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	<title>Matthew Arnold &#38; Baldwin LLP &#124; Giving you a lot more than just law... &#187; Professional Negligence</title>
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	<description>MAB</description>
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		<title>Legal Aid, Sentencing and Punishment of Offenders Bill Receives Royal Assent</title>
		<link>http://www.mablaw.com/2012/05/legal-aid-sentencing-and-punishment-of-offenders-bill-receives-royal-assent/</link>
		<comments>http://www.mablaw.com/2012/05/legal-aid-sentencing-and-punishment-of-offenders-bill-receives-royal-assent/#comments</comments>
		<pubDate>Fri, 04 May 2012 18:58:24 +0000</pubDate>
		<dc:creator>Jane Anderson</dc:creator>
				<category><![CDATA[Banking & Finance Litigation]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Jackson Reforms]]></category>
		<category><![CDATA[LASPO]]></category>
		<category><![CDATA[Litigation]]></category>
		<category><![CDATA[litigation funding]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=19900</guid>
		<description><![CDATA[The Legal Aid, Sentencing and Punishment of Offenders (“LASPO”) Bill was granted Royal Assent on 2 May 2012. The Bill has not had a smooth journey through Parliament, with the proposed amendments receiving no less than 14 defeats on votes in the House of Lords. However, all defeats were reversed in the House of Commons. [...]]]></description>
			<content:encoded><![CDATA[<p>The Legal Aid, Sentencing and Punishment of Offenders (“LASPO”) Bill was granted Royal Assent on 2 May 2012.</p>
<p>The Bill has not had a smooth journey through Parliament, with the proposed amendments receiving no less than 14 defeats on votes in the House of Lords.</p>
<p>However, all defeats were reversed in the House of Commons.</p>
<p>It is now inevitable that the Government will enshrine in law a major part of Lord Justice Jackson’s proposals by no later than April 2013. Among the main changes will be; (1) the abolition of the right of claimants to claim from the opposition success fees and after-the-event insurance premiums from defendants; (2) the introduction of contingency fees, where claimants can fund their claims by paying their lawyers a percentage of the compensation awarded.</p>
<p>LASPO will be introduced in conjunction with a raft of new Court procedure rules to implement some, but not all, of the other Jackson reforms which did not require primary legislation.</p>
<p>Now that the legislation is settled, MAB will be preparing a full report on the reforms, to be published over the Summer.</p>
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		<title>Government to abolish recoverability of Success Fees and ATE Premiums –  the end of &#8220;no win no fee&#8221;?</title>
		<link>http://www.mablaw.com/2011/07/government-to-abolish-of-recoverability-of-success-fees-and-ate-premiums-the-end-of-no-win-no-fee/</link>
		<comments>http://www.mablaw.com/2011/07/government-to-abolish-of-recoverability-of-success-fees-and-ate-premiums-the-end-of-no-win-no-fee/#comments</comments>
		<pubDate>Tue, 26 Jul 2011 15:10:09 +0000</pubDate>
		<dc:creator>Justine Ash</dc:creator>
				<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[CFAs; No win no fee; ATE; Legal Aid Sentencing and Punishment of Offender's Bill]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=12827</guid>
		<description><![CDATA[Currently, a claimant (be it a person or an entity) who wishes to fund their civil litigation case has the following options:- (i) Conditional Fee Agreement (CFA/”no win, no fee”) where the “success fee” is   potentially recoverable from the losing opponent; and (ii) After the Event Insurance (ATE) where against the costs of losing the [...]]]></description>
			<content:encoded><![CDATA[<p>Currently, a claimant (be it a person or an entity) who wishes to fund their civil litigation case has the following options:-</p>
<p>(i) Conditional Fee Agreement (CFA/”no win, no fee”) where the “success fee” is   potentially recoverable from the losing opponent; and</p>
<p>(ii) After the Event Insurance (ATE) where against the costs of losing the case, the premium is  potentially recoverable against the losing opponent.</p>
<p>Under Part 2 of the Government’s proposed <a title="http://www.publications.parliament.uk/pa/bills/cbill/2010-2012/0205/cbill_2010-20120205_en_1.htm" href="http://www.publications.parliament.uk/pa/bills/cbill/2010-2012/0205/cbill_2010-20120205_en_1.htm">Legal Aid Sentencing and Punishment of Offender’s Bill</a>, recovery of the success fee and ATE premiums will be abolished.  Unless the Bill is overturned in the House of Lords in the autumn, it is predicted that the Bill could be in force as early as April 2012.</p>
<p>The Lord Chancellor and Secretary of State for Justice, Kenneth Clarke, introduced the second reading of the Bill in the House of Commons on Wednesday 29 June 2011 and the Bill was passed with a vote meaning it will now be considered for scrutiny by a Public Bill Committee.  Those who are interested and who want to have their say on the proposed Bill, can submit their views in writing to the House of Commons Public Bill Committee.  The deadline for written submissions is at the end of the Committee stage on Thursday 13 October 2011.</p>
<p>The Government does not propose that the Bill be retrospective and so any prospective Claimant reading this article who thinks they may have an eligible civil litigation case (whereby their case is assessed by their lawyer to have at least a 60% chance of success) should seek appropriate advice from their solicitor now because a CFA/ATE must be taken out before the abolition takes effect.</p>
<p>Once the law is changed, many claimants will lose the ability to fund their case because they will need to pay their own success fees and ATE premiums.  These fees and premiums could add up to more than the damages recovered, even if their case were to succeed.</p>
<p>The proposed amendments have been subject to widespread criticism on the grounds that the proposed  legislation will remove access to justice to a large proportion of the population and countless small and medium size businesses who rely on &#8220;no win no fee&#8221; .  Watch this space for developments and updates.</p>
<p>See also:http://services.parliament.uk/bills/2010-11/legalaidsentencingandpunishmentofoffenders.html</p>
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		<title>Duty of care – valuers and the buy-to-let market</title>
		<link>http://www.mablaw.com/2011/06/duty-of-care-valuers-and-the-buy-to-let-market/</link>
		<comments>http://www.mablaw.com/2011/06/duty-of-care-valuers-and-the-buy-to-let-market/#comments</comments>
		<pubDate>Wed, 22 Jun 2011 11:28:23 +0000</pubDate>
		<dc:creator>Jonathan Sachs</dc:creator>
				<category><![CDATA[Banking & Finance]]></category>
		<category><![CDATA[Banking & Finance Litigation]]></category>
		<category><![CDATA[Financial institutions]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Upload-Finance]]></category>
		<category><![CDATA[bank]]></category>
		<category><![CDATA[banks]]></category>
		<category><![CDATA[buy-to-let]]></category>
		<category><![CDATA[duty of care]]></category>
		<category><![CDATA[Valuation]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=10292</guid>
		<description><![CDATA[Last October we reported on a case where a valuer was held to owe a duty of care to a purchaser on a buy-to-let property in respect of a valuation provided to the lender not the purchaser.  The valuation was held to be negligent not only in regard to the capital value but most interestingly [...]]]></description>
			<content:encoded><![CDATA[<p>Last October we reported on a case where a valuer was held to owe a duty of care to a purchaser on a buy-to-let property in respect of a valuation provided to the lender not the purchaser.  The valuation was held to be negligent not only in regard to the capital value but most interestingly in respect of the valuation of the rent to be obtained on a property. </p>
<p>Perhaps unsurprisingly, this case was appealed.  The Court of Appeal has now delivered its Judgment. </p>
<p>The first issue to be determined was whether the buy-to-let purchaser, Mr Scullion had relied on the valuation report.  The Court of Appeal decided that the Judge at the first hearing had asked the right question and therefore this issue could not be challenged.</p>
<p>The second more fundamental question was whether the valuers, Colleys owed the purchaser, Mr Scullion a duty of care.  Much reliance at first instance was placed on the case of <em>Smith v Eric S Bush </em>[1990] 1 A C 831 where the court concluded that as valuers know that 90 per cent of purchasers rely on a mortgage valuation and do not commission their own valuation since many purchasers cannot afford another second valuation the valuer owed the purchaser a duty of care.  </p>
<p>The Court of Appeal concluded that Colleys did not owe the purchaser a duty of care.  There was no inherent likelihood that a purchaser buying a buy-to-let flat would rely on a valuation.  The Court took into account the following factors:</p>
<ul>
<li>The valuation was to purchase a residential unit not as the purchaser’s residence, but for the purpose of an investment. People who buy to let are likely to be richer and more commercially astute than people who buy to occupy and can be regarded as more likely to obtain and more able to afford an independent valuation.   </li>
<li>There was no evidence to support the proposition that anything like 90% of the people who bought to let in 2002 relied on valuations prepared by a valuer instructed by their mortgagees rather than obtaining their own valuation.</li>
<li>A purchaser buying a property to let is at least just as interested in its rental value as in its capital value.   A valuer valuing a property for a prospective lender for a buy-to-let purchaser would expect the purchaser if he is prudent to obtain his own advice.  A rental value can be a tricky and sensitive issue. </li>
<li>A valuer instructed by the prospective lender would appreciate that the lender is primarily interested in its capital value because a mortgagee’s principal concern is that any loan is properly secured.</li>
</ul>
<p>The Court of Appeal also considered how much Mr Scullion could claim in respect of the rental value.  Although this analysis did not assist Mr Scullion it will be of benefit to others who are entitled to claim against a valuer. </p>
<ul>
<li>Since Colleys had suggested that it would take a month to find a tenant, the first month of rent would not be allowed. </li>
<li>Whilst the flat was not let because of the unrealistic rent, then damages for that period could be awarded less the first month.  Once a tenant had been found at a lower price, then the recoverable loss would be the amount estimated by the rental valuation less the amount actually paid by the tenant. </li>
<li>Once the tenant left the property, Mr Scullion then made a decision to keep the property empty so as to try and sell it so there was a powerful case for saying that no damages would be attributed as he would have received no rental income whatever the valuation.  However, he may well have been entitled to some damages and so could claim the difference between what a correct valuation would have been and what it was valued at. </li>
</ul>
<p>This is a decision that recognises the realities of the buy-to-let market as compared to a purchaser of residential properties to live in.  It will be interesting to see whether this case will have an impact on purchasers of high end properties who may also be able to afford their own valuations.  It  provides a helpful way in which the rental loss could be determined and the question will be whether lenders will now be able to claim loss of rental value when pursing valuers.  Perhaps we have not heard the last of this case and it may be that this case will go to the Supreme Court.  Of course, this will not be of any comfort to Mr Scullions who as the Court of Appeal recognised was taken advantage of and misled by the sellers.</p>
<p><em> </em><em>Emmett Thomas Scullion v Bank of Scotland PLC</em> [2011] EWCA Civ 693</p>
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		<title>The impact of indemnity insurance on success fees and conditional fee agreements</title>
		<link>http://www.mablaw.com/2011/04/the-impact-of-indemnity-insurance-on-success-fees-and-conditional-fee-agreements/</link>
		<comments>http://www.mablaw.com/2011/04/the-impact-of-indemnity-insurance-on-success-fees-and-conditional-fee-agreements/#comments</comments>
		<pubDate>Mon, 04 Apr 2011 11:33:09 +0000</pubDate>
		<dc:creator>Jane Anderson</dc:creator>
				<category><![CDATA[Banking & Finance Litigation]]></category>
		<category><![CDATA[Litigation and Dispute Resolution]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[ccfa]]></category>
		<category><![CDATA[CFA]]></category>
		<category><![CDATA[Court of Appeal]]></category>
		<category><![CDATA[indemnity]]></category>
		<category><![CDATA[Insurance]]></category>
		<category><![CDATA[success fee]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=9175</guid>
		<description><![CDATA[Introduction  In the recent Court of Appeal case of Sousa –v- Waltham Forest London Borough Council [2011] EWCA Civ 194, the Court considered whether a claimant was entitled to recover a success fee under a conditional fee agreement with his legal advisers despite being fully indemnified under an insurance policy.  Conditional Fee Agreements  A conditional [...]]]></description>
			<content:encoded><![CDATA[<p><strong>Introduction</strong></p>
<p> In the recent Court of Appeal case of <a href="http://www.bailii.org/ew/cases/EWCA/Civ/2011/194.html">Sousa –v- Waltham Forest London Borough Council [2011] EWCA Civ 194</a>, the Court considered whether a claimant was entitled to recover a success fee under a conditional fee agreement with his legal advisers despite being fully indemnified under an insurance policy.</p>
<p> <strong>Conditional Fee Agreements</strong></p>
<p> A conditional fee agreement (“CFA”) is an agreement between a client and his solicitor whereby the solicitor agrees not to be paid unless they win the case.  Hence their more common name, ‘no win, no fee’.  The CFA usually incorporates a success fee, which is an uplift on the amount of costs the client would have paid had he engaged his solicitor on a usual retainer basis.</p>
<p> It is also possible to enter into a collective CFA (“CCFA”).  This is a CFA made between a law firm and a purchaser of legal services, such as a bank, trade union or company.  A CCFA provides for fees to be payable on a common ground relating to a number of cases in a similar class.</p>
<p> There is no longer a statutory reference to CCFAs as the <a href="http://www.legislation.gov.uk/uksi/2000/2988/contents/made">Collective Conditional Fee Agreements Regulations 2000 (SI 2000/2988)</a> were revoked on 1 November 2005.  This revocation was not retrospective so these regulations still apply to any cases brought under a CCFA that that pre-dates 1 November 2005.</p>
<p> The <a href="http://www.sra.org.uk/code-of-conduct.page">Solicitor’s Code of Conduct 2007</a> refers to CCFAs and hence they are still a valid form of CFA.  There is therefore, no reason for parties not to enter into CCFAs where such a agreement of payment is deemed acceptable.</p>
<p> <strong>Guidance on the recovery of costs</strong></p>
<p> A court has <a href="http://www.justice.gov.uk/civil/procrules_fin/contents/parts/part44.htm">certain parameters</a> it must give consideration to when making decisions about costs:</p>
<p> -         it must regard all the circumstances (CPR 44.3(4))</p>
<p>-         it must not allow unreasonably incurred costs or those which are unreasonable in amount to be assessed (CPR 44.4(1))</p>
<p>-         when assessing costs on the standard basis only costs proportionate to the matters under consideration will be allowed.  The court will resolve any argument over reasonableness or proportionality in favour of the paying party (CPR 44.4(2))</p>
<p>-         the court must consider whether there were any other methods of funding available when deciding if a CFA’s success fee was reasonable (section 11.8(1), Practice Direction 44.5 (Costs Practice Direction)</p>
<p> <strong>Background</strong></p>
<p>In the case of <a href="http://www.bailii.org/ew/cases/EWCA/Civ/2011/194.html">Sousa –v- Waltham Forest London Borough Council</a>, Sousa (“S”) incurred damage to his house as a result of the roots of a tree in the street.  S claimed on his own household insurance to repair the damage.</p>
<p>S’s insurance company brought a claim against Waltham Forest London Borough Council (“the Council”) as the trees that caused the damage were their responsibility.  S’s insurers instructed solicitors who acted for them under a CCFA with a success fee of 100%.</p>
<p>The claim was settled and the Council agreed to pay S’s costs on the standard basis.  Costs were agreed, save for whether the success fee was recoverable.</p>
<p>When conducting the assessment, the district judge decided that S was never at risk of having to pay costs, because he was covered by insurance, and therefore he refused to allow any success fee.</p>
<p>An appeal was allowed by Judge Behrens, he considered that the subrogation arrangement (that of the insurers to sue on S’s behalf) was irrelevant.</p>
<p> The Council appealed.  Their position was that S was indemnified for costs and in accordance with section <a href="http://www.justice.gov.uk/civil/procrules_fin/contents/practice_directions/pd_parts43-48.htm">11.8(c)</a> of the Costs Practice Direction, this fact should be taken into consideration.  S was to be in no different a position from someone who had before the event insurance – they would not be entitled to a success fee.</p>
<p>S’s insurers position was that the court should disregard the insurance as it was “res inter alios acta” (behind the curtain).</p>
<p><strong>Decision</strong></p>
<p>The appeal was dismissed.  Its position was that S was entitled to recover his costs, including the success fee.  S’s insurers had the same right to enter into a CCFA and recover a success fee as S would have done, notwithstanding the subrogation arrangement.</p>
<p>The decision surrounding the recoverability of the success fee centred on whether the costs had been unreasonably incurred, or were unreasonable in amount.  If the indemnity was ignored then there was no reason why S should not be able to enter into a CFS with a success fee.</p>
<p>However, as already stated, the court had to consider all the circumstances.  As a result the indemnity was relevant.</p>
<p>Bearing in mind the case was as a result of a subrogated arrangement; S had no option by to do whatever his insurers requested in order to pursue the claim.  S could not remove the CCFA arrangement that his insurers had in place as he was not in control of the proceedings. </p>
<p>The court held that it was reasonable for the insurers to enter into a CCFA.  The Council had also accepted this in accordance with the House of Lord’s earlier decision in <a href="http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd051020/camp.pdf">Campbell –v- MGN (No 2) [2005] UKHL 61</a>:</p>
<p>‘…the mere fact that a person is able to fund litigation without resorting to a conditional fee agreement does not make it unreasonable for him to do so.’</p>
<p>This decision stood, despite the later decision of the European Court of Human Rights (ECtHR) in <a href="http://www.bailii.org/eu/cases/ECHR/2011/66.html">MGN Ltd –v United Kingdom [2011] ECHR 66</a>, that the order for MGN to pay the success fee was disproportionate bearing in mind the aims of the government and <a href="http://www.hri.org/docs/ECHR50.html">Article 10 of the European Convention on Human Rights</a>.  The interference in this case was found to be part of a legitimate aim intended to widen the access to justice.</p>
<p>The Council made submissions to the Court that they should bear in mind the <a href="http://www.bailii.org/eu/cases/ECHR/2011/66.html">ECtHR</a> result even though Article 10 did not feature in the case in question.  Their submissions were rejected as the Court found that it would be illogical if the means of a CFA party were taken into account on a reasonableness question in an Article 10 case only.</p>
<p>The Council put forward a second argument that success fees amounted to a denial of justice and had an impact on the freedom of access to the court.  The Court however was not convinced by this argument either.</p>
<p><strong>Impact</strong></p>
<p>This decision will have obvious benefits to those who use CCFA’s. The decision also enforces the court’s belief that <a href="http://www.bailii.org/eu/cases/ECHR/2011/66.html">MGN –v- United Kingdom</a> has no immediate effect when it comes to the challenge to success fees.</p>
<p>The decision also demonstrates the court’s support for the <a href="http://www.judiciary.gov.uk/NR/rdonlyres/8EB9F3F3-9C4A-4139-8A93-56F09672EB6A/0/jacksonfinalreport140110.pdf">Jackson reforms</a>, and sanctioned <a href="http://www.judiciary.gov.uk/NR/rdonlyres/8EB9F3F3-9C4A-4139-8A93-56F09672EB6A/0/jacksonfinalreport140110.pdf">Jackson LJ’s</a> view that of the flaws in the current regime of recoverability, namely that any individual, rich or poor, human or corporate, may enter into a CFA, regardless of their means to fund litigation without it.</p>
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		<title>Foreseeable Losses From Negligent Solicitor&#8217;s Advice</title>
		<link>http://www.mablaw.com/2011/02/foreseeable-losses-from-negligent-solicitors-advice/</link>
		<comments>http://www.mablaw.com/2011/02/foreseeable-losses-from-negligent-solicitors-advice/#comments</comments>
		<pubDate>Wed, 23 Feb 2011 09:58:17 +0000</pubDate>
		<dc:creator>Jane Anderson</dc:creator>
				<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[foreseeable loss]]></category>
		<category><![CDATA[negligent advice]]></category>
		<category><![CDATA[restitution]]></category>
		<category><![CDATA[SAAMCO]]></category>
		<category><![CDATA[scope of duty]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=7546</guid>
		<description><![CDATA[Introduction  In the recent Court of Appeal case of Haugesunde Kommune and another –v- Depfa ACS Bank (2011) EWCA Civ 33, an appeal was allowed which overturned an order against Norwegian Solicitors to pay significant damages after they gave negligent advice. This case emphasises that solicitors’ liability for negligent advice will very much depend on [...]]]></description>
			<content:encoded><![CDATA[<p><strong>Introduction</strong></p>
<p><strong> </strong>In the recent Court of Appeal case of <span style="text-decoration: underline"><a href="http://www.bailii.org/ew/cases/EWCA/Civ/2011/33.html">Haugesunde Kommune and another –v- Depfa ACS Bank</a></span> (2011) EWCA Civ 33, an appeal was allowed which overturned an order against Norwegian Solicitors to pay significant damages after they gave negligent advice. This case emphasises that solicitors’ liability for negligent advice will very much depend on the scope of their duty.</p>
<p><strong> </strong><strong>The Usual Position</strong></p>
<p> In Professional Negligence cases, the principle applied in order to establish the existence of loss, as set out in <span style="text-decoration: underline"><a href="http://www.bailii.org/uk/cases/UKHL/1996/10.html">South Australia Asset Management –v- York Montague Limited (1996)</a></span> (“SAAMCO”), is that the court will compare the position the Claimant finds itself in having heeded the advice, with its position had there been no breach of duty.</p>
<p> In order to establish what losses are recoverable the first point is to define the scope of the duty for which the professional is responsible.  This is often a case of easier said than done.</p>
<p> The recent European case of <span style="text-decoration: underline">Haugesunde Kommune and another –v- Depfa ACS Bank (“the Bank”) </span>has highlighted the importance of this distinction.</p>
<p> <strong>Background</strong></p>
<p> In <span style="text-decoration: underline">Haugesunde Kommune</span>, the Bank took legal advice from Wikborg Rein and Co (“Wikborg”), a Norwegian firm of solicitors, regarding its proposed transaction to enter into Swaps Contracts with two Norwegian municipalities.  The Bank was to pay a lump sum to each municipality and would then be repaid over a period of time.  It required advice from Wikborg as to whether the municipalities had the legal power to enter into these contracts.</p>
<p> The Bank was advised that this transaction would not constitute “a loan” and that the municipalities did have authority to enter into them.</p>
<p> The Bank paid the sums.  The municipalities invested the money which sustained losses.  Shortly after the investments were made, the Norwegian Ministry of Defence published a decision that Swaps Contracts, such as these, did in fact constitute loans.</p>
<p> Following their losses the municipalities sought to establish they had no liability to the Bank under these contracts.  Part of their argument was that they did not have the power to enter into the contracts in the first place and as a consequence the contracts were void.  Not surprisingly, the Bank counterclaimed.  The Bank’s position was that either the contracts were valid or, in the alternative it made a claim of restitution for the advances.</p>
<p> Wikborg were joined into the action by the Bank, with a claim for the losses they suffered resulting from Wikborg’s negligent advice on the validity of the contracts.</p>
<p> The municipalities succeeding in showing the contracts were void, but were not successful regarding the Bank’s counterclaim for restitution.  Wikborg also failed to defend the claim for negligence against them but issues relating to quantum were left undecided.</p>
<p> The Bank’s position was that it had suffered a loss of the total sums paid to the municipalities at the time of payment.  The Bank argued that they were entitled to recover this total loss as a result of the negligent advice it had received, less any sums it recovered from the municipalities.</p>
<p> The court agreed, finding that the Bank would not have made the advances if it had received advice from Wikborg that there was a risk that the contracts were void and therefore there was no contractual relationship between the Bank and the municipalities.</p>
<p> Wikborg were ordered to pay millions in damages to the Bank. </p>
<p> <strong>Appeal</strong></p>
<p>Wikborg appealed against the decision, its argument being that the principles set out in <a href="http://www.bailii.org/uk/cases/UKHL/1996/10.html">SAAMCO</a> applied.  Wikborg contended they should only be responsible for the losses resulting from negligence regarding advice within the scope of its duty.  Wikborg contended that although its advice was incorrect regarding the ability of the municipalities to enter into the contract, and it was acknowledged that the Bank would not have entered into the contracts but for the advice given, they should not be responsible for the losses suffered because its advice was relied upon.  They should only be responsible for the consequences of the advice being wrong.</p>
<p> The consequences were that a contractual obligation to repay the advances in the future at a low rate of interest, as agreed with the municipalities, became an obligation in restitution to repay the advances immediately or to incur a higher interest rate.</p>
<p> <strong>Decision</strong></p>
<p> Rix LJ was of the opinion that Wikborg’s retainer was not a general one but they were asked to advise on a specific point regarding the legal standing of the municipalities to enter into the contracts.</p>
<p> Wikborg, as part of its advice, warned the Bank that they would be unable to execute a judgment against the municipalities.  The Bank was in the position therefore that it was making up its own mind on the creditworthiness of the municipalities.</p>
<p> Attention then turned to what extent the Bank’s losses fell within the scope of Wikborg’s duty.  If the losses were due to the contract being invalid, then that was within scope.  In this case though, the losses suffered were due to the bad investments made by the municipalities.  Without the bad investments the sums would have been repaid. </p>
<p> The losses would only have been within the scope of Wikborg’s duty if the municipalities had been prevented from repaying the sums back to the Bank as a result of their lack of legal power to enter into the contracts in the first place.</p>
<p> Rix LJ found that the Bank did acquire a right in restitution.  That right was acquired immediately the advances were made because there was no contractual remedy due to the invalidity of the contracts.</p>
<p> Wikborg were found not to be responsible for any loss the Bank suffered following the advances.  Even if the Bank suffered a total loss upon the transfer of sums, such loss was not within the scope of Wikborg’s duty.</p>
<p> Gross LJ arrived at the same conclusion, although through a different avenue.</p>
<p> Gross LJ simply held that the Bank could not recover from Wikborg loss for which Wikborg was not responsible.  Gross LJ’s position was to establish the proper scope of Wikborg’s liability.</p>
<p> There was, by Gross LJ’s reckoning, no evidence that the loss resulted from the invalidity of the contracts and hence the Bank was not entitled to a finding that its loss was attributable to Wikborg’s negligent advice.</p>
<p>  <strong>Conclusion</strong></p>
<p> The fact that the two judges did not agree on the reasons for reaching their conclusions illustrates how difficult it can be to apply to principles of the <a href="http://www.bailii.org/uk/cases/UKHL/1996/10.html">SAAMCO</a>  case.</p>
<p> It is important in all cases to remember that that it is only when the professional’s scope of duty extends as far as advising on whatever is the direct cause of loss that the professional, if negligent, can be held liable for that loss.</p>
<p>Or, in possibly simpler terms, it is a pre-requisite for the claimant to demonstrate that their loss has been suffered as a result of the negligent advice.</p>
<p> It cannot, after all, be reasonable for the professional to be liable for losses which would have been sustained even if the professional gave their client the correct advice.</p>
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		<title>Expert Witness Immunity – the end of the road?</title>
		<link>http://www.mablaw.com/2011/01/expert-witness-immunity-%e2%80%93-the-end-of-the-road/</link>
		<comments>http://www.mablaw.com/2011/01/expert-witness-immunity-%e2%80%93-the-end-of-the-road/#comments</comments>
		<pubDate>Fri, 14 Jan 2011 17:44:14 +0000</pubDate>
		<dc:creator>Justine Ash</dc:creator>
				<category><![CDATA[Litigation and Dispute Resolution]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Expert Witness Immunity; Professional Negiligence; Litigation; Stanton v Callaghan; Negligent Opinion;]]></category>
		<category><![CDATA[Experts]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=6849</guid>
		<description><![CDATA[The definition of an expert witness is a witness who by virtue of their education, training, knowledge and professional expertise is more specialised in a particular subject beyond that of the average person, sufficient that others my officially and legally rely upon their knowledge concerning an evidence or fact, as long as it remains within [...]]]></description>
			<content:encoded><![CDATA[<p>The definition of an expert witness is a witness who by virtue of their education, training, knowledge and professional expertise is more specialised in a particular subject beyond that of the average person, sufficient that others my officially and legally rely upon their knowledge concerning an evidence or fact, as long as it remains within the scope of the expert’s expertise.</p>
<p>Traditionally, an expert witness has been protected in court proceedings by expert witness immunity.  That is to say, because of the public interest in an expert witness being able to give truthful and fair evidence in court, without fear of being sued by a party whose case is lost, an expert has, up until now, been able to plead witness immunity from professional negligence suits.  The leading authority in expert witness immunity is the case of <span style="text-decoration: underline"><a href="http://www.bailii.org/ew/cases/EWCA/Civ/1998/1176.html">Stanton v Callaghan</a></span> (1998 1 Q.B 75).</p>
<p>However, the case of <span style="text-decoration: underline"><a href="http://www.bailii.org/ew/cases/EWHC/QB/2010/61.html">Paul Wynne Jones v Sue Kaney</a> </span>[2010] EWHC 61 (QB) threatens to do away with expert witness immunity. </p>
<p><strong><span style="text-decoration: underline"><a href="http://www.bailii.org/ew/cases/EWHC/QB/2010/61.html">Paul Wynne Jones v Sue Kaney</a> </span></strong></p>
<p>In  <span style="text-decoration: underline">Wynne Jones v Kaney</span>, the Claimant, Mr Wynne Jones, alleged that Ms Kaney provided negligent opinion when she acted as an expert witness in the capacity as Mr Jones’ psychiatric expert in a previous personal injury claim arising out of a road traffic accident.  Ms Kaney applied to have Mr Wynn Jones’ claim struck out on the grounds that she, as an expert witness, was able to rely on the protection of immunity  from suit.</p>
<p> Mr Wynne Jones argued that the case of <span style="text-decoration: underline">Stanton v Callaghan</span> was no longer good law for the two following reasons:-</p>
<p> 1. that expert witness immunity can no longer survive given the decision taken by the House of Lords’ in 2000  in <span style="text-decoration: underline"><a href="http://www.publications.parliament.uk/pa/ld199900/ldjudgmt/jd000720/hall-1.htm">Arthur Hall v Simons</a></span> [2000 3 WLR 543) in which a barrister’s immunity from suit was abolished; and</p>
<p> 2. the idea that an expert witness is allowed to rely on witness immunity is inconsistent with the right to a fair trial as enshrined by <a href="http://www.hri.org/docs/ECHR50.html">Article 6</a> of the European Convention on Human Rights. </p>
<p> Article 6 states: <em>“everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”.</em></p>
<p>At first instance, Ms Kaney&#8217;s argument succeeded.  Mr Justice Blake held that although the case of <span style="text-decoration: underline">Stanton</span> was binding on both him and the Court of Appeal,  he noted that in the subsequent cases after Stanton, the policy basis for expert witness immunity had been narrowed or undermined.  He noted:</p>
<p><em>“there is a substantial likelihood that on re-examination by a superior court, with the power to do so, it will emerge that the public policy justification for the (expert witness immunity) rule cannot support it.” </em></p>
<p>Mr Justice Blake granted Mr Wynne Jones a leapfrog certificate enabling him to apply for permission to appeal the question directly to the Supreme Court thereby avoiding the need for the appeal to be heard first by the Court of Appeal.</p>
<p><strong>Current Position</strong></p>
<p>The Supreme Court is imminently to decide whether an expert witness should be granted immunity from professional negligence suits.  If the Supreme Court grants permission, there is a risk that expert witness immunity might be abolished altogether.  At the very least, it could be severely curtailed. </p>
<p>This would mean that experts would then themselves be exposed to professional negligence claims</p>
<p>It is not yet clear which way the Supreme Court will go and whether it will take the opportunity to revisit the case law and public policy considerations behind expert witness immunity.  Should the Supreme Court decide to abolish expert witness immunity, then professional experts witnesses must look out.  A more tempered approach by the Supreme Court, however, would be to reduce the application of expert witness immunity, whereby a negligent or reckless expert could indeed find himself being sued for breaching the duty of case owed to his client.  Either way, professional indemnity insurance premiums would rise and it is also possible that we may see a decline in the number of experts putting themselves forward to act as experts in litigation where there is an overt risk that the expert could himself find that he could be sued for giving his opinion or conduct.</p>
<p><strong>Please watch this space for an update.</strong></p>
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		<title>Valuer’s liability in respect of its valuation of the rental income</title>
		<link>http://www.mablaw.com/2010/10/valuers-liability-in-respect-of/</link>
		<comments>http://www.mablaw.com/2010/10/valuers-liability-in-respect-of/#comments</comments>
		<pubDate>Tue, 26 Oct 2010 15:07:20 +0000</pubDate>
		<dc:creator>Jonathan Sachs</dc:creator>
				<category><![CDATA[Banking & Finance Litigation]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Upload-Finance]]></category>
		<category><![CDATA[appeal]]></category>
		<category><![CDATA[banking]]></category>
		<category><![CDATA[banks]]></category>
		<category><![CDATA[capital value]]></category>
		<category><![CDATA[contributory negligence]]></category>
		<category><![CDATA[negligence]]></category>
		<category><![CDATA[rental value]]></category>
		<category><![CDATA[valuer]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=5614</guid>
		<description><![CDATA[Is a valuer liable for any losses incurred in respect of its rental valuation as well as its valuation of the capital value of a property? In March, this year the court held that a valuer had breached duties owed to a buy-to-let investor where the valuation report had been provided to the mortgage lender [...]]]></description>
			<content:encoded><![CDATA[<p>Is a valuer liable for any losses incurred in respect of its rental valuation as well as its valuation of the capital value of a property?</p>
<p>In March, this year the court held that a valuer had breached duties owed to a buy-to-let investor where the valuation report had been provided to the mortgage lender <em>Scullion v Bank of Scotland PLC</em> [2010] EWHC 572.  The Judge found that the valuers had acted negligently both in over-stating the capital value of the property and the expected rental value.  The court has now ruled in the same case as to what damages could be claimed.</p>
<p>Applying the principles set out in the House of Lords case of SAAMCO, the court held that Mr Scullion, the buy-to-let investor, was only entitled to recover the difference between the price paid for the property and the true value of the property.  In this case because Mr Scullion had ended up paying £200 less than the true valuation, he had suffered no loss.</p>
<p>More interestingly was the court’s assessment of the damages owed in respect of the overstatement of the rental value.  The court noted that Colleys who were the valuers, knew that Mr Scullion was a buy-to-let purchaser and so should have appreciated that the statement of rental value was critical as Mr Scullion needed to ensure that when he committed himself to make periodic payments under the mortgage and to pay the normal outgoings, that he would receive sufficient rent to discharge those liabilities. </p>
<p>Counsel for the valuers argued that the scope of the duty owed to Mr Scullion could not exceed the scope of the duty owed to the mortgage lender and the rental value was merely a further piece of information relevant to the decision whether to lend rather than a piece of information upon which the lender had placed, or was entitled to place any independent reliance.</p>
<p>The Judge disagreed.  First, he took the view that the scope of the duty owed to Mr Scullion could be wider than that owed to the lender.  He explained that the purpose for which reliance may be placed on the valuation may differ between lender and the borrower and that there may be a contractual limitation which will not apply to the borrower or which was not communicated to the borrower. </p>
<p>Secondly, although the capital value was of great importance, “it was also very important to both lender and borrower in this buy-to-let transaction that the rental which could be achieved by letting the flat should exceed the mortgage payments by a specified margin, and that Colleys knew or ought to have appreciated this.”</p>
<p>In calculating the damages, the court excluded any items which were relevant to the market value of the property such as legal fees for the purchase of the property, stamp duty and carpets to furnish the property.  Mr Scullion was entitled to recover damages to compensate him for losses caused by the fact that he was unable to let the property to cover his mortgage payments.  On a year to year basis, the court calculated his mortgage payments and then deducted the rental obtained and added his costs incurred due to the cash flow difficulties he had encountered.</p>
<p>The valuer asserted that the claim for damages should be reduced because of contributory negligence.  However, the claim of contributory negligence failed because Mr Scullion did not do anything to cause or contribute to these losses.  The anticipated rental value was entirely of the valuer’s own making. </p>
<p>It is believed that this may be the first case where a court has held a valuer liable in respect of its valuation of the rent to be obtained on a property.  It was significant in this case that the valuers knew that this was a buy-to-let mortgage and therefore the valuers knew or ought to have appreciated that the rental to be achieved was important to both the lender and the borrower.  There may now be the possibility that other cases can be brought where there has been a negligent overvaluation of the rent, where the valuer is aware or ought to be aware of the importance of its rental valuation and where the rental value has been relied on. </p>
<p>The question remains as to whether such claims will be open to lenders as well as borrower landlords.  The Judge noted that the rental valuation was of importance to the lender and the borrower.  If it can be established that a lender had relied on the rental valuation when agreeing to lend and it had placed independent reliance on this valuation rather than it being merely a factor in deciding to whether the property was adequate security then this may give rise to potential claims by lenders.  Not surprisingly, however, the Judge gave permission to appeal on the legal issues of (1) whether the valuer owed a duty of care in tort to Mr Scullion at all; and (2) whether the scope of that duty extended to the losses in respect of the defective rental valuation.  No doubt how the Court of Appeal approach these two questions, will be followed with interest by all concerned.</p>
<p><em>Scullion v Bank of Scotland PLC</em> [2010] EWHC 2253</p>
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		<title>Boundaries &#8211; Financial Ruin v Compromise?</title>
		<link>http://www.mablaw.com/2010/06/boundaries-financial-ruin-v-compromise/</link>
		<comments>http://www.mablaw.com/2010/06/boundaries-financial-ruin-v-compromise/#comments</comments>
		<pubDate>Tue, 01 Jun 2010 10:21:17 +0000</pubDate>
		<dc:creator>Faiza Ahmad</dc:creator>
				<category><![CDATA[Buying a New Home]]></category>
		<category><![CDATA[Buying a new home]]></category>
		<category><![CDATA[Estate Agents]]></category>
		<category><![CDATA[Helping you personally]]></category>
		<category><![CDATA[Housing Trusts]]></category>
		<category><![CDATA[Planners]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Property Litigation]]></category>
		<category><![CDATA[Residential Developers]]></category>
		<category><![CDATA[Schools]]></category>
		<category><![CDATA[Sectors]]></category>
		<category><![CDATA[Selling your Home]]></category>
		<category><![CDATA[Selling your home]]></category>
		<category><![CDATA[Services]]></category>
		<category><![CDATA[Solicitors]]></category>
		<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[Upload-RealEstate]]></category>
		<category><![CDATA[boundaries]]></category>
		<category><![CDATA[boundary disputes]]></category>
		<category><![CDATA[garden disputes]]></category>
		<category><![CDATA[neighbour disputes]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=3672</guid>
		<description><![CDATA[£30,000, £40,000, £75,000, £100,000 – significant amounts of money? Yes and these are all examples of the legal costs people across the country have recently spent on fighting boundary disputes with their neighbours. Would you spend £60,000 fighting your neighbour in Court over the colour they chose to paint their garden railings? Neighbour disputes can quickly [...]]]></description>
			<content:encoded><![CDATA[<p><strong><span>£30,000, £40,000, £75,000, £100,000</span></strong><span> – significant amounts of money? Yes and these are all examples of the legal costs people across the country have recently spent on fighting boundary disputes with their neighbours. Would you spend £60,000 fighting your neighbour in Court over the colour they chose to paint their garden railings? Neighbour disputes can quickly escalate. Such a case ended up in the Court of Appeal last month and left one party a reported £60,000 poorer because they wanted garden railings to painted blue rather than black.  A simple search on the internet reveals the reality of neighbours, who once lived in harmony, fighting tooth and nail, reaching the Court of Appeal , fighting over small strips of land which in monetary terms are often worth very little. Even more alarmingly, there was a report last month that Police are investigating a fatal stabbing which it is claimed was caused by a dispute between neighbours over a fence.</span></p>
<p><span>Legal costs in dealing with and fighting boundary disputes are notoriously out of line with the monetary value of the issues in dispute and the effect on neighbour relations and stress high. &#8220;Principles&#8221; take over and costs mount to £1000s before you know it.  The alternative  is for the parties to try to resolve matters by agreeing terms with eachother on the best terms possible for both parties. There might be no winner and no loser, but a solution which both parties can live with without incurring huge costs and without further souring relations.</span></p>
<p><span>Alternative dispute resolution can help at the outset once solicitors are involved. Parties coming together on site with a mediator and solicitors can often focus the parties&#8217; minds on the reality of the situation. On site resolution seems the most sensible and cost effective method of dealing with such a dispute rather than lengthy correspondence, compliance with Court procedure, the associated costs and growing animosity.  A day long mediation will be money well spent  if not to resolve matters entirely then to at least narrow down the issues remaining in dispute.  If matters cannot be resolved at such a meeting, then the parties can decide whether or not they wish to litigate and proceed with litigation but should be fully aware of the potential costs liability they may incur. This is not to say neighbours who wish to fight a boundary dispute should not, nor does it trivialise the importance of issues relating to someone&#8217;s property. It can be a commercial approach to dealing with what is otherwise an expensive and emotionally exhausting experience.</span></p>
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		<title>Surge in negligence claims against estate agents and surveyors</title>
		<link>http://www.mablaw.com/2010/05/negligence-claims-estate-agents-surveyors/</link>
		<comments>http://www.mablaw.com/2010/05/negligence-claims-estate-agents-surveyors/#comments</comments>
		<pubDate>Thu, 20 May 2010 15:15:06 +0000</pubDate>
		<dc:creator>Richard John</dc:creator>
				<category><![CDATA[Buying a New Home]]></category>
		<category><![CDATA[Commercial Developers]]></category>
		<category><![CDATA[Commercial Property]]></category>
		<category><![CDATA[Estate Agents]]></category>
		<category><![CDATA[Mortgage Providers]]></category>
		<category><![CDATA[Mortgage Repossession]]></category>
		<category><![CDATA[News]]></category>
		<category><![CDATA[Plot Sales]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Residential Developers]]></category>
		<category><![CDATA[Upload-RealEstate]]></category>
		<category><![CDATA[banks]]></category>
		<category><![CDATA[building societies]]></category>
		<category><![CDATA[Commercial Developer]]></category>
		<category><![CDATA[Estate Agent]]></category>
		<category><![CDATA[Mortgage repossession]]></category>
		<category><![CDATA[Residential Developer]]></category>
		<category><![CDATA[residential property]]></category>
		<category><![CDATA[surveyors]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=3582</guid>
		<description><![CDATA[An investigation carried out by a London law firm has revealed a huge rise in the number of professional negligence claims brought over valuations of residential and commercial properties in 2009. The investigation found that there were 25 High Court cases in 2009, compared to only one case in the previous five years. Claims were [...]]]></description>
			<content:encoded><![CDATA[<p>An investigation carried out by a London law firm has revealed a huge rise in the number of professional negligence claims brought over valuations of residential and commercial properties in 2009.</p>
<p>The investigation found that there were 25 High Court cases in 2009, compared to only one case in the previous five years. Claims were brought against valuers for many reasons, including:</p>
<ul>
<li>negligently overvaluing commercial premises that dropped in value because tenants became insolvent during the recession;</li>
<li>negligently overvaluing residential property development sites which dropped in value because of falling house prices and a big increase in similar new build properties built during the housing boom;</li>
<li>negligently underestimating the cost of putting a development project on hold; and</li>
<li>negligently valuing a property that was subject to a fraud.</li>
</ul>
<p>Banks and building societies have launched legal action against surveyors, claiming that they had overvalued properties that they had repossessed and been forced to sell for much lower sums. However, surveyors have hit back at these claims, stating that many of these properties had securitised loans against them and that lenders, rather than valuers, were to blame for the upward pressure on prices.</p>
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		<title>Buxton v Mills-Owens &#8211; one for the lawyers</title>
		<link>http://www.mablaw.com/2010/03/buxton-v-mills-owens-one-for-the-lawyers/</link>
		<comments>http://www.mablaw.com/2010/03/buxton-v-mills-owens-one-for-the-lawyers/#comments</comments>
		<pubDate>Fri, 12 Mar 2010 17:31:52 +0000</pubDate>
		<dc:creator>Amanda Melton</dc:creator>
				<category><![CDATA[News]]></category>
		<category><![CDATA[Professional Negligence]]></category>
		<category><![CDATA[Solicitors]]></category>
		<category><![CDATA[Court of Appeal]]></category>
		<category><![CDATA[Lord Dyson]]></category>
		<category><![CDATA[Solicitors Code of Conduct]]></category>
		<category><![CDATA[solicitors retainer]]></category>

		<guid isPermaLink="false">http://www.mablaw.com/?p=2665</guid>
		<description><![CDATA[Ever been forced to argue an unrealistic case (&#8220;doomed to disater&#8221; or &#8220;bound to fail&#8221;) to conclusion by a client who seems to have lost the plot?  An article in the Law Society&#8217;s Gazette (3 March 2010, Jonathan Rayner) reminds us that last month the Court of Appeal concluded that in such circumstances solicitors could decline to [...]]]></description>
			<content:encoded><![CDATA[<p>Ever been forced to argue an unrealistic case (&#8220;doomed to disater&#8221; or &#8220;bound to fail&#8221;) to conclusion by a client who seems to have lost the plot?  An article in the Law Society&#8217;s Gazette (3 March 2010, Jonathan Rayner) reminds us that last month the Court of Appeal concluded that in such circumstances solicitors could decline to act and still be paid as such conduct on the part of a client constituted reasonable ground for refusing to act further for the client, a ground to terminate the contract for legal services at common law, echoed in rule 2.01(2) of the Solicitors Code of Conduct 2007. </p>
<p>In reaching this conclusion in an otherwise dry case concerning planning law, Dyson J emphasised that &#8220;solicitors should not lightly be able to terminate their retainers, leaving their clients with the task of finding fresh solicitors to complete the job&#8221; but decided that the solicitor&#8217;s right must extend beyond the case &#8220;..in which he is instructed to do something improper.&#8221;</p>
<p>Lord Dyson went on to say, in words likely to cheer the reasonable advocate (is there such a person?), &#8220;In my judgment, if an advocate considers that a point is properly arguable, he should argue it without reservation. If he does not consider it to be properly arguable, he should refuse to argue it.&#8221;  How refreshing.</p>
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