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22-07-2015

R3 with Moon Beever and 3 Hare Court win an important case of principle for the Insolvency Industry and the use of CFAs Coventry & Others -v- Lawrence and Others

On 20th July 2015, The R3 team of Frances Coulson of Moon Beever, Simon Davenport QC leading Tom Poole, Dan Lewis and Clara Johnson, all of 3 Hare Court, successfully intervened in the much-awaited and ground-breaking Supreme Court costs appeal case considering CFA consequences under the LASPO Scheme. Seven Supreme Court Judges decided (by 5:2) to reject the appeal.

The Supreme Court rejected the contention that the order for costs made under the LASPO Scheme was incompatible with, and hence infringed, Article 6 and/or Article 1 of the First Protocol to the European Convention on Human Rights.

The issue directly concerned the liability to pay a success fee to the successful party’s lawyers on top of the base costs, to compensate the lawyers for acting on a CFA and an ATE premium in return for an insurance company having agreed to underwrite any liability for costs had the other party won.

The Supreme Court permitted interventions from senior interested parties including the Secretary of State for Justice, the Bar Council and the Law Society. Three governing bodies of practitioners were permitted to intervene (media, asbestos and the Association of Business Recovery Professionals Limited, known as “R3”, the insolvency industry lead body).

R3 was assisted by Frances Coulson of Moon Beever who instructed Simon Davenport QC, Tom Poole, Dan Lewis and Clara Johnson. Their arguments that the Scheme was not incompatible with Article 6 or A1P1 were accepted including recognition at paragraph 64 of the joint speech of Lords Neuberger and Dyson, that the Scheme is a general measure (i) justified by the need to widen access to justice to litigants after the withdrawal of legal aid, (ii) made following wide consultation and (iii) was well within the wide area of discretionary judgment that the legislature and rule-makers had, it being noted that this was the third such scheme enacted.

The Supreme Court accepted that in a situation where there are no perfect solutions the Scheme, looked at as a whole, was a rational and coherent one for providing access to justice to those to whom it would probably otherwise have been denied and hence struck a fair balance between the interests of different litigants.

It further observed that the attack would have imperilled the whole Scheme and disincentivised any lawyer from taking on such cases, which lay at the heart of R3’s concerns.

If you have any queries or questions concerning this matter, please contact Frances Coulson of Moon Beever at fcoulson@moonbeever.com

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