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The Times

Thursday, August 4 2016

Frances Gibb and Jonathan Ames bring this morning’s must-read of all things legal, including news, comment and gossip.

Today

  • Government ‘must turn to City lawyers’ for Brexit advice
  • French pressed for inquiry into 'Jungle' legal failings
  • Legal profession ‘failing’ UK small businesses
  • Supreme Court backs insurers over motoring claims
  • Dispute highlights growing trend in will challenges
  • Call for review of law firm structure revolution
  • Comment: Supreme Court encourages lying to insurers
  • Blue Bag diary: Mr Justice Peter Smith’s last stand?
  • More Blue Bag: Summer school with lawyers

Tweet us @TimesLaw with your views.

 
Story of the Day

Government ‘must turn to City lawyers’ for Brexit advice

Ministers will be forced to recruit the cream of City of London lawyers to bolster Whitehall’s trade negotiation strength in advance of the UK formally leaving the EU, a leading international lawyer has predicted.

Law firms in the Square Mile should be able to name their price when seconding top partners to the civil service. A core team of about a dozen is anticipated to be required as more than 40 years of EU membership has left Britain bereft of hardball trade deal experience.

“The government will want the best of the best to advise them,” Penelope Warne, the UK office senior partner at CMS, told The Brief in an exclusive interview. “I can see a specialist government advice team being created – a cadre of about a dozen lawyers that will be seconded to Whitehall.”

In addition to advising on how to play tough in trade negotiations, Warne said that the government would need City lawyers to counsel on what EU rules and regulations could be transposed into UK legislation and what would have to be created anew.

However, Warne had a stark prediction for City lawyers licking their lips at the prospect of advising on the unravelling of four decades of EU membership. “For many law firms, Brexit won’t lead to a huge amount of work,” she said.

“There will be work for those firms that specialise in sectors that are heavily regulated – for example, financial services, life sciences and energy. But the problem for many of the top tier big City law firms is that they are large machines that are not as sector-focused as some of the middle level practices.”

Warne also pointed out that the much-derided Swiss verein structure would benefit those law firms using it in a post-Brexit legal world. The verein has often been dismissed as providing nothing more than a veneer of unity over what is in fact a franchised network of offices.

Warne said that CMS’s use of the structure will mean that its English lawyers will not have to queue for qualification in the Republic of Ireland so that they are allowed to carry on practising in the EU. “All our European offices are run by EU-qualified lawyers,” she said.

 
 
News Round Up
French pressed for inquiry into 'Jungle' legal failings

French police routinely failed to protect migrants in the the Jungle camp outside Calais from violence and the inhabitants lacked access to justice, a report from a group of English lawyers maintains.

The Jungle and Grande-Synthe camps were not able to offer adequate legal advice or legal observers, according to a report from the human rights committee of the Bar Council of England and Wales.

In the report, the committee called on the French government to begin an independent investigation into allegations of police abuse and neglect of power in the camps, and for further human rights monitoring to be put in place urgently.

“The lack of effective legal protections in the Jungle and Grand-Synthe for vulnerable refugees, including women and children, should be of huge concern,” said Kirsty Brimelow, QC, the committee’s chairwoman and a barrister at Doughty Street Chambers in London.

“The UK and French governments must jointly ensure accountability for all human rights violations inflicted on camp residents. The treatment of refugees is one of the historic wrongs of our time. It is happening on the shores of Europe. Urgent action is required.”

The report highlights several cases, including allegations that a 16-year-old Iranian was taken by French police to a field outside Calais, where he and others were forced to kneel down in a line before being beaten repeatedly with truncheons.

Another claim involves a British volunteer, who was allegedly pushed, slapped and strangled by police, and had a tear gas canister shot at her face, while attempting to document camp evictions. An Eritrean man was claimed to have been kicked and hit by officers and had tear gas sprayed in his face.

Legal profession ‘failing’ small UK businesses

Nearly half of small businesses in Britain are failing to seek legal advice for legitimate potential claims, research published yesterday shows.

Concerns over legal fees and the amount of time required to mount a legal action were cited as the main reasons dissuading the nation’s shopkeepers and start-up entrepreneurs from instructing lawyers.

Researchers from Ajuve, an online dispute resolution service, surveyed 500 small businesses and found that on average they had three potential legal disputes annually, while about a fifth had five or more.

Nonetheless, nearly 40 per cent of the small businesses said they did not have practices in place to deal with potential small claims disputes.

Some 65 per cent described the current claims procedure as outdated and 58 per cent said it should take six weeks or less for a claim to be determined. Presently civil court claims can take between six months and two years to be resolved.

Rush to direct access barristers, claims Bar Council

When it comes to the ramifications of the UK leaving the EU, some small businesses are flocking to lawyers for advice – and they are increasingly choosing barristers over solicitors.

Figures released earlier this week showed that advice on the business implications of Brexit was one of the top five requests on the Bar Council’s recently launched direct access portal. The online facility promotes barristers who are qualified to advise the public and small businesses without the traditional intervention of a solicitor.

The council surveyed 9,000 searches made over the first seven months of this year and found that the five most popular areas of law about which potential clients wanted advice were general civil, property, employment, EU and professional negligence.

“We can only assume that the reason EU law is so high up the rankings is because of the uncertainty of Brexit,” Chantal-Aimée Doerries, QC, the Bar Council chairwoman, said.

In a statement that will do little to endear the council to solicitors, Doerries added: “It is encouraging to see that growing numbers are turning to direct access barristers for legal help.

“Direct access allows anyone to go straight to a barrister where their case or legal problem is suited to that type of approach. The point of direct access is that it creates more choice for those who need a legal professional to help them and allows them access to the specialist skills of a barrister.”

Supreme Court backs insurers over foreign motorists without cover

British motorists involved in accidents abroad caused by uninsured drivers will have to make do with local compensations schemes that are likely to be less beneficial than awards granted in the UK, the Supreme Court ruled yesterday.

The UK’s most senior judges backed the Motor Insurers’ Bureau – the body that pays compensation to UK victims of accidents involving uninsured drivers – in a claim brought by a Welsh holidaymaker (see The Brief, July 13, 2016. The result will be a relief to the insurance sector because if the court had gone the other way, industry experts speculated that premiums would have to rise.

Tiffany Moreno was seriously injured in an accident with an uninsured driver in Greece. The bureau accepted that it had a liability to pay but Moreno claimed that damages should be assessed according to English law, where the compensation was likely to be higher.

Five Supreme Court judges led by Lord Mance found in favour of the insurance body – a judgment that was predictably welcomed by its lawyers.

David Holt, a partner at the national law firm Weightmans, said that the decision showed “that the process of victim protection across Europe all operates to a consistent theme, namely that, in general, the law of the country of accident will be the applicable law for both liability and the assessment of damages”.

Dispute highlights growing trend in will challenges

The daughter of a double glazing businessman is asking a judge to overturn her father’s will that left his entire £1 million fortune to her stepmother.

In a case that typifies a growing trend of wills being legally challenged, Danielle Ames, 41, told a London court yesterday that her father had promised her: “One day all this will be yours.” She said that she idolised her father, who doted on her as his only child, and described him as her best friend.

But after Michael Leslie Ames died in 2013, his daughter was stunned when his will revealed that all his assets had been left to her 63-year-old stepmother, Elaine Ames. The daughter is now asking Judge David Halpern, QC, to override her father’s wishes and award her £300,000 as “reasonable provision” from the estate.

Her stepmother is insisting that her late husband deliberately cut his daughter out of any inheritance as he had a powerful work ethic and believed that adult children should look after themselves. His daughter is an unemployed mother of two.

Oliver Wooding, a barrister from St John’s Chambers in Bristol, who is acting for Danielle Ames, told the court that his client was dependent on her father and his death had left her in serious financial difficulty. But her stepmother’s barrister, Faith Julian from 9 Stone Buildings in Lincoln’s Inn, said that Danielle Ames was “fit and able to work” and ought to be responsible for herself.

The hearing falls against the backdrop of a trend highlighted by probate specialist lawyers, who say that as the UK population gets older and increasing numbers are suffering from dementia, disputes over wills are growing.

In a case presently before the High Court, the children of Michael Inchbald, the interior designer who worked on the QE2, Claridge’s and the Savoy Hotel, are battling over the terms of his will and £20 million fortune.

The Ames case continues, while the Inchbald case awaits judgment.

Law Society calls for review of law firm structure revolution

Justice ministers must ensure a level playing field between traditional law firms and the growing new breed of legal advice businesses, the body representing solicitors said yesterday.

The Law Society told the Ministry of Justice that the alternative business structure regime – which allows lawyers and non-lawyers to form partnerships and for outside capital to be pumped into legal practices – should be reviewed in three years.

Responding to a consultation from the MoJ, the organisation, which represents 130,000 practising solicitors in England and Wales, claimed “that initial take-up of ABS has been reasonably slow and has mostly been by established solicitors’ firms taking advantage of the opportunity for non-lawyers to become owners or investors”.

However, the society forecast that a significant change in the market was “likely in the next few years”, and that more alternative businesses would appear, not least as a result of enhanced use of technology.

Catherine Dixon, the society’s chief executive, told ministers that the ABS sector should be reviewed “to gauge whether changes have adversely impacted on diversity in the legal services market”.

In Brief

50 law firms face race against time to stay in business as insurer goes bust – Law Gazette

Motor insurance giant to launch first barrister panel – The Lawyer

DLA Piper’s former Turkish partner raided by the police in the aftermath of coup – Legal Week

Cameras allowed in court for sentencing – The Times

 
Byline
Comment

Supreme Court encourages lying to insurers Duncan Rutter

The Supreme Court's decision several days ago in Versloot is perfectly logical but does nothing to discourage fraud.

There are three types of fraudulent first party claims: those that are wholly fabricated; those that are genuine but fraudulently exaggerated; and claims that are justified but dishonestly embellished by collateral lies, or so-called fraudulent devices.

By a four to one majority, the Supreme Court held that only the first two types would result in the whole claim being defeated. In the third type, collateral lies – whatever one might think of them morally – are irrelevant and cannot be relied on to defeat the claim.

Lord Mance, dissenting, questioned whether a material lie can ever be irrelevant and looked at what public policy demands. He argued that the fraudulent device rule, like legal responses to other types of fraudulent claims, “serves a … role in encouraging integrity and deterring fraud in the claims process”.

He pointed out that fraud in the claims process “will, or will almost always, be associated with ... the pursuit of what the insured believes or fears to be at least a questionable claim” and criticised his fellow Supreme Court justices for looking at the issue “with hindsight, rather than by reference to the state of mind with which a fraudulent device is usually deployed”.

In other words, what is important is not whether the insured has a valid claim but what that person intends when lying to the insurer. Lord Mance concluded that collateral lies, provided they passed a threshold test of materiality, should be capable of defeating the claim.

Lord Sumption noted that it had been submitted to the court that there was “little empirical evidence that the [fraudulent devices] rule was an effective deterrent to fraud”. Yet Lord Mance’s approach chimes with the views of the insurance fraud task force.

In its report from the beginning of this year, the task force said many consumers perceive that “it is necessary to negotiate with insurers at … the claims stage. This can lead to consumers providing overly optimistic valuations or exaggerating claims in expectation that insurers will try to haggle down the settlement. Many consumers do not recognise that this behaviour is dishonest despite being at risk of submitting fraudulent claims … the normalisation of fraudulent behaviour is socially corrosive and undermines social cohesion by eroding trust.”

In other words, many consumers regard lying as a normal part of the claims process. The problem at the heart of insurance fraud is a culture that sees no wrong in telling lies to promote a claim.

If Lord Mance is right, this latest Supreme Court decision will only serve to encourage the very behaviour that the task force is trying to stamp out.

Duncan Rutter is president of the Forum of Insurance Lawyers and a partner at DAC Beachcroft, a City of London law firm

 
 
Tweet of the Day

Total number of announcements so far by the Department for Exiting the EU: one (on ministerial appointments). https://t.co/zw2cidcpy4

Mark Elliott @ProfMarkElliott

 
 
Blue Bag

Mr Justice Peter Smith’s last stand?

Email perils were dramatically highlighted this week when the office that hand-holds the judiciary in England and Wales distributed a notice flagging up an important judgment in the Queen’s Bench Division of the High Court.

The court ruled that the NHS is responsible for providing a daily pill to prevent HIV infection in homosexual men and was a big story for health specialist hacks.

But there was a problem – oddly the High Court case appeared to be heard by two judges, Mr Justice Green and Mr Justice Peter Smith. The listing of the latter raised eyebrows even further, as Mr Justice Peter Smith is currently the subject of a disciplinary inquiry involving allegations of bias against a set of barristers’ chambers. And as The Times reported, he is also on sick leave and may never return to work.

Was the NHS ruling his last hurrah? No, came a terse statement from the judicial communications office. “Please note that the judge who gave the judgment was Mr Justice Green, not Mr Justice Peter Smith as stated in the earlier email."

Summer school with lawyers

This could go either way – a commendable example of a City of London magic circle law firm trying to engage with journalists and by extension the wider world, or a patronising marketing gambit that is destined to backfire.

Allen & Overy, the Square Mile international mega-firm, is to hold a “media summer school”. The Brief may be alone regarding this point, but the words “summer” and “school” do not evoke fond memories so the firm is off to a bad start.

A&O said that the sessions, run over four days, would be an “opportunity to get to grips with some of the basic principles underpinning the markets in which our clients work [including] … the more esoteric financial products such as credit derivatives or delving into the changing landscape of global investigations”.

Tempting – but it’s a fair bet the cricket test series will be more alluring.

 
 
Quote of the Day

“The challenge for the independent review will be to find a way of accommodating Sharia councils within the UK legal order, which both respects the religious and cultural freedom of Muslims in the UK and ensures that the human rights of vulnerable Muslims, especially Muslim women, are protected.”