GLO - JUDGE’S RULING

1.  MERITS OF THE APPLICATION/CASE

2. “Unnecessary”

 “Pursued aggressively and without proper regard to the rules which apply to group litigation”.

 “… the interests of the claimants … will not have been met.”

 “… there has been protracted delay in mounting those claims which would have been avoided had a more sensible  approach to the case   been adopted from the outset.”

13. “… misconceived and constitutes a gross abuse of the system …”

30. “… there is no evidence, apart from the belated say so … that any consideration was given to other means of testing the enforceability of   the UDM form of agreement. “

32. “There is … no reason why this issue could not have been decided in a single, or at most two or three test cases  heard at the same time   as, or immediately the one after the other.”

39. As to the possibility of obtaining the support of the Legal Services Commission: “… that is undoubtedly a step which should have been  taken before the precipitate decision was taken, which was in any event inappropriate, to embark on this application for a GLO.”

70. “… the multiple inaccuracies which are contained in the generic Particulars of Claim.  These inaccuracies involve claimants who have either  not been clients of the individual firms, claimants who have not suffered deductions from the award of compensation to them, claimants  who had withdrawn their claims and claimants who have made payments directly to the union rather than to the solicitors for onwards  transmission by the union concerned.”

 “This list of inaccuracies … is illustrative of the fact that much wasted effort has been incurred in investigating the allegations made in  respect of claims which do not, in any event, exist …”

71.(1) “The court has not been persuaded that any or any serious thought was given to alternative means of adjudication of the underlying  claims.”

71.(2) “… there is no justification for the inclusion of any of the solicitor Respondents in this application ….  If the claims succeed against the  union or its claims handlers, there is no reasonable likelihood of solicitors coming under any liability to the individual claimants, who will  recover from UDM, or not at all.”

71. (4) “There are other unions and independent sections of unions who are not involved … which if it had validity ought to have been joined.”

71. (5) “The gross imbalance between the costs incurred and to be incurred and the sums to be recovered.”

75. (1) “There has been a failure to identify with precision what are said to be the factual and legal issues which merit such an order.”

75. (6) “The inaccuracies in regard to the identity of the claimants who have claims and of what those claims consist, have added significantly to  the burden of work which has fallen on the solicitors Respondents in resisting this application.”
 
77. “… these proceedings have done nothing to advance the cause of those claimants who may have had deductions made from their  compensation in circumstances where there was no legal right for such deductions to have been made.   Unnecessary delay has resulted  by the adoption of a method of proceedings which was, from the outset, unlikely to succeed.  Much will have been wasted by way of costs  which may or may not prove to be recoverable from the insurers.  Hopes may have been raised that a ready solution was at hand for the  resolution of the underlying problem.  These were encouraged by the imperfect appreciation of what could be achieved by the mistaken   method which has been employed for this a heavy burden of responsibility has on the legal advisers who instructed the present application  which was … doomed from the start”.

2. GREENE WOOD & McLEAN SOLICITORS /BARRISTERS

13. “Not only was the application itself misconceived, but also it has been pursued in a manner which is both heavy handed and inept.  There  are features present which reflect no credit on those who have been responsible for bringing it before the court.”

32. “What so clearly emerges … is that Mr Edwards appears never to have contemplated some altogether simpler process for resolution of the  issue …”

33. Mr Edwards said that “the most cost effective and proportionate way for the claims to be resolved is by way of a  GLO.”

34. “In the light of the figures which appear later in this judgment this last statement is surprising and, was either made without having   considered the matter sufficiently, or it shows a remarkable failure of judgment on the part of”  Mr Edwards.

42. “Costs have escalated to a level that is truly staggering, a feature that is due to the manner in which the Applicants’ solicitors have  managed the litigation thus far.”

46. “The fact is that the Applicants’ solicitors had already decided that they would mount this application in June 2005.  Further, when it came  to making the claim against the Respondents separately, events show that the determination was to proceed with this application, come  what may.”

47. “Other than to enter into correspondence having the aggressive characteristics evident from the letters… there is  nothing to show that  the Applicants’ solicitors took any such action between July 2005 and [26 October 2005].”

55. “Both the court and the respondents have been kept ill informed about the true state of insurance arrangements for ATE made by the  Applicants’ solicitors until they were compelled by orders made during the course of the present hearing to divulge precisely what had been  occurring.”

66. “… there was clear evidence of obstruction on the part of [the Applicants’ solicitors] concerning the true position  in regard to insurance.”

66.(13) “… a number of ‘confirmed’ variations to the policy terms were announced by Leading Counsel and his instructing  solicitors.  The question  may arise as to the authority which he or they may have had to make those amendments to the insurance which the individual Applicants  had been led to believe would have been in place according to the prospectus with which they had been provided at the outset.”

70. “One of the disturbing aspects of this pattern of carelessness … is the fact that despite having their attention drawn to many of these  inaccuracies … the Applicants’ solicitors have ignored them when preparing the schedules ….   The consequence is that costs have been  incurred which may not in the event prove to be recoverable”.

75. (5) “… individual Claimant, who may well not have been consulted about the alterations to his agreement with and by the Applicants’  solicitors.”

76. “The period which was allowed to elapse between the original threat of proceedings and the date of the application for a GLO raises  questions about the motivation behind it …”

77. “… a heavy burden of responsibility lies on the legal advisers who instituted the present application, which was, in  my judgement, doomed  from the start.”
 
3.  THE POSITION OF BERESFORDS AND OTHER SOLICITORS

14. “… the primary claim, for recovery of sums paid to the union under those agreements, would be against the union.  It would only be in the  event that the union was financially unable to meet the claim that any question of a solicitor’s  liability to any claimant for negligent  advice, or failure to advise, in relation to the effect or necessity of such an agreement, would eventuate.”

24. “… subject to recoverability of any sums ordered to be paid in the judgment against the union, either the claim will succeed against the  union, in which case there will be no damage suffered by the Applicant which he can recover from the solicitor, or the claim is  unenforceable against the union, in which event the Applicant will have no claim against the solicitor.”
 
25. “… what is the point of suing any of the solicitor Respondents at all, let alone through the medium of group litigation.”

71. (2) “… there is no justification for the inclusion of any of the solicitor Respondents … there is no reasonable  likelihood of solicitors coming  under any liability to the individual claimants who will recover from UDM, or not at all.”
 
75.(2) “There is no merit in including solicitors in the proposed litigation until the issue of the liability of the union or its claims handlers has been  decided.  In all probability there will never be any need for the solicitors Respondents to be involved ….”

4.  INSURANCE

52. “The Applicants’ solicitors sent a copy of the summary of the insurance to UDM solicitors on 23 December [2005].  A    number of questions were prompted, but left unanswered by this disclosure, which was, on its face, plainly incomplete.”

55. “The contents of those documents provide the explanation for the seeming, and actual reluctance on the part of the    Applicants’ solicitors to disclose the full history and contents of the relevant insurance arrangements.”
 
61. “… drip feed of inadequate information ….”

64. “This constant change of position led me to observe, during the hearing that the Respondents were having to face a    situation where the sands were forever shifting.”

66. “… there was clear evidence of obstruction on the part of [the Applicants’ solicitors] concerning the true position  in regard to   insurance.  Such documents as have been produced … confirm that there had indeed been obstruction, the reasons for which now have  become clear.  The following disturbing features have been revealed:”

 (see 1 – 14 in paragraph 66)

-  no insurance in place when prospectus issued to claimants.

- “… lurking doubt about the efficacy of the insurance arrangements.”

- whether the ATE policy will cover adverse costs’ orders made against the Applicants?  “… this must be a doubtful  proposition.”

- “… there is doubt even, whether or not the cover available for adverse costs is in truth the figure of £1m.”

 
67. “… there has been obstruction with regard to the necessary disclosure of the insurance position.  The court has been left in doubt in regard  to …”

- the true level of cover.

- whether there is liability for the premium on the individual claimants.

- Extent of cover available to meet successful respondents costs.

68. “The questions arise whether the fact that the insured never comes under any liability, whatever the circumstances,    means that the policy is void for uncertainty, the arrangement … is unlawful because it is champertous or the premium is not one within  s.29 [Access for Justice Act 1999].”

75. (5) “The great uncertainty in regard to the sufficiency and efficacy of the ATE insurance, including the question whether the many  amendments to the cover which were introduced during the course of the hearing, would be enforceable in the light of the absence of  consideration moving from the individual Claimant, who may well not have been consulted about the alterations to his agreement with and   by the Applicants’ solicitors.” 

5.  TRADES’ UNIONS AND DEDUCTIONS FROM COMPENSATION

3. “It has been one of the historical functions of trades’ unions that they would support any of their members who had a claim arising out of  industrial accident or for disability arising out of their employment.  Likewise it has been a feature of such supported litigation that the  union would, under its rules and therefore by contract, become entitled to a fixed or small percentage share of the damages awarded in  order to defray the costs of unsuccessful claims and to fund future litigation of interest to the union concerned".
 
6. “It is now public knowledge that both the UDM and some of the independent branch unions of the National Union of Mineworkers (NUM)  entered into separate agreements with some of their members who brought proceedings in one or other, and sometimes both, sets of the  litigation referred to above. From the sums awarded under the agreements,  certain fixed or percentage sums (capped at moderate levels)  have been recovered or withheld from the awards of compensation made under them.  There has been considerable pressure raised, in the  media and elsewhere, which has had the objective of forcing the trades’ unions concerned or solicitors, who have been the vehicle for the  recovery of those sums by the union, to disgorge them for the benefit of the claimant himself, the widow or his estate.”

12. “It has also to be understood that in addition to the two NUM area unions, each of which is an independent trades’    union, there are other area unions within the umbrella of the NUM which have not been made Respondents to the present application,  notwithstanding that agreements similar to those in which Raleys are involved are believed to have been  made between them and their  members, solicitors have acted on the instructions of the unions concerned.  Finally,  there is a third trades’ union, NACODS (the National  Union of Colliery Overmen Deputies and Shotfirers) of which there are three autonomous sections covering the areas South Wales, National  and Scotland that do not feature in this proposed litigation, although it is believed that their practice in respect to agreements between  them and their members was similar to that employed by other unions.  Altogether it is believed that there are more than 20   autonomous unions or sections of unions which have made agreements of the same general kind as those in issue in this application.”

15. “In the case of the NUM, the position is slightly different.  None of the agreements was made directly between the NUM and the Claimant.   The method devised was for the union appointed solicitors (Raleys, the 5th  Respondent who acted solely for NUM Yorkshire and Lancashire  sections), to whom the claimant had been directed by the union, acting as the union’s agents, to require the claimant to enter into an  agreement with “In the case of the NUM, the position is slightly different.  None of the agreements was made directly between the NUM  and the claimant.  The method devised was for the union appointed solicitors (Raleys, the 5th  Respondent who acted solely for NUM  Yorkshire and Lancashire sections), to whom the claimant had been directed by the union, acting as the union’s agents, to require the  claimant to enter into an agreement with the NUM for the prosecution of his claim under the CHA(s).  The agreement required the claimant  to pay a pre-determined sum, which varied according to bands of compensation recovered, to the union for its support of the claim.  Raleys  would be expected to collect the sum claimed by the union on the successful conclusion of the claim and remit that sum to the union.  So,  as with the UDM cases, the primary claim lies against the union rather than the solicitors.  There is a glaring anomaly, in the cases as  presented thus far, in that although it is recognised on the Applicants’ behalf that the NUM areas would be primarily liable to the Applicants,  if sued, the fact is that despite having been given the opportunity to join these unions, the Applicants have not done so.  Indeed have  stated that it is not their intention so to do.”

16. “No reason is given for taking this stand.  Quite obviously, it throws doubt on the practical utility of an application such as the present if  those who logically would be liable if the present proposed defendants are to be held liable and others who are in a similar position will not  be bound by the judgment in the group litigation.”

6.  MEDIA

45. “The reality is that since July 2005 there has been very substantial publicity and media attention (newspapers, TV  and radio) quite apart  from meetings sponsored by interested MPs and, yet, the numbers of applicants to date are no  greater than [65].”

76. There is no doubt that in some of the publicity material which was put out by or on behalf of the AGM misleading information was  published.”

7.  THE LAW SOCIETY

9. “Arising from the discussions which took place in open court on that day, it had been the hope and expectation that the Law Society would  engage with one or more of the firms concerned with a view to bringing about a Court resolution of the issue.  It is a matter of regret that  nothing has come of this initiative.  Into the void has come the present application.”