goods lost them through the fault of another before he could make delivery and earn the price, could he recover that price as damages for their loss, or was he limited to the lower manufacturing cost of replacing those goods, at any rate, unless he proved that he could not make good the lost sale to his buyer?
In his Lordship’s judgment, whether the matter was looked at by analogy with the case of the seller who sued his buyer for nonacceptance, or whether the matter was looked at more directly, asking what an owner of goods had lost by reason of having his goods lost or converted by a bailee, in breach of contract, there being, as in the present case, no problem on the ground of remoteness or lack of knowledge of the profit in question, the answer must be that prima facie the owner was entitled to the value of his goods.
If the defendant wished to say that the loss was less because the profit could have been earned in any event by a substitute or replacement sale, at the cost only of the expenditure of a lesser sum for the purpose of manufacturing or buying in further goods, then the defendant bore the burden of proving that case.
It was not for the claimant to prove a negative, that he had not recouped the profit by a substitute sale, but for the defendant to prove a positive, that the profit had been recouped and thus the loss of profit had not been suffered at all.
Lord Justice Wilson and Lord Justice Rimer agreed.
Barristers snub major trials in row over fees
Times Online Thursday 11th September 2008
Dozens of major trials, including rape and murder cases, are under threat because barristers are refusing to work for a minimum £91 an hour.
At least five big criminal prosecutions, including the Rhys Jones murder trial in Liverpool, have been hit by the boycott, The Times has learnt. Dozens more risk disruption and delays if the dispute over legal aid rates is not resolved swiftly.
Peter Lodder, QC, the new chairman of the 4,000-strong Criminal Bar Association, told The Times that judges could have to release defendants if the dispute is not settled soon.
Trials involving defendants held in custody can only be delayed up to 112 days between their committal and trial. Courts have the option of releasing defendants on bail but in serious cases there is a greater risk that they would abscond, he said.
The crisis has arisen because just three QCs and only about a hundred other barristers have signed up to the new panel of lawyers set up under the reforms to handle these long trials, out of a possible total of 2,300.
They are objecting to what Mr Lodder called “derisory” rates of pay offered by the Legal Services Commission (LSC) for the most serious trials.
The stand-off has developed because ministers thought privately that the barristers were bluffing and assumed that they would back down once the new fees regime was in place.
A spokeswoman for the Ministry of Justice insisted last night that trials were unlikely to be held up for want of a suitable barrister. “Solicitors have told the Legal Services Commission that they expect to be able to find counsel of the requisite experience to act in very high-cost cases,” she said.
Mr Lodder said that some of the trials due to start in October would clearly not be able to do so.Cases so far affected include: the murder trial of a teenager and others accused of killing Rhys Jones, 11, which has been adjourned and is likely to be delayed further; a trial at Oxford Crown Court of 12 Albanian men charged with conspiracy to sell drugs; a trial of 28 defendants on money-laundering charges, to be heard at Woolwich Crown Court next year; a trial at the Old Bailey to be heard in March in which 12 youths are accused of murder; and a drugs and firearms conspiracy trial involving 18 defendants due to take place at Preston Crown Court, for which no date has yet been fixed.
Mr Lodder outlined the dangers of using inexperienced barristers for complex cases. He said that if defendants were not properly represented trials would not run effectively, would cost more and there was a risk that there would be wrongful convictions.
“Society as a whole has an interest in seeing that these cases are properly funded,” he said. “If barristers won’t do this work, then the whole ethos of serving the public suffers – as does the reputation of the criminal justice system.” He said that under the new rates top Queen’s Counsel were on preparation rates (for work leading up to trial) of £91 an hour. He said that a barrister would pocket about half of that after paying overheads, expenses, tax and so on.
“You might be better off buying a pair of pliers and working as a plumber,” he said. “This is our livelihood and most barristers are proud of the work they do. And contrary to public conception, these are not all fat cats – few barristers doing these high-profile cases earn a lot of money.”
The commission, which is in charge of the £2 billion legal aid budget, is trying to curb spiralling costs. Reforms have been agreed for all other smaller cases, but proposals that big trials lasting more than 40 days should be paid under contract are strongly opposed.
Preparation work rates range from £70 to £100 gross per hour for a junior barrister to £91 to £145 per hour for a QC. For a day in court the rates range from £285 to £476 for a top QC. In a privately funded case, he or she could earn at least double that. A commercial barrister earns up to £500 an hour.
The barristers also argue that hourly rates of pay encourage delays and are calling for a system of fixed fees according to types of cases.
Last year there were about 400 defendants funded by legal aid in 100 “very high-cost” trials, at a cost of £100 million. The commission said: “Defence teams are typically paid around £400,000 for such cases but costs in some, such as the Jubilee Line fraud case, have run into several millions.”
The commission has now agreed that in some cases solicitors may employ barristers outside the specialist panel. The lawyers instructed would be paid the lower rates of pay that apply to run-of-the-mill cases.
In the Rhys Jones trial, an exception has been made for the main defendant, a 17-year-old youth, so that he can have a barrister of his choosing.
There is still an impasse over the Oxford trial. Heather Howe, of the solicitors’ firm Criminal Law Advocates, said: “At present three of our clients have no barrister and the list of panel advocates that are suitably experienced to take this case and are available is down to two – one of whom is living in the South of France.
“The trial is likely to be delayed and costs to escalate through the roof if new counsel have to be instructed at this late stage. Trial is set for January 5 and we are very concerned.”
Mr Lodder said that in the Liverpool trial the main defendant had declared that if he could not have counsel of his choice, he would defend himself. “This would be a nightmare and cause a huge delay. He would not have the professional expertise and huge amounts of time would be taken guiding him through the paperwork.”
A spokesman for the commission said that the panel was due to run until July next year until a new scheme came into effect. He said: “To ensure best quality and best value for the most expensive criminal legal aid cases, the Legal Services Commission decided to establish a very high-cost cases panel which is due to run until July next year.
“The LSC believes this panel offers real benefits to those that have signed up to it as they have the first opportunity to take on work worth in excess of £100 million a year.”
He added that the commission was working with the Ministry of Justice, the Bar Council and the Law Society on alternative payment schemes.
A ministry spokeswoman said that the panel, which was set up after a competitive tendering exercise, was part of “a balanced package of reforms to put the legal aid budget as a whole on a sustainable footing”. She said: “Our reforms are about ensuring the long-term sustainability and future of legal aid. We want to get the best value for money so that we can help as many people as possible within the resources available.”
A working group had been set up to make proposals for the scheme that will be set up from the summer of next year and it would report shortly.
New Manchester Office for Forths
Leeds firm, Forths Forensic Accountants today opened a second office in Manchester enabling a better service to their increasing number of clients and contacts from the North West.
Forths Forensic Accountants have specialised in Insurance Litigation/Personal Injury work for the past six years and are one of the leading Forensic Accountants in the North of England.
Following continued success from three to 20 fee earning staff, business demand has required the expansion of a second office. With an increase in the number of personal injury claims each year and a trend towards a compensation culture, Forths have experience in both the Claimant and Defendant Personal Injury sector having worked with many of the countries leading Claimant PI firms of Solicitors. They boast regular instructions from seven of the top ten firms in the UK. In addition, they also undertake work for many Defendant PI firms as well as some of the countries leading insurance companies.
Richard Forth, Managing Director of Forths Forensic Accountants said, “Having undertaken a significant amount of work for North West based solicitors throughout our existence, we are now delighted to be able to offer a more local presence in the North West market. We have every reason to believe that our Manchester office will be equally as successful as our Leeds based operation, as it is based on the same ethos of high quality, professional advice, responsive service standards and approachable experts who can assist on a whole range of size of disputes. We welcome the opportunity of working with new clients and increasing our presence in the North West market.”
For more information about Forths Forensic Accountants, visit their website at www.forthsonline.co.uk. If you would like to attend the formal opening of the Manchester office, contact Michelle Edmundson on 0113 387 5697 or michelle@forthsonline.co.uk.
Medical Appeal Partly Successful
Post Online Thursday 28th August 2008
At case management in a clinical negligence action, the master: (a) refused the claimant permission to adduce expert evidence on the appropriate earnings index in France , where the claimant had settled with her family and determined that the application be adjourned to trial and (b) granted permission to adduce expert employment/earnings evidence in relation to the claimant’s father’s rewards from setting up a hedge fund, relevant to the claim for care and accommodation.The claimant appealed.
On the first issue, the judge allowed the claimant’s appeal on the basis that the master’s reasons for refusing permission were sparse. The judge held that obtaining accountancy evidence pre-trial would (1) allow settlement negotiations to take place between the parties; and (2) inform the court’s judgement as to whether a lump sum/periodic payment should be made.
On the second issue, the judge allowed the claimant’s appeal as the master’s reasons for granting the defendant permission to adduce expert financial evidence were explained and considered. More specifically, the lack of evidence put forward was one reason why the court might be assisted by such expert evidence being obtained.
Rugby Player was Employed
Post Online Thursday 21st August 2008
The claimant was punched by the first defendant, Richard Carroll on 29 October 2005 whilst playing a Rugby Union match. Both players were semi professional and had other full-time employment. The first defendant was held liable for the assault and the claimant awarded damages. The question was whether the second defendant was vicariously liable for the first defendant’s tortuous assault on the claimant.Both the judge at the first instance and the judge in the first appeal held it was not. The Claimant appealed. The Court of Appeal concluded the first defendant was employed by the second defendant. A contract contained terms relating to a match fee and bonus, the observation of the highest standards in conduct both on and off the pitch with a specific requirement for there to be no physical assaults.
The first defendant was therefore acting under a contract of employment. The question to be determined was whether the punch fell in or outside the scope of that employment. There had been a breach of an express contractual term and the fact the first defendant had employment elsewhere was irrelevant. There was a significantly close relationship between the tortuous act and it was therefore fair and just to hold the club liable.
Arguments that the club was non- profit making and fees were paid to ensure that players were not poached was irrelevant. Players were retained under a contract.
Player in record PI Payout
Post Online Thursday 14th August 2008
This week’s High court decision to award a promising young footballer £4.5m, said to be the highest personal injury claims settlement in UK professional sports history, will not open the floodgates to large payouts, according to legal experts.The case, decided on Monday, involved former Manchester United reserve player Ben Collett, whose career ended after a tackle on the pitch by a Middlesbrough FC player in 2003. Expert testimonies were given from team manager Sir Alex Ferguson and captain Gary Neville. Both commented that although Mr Collett had not yet played in the first team, he had the potential to have a major football league career.
Kathy Dwyer, partner at Davies Lavery, said the case stood out because the prosecution successfully argued on the basis of Mr Collett’s potential earnings, which is more difficult to do in the competitive sporting world where success is not easy to achieve.
She added that the star witness also would have helped.
‘It’s not everyday you get Alex Ferguson giving evidence on your behalf,’ she said.
Mr Collett’s own lawyer agreed that the decision would not change the course of sport litigation practices.
‘Thankfully, injuries of this severity are not a common occurrence on the football or any sporting pitch so I do not see this successful claim opening the floodgates to litigious action by sportsmen,’ said Jan Levinson, a partner at Beachcroft.
However, a source in Halliwell’s sports litigation team said it might make others interested in ‘testing the waters’ around personal injury claims.
‘The choice of expert testimony was the most interesting angle and I expect we’ll see a lot more of it,’ said the source.
Zurich institutes crackdown on exaggerated PI claims
The Lawyer Monday 11th August 2008
Insurance giant Zurich is to establish a hit list of personal injury (PI) firms in a bid to crack down on claimant practices that bring exaggerated costs orders against it.The insurer has fired a warning shot to claimant PI firms after it successfully won a test case against claimant firm Delta Legal, which was found to be exaggerating costs by an average of £3,000 per case.
Delta Legal has approximately 100 bills in the legal system at any one time. The average legal costs claimed on cases dealt with by Zurich’s defendant firm Beachcroft are approximately £10,000 per case, which means Delta Legal has claims in the system of approximately £1m per month.
Zurich UK technical claims manager Steve Thomas told The Lawyer: “We’ve decided to take court action to stamp out this behaviour and reduce unnecessary claims costs.
“When for every pound we spend on damages a further 93p goes to lawyers in legal costs, it’s time to take definitive action. This case is intended to send a strong message to legal cost negotiators that, if a bill is dishonest, we’ll take the matter to court without hesitation.”
Thomas said Zurich would now look to build a national database to track claims costs in a bid to pinpoint problem areas. The insurance market had refrained from taking legal action against claimant firms after the Ministry of Justice (MOJ) proposed sweeping reforms of the PI sector in May 2007.
However, the watered-down nature of the MOJ proposals, which will now only apply to motor-related claims rather than to all employers and public liability claims, has spurred insurers into action.
