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High Court rules in favour of Barnet outsourcing

Photo of Barnet the Guinea Pig for Your Expert Witness storyOn 29 April the High Court ruled that a London council could proceed with its plan to outsource a number of its services to private companies – including Capita.

Lord Justice Underhill dismissed an application for judicial review brought by a disabled resident. The judge ruled that the application was out of time; however he did also rule on the substantive issues. One of the grounds claimed was that the council had failed to carry out an impact assessment under the Equality Act 2010.

Lord Underhill said: “The judgment as to whether the provisions of the contract adequately address the interests of groups with a protected characteristic is for the council, and not the court, to make; and its assessment could only be challenged if it fell outside the wide discretion which it enjoys.”

Last Updated on Monday, 29 April 2013 17:13

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Court rules against public funding of expert report in a family case

Experts in family cases must be especially careful to ensure their fees will be paid before accepting instructions. The funding of expert witnesses in family cases reached a stalemate this week after the High Court ruled that the Legal Aid Agency (LAA) - formerly the Legal Services Commission - was not obliged to cover the full cost of an expert witness.  After intervening in the case, the Law Society reacted with disappointment at the ruling. The LSC is not normally obliged to fully fund the cost of an expert witness where the child is legally aided and the parents are unable to afford the costs.

Law Society president Lucy Scott-Montcrieff said: "The LSC's position simply results in deadlock. The court has first to decide that an expert report is necessary, not just desirable, to help it decide a child's future, but unless someone is able to pay - in this case the legal aid budget - there cannot be a report. The court's ruling does not address that impasse, and for that reason it is disappointing for those children who find themselves in the family court."

Following the family legal aid changes implemented last week, more cases will appear where children alone are legally aided, said Scott-Montcrieff. The High Court judgment in R (JG) v The Legal Services Commission followed the refusal of the LSC to pay more than one third of an expert's fees.  The LSC's decision was based on section 22 (4) of the Access to Justice Act, which states that costs cannot be awarded against one party simply because they benefit from legal aid. "Reports required from the court for the child's benefit should be paid for by the legal aid budget where the parents are unable to contribute: it should not be enough to argue, as the LSC did, that the parents also benefit from a report."

Experts should ensure their terms and conditions cover the possibility of non-payment by the LAA and there is still recourse to the instructing solicitors.

Last Updated on Thursday, 11 April 2013 11:50

Children face uncertain future following High Court decision, Law Society warns

Image of Blind Justice for Your Expert witness storyThe Law Society has warned that children caught up in family law cases will face "alarming uncertainty about their future" because of a stalemate over the funding of expert witnesses in such cases.

The High Court ruled on 10 April that the Legal Aid Agency – formerly the Legal Services Commission (LSC) – is not normally obliged to fully fund the cost of an expert witness report ordered by a judge in the family court, where only the child is legally aided and the parents are unable to afford the costs of a report.

The judgment in the case of the R (JG) v The Legal Services Commission followed the LSC's refusal to pay more than one-third of an expert's fees in a case in which the County Court had previously determined that the parents were not able to pay the other two-thirds. The LSC's decision was based on section 22 (4) of the Access to Justice Act which states that costs cannot be awarded against one party simply because they benefit from legal aid. The Law Society, which has expressed disappointment at the decision, had intervened in the case to ensure that the court was aware of the difficulties that the LSC's decision was likely to cause.

Last Updated on Wednesday, 10 April 2013 15:56

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Daejan decision offers good news and bad for landlords

On 6 March the Supreme Court issued its eagerly-awaited decision in the case of Daejan Investments Ltd vs Benson, concerning the rights of leaseholders to be consulted over the cost of works to their buildings.

Daejan Investments Limited is the landlord of a block of shops with flats over in Muswell Hill in London. The case revolved around the fact that the company had failed to comply with the consultation requirements set out in the Landlord and Tenant Act 1985 for work carried out on the five flats in Queens Mansions.

The Act states that landlords must 'consult' with their tenants otherwise face the possibility of not being paid the full cost of works. The original decisions in the Leasehold Valuation Tribunal and Court of Appeal went in favour of the tenants (Benson and others), preventing the landlord from recovering over £200,000 in costs. The landmark decision by the Supreme Court has overturned that, albeit by a majority of three to two.

David Barrett, an associate and property dispute resolution expert at leading national law firm Thomas Eggar LLP, commented: “Landlords will be mightily relieved by the long awaited decision of the Supreme Court handed down. By a majority of three to two, the Supreme Court has overruled the decision of the Court of Appeal, Upper Tribunal, and Leasehold Valuation Tribunal (LVT).

“As a result of the decision, the Supreme Court has widened the discretion of the LVT to grant a landlord dispensation from the consultation requirements which relate to the costs of ‘qualifying works’ payable through service charges.”

In its landlord and tenant blog, Painsmith Solicitors (blog.painsmith.co.uk) said: “The Court has now ruled that, whilst agreeing with the Court of Appeal that the effect on a landlord was not relevant, it was pertinent to take account of the prejudice which any leaseholder may suffer. The Court made clear that the consultation requirements are part of the broader statutory regulation of service charges and ensure that leaseholders do not pay for inappropriate works or pay unreasonable amounts. This is different from transparency per se.”

Dissenting from the judgement, however, Lord Wilson stated: “Lord Neuberger’s conclusion…that the gravity of the landlord’s noncompliance with the Requirements is relevant to dispensation not of itself but only insofar as it causes financial prejudice to the tenant seems to me to subvert Parliament’s intention.”

David Barrett continued: “Whilst tenant advisory groups may feel that landlords will have carte blanche to ignore the statutory procedures, the detailed judgment, delivered by Lord Neuberger, takes a characteristically considered approach to the intention behind the procedures and seeks to clarify the discretionary powers open to the LVT when dealing with such applications.”

Painsmiths agreed: “In practice it seems that dispensation will remain very fact specific. Landlords would in our opinion be foolhardy to think they can simply flout the rules and then subsequently make an application for dispensation. That being said where there is a breach the well advised landlord will be looking to make an application at the earliest opportunity and to consider what reasonable conditions they should offer.”

A more practical spin on the story was offered by leasehold advisor Bernie Wales, who pointed out that the whole process could have been avoided had Daejan complied with the requirement to consult in the first place.

“Whilst this is an obvious disappointment for the leaseholders, who have to pay £46,000 each for major works, the Daejan v Benson case goes to show that not complying with Section 20 consultation procedures can cost a landlord dearly. Daejan can afford £50,000 plus their own costs, but it is a complete waste of money (and 7 or 8 years of legal argument) and could have been avoided.”

Last Updated on Tuesday, 02 April 2013 13:40

Investment manager argues for fall in compensation discount rate, rather than a rise

Picture of Katie Wilson for Your Expert Witness storyOn 12 February Justice Minister Helen Grant has this week stated that initial evidence from consultation period on the discount rate used to calculate deductions from compensation awards may support a rise in the rate.

However, Katie Wilson, advice policy manager at financial advisors Towry (pictured), has called on the Government to reduce the discount rate, to ensure catastrophically injured claimants are adequately compensated for their financial losses.

She explained: "The Government's second consultation period into discount rates...which will address the legal framework for setting the rate, opened this week and its introductory paragraphs include the statement, 'The main criticism of the present law regarding the setting of the discount rate seems to be that the types of investments used as a basis for setting the discount rate are too cautious. Their rates of return are therefore too low. A less risk averse set of investments would, it is argued, be a more realistic reflection of the way that claimants actually invest and a better basis on which to set the discount rate.'

Last Updated on Monday, 18 February 2013 18:09

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