CMLF success against Slater and Gordon UK Limited : a major victory in the campaign for fair legal fees

210. That[1] raises the questions: was the premium ever paid in 2017 as Slater and Gordon assert? Also, to whom were the claims handling commission and claims fund contribution paid? and why were they paid? and what were they actually for?

[1] An email from the ATE insurers confirming that the premium had not been paid but, if it were to be paid a "claims handling commission" of £30 and a "claims fund contribution" of £176.13 "would fall due"

212. That[1] raised the questions: which separate group company? Which group? Was it actually separate? and what are the payments for? This was, after all, simple ATE insurance for simple Portal claims with limited fixed costs ACO liabilities. An objective bystander might think that the premium for insurance would cover and include the costs of the insurer managing its own fund of premiums. A simple phone call or email from Slater and Gordon to the ATE insurer would trigger the policy for each Claimant under a pre-negotiated group agreement for ATE for their Portal claims. What "handling" of the claims was going on?

[1] S & G's description of the payment as "a legitimate claims-handling fee for services payable to a separate group company who was appointed by the ATE Insurer to provide claims handling services and manage the claims fund"

220. If the solicitor has complied with the SC rules, full disclosure of the commission will make the situation clear on paper. A simple paper trail may determine whether the commission is owed to the client or not.

  164. …As to the assertion that the current claims by the Claimants will fail in droves, one only has to listen to the audio recording of the sign up process for Mr. Turnbull to feel uncomfortable about lack of informed consent for the URL clauses in the CFA. I reject that submission.

Full details of the tragic case of Mr.Turnbull, including the full audio recording that the judge has referred to, can be found here : Piper v Slater and Gordon

The "secret commission" and "sign up process" arguments could both result in significant refunds for large numbers of former clients of S & G and other solicitors who have been involved in this market since 2013. 

This is independent of the case of Belsner v CAM Legal Services Limited, which will be considered by the Court of Appeal in July. In that case the High Court has already found that, because a personal injury client had not been given sufficient information about the overall costs, the amount that her solicitors was entitled to charge by way of a deduction from legal fees was restricted, resulting in a refund.. 

Overall number that could be entitled to a refund of fees following a personal injury claim is around 3.675 million.

Average refunds achieved to date by CMLF are £734.17. If we are right about secret commissions that is likely to increase to close to £1,000 per claim.

 Of more interest to legal fees nerds

The judgment clarifies some important aspects of the law in relation to this case type, which are known as "Solicitors Act Assessments", and in doing so significantly increases client protection.

 196. I have considered the public interest in access to justice for Claimants who feel aggrieved by deductions made from their damages by PI firms. I consider that it is in the public interest for claimants generally to be enfranchised to test the way in which those fees were explained, charged, deducted and calculated.

 205. …When asked how it would be just to the Defendant's ex-clients to have their claims stayed because their first lawyers were squabbling with their second lawyers over the latter allegedly having insufficient funds to pay the first lawyers' legal fees if the assessments went against the clients, the Defendant submitted that Slater and Gordon might not get paid in full due to suspected impecuniosity. I have dealt with that above. Weighed against that risk is the principle that access to justice is important. All litigation is uncertain. No PI solicitors firm is immune from financial pressures as the financial history of many firms (some of which have gone bust and others of which have been taken over) during the last 20 years has shown.

127. I take into account that CPR r.31.1 [the rule re standard disclosure] states that it applies to all "claims". The Defendant submits that the Claimants' claims are not claims they are SOCAs. I rule that these part 8 claims are "claims". The procedure for handling the claims is to use SOCAs but that does not change the nature of the claims. I reject the appeal made on this issue. It is not necessary for me to go further because these claims are all at the stage before a SOCA order is made, but should I have had to do so, I would have held that the claims remain claims even after the SOCA is ordered.

129. On policy grounds I take into account that it is in the interests of the parties to a part 8 claim and the interests of the Courts and of justice, that the Judges dealing with such claims can make whatever case management decisions they should need to make so as fairly to elicit the issues and to permit the parties to prove their claims and to achieve justice in accordance with the overriding objective in CPR r.1.1. I also consider that the power to order disclosure is useful, for the purpose before a SOCA is made, of determining whether a hybrid hearing is needed within part 8 or a transformation order should be made (transforming part or all of the part 8 claim into a part 7 claim) and to identify the scope of the issues and to decide which judge should hear which issues. Disclosure should not be the normal order in SOCAs because it is not usually needed and this judgment should not be taken as a licence to apply in all part 8 claims. 

 141. The Claimants sought standard disclosure of the Slater and Gordon retainers and the audio recordings of the signing of the retainers and all other documents relating to the pleaded issues. The Judge granted it. The Defendant did not want to give any of these and appeals the order for standard disclosure. Should I grant the appeal on the grounds that disclosure is not usually ordered in Part 8 claims? I see no reason in justice to do that. Should I grant the Appeal on the basis that there is no power to order disclosure? I have already ruled that the court had such power. Should I interfere with a case management decision on the basis that I disagree with it? I do not disagree with it. In addition I have taken into account the case law on my powers in appeals set out above and dismiss this ground of appeal. The disclosure order stands and should be complied with in my judgment.

 219. ...In my judgment the Cash Account cannot be signed off in the SOCA and no order can be made by the CJ for sums to be paid to or by the Defendant or the Claimants unless the items in the Cash Account are accurate and certified by the CJ. If they are in dispute, that dispute must be resolved before the final SOCA order can be made between the parties.

 223. Taking into account what I have set out above about hybrid hearings and transferring parts of part 8 claims to the Chancery Division for determination, I do not consider that the right way to go forwards in these claims was or would be to require the Claimants to issue 150 or less part 7 claims relating to the alleged secret commissions. These commissions were very small sums. The issuing fees alone would be substantial. The better way for these issues to be dealt with would be to consider the correct Judge/transfer to the Chancery Division etc. at the next case management hearing after disclosure and part 18 answers certified by a statement of truth, and to determine the scope of the SOCA orders at the same time. The issues may involve quantification of the ATE premiums or the proof of the existence of and reason for the alleged secret commissions.