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The Commercial Litigation Journal: July/August 2012

David Robinson contemplates a recent case on the extent of a solicitor’s duties

In a decision that will be welcomed by solicitors and professional indemnity insurers alike, the High Court in Shepherd Construction Ltd v Pinsent Masons LLP [2012] held that the duties owed by a firm of solicitors were invariably determined by reference to its retainer(s). A firm would not assume responsibility for all previous advices provided by predecessor firms and an argument to the contrary, based on the notion of a continuing retainer implied by discrete commissions, was unsustainable.


Mark Surguy looks at the costs consequences of not quite winning

Americans like the English system of litigation, where the loser pays the winner’s costs, because it dissuades litigation. However, winning and losing may not be straightforward concepts.

Julian Chamberlayne and Kerie Receveur review recent case law on retrospective and discounted conditional fee agreements

A discounted conditional fee agreement (CFA) (otherwise known as a ‘no win, low fee’ agreement), as we will all know, means that a law firm will be paid at the agreed discounted hourly rate as the case proceeds, but will forego the balance of its base costs if the client loses, and will recover all of its base costs with or without a success fee if the client wins. On the other hand, a retrospective CFA is based on a conditional fee agreement that covers work done before the date the document was signed. A retrospective CFA can occur in a number of situations, for instance:

David Sawtell reports on the impact of Fairclough Homes on applications to strike out

Fraud is a costly business. It prolongs trials, complicates pleadings and ties up court resources. For some years, defendant insurance companies facing suspicious personal injury cases have attempted to argue that a claimant who is dishonest about significant aspects of his case should see his entire claim struck out, even after a trial has found that there are genuine aspects to it that sound in damages. The Supreme Court decision in Fairclough Homes Ltd v Summers [2012] effectively puts an end to this argument. At the same time, however, the Supreme Court endorsed a line of case law that confirms that cases can be struck out before trial where a fair trial is simply not possible.

Alison Padfield considers the recovery of the costs of investigating insurance fraud: current routes and proposed reform

According to the United Kingdom’s Insurance Fraud Bureau, undetected general insurance claims fraud amounts to £2.1bn a year and adds, on average, £50 to the annual costs individual policyholders face (see In cases where insurers suspect fraud, they may investigate and then refuse to pay the claim; but what of the costs that they incur in the investigation? The case-law suggests that there are two potential routes to recovery of the costs of investigating a fraudulent claim: the first is a conventional costs order in legal proceedings, and the second is a claim for damages for the tort of deceit.

John Leadley, Nicola Gare and Charlotte Nolan discuss costs and litigation funding

The long-awaited costs reforms brought about as a result of Lord Justice Jackson’s Report on Civil Litigation Costs (the Report), dated December 2009 and published in January 2011, are both revolutionary, in allowing for the first time the use of contingency fees in the form of Damages Based Agreements (DBAs), but also challenging in ending the recoverability of CFA (‘no win, no fee’ agreements) success fees and ATE premiums, which were themselves landmark reforms implemented by the Access for Justice Act 1999.

Clare Arthurs assesses a recent challenge to corporate protection

The expression ‘Piercing the corporate veil’ is a neat turn of phrase, but what does it actually mean? In VTB Capital plc v Nutritek International Corp (Nutritek) [2012], the Court of Appeal examined the principle in some detail and gave useful guidance on how the courts should apply it.