Ben introduces the Supreme Court's decision in PACCAR as representing a significant failure of pragmatism. This case, previously discussed in our PodCost series, remains highly significant for litigators. The issues arose out of attempts to undermine the effectiveness of the Competition Appeal Tribunal (CAT) – the specialised forum for mass redress in competition cases. PACCAR represents the latest effort to hinder collective competition actions. The challenge this time is to claimant funding methods.
Despite lower courts rejecting the idea that a litigation funding agreement could be treated as a Damages-Based Agreement (DBA), the Supreme Court adopted a strict ‘blackletter’ approach. It deemed litigation funding agreements with funders receiving a share of damages to be DBAs, making them unenforceable in the CAT. Most judges outside the Supreme Court think that it is a highly impractical decision and the fallout from it needs to be minimised as much as possible.
The decision has caused chaos, prompting potential legislative amendments. Specifically, an amendment to the Digital Markets, Competition and Consumers Bill, aims to retrospectively reverse the PACCAR decision. However, Ben highlights that the proposed changes will still render funding agreements unenforceable, albeit for different reasons. Ben critiques the draft legislation, highlighting its flaws at both micro and macro levels. He describes the legislation as currently drafted as profoundly missing the target.
The discussion also touches on the Buckland amendment, seeking to expand the CAT's scope to include large-scale consumer class actions. Ben analyses the CAT's decision in Neil v Sony, where claimants adapted their funding agreement following PACCAR, emphasising that the judgment of the CAT signals its priority to limit the impact of the Supreme Court's decision.
Shifting focus, Ben then examines the Court of Appeal's decision in Churchill v Merthyr Tydfil, which deals with Japanese knotweed encroachment. The Court's departure from Halsey on the power to stay proceedings and order ADR is discussed. Ben is not surprised by the court’s decision not to order a stay on the facts of this ‘atypical’ case.
The next topic is the news that guideline hourly rates (GHRs) are to be uprated in January 2024. Ben criticises the disconnect between GHRs and the hourly rates charged by city firms for heavyweight commercial litigation. The tension between judges setting rates and reflecting market realities is highlighted. It is unsatisfactory that on summary assessment there will be an immediate haircut of £300 to £400 per hour even though the receiving party has won in court. If judges are not allowing work which is reasonable, having regards to what would be charged generally in the marketplace by people doing comparable work, it seems to Ben to be a plain error of law if GHRs are applied on assessment. This part of the discussion finishes with a proposal from Ben which would address the issue in months were it to be adopted!
Finally, Ben discusses the Solicitors Act, describing it as outdated and divorced from modern commercial practices. Gone are the days when solicitors bill only at the end of the case, stepping back to review the outcome of the case before adding the ‘B factor’ for complexity to their ‘A factor’ expense rate. It is ‘ridiculous’ that clients only have one month from delivery of a bill in which to challenge it. No-one cares about the difference between contentious and non-contentious costs and, because the law in this area hasn’t kept up with modern commercial practices, judges make findings that a bill is not a bill in order to protect the right of the client to challenge their legal costs.
For more of Ben’s pithy insight into this, and the other topics covered in this edition of the PodCost, the full versions can be viewed and listened to via the usual platforms.
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