It looks as if they will be implementing the non-recoverability of Insolvency ATE success fees in line with the advertised April 2015 deadline.

“They” being the powers that be and in whose hands we rest. Personally I am confused by the known position v. the rumours and what I think is intended by the regulations.

The most pressing point is that April 2015 is the Insolvency deadline beyond which the ATE premiums for insolvency claims will not be recoverable, of this we are all certain. If the IP cannot recover the ATE premium, as will the case from April, (and despite rumours to the contrary) for once my crystal ball is crystal clear, there will be significant reductions in the sums distributed to creditors. In our experience one of the largest creditors in bankruptcies is HRMC. Has HMG thought this one through?

Looking at the numbers when comparing the financial effect between recoverable v. non-recoverable CFA uplifts and ATE premiums the difference amount available for creditors could be as much as 50%. If this is the case many insolvency proceedings will not be financially viable with IPs unable to instigate the necessary litigation. If this is the end result, wither justice for creditors?

The Jackson report may have suggested the need for alternative funding methods for all litigation, this has yet to materialise and it is this which I think has ultimately led to the current rumours of the April deadline being removed.

We can only use the known position, and as the deadline is fast approaching, it would be a wise lawyer and IP who seek After The Event (ATE) insurance before clients become liable for the premium. If the guillotine does drop in April and cover is not in place, who will get the blame? Could there be a negligence case in the offing?

So while there is still scope to operate under the old rules, maximise the opportunity and get those applications in for our expert attention and avoid the last night essay crisis, which I am sure readers will remember without fond memories, I certainly do, Samson Agonistes being the worst experience.

Also Known As – ‘Funding and Lending, what’s the difference?’ and ‘Big Brother and Big Brother’s Little Brother’. Any other contributions welcomed.

As to what it is depends on who you talk to. To clients and lawyers it is a means of pursuing a case that might not be possible without outside funding. To a funder it is a high risk activity that deserves a suitable reward (i.e. lots).

There are two types of funding, those for big cases and those for smaller cases.

Apart from merits, I think the starting point is the size of the claim, will damages be sufficient to bear the cost of the funding? The whole point is that this is somebody else’s money which is used for the benefit of your client’s legal action, why should their reward not be proportionate? We say a ‘big case’ has an estimate of damages in excess of £500,000. A funder needs a case to be at this level for the reward to be proportionate to risk, a win may cost up to half of a settlement and funders use the theory that to the client ‘half a pie is still better than nothing’. Should a case lose, the funder is left out of pocket.

Funders are being asked to provide money for a case where there is no guarantee of a return, the costs may increase dramatically and they do not know when or even if they will see a return on their investment. Additionally, with the ‘Arkin v Borchard Lines Ltd and others’ Judgement (2005), the funder could be liable for the defendant’s costs up to £1 for every £1 they advance. This though, can be mitigated by an After the Event Insurance policy, which at least insures the adverse costs to the limit of indemnity.

The funding calculations which I have seem are complex, heavily detailed and make my brain hurt.

Smaller cases are those with damages between £25,000 and £500,000 and a different set of lenders (I use the word advisedly) look at this market. Multiples of the sum advanced do not work in these cases. Charging an interest rate is the solution, no need for complex calculations as interest is easy to work out. The lenders follow the familiar model of lending money via a regulated CCA. The repayment due at the end of the case is the principle loan plus interest accrued.

When backed by ATE insurance, this way of lending works well, particularly in the clinical negligence market because disbursements costs are high but so too are damages, making loans affordable without denting damages too much.

The smaller lending market is relatively new initially developing within the clinical negligence field. QLP are at the forefront of these surely needed developments.

Do not forget that Lord Jackson uplifted damages by 10% to help with the cost burden now placed on claimants.

Excitingly, Jeffrey Jones & Others –v- Secretary of State for Energy & Climate Change and Coal Products Ltd [2013] EWHC 1023 (QB) suggest interest is recoverable. Any cost consultants care to comment: qlp@qlp.ltd.uk.

As an independent broker, we make sure we are at the forefront of these developments and have our own facility:

The way forward, is to talk to us at QLP and we will take you through, in detail, all the twists and turns that need to be navigated to achieve a successful outcome.

As you no doubt know the Government has announced a further increase to court fees. The thinking appears to be that claimants have unlimited funds and should subsidise the courts. Apparently claimants should pay a more realistic cost of their court action. There are arguments that some costs are already much higher than their actual cost to the courts and I see it as another nail in the coffin of justice for all!

Small companies and individuals will have to pay these costs upfront, either from their pockets or the solicitor will have to subsidise them (much like at present but with higher drag on their cash flow).

QLP has the solution.

The clients can borrow the money (up to £100,000) from our partner (Novitas Funding) and secure the liability with an After the Event (ATE) policy from another partner ARAG.

At the conclusion of an unsuccessful case the ATE policy takes the strain, on successful conclusion of the case, court fees are legitimate disbursements and can be recovered from the defendant. At the time of writing we believe that interest on the loan is a legitimate disbursement and so is also recoverable (Jones v Department of Energy & Coal Board).

If court fees are too much to carry/fund talk to us.

QLP is always reviewing and expanding what can be funded (multi track PI is next) and solicitors’ views are always of appreciated.

All shall be well and all manner of things shall be well (Julian of Norwich c. 14^th c)

Now safely back in the office, family dispersed around the world once again, it is time to look at the year ahead. Looking at the Sunday papers it’s going to be an awful year?

So, giving a hostage to fortune, 10 predictions for the year ahead:

1. There will be at least 1 general election this year. However, I think it will be more fun predicting what will happen to the politicians we all know and love, Prime Minister? Your guess is as good as mine but the deputy PM is a contest between Alex Salmond and Nigel Farage. Nick Clegg will end up as a trainee barista in a coffee shop.
2. The EU will remain in its usual mess, there will be a lot of talk (no change there then!) and nothing will change.       Greece will teeter on a number of edges again and the Euro will wobble but by some miracle (or PR spin?).remain
3. Climate change will shift up a gear or still does not exist, depending who you talk to. Again there will be a lot of talk and we all go on our merry ways so no change there (again!).
4. There will be ‘weather events’ that will come as a surprise to train operating companies (TOCs) despite everybody else expecting them. Network Rail will pay the TOCs compensation and as usual most of us will not claim and the TOCs will pocket a tidy profit.
5. Markets will crash, our investments and pensions will fall in value, the Pound will fall but everyone will be happy, inflation will be low, holidays to Europe will become cheaper (they are in a worse mess then we are), petrol will be cheap and that will do more for economic growth the all Government initiatives
6. Income tax receipts will continue to disappoint, well there are no big bonuses to tax!
7. We will all have high expectations of our sporting teams and will be disappointed, after all it is Australia in the cricket.
8. It is all dark and dismal at the moment, however spring will come, the flowers will bloom and the birds will sing.       It will be all sunshine and clover, everything will be fine, none of these predictions will come true and life will be worth living again.
9. Numeracy will not improve in the next 12 months.

All here at QLP Legal would like to wish all of you a very happy and prosperous new year.

As you get older life seems to whizz by and so here we are again, approaching Christmas. The party (both family, friends and business) invites are coming in thick and fast. I have two personal problems with Christmas, diabetes and I do not drink (unfortunately).
All the delicious Christmassy food, cake, pudding, pies, etc. are the top of my list of big no-nos. Problem is I love them, the smells drive me crazy and will power is tested to the limit, then there are the Christmas parties, they start off as good fun, then drink helps to loosen up everyone (well nearly) and I am asked about lifts home
As a typical middle aged male (I can still look back and remember middle age) I need the lubrication of drink to help me ‘dance’, without it I am too embarrassed to try (yes, I am a dad). Another phenomenon, time seems to slow down dramatically when you are sober, where as in the old days, I had lots of interesting conversations!
There are good points, lots of people are nice to you, after all, I would not mind driving them home, would I?
Having said all the above, Christmas is a good time to catch up with people, an office party can lead to mutually beneficial business. Re-igniting old links and the best part?
In the morning I can remember!!!!!

So a very Happy Christmas and a safe and prosperous New Year to you all.