Jackson and the occupational hazards of
commoditised litigation: a practical view from the
Bar
Resource type: Articles: know-how
Status: Published on 06-Mar-2013
Jurisdictions: England, Wales
In his monthly column, James Bickford Smith considers two judgments that illustrate the hazards
of the commoditised litigation that will be transformed, for better or worse, by the Jackson
reforms.
James is a barrister at Littleton Chambers specialising in commercial and employment law.
James Bickford Smith, Littleton Chambers
Few will not have received a text message or recorded call asking them if they have taken out
Payment Protection Insurance (PPI). Many may have received the type of call or message telling
them that they "are entitled" to a "refund". As good lawyers, readers of this column will know that
this is unlikely, and that such calls are tips of the iceberg-like PPI litigation that has been passing
through the civil courts over recent years.
As the Jackson reforms move ever closer to implementation (the key CPR Update coming into
force on 1 April 2013, see the red Jackson/civil litigation reforms link to key Jackson materials
accessible from the PLC Dispute Resolution home page) it is worth noting that the PPI litigation has
now begun to throw up some lower court decisions that shed an interesting light on what life might
be like after the reforms. These also prompt reflection on what the reforms may and may not
achieve.
Funding models and commoditisation
The key issue here, simply, is litigation funding. The Jackson reforms, as is well-known, will make
the common funding models that have underpinned many claimant solicitors' practices almost
untenable if not outrightly so; for a neutral overview of the changes, see Article, The economics of
litigation funding post-Jackson.
The ensuing question that many have been debating is whether it may be possible, through
economies of scale, to maintain claimant practices in areas where no special exemptions to the
reforms apply. It is here that some of the recent lower court PPI judgments are illuminating. These
would not normally be candidates for inclusion in this column because they set out no new law:
most PPI legal issues having by now been resolved by the Court of Appeal in Harrison v Black
Horse Limited [2011] EWCA Civ 1128 (see Legal update, Court of Appeal hands down emphatic
judgment in Harrison and another v Black Horse Ltd), or in the Manchester test cases (see cases
reported as Carey v HSBC [2009] EWHC 3417 (QB) and Sternlight v Barclays Bank [2010] EWHC
1865 (QB)). Here, however, it seems worth making an exception given that these judgments
suggest clearly that it will be very difficult to commoditise even the type of claims that to many
will look "standard form".
Plevin v Paragon Personal Finance Ltd and another
In Plevin v Paragon Personal Finance Ltd and another [2012] EW Misc 24 (CC), Mrs Plevin brought
a PPI claim against the lender (Paragon) and the broker (LL Processing (UK) Limited (In
Liquidation)). The claim against the broker settled for £3,000. The case against Paragon proceeded
to trial in the Manchester County Court before Record Yip QC.
Having recounted the basic facts, the Recorder's judgment continues as follows:
"Against that perfectly straightforward factual matrix, the claim has been grossly overcomplicated
by the way in which it has been presented by the Claimant's legal representatives. In my
judgment, the true issues in the case could, and should, have been narrowed by the pleadings,
allowing the matter to proceed as a straightforward fast-track trial concluding within a day.
Instead, it was presented as a matter of such complexity that the District Judge was persuaded to
allocate it to the multi-track and to allot 4 days of court time to it. At its highest, the claim against
Paragon has a value of about £5,000 (after deduction of the settlement with the broker). I am told
that the Claimant's cost estimate is £320,000 (including a substantial ATE premium). The First
Defendant has in turn run up a huge costs bill in defending the claim. There can really be no
justification for the course this litigation has taken."
The Recorder continued to identify the root problem with the proceedings being the fact that
particulars of claim had been amended with generic material "to produce something that really
was not a proper pleading but rather contained lengthy narrative and argument from which it was
hard to discern the Claimant's true case".
At trial that case came apart:
"The Skeleton Argument and oral opening of [counsel], who appeared for the Claimant at trial,
was not much clearer. When the time came for his closing submissions, [counsel] indicated that he
felt unable to address me on the legal issues without adjourning overnight. I reluctantly agreed to
this so as not to prejudice the Claimant but I am afraid I was left with the over-riding sense that
even by the end of trial the Claimant's legal representatives had been unable to clearly identify
what her true case was. It certainly did not help that her evidence at trial was materially different
to that contained in her witness statement. While I have to wonder why she signed a witness
statement that was patently wrong, her demeanour at trial and the straightforward way in which
she answered questions suggested that the difference is not to be attributed to any dishonesty on
her part. It seemed to me that despite generating vast costs, her solicitors' preparation had simply
failed to get to the bottom of her factual case."
In short, in the witness box the claimant had set out a factual narrative inconsistent with her
pleaded case and witness statement. The contention that the broker was acting as Paragon's agent
failed resoundingly. A similar fate befell the contention that the claimant had been told that PPI
was compulsory:
"The allegation that the PPI was misrepresented as being compulsory is simply not supported by
the factual evidence. It was not Mrs Plevin's evidence that she was told that PPI was compulsory.
She had virtually no recollection of the initial conversation with the broker. Contrary to the
approach taken in her statement, she was anxious to avoid saying anything in oral evidence that
might not be entirely accurate. Her answer to most questions about the transaction was that she
simply could not recall matters."
Redpath and another v Black Horse Ltd
Similar themes emerge from the judgment of DDJ Large in Redpath and another v Black Horse Ltd
[2012] EW Misc 28 (CC), a PPI claim litigated in the Morpeth and Berwick County Court. DDJ Large
was, however, even more detailed and direct in listing the inconsistencies between the claimant's
particulars of claim, witness statement and evidence in court. His conclusion was to the point:
"38. I have identified (adequately I hope, for counsel) those areas which caused me the main
concern. Of course, it happens this way and I explored matters a little bit further with Mr Redpath
when he gave his evidence, and sadly it is a sort of situation which is all too familiar to those of us
who sit in my seat here. The reason this claim came to Court was because Black Horse did not
concede liability. It started by a cold call to Mr Redpath and it is a cold call that I can almost recite
verbatim, even though I was not at the other end of the telephone: 'You may be entitled to x
thousand pounds for a mis-sold PPI policy. Please contact blah blah blah'. They come by
telephone, they come by email, they come by text message interminably to mobile phones, and
they happen purely automatically. The people who contact you have not got the foggiest idea
whether you have ever had a PPI; they are just hoping that somebody will (to put it bluntly) 'rise
to the bait' and respond to them and say 'Yes, we did have a PPI', and then they will explore the
matter further.
39. That is how it starts and I have not asked this but if I had asked it I would guess and it is
implicit in what Mr Redpath did tell me, that they were assured it would never come to Court
because they would get compensation. We have been through it several times before with different
sorts of statements. About ten years ago, it was social housing disrepair claims we had in those
days. I was the sitting resident Judge at North Shields County Court and in one month we
discovered we had 99 claims for disrepair of council houses because people were going around the
neighbourhood knocking on doors and asking 'Is there anything wrong with your house?'."
Volume Litigation
Many readers of these judgments will doubtless feel that the judges made robust findings that
some involved in PPI volume litigation richly deserve. Key inconsistencies between pleadings,
statements and oral evidence always open legal representatives to criticism, which was duly
forthcoming in these cases. At a broader level, the costs and funding arrangements referred to
disapprovingly in Plevin appear a textbook example of the type of litigation dynamics that the
Jackson reforms aim to put an end to.
The question that remains, however, is this: for all the fact-sensitivity of individual calls or
meetings, product recommendations and creditor-debtor relations, PPI claims are fairly generic.
That suggests it should be possible to achieve efficiencies of scale through template documents,
question lists, and specialised teams. That in turn should tend to attract litigation funders.
However, what emerges very clearly from these cases is that such efficiencies can all too easily
prove illusory. That there are individual stories to tell is, in a sense, heartening. Nevertheless, the
conclusion that follows is that time and cost have to be spent on the production of bespoke
documents. Almost anyone who has litigated a witness action would consider that obvious. That
being the case, then it may simply be illusory to hope that efficiencies of scale will allow for the
litigation of claims that the Jackson reforms would otherwise render uneconomic. Outside the pure
PI field it may simply be that many claims with low quantum will soon cease to be worth litigating
professionally, whether or not their facts are similar to many other cases involving the same
Defendants. Expect post-Jackson nuisance calls not to involve a claim against a bank.