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Open letter to The Editor, The Times
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Our ref: MJR/dm
Your Ref:
Date: 20 April 2006
When calling please ask for: Mr Martin Ryan
BY EMAIL:
The Editor At The Times
The Editor
The Times
1 Pennington Street
London E98 1XY
Dear Sir
OPEN LETTER
This letter is the response of Beresfords Solicitors to the article in The Times yesterday (19th April 2006). The article demonstrates a surprising lack of understanding of relevant legal procedures and the background relating to the underlying matters with which the article is concerned. It is of concern that for apparent journalistic effect the article is peppered with unfounded slur and innuendo. The theme of the article overlooks the fundamental premise of any litigation that cases are properly and fully prepared and that clients are protected from the inherent financial risks. You are well aware that, despite the best preparation, litigation always remains a risky business.
There has been a serious failure in the article to address the financial risks inherent in personal injury litigation for both client and solicitor or to reflect that it is precisely in order to reduce financial risk and to secure some measure of protection for the client that wholly justified expense is inevitably incurred. It is simply not in the interest of clients to venture into litigation without reasonable protection against eventualities. All of Beresfords’ rights with regard to the article appearing in the Times are strictly reserved.
We address some of the more glaring misconceptions and imbalanced reporting in the article as follows:
1. In relation to claims for damages for noise induced hearing loss (“NIHL”) the article use the words “straightforward”, “routine” and “comparatively simple legal process”. This is a mis-description; such claims cannot properly be described as routine or simple and are fraught with difficulty and, importantly, financial risk for both the solicitor and client. Beresfords have nonetheless successfully pursued many such claims on behalf of clients notwithstanding the inherent difficulties and risks which include the following:
(a) The claimant is required to produce supportive evidence from a suitably qualified and experienced medical consultant to the effect that a significant level of hearing loss is indeed likely to be the result of exposure to noise at work (as opposed to simply age related deterioration or other factors). The DTI typically declines to settle such claims where the level of hearing loss is under 10 decibels. However, Beresfords has pursued such claims for its clients and successfully obtained damages from the DTI in cases which have had to be issued at court. Firms of solicitors acting without insurance and funding for their clients would hardly have shown the same appetite for pursuing similarly difficult claims on behalf of their clients;
(b) Evidence is required to establish the levels of noise to which a claimant was exposed at work and this can include detailed, and expensive, evidence from forensic engineers;
(c) Many claimants have had more than one employer who has exposed them to levels of noise at work. Detailed consideration is required of the apportionment of the level of hearing loss between respective defendants;
(d) Where claims are denied or unreasonably low offers are made, the solicitors concerned have to be prepared to issue court proceedings with all the attendant risks, principally being the carrying out of thousands of pounds worth of work in a particular claim with the promise of no fee whatsoever if the claim was eventually unsuccessful at trial.
2. There is an ill-founded and uninformed suggestion in the article that it has been unnecessary to insure these claims:
(a) The courts have accepted for some years that it is appropriate for claimants to insure their cases at the outset. By doing so, the amount of the insurance premium is considerably reduced when compared with the premium cost of insuring at a later stage in a claim, possibly after a denial by a defendant and/or at the point of issuing proceedings. A failure to insure a claim at the outset presents a potentially serious prejudice to a claimant’s case. When the claim becomes difficult, in terms of a denial or unreasonably low offer, the claimant may at that stage find that there are no insurers willing to take the claim or that those which are set premiums at a level which cannot be afforded and/or cannot be recovered in full from a paying party;
(b) In cases where no insurance cover is obtained at an early stage the client may well be placed in a seriously disadvantageous position by the solicitor who has failed to obtain it. A number of possibilities occur:
(i) When difficulties with the claims arise (eg the DTI or other defendant lawyers simply say that they will not pay) the client is informed that matters have become rather difficult and that the claim has to be dropped. Alternatively, the claimant might be referred to a firm of solicitors which can or will put insurance in place and proceed with the claim;
(ii) Where firms are prepared to issue court proceedings without the claimant having insurance in place the firm itself must stand the risk but this is not necessarily to the client’s advantage. For example if the firm becomes insolvent, possibly as a result of a number of failed cases giving rise to a defendant costs liability, the client is left without insurance in place and it is the client who must run the risk and become liable for the defendants’ costs;
(iii) Firms proceeding on the basis that they carry the risk of paying the defendants’ costs and that they have to pay the claimant’s disbursements as they accrue during the conduct of a matter have little incentive to pursue borderline claims. Such firms proceed not only on the basis that they are not paid if the claim does not succeed (this is common to all solicitors working on Conditional Fee Agreements) but they also stand the risk of paying out very substantial sums in opponents’ costs and disbursements if the claim is unsuccessful. That presents a considerable pressure on such firms when advising clients on the desirability of proceeding beyond a certain stage or in relation to accepting low offers of settlement;
(iv) In order to ameliorate their own risk some firms have been known to enter into arrangements with, for example, medical experts whose evidence is adduced on the basis that that expert will only be paid if the claim succeeds. This is unsatisfactory and has lead to the rejection of evidence.
(c) It is stated in the article that it would be “absurd” for the DTI to pursue individual miners through the courts for costs yet this has actually happened. This firm has evidence of claimants having to pay the DTI’s costs in the event that claims have failed after the issue of proceedings. There is nothing unorthodox in this since normally the loser pays. All of Beresfords’ clients have been properly advised at the outset and have had insurance policies in place to cover this eventuality. The suggestion made in the article that such cases simply “sail through” is naive. At the commencement of a claim (which, we repeat, is the correct time to insure) it is simply not known whether or not the claim will succeed or indeed at what stage it will do so.
3. The article refers to the involvement in Beresfords’ claims of Composite Legal Expenses (“CLE”) though it omits to set out (which was within the knowledge of the writer of the article) that CLE were one of the UK’s leading suppliers of After the Event Insurance, winners of the British Insurance Awards 2003 and listed by the Association of Personal Injury Lawyers as one of its approved funding insurers (FSA approved). CLE offered to those solicitors who were admitted to its panel (including Beresfords) a fully delegated authority to insure its clients’ cases when they were thought to have a better than 50% prospect of success. Such an authority, underwritten by National Insurance Guarantee, was not granted lightly and solicitors were carefully audited by the insurers before being accepted onto the panel. Some firms of solicitors have found it difficult to demonstrate the necessary levels of expertise to acquire that sort of trust and authority from an insurer.
4. The “secret deal”.
The innuendo arising from these references is the most scurrilous and unwarranted and the implication of the headline, to the effect that the firm has acted improperly, is entirely unjustified. In fact, as The Times was aware, Beresfords’ procedures for insuring claims were in existence before the meeting to which you refer and the arrangement of ATE insurance for our clients was (and still is) a matter of routine. The meeting in question was attended between officials of the Union of Democratic Mineworkers and the two senior partners at Beresfords and the minutes (it is a routine matter to minute meetings though perhaps not meetings which are intended to be “secret” in the sense that they relate to any impropriety) were voluntarily disclosed by Beresfords to the Law Society (as The Times was also aware) in connection with its ongoing investigations into a considerable number of solicitors’ firms, many of whom have had relationships with trades union introducers.
5. None of the payments referred to by The Times, including insurance commissions and payments to trades unions related to the introduction of claims, has been paid by Beresfords’ clients. All of this firm’s clients have proceeded in their claims on the basis that they bore no financial risk whatsoever in the event that the claims did not succeed. Such claimants proceeded with the benefit of a robust policy of insurance, underwritten by one of world’s largest insurance companies, the premium in respect of which (with other disbursements) was fully funded. Any clients who have wished to pay their own expenses have had the opportunity to do so. In practice, clients have been happy to proceed on the basis that a financial institution (such as Halifax Bank of Scotland) would pay their expenses with the client bearing interest on the loan in the event of success in the claim. They have done so in the knowledge that their solicitors have been fully committed to pursuing the claim vigorously, that the risk of paying an opponent’s costs was insured and that an institutional funder was making payment of their disbursements as the case proceeded. It should be noted that this was actually the intention of the Government when it effectively abolished legal aid for personal injury cases from April 2000 and specified that insurance premiums were to be paid by defendants (which include the DTI) in claims which succeed.
Beresfords remains prepared to explain its position in these matters (subject to client confidentiality) to parties who are interested in a balanced discussion of the facts as opposed to a repetition of the present mud slinging exercise. In the meantime, we will continue to obtain compensation for thousands of injured working people and their families and all such claims are, we repeat, carried out at no financial risk to our clients in the event that they are unsuccessful.
As you will appreciate from all of the above, this firm entirely refutes any and all implications which can be drawn from the article to the effect that it has acted improperly in any way. You are invited to reconsider your position.
Yours sincerely
Mr Martin Ryan
BERESFORDS SOLICITORS LLP
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