Author: Whitestone Chambers

New aviation insolvency rules suggested in wake of Monarch collapse

In the early hours of the morning on 2 October 2017, Monarch Airlines flight ZB3785 from Tel Aviv to Manchester touched down. It was to be the Airlines’ last flight, just under 50 years since its first, when its Bristol 175 Britannia 300 turboprop landed in Madrid.
The collapse of the company resulted in the largest ever peacetime repatriation exercise, during which the Government and the Civil Aviation Authority, (the “CAA”), brought 110,000 stranded passengers back to the UK, running 700 flights over a two-week period. Commenting on the operation, Chris Grayling, Secretary of State for Transport, said that “[t]he CAA has essentially set up one of the UK’s largest airlines to conduct it”.
The Government has wasted no time in suggesting that the time has come to revisit the rules governing insolvency in the aviation sector. This article discusses these possible reforms.

The collapse of Monarch
Monarch Airlines was formed on 5 June 1967, as a subsidiary of Globus Getaway Holdings, being funded largely by the Mantegazza family. It expanded steadily until the 2000s, during which the company’s disappointing turnover forced the board to reconfigure many of the company’s operations. Despite these efforts, a pre-tax loss of £32.3 million was announced in the financial year ending in 2009.
Although reporting a modest profit in 2010, the company lost £45 million in the year ending October 2011. After a failed £75 million rescue package in 2011, the airline was bought for the nominal sum of £1 in 2014 by private equity firm Greybull Capital.
A particular concern prior to the takeover was the company’s pension scheme, which was reportedly carrying a deficit of some £158 million. As part of the takeover, the pension scheme was separated from the company under an agreement with the Pension Protection Fund, (the “PPF”), which was approved by the Pensions Regulator. Under the terms of the agreement, the former owners made a £30 million mitigation payment into the company and demonstrated that the company’s other creditors had made “significant compromises” on their claims. Greybull Capital gave the PPF a 10% equity stake in the restructured company as well as a £7.5 million secured loan note,[1] allowing the PPF to gain from any turnaround in the company’s fortunes.
Notwithstanding these efforts, reports emerged in September 2017 that the company was facing difficulties with its CAA Air Travel Organiser’s Licence, (“ATOL”), owing to severe financial difficulties. The airline had faced similar problems the year before, but managed to renew its licence following a quick cash injection from shareholders. Without its ATOL, the airline would have been unable to sell package holidays, rending many of its operations defunct.
On 30 September 2017, the CAA extended Monarch’s licence, leaving it with 24 hours to settle its financial affairs. On 1 October, however, the airlines’ late night flights to Ibiza were cancelled at the point of boarding as the deadline for its licence extension loomed. At 4:00 BST the following morning, the CAA confirmed that Monarch Airlines had ceased all operations and had entered administration, leaving 110,000 passengers overseas and over 300,000 future bookings cancelled.

The insolvency rules
On 3 October 2017, the company’s Chief Executive, Andrew Swaffield, publicly blamed the applicable insolvency rules for the company’s collapse. He explained that there was a detailed rescue plan in place, under which the airline was to sell its short-haul business and switch to long-haul flights using a fleet of new Boeing 737 Maxs. The new model’s fuel efficiency would have given the company a clear cost advantage over competitors.
However, the grounding of the airline by the CAA apparently made the search for an appropriate buyer impossible.
He told BBC Radio 4:
“The UK’s insolvency framework doesn’t allow airlines to continue flying, unlike in Germany or Italy, where we see both Air Berlin and Alitalia continuing in administration . . . We couldn’t figure out a way of reducing those losses significantly, either by selling the short-haul airline or by improving it”.
The suggestion seems to be that the company could have survived were it not for the immediate suspension of operations. The comments have resulted in speculation as to the appropriateness of the UK’s insolvency rules in the aviation sector.

Suggested reforms
On 9 October, Chris Grayling made a statement on the collapse of Monarch to the House of Commons. He said:
“Of course, right now our efforts are rightly focused on getting employees into new jobs and getting passengers home. After that, our effort will turn to working through any reforms necessary to ensure that passengers do not find themselves in this position again.
“We need to look at all the options–not just ATOL, but whether it is possible to enable airlines to wind down in an orderly manner and look after their customers themselves, without the need for the government to step in. We will be putting a lot of effort into that in the months ahead”.[2]
Exactly how the Government foresees enabling airlines to “wind down in an orderly manner and look after their customers themselves” remains to be seen. It seems that the policy behind any reform, however, will be to allow airlines to continue trading as long as possible and to avoid collapse as far as possible. This may mean more relaxed ATOL licensing requirements, or a grace period during which companies can trade, and hopefully stabilise, before entering administration.
Although no concrete steps have yet been taken, the preliminary comments on suggested reform have been welcomed by industry experts.
Following the statement to the House of Commons, Adrian Hyde, President of the Association of Business Recovery Professionals, (“R3″), commented that:
“The transport secretary’s interest in airline insolvency rules is welcome. The air industry is one of a number of parts of the economy where sector-specific rules on insolvency can make orderly wind-downs or business rescue tricky. Key licences can often be withheld from insolvent companies, for example. More structured wind downs could help improve outcomes for employees, creditors, and customers.
“Although the thinking behind some of the rules in various sectors is understandable, the rules can sometimes make rescue all but impossible–leading to avoidable job losses or creditors being left out of pocket–or can significantly alter the way the insolvency is handled. R3 would welcome the opportunity to work with the government and regulators to introduce constructive and positive reforms, as they have in other specific sectors”.

Watch this space
Whether or not “positive reforms” are made, Mr Grayling’s comments arguably commit the Government to a reconsideration of the insolvency framework applicable to the aviation sector. Following the controversies surrounding the Government bailout of the banks following the 2008 financial crisis, reform to the insolvency rules that would allow companies to cease trading in stages, mitigating losses and encouraging rescue, seems a positive and workable policy.
The collapse of the company also raises questions following the involvement of the PPF. On 9 October, Frank Field, Chair of the Work and Pensions Committee, wrote to Alan Rubenstein, Chief Executive of the PPF, asking whether the Fund has received any payments from Monarch in respect of the secured loan note and where it ranks in order of creditor preference.[3]
Commenting on the letter, Mr Field stated:
“How can it be that once again, mega rich individuals could walk away from a collapsed company with a bumper profit while ordinary people pick up the bill? This massively supports the case for the law to change, to robustly protect pension schemes against owners seeking to line their pockets while avoiding their responsibilities, in line with our recommendations”.

© 2017 Chambers of Lawrence Power

[1] A secured note is a form of loan that is backed by the borrower’s assets. In the event of default by the borrower, the assets can be sold as collateral to repay the loan.
[2] https://hansard.parliament.uk/commons/2017-10-09/debates/D27444A9-86D6-4E2B-A675-8D7A1DD15FF8/MonarchAirlines.
[3] http://www.parliament.uk/documents/commons-committees/work-and-pensions/Correspondence/Letter-from-the-Chair-to-CEO-of-The-Pension-Protection-Fund-relating-to-Monarch-Airlines-retirement-benefits-plan-9-October-2017.pdf.

Government begins crackdown on fraudulent holiday sickness claims following landmark private prosecution

Background

In June 2015 and July 2016, Paul Roberts, Deborah Briton and their two children visited the ever-popular holiday destination of Mallorca, the largest of the Balearic Islands.

Upon return to the UK after their 2015 holiday, Ms Briton posted on her Facebook account:
“Safely home after two weeks of sun, laughter, fun and tears. Met up with all our lovely holiday friends who made our holiday fab”.

She similarly posted after the 2016 holiday: “Back home after a fantastic holiday, my favourite so far”.

Notwithstanding their evident enjoyment of their holidays, the couple instructed solicitors in August 2016 and claimed against the hotel for £20,000 compensation after gastroenteritis, (also known as “Spanish tummy”), allegedly ruined their holidays.

The letter before claim stated that: “Our client’s holiday was ruined due to their symptoms as they were ill for the entire remainder of the trip. They were unable to enjoy the holiday”.

Upon discovery of Ms Briton’s clearly inconsistent Facebook posts and witness accounts of the family’s enjoyment of their holidays from hotel staff, tour operator Thomas Cook commenced a landmark private prosecution against the couple.

The prosecution follows a 500% increase in fraudulent holiday food claims since 2013, which led Foreign Secretary Boris Johnson to report in June 2017 that British holidaymakers’ digestive systems have “become the most delicate in the world”.

How to bring a private prosecution

Thomas Cook was able to bring a private prosecution pursuant to section 6(1) of the Prosecution of Offences Act 1985, which provides that any individual or organisation can commence criminal proceedings.

Although the vast majority of criminal proceedings are commenced by the Crown Prosecution Service, (the “CPS”), private prosecutions are a useful, albeit often costly, mechanism for the victims of crimes that the CPS do not prosecute. This is particularly important in times of austerity, during which state prosecution services may not have sufficient resources to prosecute successfully particular crimes.

For example, the Association of British Insurers, (the “ABI”), estimate that, in 2016, insurers detected 125,000 fraudulent insurance claims worth £1.3 billion and that a similar amount of fraud goes undetected each year.[1] Notwithstanding this, it seems that the CPS does not have the resources to dedicate sufficient time to cracking down on the problem of undetected fraud.

The private prosecution of Mr Roberts and Ms Briton is a vital step in the right direction, illustrating how useful private prosecutions can be in plugging any gaps left by the budgetary constraints imposed upon state prosecution services.

The sentencing hearing

After admitting four counts of fraud, Ms Briton was sentenced to nine months, and her partner 15 months, in prison.

Judge David Aubrey QC, sitting in Liverpool Crown Court, was highly condemnatory of the couple’s behavior. He referred to their claims for compensation as a “complete and utter sham”, stating that:

“Those who may be tempted in the future to make a dishonest claim in relation to fake holiday sickness, if they are investigated and brought to justice, whatever the circumstances of an individual, he or she must expect to receive an immediate custodial sentence”.

Government response

Mr Roberts and Ms Briton were sentenced on the same day that the Government announced a call for evidence from holiday companies of fraudulent holiday sickness claims. The document invites members of the public and relevant stakeholders to submit evidence of stated issues including the increase in low value personal injury claims following gastric illnesses allegedly suffered whilst on holiday. The Government will then use these responses to examine how it can best tackle the proliferation of fraudulent claims.

The call for evidence can be found here.

It marks the start of a clear crackdown on the problem, which has resulted in some Spanish holiday resorts reportedly considering banning British tourists altogether.

In announcing the launch of the call for evidence, Boris Johnson stated that:

“The recent rise in false claims against tour operators, partly fueled by unscrupulous touts, tarnishes the UK’s reputation overseas. It is also hugely unfair to those who genuinely do become ill, who risk becoming victims of unjustified suspicion. This is the first step in fighting the scam holiday claim epidemic”.

Such comments have been received well by industry experts.

After the announcement of the call for evidence, the Association of British Travel Agents, (“Abta”), commented that:

“It is crucial that the government brings in new rules that control legal costs on holiday sickness claims as soon as possible, and we welcome the chance to be able to submit further evidence from our members to help crack down on these bogus claims”.[2]

Lessons learnt

First and foremost, it is clear that the Government is committed to stamping out fraudulent holiday claims. Judge David Aubrey QC’s statement that those found guilty of making fraudulent claims will receive custodial sentences, together with the Government’s call for evidence, illustrates the strong stance to be taken in future cases.

This must also be viewed as part of the Government’s initiative to intervene in and stamp out fraudulent behaviour generally. The prosecution comes four weeks after the announcement by the City of London Corporation of plans to build a new court centre dedicated to fraud as well as cyber crime.

Justice Minister Dominic Raab commented that the new court “will build on UK legal services’ unique comparative advantage, by leading the drive to tackle fraud and crack down on cyber-crime”.

Finally, the case provides two useful reminders. First, of private companies’ willingness, particularly in the insurance sector, to investigate customer’s social media accounts when assessing the legitimacy of a claim. Secondly, of the usefulness of private prosecutions of crimes which state prosecution services choose not, for whatever reason, to prosecute.

[1] https://www.abi.org.uk/products-and-issues/topics-and-issues/fraud/.
[2] https://abta.com/news-and-views/news/abta-statement-in-response-to-the-governments-call-for-evidence-on-holiday.

Christopher Hanges and Maxwell Myers
© 2017 Chambers of Lawrence Power

The Final Destination

The Court of Appeal holds that compensation under Regulation 261/2004 is available for delay on connecting flights which start or end outside of the EU.

1. On the 12 October 2017, the Court of Appeal delivered judgment in the joined cases of Gahan v Emirates and Buckley and ors v Emirates [2017] EWCA Civ 1530, in which both the Civil Aviation Authority and the International Air Transport Association intervened.

Flying Emirates through Dubai

2. Miss Thea Gahan had booked with Emirates to travel from Manchester to Dubai (the first leg) and then from Dubai to Bangkok (the second leg). Her first leg was delayed so that she arrived in Dubai 3 hours and 56 minutes late, missing her connecting flight, and finally arrived in Bangkok 13 hours and 37 minutes late. At first instance, she was awarded compensation under Article 7 of the Regulation in respect of the first leg but the second leg was discounted, meaning Miss Gahan only recovered €300 and not €600. Miss Gahan appealed on the basis that her final destination was Bangkok, at which she arrived more than 3 hours late, and therefore she was entitled to recover €600.

3.In the second of the joined cases, the Buckley family had booked with Emirates to travel from Manchester to Sydney via Dubai. Their first leg was delayed by 2 hours 4 minutes so that their second leg was automatically rebooked and they arrived in Sydney a further 16 hours and 39 minutes late. In contrast to Miss Gahan, the Buckleys were successful at first instance and Emirates appealed.

4. The Court of Appeal had to consider:
(1) whether compensation for the second leg of the journey in each case was awardable under Regulation (EC) No 261/2004 (“the Regulation”); and
(2) as a result of arguments made by Emirates, whether there was jurisdiction under the Regulation itself; and
(3) if so, whether it was excluded by the Montreal Convention. Section 19 of the Montreal Convention, of which the EU and UK are signatories, limits liability for damage caused by delay [20] – [24].


Connecting flights and delay

5. The Court of Appeal allowed Miss Gahan’s appeal and dismissed Emirate’s so that compensation was available for both legs in both cases. The Court started with the basic proposition that:
‘… where a carrier provides a passenger with more than one flight to enable him to arrive at his destination, the flights are taken together for the purpose of assessing whether there has been three hours or more delay.’ [73]

6. Accordingly, what counted was the delay in a passenger reaching their final destination. This was based on EU jurisprudence from Sturgeon v Condor Flugdienst GmbH [2009] ECR 1-10923 (C-402/07 and C-432/07), and from Air France SA v Folkerts [2013] (C-11/11), in both of which the Court of Justice for the European Union (“CJEU”) held that compensation under Article 7 of the Regulation was to be quantified by reference to the delay in arriving at the passengers’ final destination. In the case of directly connecting flights, a passenger’s final destination was the destination of the last flight (Article 2(h)).

Jurisdiction under the Regulation

7. The Court went on to reject Emirates’ second argument that the Regulation did not apply to flights operated by non-Community carriers (such as Emirates) outside of the EU. The Court considered that the Regulation took effect:

‘… when the carrier is present in the EU and it imposes a contingent liability on the carrier at that point. The liability may never crystallize but if it does do so, it will crystallize outside the jurisdiction.’ [76]

8. The basis for jurisdiction over non-Community carriers under the Regulation was, contrary to the submission on behalf of Emirates, territorial in nature [77]. It was sufficient that the first of two connecting flights departed from the EU. There were two reasons for this:

a. the activity outside the EU was not relevant to jurisdiction, but to quantum. The Regulation applies to non-Community carriers because they use EU airports. Measuring delay by reference to connecting flights is simply the best way of measuring inconvenience [78]; and
b. the decision was supported by the case of Holmes v Bangladesh Biman Corp [1989] AC 1112 which suggests that place of departure, stopping place, or destination are sufficient to avoid breaching extraterritoriality [79].

9. The Court noted that this finding might produce some anomalous results:
‘… it is possible that there is no compensation for delay on a flight which starts outside the EU and has several “legs”, some of which take place in the EU.’ [80]

10. However, the Court justified this anomaly by implying that the purposive logic of Sturgeon, which holds that long delay causes similar inconvenience to cancellation in the case of connecting flights, outweighed potential oddities [80].

The Montreal Convention and the Regulation

11. As an alternative submission, Emirates had argued that there was no jurisdiction to award compensation under the Regulation, since the Montreal Convention took precedence.

12. The Court made two preliminary points before deciding the issue:

a. As stated in Council Decision 2001/539: (1) the EU exercises competence to regulate the activity of carrier’s activities within the EU, including those of non-Community carriers; whereas (2) the UK has competence in relation to non-Community carriers outside the EU [83].

b. The Montreal Convention is not a pre-accession treaty to which Article 351 TFEU applies. It was ratified after the UK joined the EU. The relevance of this was questionable given the principle that Member State institutions should not act to prevent or hinder the performance by the EU of its international obligations [83].

13. Following Dawson v Thomson Airways Ltd [2015] WLR 883, the Court noted that:

‘… the jurisprudence of the CJEU as to the meaning of [the] Regulation … is binding on this Court even though it conflicts with jurisprudence of the Supreme Court and House of Lords.’ [86]

14. Although it was true that Dawson concerned a Community carrier, the principle was the same:

‘… a point of international law decided by the CJEU was binding on the national court if it was a necessary step in reaching a conclusion as to the meaning of an EU regulation.’ [86]

15. The Court found that it was bound by Lord Toulson’s findings at paragraphs 59 and 66 of Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347 that any issue as to the compatibility of the Regulation with the Montreal Convention had to be determined in accordance with EU law [60]. That meant the Court was similarly bound by Nelson v Deutsche Lufthansa AG [2012] (C-581/10) in which the CJEU had held that there was no overlap in scope between the Montreal Convention and the Regulation since the damage dealt with under each was different. The former provided for individual damage to be proved on a case-by-case basis. The latter dealt with fixed compensation for inconvenience which was identical for all passengers on a given flight [31]-[32].

16. Despite rejecting Emirates’ and IATA’s arguments, the Court expressed concern that the CJEU had decided in Nelson the meaning of damage for the purpose of the Montreal Convention without considering any international jurisprudence on the point. Although the Court concluded that it was barred by Stott, and the supremacy of EU law, from considering this issue for itself. The Court went so far as to question whether the CJEU might have been ultra vires in determining the question in Nelson so that it might not be binding on Member States [89], however, the potential for a reference to the CJEU on this issue was a matter for another day [88].

What impact?

17. Whilst the Court’s decision will come as a significant blow to carriers who operate outside of the EU, it will equally come as no great surprise to lawyers in the aviation sector. The key findings of the Court for carriers to mull over are undoubtedly [73]:

‘In the case of directly connecting flights, travelled without any break between them, the final destination is the place at which the passenger is scheduled to arrive at the end of the last component flight.’

18. And [80]:

‘… rights on cancellation operate by reference to the final destination, so that they include compensation for any connecting flight that is cancelled and not re-routed so as to arrive within three hours of the original scheduled time of arrival at the final destination.’

19. It remains to be seen whether carriers will consider limiting directly connecting flights, or providing different bookings and tickets for each flight to avoid the “directly connecting” moniker, or even providing substantial lag times between connecting flights to ensure sufficient buffers so that even longish delays avoid passengers missing connections.

20. Given the nature of modern air travel with carrier alliances, and many bookings sold by travel agents or online booking services allowing for passengers to plan for tight transit times, it is important carriers consider what “directly connecting flights” mean in the context of their own terms of booking and conditions of carriage.

Ikeni Mbako-Allison
© 2017

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Note On Costs

COST PRINCIPLES
From the White Book and Cook on Costs
CPR PARTS 44-47

PART 44 CPR – GENERAL RULES ABOUT COSTS
I. SUMMARY OF PART 44(2) CPR
A.THE COURT’S DISCRETION AS TO COSTS
44.2(1)- the court has a discretion as to (a) whether payable; (b) amount; and (c) when they are paid
44.2(2) – general rule is that costs follow the event, i.e. the unsuccessful party pays costs of successful party; but (b) the court may make a different order.
44.2(4) – court must have regard to all the circumstances, including:
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of a case even if unsuccessful overall; and
(c) any offer to settle which does not have Part 36 costs consequences.
44.2(5) – the conduct of the parties includes:
(a) conduct before and during proceedings – in particular compliance with pre-action conduct PD or any pre-action protocol.
(b) whether it was reasonable for a party to raise pursue, or contest an allegation or issue;
(c) manner in which party pursues or defends case or allegation or issue.
(d) whether a successful claimant exaggerated its claim.
44.2(6) – orders the court may make
(a) a proportion payable;
(b) a stated amount;
(c) costs from or until a certain date;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in proceedings;
(f) costs relating to only distinct part of proceedings; and
(g) interest on costs from or until date (inc before judgment).
44.2(7) – before making an order under 44.2(g)(f) above court must consider whether practicable to make order under (a) to (c) instead.
44.2(8) – where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.

II. PRINCIPLES APPLIED BY THE COURT
A. THE GENERAL RULE
(1) Order to pay costs (in full) is an order to pay unsuccessful parties costs in totality subject to assessment.
B. COSTS WHICH ARE RECOVERABLE
(1) Costs are awarded as indemnity to incurring party so that costs in excess of liability to own solicitor not recoverable (Gundry v Sainsbury [1910] 1 K.B. 645) For exceptions see R v Miller & Glennie [1983] 1 W.L.R. 1056; also Hazlett v Sefton MBC [2000] 4 All E.R. 887 DC and others in White Book Vol. 1 (2017), p1327, para 44.2.5)
Question for the court is whether the receiving party has become liable to pay the costs claimed; who actually pays is irrelevant (Edwin LLP v Popat, 12 February 2013, unrep.)
(2) Simple costs order gives entitlement to costs of and incidental to (Newall v Lewis [2008] EWHC 910 (Ch), 20 April 2008, unrep. (Briggs J & assessors), at para 16: a simple order “costs of … proceedings to be assessed on the standard basis” gives entitlement to costs or and incidental to.
(3) Costs prior to proceedings are capable of being recoverable as costs in the proceedings (Societe Anonyme Pecheries Ostendaises v Merchant’s Marine Insurance Company [1928] 1 K.B. 750, CA at p 757; see also [1931] 1 Ch. 428, CA)
(4) (a) Expense of complying with pre-action protocol in respect of claims brought in subsequent proceedings can be costs “incidental to”; but (b) costs incurred at pre-action stage in dealing with or responding to issues that are later dropped are not recoverable save in exceptional circumstances. (McGlinn v Waltham Contractors Ltd [2005] EWHC 1419 (TCC))
C. OTHER
(1) Judge should clearly state reasons when making order for costs, particularly where costs are disproportionate to amount in issue. (English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605)
(2) Reasons may be apparent from judgment, where counsel are unsure they should seek a note of reasons from the judge (Darougar v Belcher [2002] EWCA Civ 1262, 25 July 2002, unrep., CA at para 7)
D. ‘DIFFERENT ORDERS’
(1) Different orders under r.44.2(6)(a), (b), (c), and (f) demand an “issue-based approach”

Propositions from the Cases
(1) A judge:
(a) may make different orders for costs “in relation to discrete issues”; and
(b) should consider doing so where a party has been successful on one issue but unsuccessful on another issue;
(2) in that event, a judge may make an order which not only deprives him on an issue, but also entitles the other party to costs on that issue;
(3) it is no longer necessary for a party to have acted unreasonably or improperly before requiring him to pay costs on an issue on which he has failed (even if successful overall). (Johnsey Estates (1990) Ltd v Secretary of State for the Environment [2001] EWCA Civ 535, 11 April 2001, unrep., CA; and Summit Property Ltd v Pitmans [2001] EWCA Civ 2020)
—————-
(4) Justification for considering other orders before making a different order (r.44.2(7)) is that an issue-based approach will require a more detailed assessment thereby giving rise to further costs and time which may be disproportionate to the benefit gained (a percentage order under (a) will often produce a fairer result) (English v Emery Reimbold & Strick Ltd [2002] 1 W.L.R. 2409, CA.
(5) Wide discretion under r.44.2 makes predicting the outcome of an issue-based approach extremely difficult. There has been criticism for failing to employ the general starting point (Fox v Foundation Piling Limited [2011] EWCA Civ 790)

E. SANDERSON AND BULLOCK ORDERS
(1) A “Sanderson order” is an order that(successful) D1’s costs payable by (unsuccessful) D2 These are commonly made where C is legally aided (Sanderson v Blyth Theatre Company [1903] 2 K.B. 533, CA).
(2) A “Bullock order” is an order that costs payable by C to successful D1, to be paid by (unsuccessful) D2.
(3) Often the same term is used to describe a Sanderson order and the form of order remains in the discretion of the court (Bullock v London General Omnibus Co [1907] 1 K.B. 264, CA).
(4) Justification for these orders is that it avoids injustice to C in cases in which he is unsure which of two D’s ought to be sued. Justification does not arise where C completely unsuccessful.
(5) Cases list different factors but common thread is the reasonableness of the original joinder. Some cited factors are:
(i) whether the claim against the successful D had been made in ‘the alternative’;
(ii) whether the causes of action had been connected with those on which the claimant had been successful; and
(iii) whether it had been reasonable for C to join and pursue a claim against the successful D. (Irvine v Commissioner of Police for the Metropolis [2005] EWCA Civ 129).
(6) There are no hard and fast rules with these orders (Moon v Garrett [2006] EWCA Civ 1121)

F. ASSESSMENT OF COSTS OF A COUNTERCLAIM OR OF AN ISSUE
The Medway Principles
(1) Where D succeeds on defence and fails on counterclaim he is entitled to costs which he has actually and properly incurred in defeating C’s claim but not to those he would not have incurred had he not counterclaimed. C will not be entitled to costs of the claim but will be entitled to costs of defending the counterclaim.
(2) Where the matters in controversy are common to both the claim and the counterclaim, the costs should be apportioned by the costs judge (in so far as they are common). The judge should divide common costs notionally. (Medway Oil and Storage Company Ltd v Continental Contractors Ltd [1929] A.C. 88, HL)
(3) Although it is preferable for there to be only a single adjusted costs order where multiple parties are successful in claiming and counterclaiming, the court will sometimes make a cross-order. In the latter case, the principles on attribution in Medway (above) apply.
(4) Where two or more costs orders are made, any successful counterclaim will have attributed to it only the increase in costs which it had brought about (Medway above).
(5) Where both claim and counterclaim are unsuccessful, D will recover costs save those attributable to the counterclaim (Medway above).
(6) In these cases, time records will be important when it comes to assessment (Dyson Technology Ltd v Strutt [2007] EWHC 1756 (Ch).
(7) Unless there a specific order that costs are apportioned between claim and counterclaim, costs cannot be so apportioned.
(8) There is a distinction between ‘division’ on the one hand, and ‘apportionment’ on the other. Some costs will be insusceptible to division because they do not relate solely to a particular claim or issue as between only two parties (Hay v Szterbin [2010] EWHC 1967 (Ch), [2010] 6 Costs LR 926.
(9) The Medway approach will not necessarily be followed where injustice might arise to D merely because C issued proceedings first so that D is not entitled under that approach to any costs in respect of liability since they would have been necessitated by C’s claim in any event (Burchell v Bullard [2005] EWCA Civ 358; Square Mile Partnership Ltd v Fitzmaurice McCall Ltd [2006] EWHC 236 (Ch); Villa Agencies SPF Ltd v Kestrel Travel Consultancy Ltd [2012] EWCA Civ 219)
(10) However, where amounts are large, attempting the set off at the award of costs stage itself creates injustice, instead it may be more appropriate to award a percentage of costs to each party leaving the monetary value to be determined by assessment or agreement (Amin v Amin and 17 ors (costs) [2007] EWHC 827 (Ch D)

G. NO ORDER AS TO COSTS
(1) Where a court makes no mention of costs the general rule is that no party is entitled to costs (CPR r44.10; Griffiths v Metropolitan Police Commissioner [2003] EWCA Civ 313).
(2) Exceptions are when court (1) gives permission to appeal, (2) permission to apply for judicial review, or (3) makes an order on a not on notice application, but is silent on costs then an order for ‘the applicant’s costs in the case’ is deemed (CPR 44.10(2)).
(3) The deemed ‘costs in the case order provided for under CPR 44.10(2)(c) supports the contention that a court can make an order for costs on a not on notice application against the party who has not had notice (Makay and Busby v Ashwood Enterprises Ltd [2013] EWCA Civ 959 (subject to right to apply to set aside/vary CPR r23.10).

H. TYPES OF ORDER
(1) CPR PD 44, para 2, sets out a list of costs orders available following interim and appeal hearings: Costs/Costs in any event; Costs in the case/ Costs in the application; Costs reserved; Claimant’s/Defendant’s costs in case/application; Costs thrown away; Costs of and caused by; Costs here and below; No order as to costs/Each party to pay own costs.
(2) An order for ‘costs reserved’ becomes an order for ‘costs in the case’, if there is no later determination of where the responsibility for those costs lies (Cook’s on Costs (2017) at para 22.3, p333).
(3) Where both parties are awarded costs at the end of the claim, an interim order for costs in the case is determined by reference to which parties overall order for costs covered the period when the ‘costs in the case’ order was made so that that party benefits from the order (Ontulmus v Collett [2014] EWHC 4117 (QB)

I. DEEMED COSTS ORDERS
(1) Deemed cost order are available: (1) in favour of the Claimant on acceptance of a Part 36 offer (See Cooks on Costs RE PART 36]); and (2) where a claim is discontinued.
Discontinuance
(2) A C who discontinues is liable for D’s costs up until the date of discontinuance unless court orders otherwise (CPR r38.6).
(3) Where C deletes a claim by amendments to the particulars of claim this is in effect discontinuance with the same costs consequences (Isaac v Isaac [2005] EWHC 435 (Ch).
(4) The burden is on C to persuade court that some other order is appropriate, perhaps because of some unavoidable and unforeseeable change in circumstances (Re Walker Windail Systems Ltd, Walker v Walker [2005] EWCA Civ 247).
(5) It will be unusual for a change in circumstances to amount to a good reason unless connected with some conduct on the part of D which merited departure from the general rules (Teasdale v HSBC Bank plc [2010] EWHC 612 (QB)).
(6) CPR 38.6 (liability for costs on discontinuance) does not create a general discretion as to costs on discontinuance: D starts from position of being entitled to costs and it is for C to justify the making of some other order (Messih v McMillan Williams [2010] EWCA Civ 844).
(7) An example of court exercising its discretion (Webb v Environment Agency (2011) QBD 5 April).
(8) One of the factors the court will consider is the fact that an application to depart from the general rule is made some time after discontinuance (Hoist UK Ltd v Reid Lifting Ltd [2010] EWHC 1922 (Ch)).
Basis of assessment
(9) By CPR 44.9(1) assessment under the above deemed orders is conducted on the standard basis. However, where the court has a residual discretion that extends to making an order for indemnity costs on the application of the party against whom the claim has been discontinued if appropriate (Sharokh Mireskandari v Law Society [2009] EWHC 2223 (Ch) – discontinued claim had always been entirely speculative).
Interest on costs under deemed order
(10) By CPR 44.9(4) interest runs from the dare when the deemed cost order is made.

J. COSTS ORDERS BY CONSENT
(1) Parties may agree costs between themselves, including by Tomlin order which stays a claim on (scheduled) terms – if it is agreed that costs will be assessed if not agreed then this MUST be in the body of the order.
Uncertain and unclear terms
(2) Where a consent order does not include a term on application to vary, the court will likely not have jurisdiction (Richardson Roofing Co Ltd v Colman Partnership Ltd [2009] EWCA Civ 839)
(3) In interpreting a consent order, it seems the courts will treat the issues raised as questions of fact and law rather than discretion (Re Gibson’s Settlement Trusts, Mellors v Gibson [1981] Ch 179, [1981] 1 All ER 233)

K. CONTESTED AWARDS BETWEEN THE PARTIES
(1) CPR 44.2(2) (above) contains a rebuttable presumption that the unsuccessful party pays the costs of the successful party.
(2) It is only once the successful party is identified that the court considers the reasons to depart. In Straker v Tudor Rose (a firm) [2007] EWCA Civ 368, Walker LJ provided the following guidance:
(i) Is it appropriate to make an order?
(ii) If it is, the general rule is that costs follow the event
(iii) Identify the successful party
(iv) Are there any reasons for departing from the general rule, in whole or in part. If so, the court should make clear finding of the factors justifying departure.
Who is the successful party?
(3) ‘In deciding who is the successful party the most important thing is to identify the party who is to pay money to the other. That is the surest indicator of success and failure.’ (A L Barnes Ltd v Time Talk (UK) Ltd [2003] EWCA Civ 402 at [28], approach endorsed in Day v Day [2006] EWCA Civ 415).
(4) ‘For the purposes of the CPR success is not a technical term but a result in real life, and the question as to who has succeeded is a matter for the exercise of common sense.’ (Bank of Credit and Commerce International SA v Ali (No 3) [1999] NLJ 1734 Vol 149 at [17] – cited in Day).
(5) That approach applies to what is broadly termed commercial litigation (Al Barnes above). This point is controversial and approach seems to be mirrored in non-commercial cases (although see Hullock v East Riding of Yorkshire County Council [2009] EWCA Civ 1039 which suggests that things might be different in a personal injury quantum only claim).
(6) Often it will be appropriate for the loser to pay the winners costs, even where there had been issues on which the overall winner had lost (Alternative Investments (Holdings) Ltd v Barthelemy [2011] EWHC 2807 (Ch)).
(7) In Fox v Foundation Piling Ltd [2011] EWCA Civ 790 C made a personal injury claim for over £280,000. Only quantum was in issue and on disclosure of surveillance evidence C accepted an offer of £31,000 with the issue of costs outstanding. The Court concluded that from the date of an earlier offer of £23,000 D had been the successful party based on C’s conduct. In delivering the lead judgment Jackson LJ commented that:
(i) ‘Where both parties are over optimistic with their Part 36 positions, C should normally be regarded as the ‘successful party’ because s/he has been forced to bring proceedings to recover ([46])
(ii) A D in possession of surveillance evidence should make a prompt and realistic Part 36 offer (Morgan v UPS [2008] EWCA Civ 1476 – failure to make modest Part 36 offer early prevented costs protection [58-60])
(iii) The fact that the successful party has won and lost some issues may be a good reason for modifying the usual order under CPR 44.2 AND this is commonly achieved by awarding the successful party a specified portion of his/her costs [47-49]
(iv) The growing tendancy of Courts at all levels (including the Court of Appeal) to depart from the starting point in CPR 44.2 too far and too often was an unwelcome trend which had itself increased costs by arguments at first instance and a ‘swarm of appeals’ [62]’
(Cook on Costs (2017), para 22.16, p341)
(8) Cases may be distinguishable from Fox where ‘success’ had been conceded by the time that the appeal. It did not therefore contradict the Medway line of cases on ‘substantial success’ (Magical Marking Ltd & Phillis v Ware & Kay Ltd & 10 ors [2013] EWHC 636 (Ch)).
(9) Following those cases, the Court of Appeal has restated the Al Barnes approach in Northampton Regional Livestock Centre Company Ltd v Cowling and Lawrence [2015] EWCA Civ 651, [2015] 4 Costs LO 477. C recovered for breach of fiduciary duty but failed on negligence. Court found that C was the successful party but then departed from the general rule and awarded a percentage costs order of 50%.

Reasons for departing from the general rule
a. Conduct of the parties
(10) CPR 44.2(4) and CPR 44.2(5) give a non-exhaustive list of factors.
(11) Where a C has been deliberately misleading in the course of the claim by intentionally and fraudulently exaggerating the claim, the Court will usually depart from the general rule (Painting v University of Oxford [2005] EWCA Civ 161 – C’s was ordered to pay costs with result that she would have had very little left by way of damages).
(12) Reductions in cost are justified, at least partly, by the fact that they are likely to provide a disincentive to Cs who seek to make exaggerated claims (Jackson v Ministry of Defence [2006] EWCA Civ 46).
(13) Where a C is successful but dishonest s/he will often be penalised as a result. A failure to engage in negotiation will also be a factor (Wildlake v BAA [2009] EWCA Civ 1256- no order for costs on the basis of exaggeration and failure to negotiate, in spite of fact that C beat Part 36 offer).
(14) However, there is no general rule that a finding of dishonest conduct will replace the general starting point (Neale v Hutchinson [2012] EWCA Civ 345).
(15) In Northstar Systems Ltd v Fielding [2006] EWCA Civ 1660 (cited in Neale above), Waller LJ stated:
‘There is no general rule that a losing party who can establish dishonesty must receive all his costs of establishing this dishonesty, however, disproportionate they may be.’
(16) Exaggeration for the purposes of CPR 44.2(5)(d) must consist in conduct meriting criticism. That is different from merely stating a best case (Morton v Portal Ltd [2010] EWHC 1804 (QB)).
(17) ‘In my judgment it would be wrong to conclude, if there ever was a strict rule that pre-action conduct was relevant to costs only if causative of … an unsuccessful claim or of increased expense in subsequent litigation, that such a rule survives the introduction of the CPR.’ (Bank of Tokyo-Mitsubishi UFJ Ltd v Baskan Gida Sanaya Ve Pazarlama As [2009] EWHC 1696 (Ch)).
(18) Conduct of the proceedings themselves may also lead to a departure from the general rule (R (on the application of Scrinivasans Solicitors) v Croyden County Court [2013] EWCA Civ 249 – abandoned submissions and failed to make right points at the right time; see also Cooper v Thameside Constructions Co Ltd unrep 4.7.16 (TCC)).
b. Partial success
(19) This is a separate question from the identification of the successful party.
(20) ‘… [T]he fact that the claimant has won on some issues and lost on other issues along the way is not normally a reason for depriving the claimant of part of his costs’ (Jackson LJ in Fox above).
c. Calderbank offers

(21) ‘… parties are quite entitled to make … offers outside the framework of part 36. Where a party makes such an offer and then achieves a more advantageous result, the court’s discretion is wider. Nevertheless, it may well be appropriate to order that party which has optimistically rejected the offer to pay all costs since the date when that offer expired (see Jackson LJ in Fox above)’.
(22) a case involving a departure from the general rule on the basis of a number of the above principles is NJ Rickard Ltd v Holloway unrep. 3.11.15 Court of Appeal Civ.

L. AGREEMENT EXCEPT AS TO COSTS
(7) In M v Croydon Borough of London [2012] EWCA Civ 595 the Court of appeal held that where a claim had been settled there was a difference between the following types of cases:
(i) Cases where C has been wholly successful whether following a contested hearing of pursuant to a settlement;
(ii) Cases where C has only succeeded in part following a contested hearing or pursuant to a settlement; and
(iii) Cases where there has been some compromise which does not actually reflect C’s claims
(8) Re (7) above: in type (i) cases C will normally be entitled to costs absent some good reason to the contrary. In type (ii) cases the court will normally determine questions such as the reasonableness of C in pursuing the unsuccessful claim, how important the unsuccessful claim is relative to the successful claim, and how much the costs were increased by pursuit of the unsuccessful claim. In type (iii) cases the court is often unable to gauge whether there is a successful party (Emezie v Secretary of State for the Home Department [2013] EWCA Civ 733.
(9) Where detailed costs information and concessions are before a judge then an alternative approach under which the trial judge combines quantification and liability may be adopted (The Bank of Tokyo-Mitsubishi UFJ, Ltd Baskan Gida Sanayi Ve Pazarlama AS above).

M. NO WINNER OR LOSER
(1) A Court may find that there has been no ‘successful party’ which is to be distinguished from a set-off (Phonographic Performance Ltd v AEI Rediffusion Music Ltd [1992] 2 All ER 299, CA; Verrechia (t/a Freightmaster Commercials) v Metropolitan Police Comr above; Cammertown Timber Merchants Ltd v Sidhu [2011] EWCA Civ 1041).
(2) However, no order as to costs is not a fall back position and judges must still conduct the Al Barnes determination (R(on the application of Mendes v Sowthwark London Borough Council [2009] EWCA Civ 594; Taylor v Burton [2014] EWCA Civ 63).
PART 45 CPR – FIXED COSTS
PART 46 CPR – COSTS – SPECIAL CASES

PART 47 CPR – PROCEDURE FOR DETAILED ASSESSMENT OF COSTS AND DEFAULT PROVISIONS
(1)On a detailed assessment, the court will not depart from an agreed or approved budget unless satisfied that there is good reason to do so (r.3.18(b); and see Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch), 31 July 2014, unrep. (Birss J)).

© Chambers of Lawrence Power

law@whitestonechambers.com
www.whitestonechambers.com

Pre-Action Protocol for Debt Claims

The Pre-Action Protocol for Debt Claims, (the “Protocol”), comes into force on 1st October 2017.

The following article examines the concept of ‘debt’; this article focuses on the purpose, procedure and effects of the Protocol.

The objective of a Pre-Action Protocol is to prescribe the conduct the court expects the parties to take prior to commencing legal proceedings. In line with Lord Jackson’s 2010 review of litigation costs, the Protocol aims to encourage early communication and exchange of information and documents between the parties so to enable them to resolve the dispute without litigation. This Protocol expounds the new procedure for a business, (the “creditor”), to follow when claiming repayment of a debt from an individual, (the “debtor”). It does not concern debts between businesses, unless the individual is a sole trader.

Prior to this Protocol, typically the creditor would contact the debtor to secure the outstanding payment; if this failed, the creditor would either enlist a debt collection agency or instruct a solicitor and a ‘Letter Before Action’ would be sent. Under the new Protocol, this Letter is called the ‘Letter of Claim’ and section 3 stipulates the information it must include. This Letter of Claim, along with the Information Sheet and Reply Form (Annex 1 of the Protocol) and the Financial Statement (Annex 2 of the Protocol), must be sent by post to the debtor. The debtor then has thirty days to respond.

The next stage depends on what, if any, response is received from the debtor:

If there is no response within the timeframe, the creditor can commence court proceedings.
If the debtor indicates that they are seeking advice or that they require time to pay, or sends back to the creditor an only partially completed Reply Form; section 4 of the Protocol sets out the corresponding required action.
If the parties disagree about the existence of the debt, they should consider Alternative Dispute Resolution per section 6 of the Protocol. If agreement is still not reached, then the creditor should give the debtor notice of at least fourteen days of its intention to commence court proceedings.
If the creditor receives a completed Reply Form, the debtor should pay the money owed and there will be no need to commence proceedings, provided there is no error on the Form.
There are some specific exemptions and regulatory obligations that take precedence over this Protocol. These mainly concern claims where there is currently another applicable Pre-Action Protocol such as in construction or mortgage arears.

For businesses predominantly providing credit for individuals, this Protocol creates a more formal and time-consuming procedure for collecting debts. Creditors will no longer be able to pressure a debtor with the prospect of imminent court proceedings. However, if the creditor fails to comply with this Protocol, the court could impose sanctions.

There is then the potential for debtors to use the Protocol to delay payment, but even if this does not happen, the new procedure is likely to be slower and dearer than pre-October 2017.

Attached is a copy of the Protocol: https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/protocols/pre-action-protocol-for-debt-claims.pdf

© Chambers of Lawrence Power

www.whitestonechambers.com

law@whitestonechambers.com

LATEST – Multi-Track Fixed Costs

Lord Justice Jackson has tabled plans for extending fixed recoverable costs. He conceded that fixing it would not be possible without reform to procedures. Having previously suggested that fixed costs could be applied to all claims up to a value of £250,000, Jackson’s latest proposals account to a significant scaling back. His report proposed finishing the job of introducing a f…

Lord Justice Jackson has tabled plans for extending fixed recoverable costs. He conceded that fixing it would not be possible without reform to procedures.

Having previously suggested that fixed costs could be applied to all claims up to a value of £250,000, Jackson’s latest proposals account to a significant scaling back. His report proposed finishing the job of introducing a fixed grid of fixed recoverable costs for all fast-track cases, as well as a new ‘intermediate track’ for certain claims up to £100,000, which can be tried in three days or less with not more than two experts on each side. This ‘will make a real contribution to promoting access to justice’, he said.

A voluntary pilot of a ‘capped costs’ regime for business and property cases up to £250,000, for which procedures would follow those of the Intellectual Property Enterprise Court to some extent is also proposed. Jackson recommends new measures to limit recoverable costs in judicial review cases.

Jackson said, “In my view, it is now right to extend fixed recoverable costs above the fast track, but we must proceed with caution in order to protect access to justice”. He described the extension of fixed fees across the fast track as a ‘no brainer’, but said that above the £25,000 limit there was a ‘very substantial divergence of opinion’ on what should happen.

The view was echoed by the Bar Council. Andrew Langdon QC, Chairman of the Bar, said: “The review, in our view correctly, steers away from extending fixed recoverable costs up to £250,000. Encouragingly, there are also proposals in the report for a grid of recoverable fees which include ring-fencing fees for counsel or other specialist lawyers in more complex fast track cases and for intermediate track cases. These include trial advocacy fees.” However, Jackson said “I do not see how I can recommend any reform because it is necessary to protect one part of a profession, the profession exists to serve the public, not vice versa.”

Revealing the extent to which he had listened to lawyers, Jackson said he only ‘floated the idea’ of the intermediate track once his review had started and people had given their opinions.

The president of the Association of Personal Injury Lawyers, Brett Dixon, struck a note of caution over the proposed intermediate track. He said, “Thorough scrutiny of how all elements of Jackson’s recommendations would fit and work together is essential.” Law Society president Joe Egan also commented on this issue, “We hope that the process can be streamlined for cases affected by fixed costs before they’re introduced, in order to ensure that the costs will be manageable for solicitors and claims can still be brought”.

The review’s proposals have been welcomed as good news for solicitors and consumers. A ‘one size fits all’ approach for all cases, regardless of complexity, would have made many cases economically unfeasible, undermining the principle of justice delivering fairness for all. However, the government will want to see further reform and the control of lawyers’ fees in the lower value multitrack cases.

Temple Women’s Forum Cross-Profession Networking Garden Party: Chambers’ Perspective

The Head of Chambers sponsored female members of chambers to take part in the Women’s Forum. We were delighted to attend the Temple Women’s Forum Garden Party last week. This annual event was kindly ran by the Temple Women’s Forum, an organisation set up in 2012 with the view to supporting and encouraging women practitioners and judges throughout their careers at the Bar or …

The Head of Chambers sponsored female members of chambers to take part in the Women’s Forum. We were delighted to attend the Temple Women’s Forum Garden Party last week. This annual event was kindly ran by the Temple Women’s Forum, an organisation set up in 2012 with the view to supporting and encouraging women practitioners and judges throughout their careers at the Bar or in the Judiciary. The event, however, was not just about the Bar. It was a celebration of women in all areas of the legal profession, including barristers, solicitors, in-house lawyers, judges, legal academics and students, proving a wonderful opportunity for networking across these different areas. Attendees enjoyed music, canapés and speeches from The Right Honourable Lady Justice Macur DBE, Her Honour Judge Deborah Taylor and Rachel Langdale QC.

Chambers used this opportunity to allow members from all different stages of their career to attend and network with other legal professionals. We had a wide cross-section of members in attendance, including interns, former interns, pupils and those in their second six. They have recounted their experiences below.

Katie Hand, former legal work experience:

“I was invited to attend the garden party after completing a work experience placement in the previous month, and the event gave me the chance to see various members of Chambers again, whilst talking to others in different professions of law and stages of training. The evening was both incredibly enjoyable and useful, as I received much advice with regards to pursuing a career in law. The event was fantastic and I am grateful for the opportunity to have attended.”

Dinuka Kottegoda, foreign qualified lawyer:

“The Temple Women’s Forum Cross-Profession Networking Garden Party provided a great platform to meet and network with other legal professionals. The most unique feature being that it was not limited to barristers. It was an open forum Solicitors, legal administrators, students and foreign qualified lawyers could meet and mingle. I was grateful, that, as a foreign lawyer, I was given the opportunity to be a part such an event. It was directly designed to help support women in the legal field by networking and sharing experiences. I met Christine Kings, Director of Outer Temple Chambers, whom I have thereafter kept in touch with via LinkedIn. I also met another foreign qualified lawyer whose sister I was able to help with the QLTS. Learning from and helping others in this way was the purpose of the event and in my experience, I believe it was achieved and a success.”

Mina Heung, foreign qualified barrieter, second six pupil:

“I really enjoyed the Temple Women’s Forum Cross-Profession Networking Garden Party and thought that it was a great way to meet new people. Everyone was very friendly and willing to offer advice and interesting stories about their experience in the legal profession. It was a wonderful opportunity to be able to meet so male female practitioners in one place. I am grateful for the experience and look forward to next year!”

Claire Watt, legal intern:

“This was a great insight into what life at the Bar will be like. I was able to meet lots of other female legal professionals and ask questions about the Bar that I wouldn’t normally be able to do in an interview environment. It was reassuring to see so many women who have made successful careers in law and I have been inspired by their ambition. It was also interesting to meet the very supportive Andrew Langdon QC, who took the time to ask me about my legal studies so far.”

Amrit Dhanoa, first six pupil:

“Attending the networking event was particularly enjoyable as it provided an opportunity for women and men across the legal profession to interact and share their experiences. As a first-six pupil, it was a worthwhile opportunity to speak to a number of different individuals within the profession and hear about their experiences of entering and working in the legal sphere. As somebody just starting out their career at the Bar, it was comforting to see the supportive and collegiate atmosphere that exists.

It was encouraging to see so many women attend and as The Rt Hon Lady Justice Macur DBE said in her welcome address, the glass ceiling that once existed as women tried to work their way up the profession, balancing the joint challenges of career development and raising their families, has now been shattered and women have rightly earned their place at the top of the legal profession.”

Barrister’s wardrobe malfunction hits the headlines

Over the weekend, Whitestone Chambers newest tenant, Matthew Gillett, went viral on Twitter and made it onto the sport’s pages of the BBC website following a sartorial slip. Matthew is a Bristol City fan and season ticket holder. He pre-ordered the away shirt for the forthcoming 2017/18 season and when it arrived, all looked to be in order. However, after having worn it for a marathon training run…

Over the weekend, Whitestone Chambers newest tenant, Matthew Gillett, went viral on Twitter and made it onto the sport’s pages of the BBC website following a sartorial slip.

Matthew is a Bristol City fan and season ticket holder. He pre-ordered the away shirt for the forthcoming 2017/18 season and when it arrived, all looked to be in order. However, after having worn it for a marathon training run, he discovered that the label with the washing instructions was emblazoned with the Oxford United badge.

Matthew tweeted Bristol City FC to enquire whether this was an isolated or a more widespread problem. After being picked up by the supporters’ club, the tweet soon went viral (https://twitter.com/MTG1897/status/878584442603929600).

The story was picked up first by Bristol’s leading paper, the Bristol Post, and then covered by the BBC Sport website, on what Chambers presumes was a slow news day during the close season (http://www.bbc.co.uk/sport/football/40398185).

The CEO of Bristol Sport (the company behind the football club and all other sports teams in Bristol), Andrew Billingham, announced there would be a full investigation into this matter, apologised for the isolated incident and offered Matthew a replacement shirt. This offer was accepted and the case is now closed.

Moving forwards, Chambers hopes Matthew enjoys his replacement lurid purple shirt at football matches or while training for his next marathon, but refrains from wearing it while working in Chambers.

To see Matthew’s LinkedIn page, please visit https://www.linkedin.com/in/matthew-gillett-a3462b101/.

In-Flight WiFi: How Gogo achieved its dominance

In-Flight WiFi: How Gogo achieved its dominance The in-flight WiFi provider ‘Gogo’ has a reputation for poor speed and connectivity, with travelers frequently complaining of the system’s slow speed compared to its price (costing up to $60). However, with Gogo possessing 80% of the market share the consumer often has no choice but to choose it as their in-flight WiFi provid…

The in-flight WiFi provider ‘Gogo’ has a reputation for poor speed and connectivity, with travelers frequently complaining of the system’s slow speed compared to its price (costing up to $60). However, with Gogo possessing 80% of the market share the consumer often has no choice but to choose it as their in-flight WiFi provider. How did Gogo achieve such a dominant market position?

Part of the answer is that Gogo got there first. As early as the 1990s, Boeing built a satellite network called Connexion in order to provide internet access on planes. However unfortunately for Boeing, the September 11th attack halted all progress in this sector for several years. Gogo launched its own system at around the time personal electronic devices became popular, spending nearly $1 billion on infrastructure. The new company developed the latest onboard equipment and a vast network of transmission towers across North America. Just a year later, the iPhone arrived, bringing with it a vastly greater demand for onboard WiFi.

By 2008 internet access had become perceived as a basic necessity for business travelers, and airline companies turned to the only established WiFi operator in the market. The inelasticity of the new demand meant that the quality or speed of the WiFi weren’t important to secure market share: airlines had to be able to offer the service to match their competitors and Gogo was the only provider with sufficient infrastructure to provide the service.

Gogo exploited its advantage by tying airlines into long-term exclusive contracts. American Airlines was the first to sign up, followed by Delta, United, Virgin America, Alaska Air, and Air Canada. The list continued to grow, and today more than 2,000 commercial aircraft use Gogo’s services. In the last few years, Gogo has increased its fees and decreased its data speeds, making its WiFi service less popular with consumers than ever before. Nonetheless, thanks to Gogo’s long-term contracts neither of its two main competitors have been able to significantly challenge despite offering faster connections and lower prices.

These contracts also involve a “hardware lock-in”. That means that Gogo’s equipment is proprietary; the servers, antennas and other hardware will only work for Gogo’s service. Airlines who have already signed contracts with Gogo would find it very expensive and time-consuming to switch to a different provider since this would involve replacing all of the associated hardware. Apart from the obvious installation and hardware costs, installing alternative WiFi equipment means aircraft downtime, during which the aircraft are out of service and making a loss for their airline.

Additionally, there is a lack of sufficient competition to challenge Gogo’s place in the market. There aren’t enough commercial jets in the world to attract the level of innovators that are needed to make the market more open and fair. The industry simply isn’t attractive enough to developers. Although ViaSat has now signed a 10-aircraft deal with Virgin America for their service to Hawaii, the future still seems to be Gogo-dominated for now.

What’s needed is innovation and an end to proprietary equipment to really open up the market place, but there is no sign of any such change on the horizon.

RULE 44. 11 – COURT’S POWERS IN RELATION TO MISCONDUCT:

Part 44 of the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) was re-enacted on 1st April 2013 and concerns the court’s powers in relation to misconduct. incur Where a party (a) fails to comply with a court rule in assessment or summary proceedings, or (b) acts unreasonably or improperly before or during proceedings the court may disallow all or part of the costs which are being assessed or order the party at fault or that party’s legal representative to pay costs which that party or legal representative has caused any other party to incur.

The misconduct extends to the legal representative of a party as well as to the party personally and includes both summary assessment and detailed assessment proceedings and refers to any failure to comply with the provisions of Part 47 and any direction, rule, practice direction or court order.

Part 44 of the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) was re-enacted on 1st April 2013 and concerns the court’s powers in relation to misconduct. incur Where a party (a) fails to comply with a court rule in assessment or summary proceedings, or (b) acts unreasonably or improperly before or during proceedings the court may disallow all or part of the costs which are being assessed or order the party at fault or that party’s legal representative to pay costs which that party or legal representative has caused any other party to incur. The misconduct extends to the legal representative of a party as well as to the party personally and includes both summary assessment and detailed assessment proceedings and refers to any failure to comply with the provisions of Part 47 and any direction, rule, practice direction or court order.

A costs judge may investigate or make orders of unreasonable or improper conduct by a party or a legal representative. A legal representative who has been found to have acted unreasonably or improperly may be ordered personally to pay costs which another party has incurred. This power is in addition to the court’s power to make wasted costs orders in accordance with s.51(6) of the Senior Courts Act 1981 (Gamboa-Garzon v Langer [2006] EWCA Civ 1246).

By 2008 internet access had become perceived as a basic necessity for business travelers, and airline companies turned to the only established WiFi operator in the market. The inelasticity of the new demand meant that the quality or speed of the WiFi weren’t important to secure market share: airlines had to be able to offer the service to match their competitors and Gogo was the only provider with sufficient infrastructure to provide the service.

Where the court makes an order against a party who is legally represented but not present at the hearing, that party’s solicitor must notify their client in writing within seven days of receipt of notice of the order. For the procedure for wasted costs orders, see CPR 46.8.

Part 44.11.2 concerns delays in proceedings. The court has a discretion to decide whether imposing the sanction of disallowance of costs is proportionate to the delay and/or failure to comply with the relevant rule or practice direction.

(Botham v Khan [2004] EWHC 2602).

Section 44.11.3 concerns the solicitor and counsel relationship. In Davy-Chiesman v Davy-Chiesman [1984] 1 All E.R. 311 the claimant applied for an inappropriate form of relief on the advice of counsel. The Court of Appeal held that the claimant’s solicitor was not relieved from responsibility by the fact that he had instructed counsel. Solicitors also have the obligation to withdraw instructions from an incompetent counsel (Re A (A Minor) [1998] Fam Law. 339). However in certain situations a solicitor may be justified in relying upon counsel’s advice (Swedac Ltd v Magnet & Southern plc [1990] F.S.R 89), for instance if a solicitor has no experience in the area concerned (R. v Luton Family Proceedings Court Justices, Ex p. R. (1998) 4 C.L. 51).

Counsel is under a duty to reassess any advice in the light of further information to avoid a wasted costs order. (C v C (Wasted Costs Order) [1994] 2 F.L.R 34)

Counsel should not wholly rely on instructing solicitors to notify them of the dates and times of their cases (Re A Barrister (Wasted Costs Order) (No. 4 of 1992), The Times, 15 March 1994, CA (Criminal Division)); and see Re A Barrister (Wasted Costs Order) (No. 4 of 1993), The Times, 21 April 1993, CA (Criminal Division)).

Where the conduct of both the barrister and the solicitor in a case are the subject of criticism, any investigation of their professional conduct will be conducted by a joint tribunal (Vowles v Vowles, The Times, 4 October 1990).