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The wish in para 22 to provide a goad to progress was also an inadmissible basis for securing the award, particularly in the absence of any finding of any relevant prior default by NNPC from which it needed relief, and is (one might add, if it had had any potential relevance) difficult to understand as a matter of fact... |
I should not finish without addressing a point made by NNPC in a footnote - doubtless to avoid too obvious a hostage to fortune on the main issue - on the last page of its written case. Ratio |
The footnote records that NNPC also considers that it follows that NNPC can allow the guarantees given previously (in a total sum of US$ 80m) to lapse without affecting its right to have its defence under section 103(3) of the 1996 Act determined prior to IPCO being permitted to enforce the Award. Ratio |
I do not accept that. Ratio |
The security of USD 80m was the agreed price of adjournments in 2005 and 2008-2009 which have lasted in total nearly 12 years. Ratio |
NNPC undertook by the consent order dated 17 June 2009 to maintain the guarantees until further order of the Court. Ratio |
That the adjournment will now lapse is no reason for the Court to permit the existing security to lapse, still less for any argument that NNPC is entitled to allow it to lapse. Ratio |
The guarantees should continue in place until further order, pursuant to NNPCs undertaking. Ratio |
For the reasons I have given, the appeal must in my opinion be allowed, the Court of Appeals order attaching conditions (in particular, the requirement to provide further security of USD 100m) in relation to the challenges raised by NNPC must be set aside and NNPCs fraud and non-fraud challenges must be remitted to the... |
The parties will have 21 days to make submissions as to the precise form of order and as to costs. RPC |
For the reasons I have given, the appeal must in my opinion be allowed, the Court of Appeals order attaching conditions (in particular, the requirement to provide further security of USD 100m) in relation to the challenges raised by NNPC must be set aside and NNPCs fraud and non-fraud challenges must be remitted to the... |
The parties will have 21 days to make submissions as to the precise form of order and as to costs. RPC |
This appeal tests the limits, in a modern context, of the long-established remedy known as the solicitors equitable lien. FAC |
In its traditional form it is the means whereby equity provides a form of security for the recovery by solicitors of their agreed charges for the successful conduct of litigation, out of the fruits of that litigation. FAC |
It is a judge-made remedy, motivated not by any fondness for solicitors as fellow lawyers or even as officers of the court, but rather because it promotes access to justice. FAC |
Specifically it enables solicitors to offer litigation services on credit to clients who, although they have a meritorious case, lack the financial resources to pay up front for its pursuit. FAC |
It is called a solicitors lien because solicitors used to have a virtual monopoly on the pursuit of litigation in the higher courts. FAC |
Nothing in this judgment should be read as deciding whether the relaxation of that monopoly means that the lien is still limited only to solicitors. FAC |
Solicitors have, since time immemorial, been entitled to a common law retaining lien for payment of their costs and disbursements. Ratio |
That is an essentially defensive remedy, which merely enables them to hold on to their clients papers and other property in their actual possession, pending payment. Ratio |
It affords no assistance where there is nothing of value in the solicitors possession, and is powerless where, in a litigation context, the defendant to the claim pays the judgment debt or agreed settlement amount direct to the solicitors client, the claimant. Ratio |
But equity deals with that deficiency in the common law by first recognising, and then enforcing, an equitable interest of the solicitor in the fruits of the litigation, against anyone who, with notice of it, deals with the fruits in a manner which would otherwise defeat that interest. Ratio |
Originally the fruits of the litigation were first identified in the judgment debt. Ratio |
Later this was extended to the debt due under an arbitration award and, later still, to the debt due to the claimant under an agreement to settle the claim. Ratio |
Each of those types of debt was identified as a form of property, a chose in action, in which equity could recognise and enforce an equitable interest in favour of the solicitor. Ratio |
It was called a lien because the chose in action represented the fruits of the solicitors work. Ratio |
But it is better analysed as a form of equitable charge. Ratio |
Traditionally, the solicitors interest could not be identified as a beneficial share in the chose, because that would have offended the laws against maintenance and champerty. Ratio |
Rather it was, from the earliest times, recognised as a security interest, enforceable against the fruits of the litigation up to the amount contractually due to the solicitor, in priority to the interest of the successful client, or anyone claiming through him. Ratio |
It did not depend upon the fruits of the litigation including a specific amount for party and party costs, such as a judgment for costs, or an element in a settlement sum on account of costs. Ratio |
In the ordinary course of traditional litigation, with solicitors acting on both sides, the amount due under a judgment, award or settlement agreement would be paid by the defendants solicitor to the claimants solicitor. Ratio |
Or the claimants solicitor might recover the sum due to his client by processes of execution. Ratio |
In either case the equitable lien would entitle the solicitor not merely to hold on to the money received, but to deduct his charges from it before accounting to his client for the balance. Ratio |
But equity would also enforce the security where the defendant (or his agent or insurer) paid the debt direct to the claimant, if the payer had either colluded with the claimant to cheat the solicitor out of his charges, or dealt with the debt inconsistently with the solicitors equitable interest in it, after having no... |
In an appropriate case the court would require the payer to pay the solicitors charges again, direct to the solicitor, leaving the payer to such remedy as he might have against the claimant. Ratio |
This form of remedy, or intervention as it is sometimes called, arose naturally from the application of equitable principles, in which equitable interests may be enforced in personam against anyone whose conscience is affected by having notice of them, either to prevent him dealing inconsistently with them, or by holdi... |
The modern context in which the extent of this remedy comes to be reviewed is that of the pursuit of modest claims for personal injuries arising out of road traffic accidents, by solicitors retained under a Conditional Fee Agreement (CFA) using the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffi... |
In bare outline this highly effective scheme, hammered out by stakeholders under the auspices of the Civil Justice Council and approved by the Civil Procedure Rule Committee, enables modest claims for personal injuries to be notified by the claimants solicitors to the defendants insurer using a bespoke online platform ... |
It is an express objective of the RTA Protocol, and its provisions are designed so to ensure, that the solicitors are paid their fixed costs and charges at each stage of the process, direct by the defendants insurer. FAC |
The casus belli for this litigation was a decision by the appellant insurer (Haven) to respond to the notification of claims on the RTA Portal by offering to settle direct with claimants, on terms which included no amount for their solicitors costs or disbursements (fixed or otherwise), with the twin inducements to cla... |
The motivation of the insurer was the opportunity to avoid having to add, to the settlement amount for the injury, the fixed costs and disbursements payable under the terms of the RTA Protocol to the claimants solicitors. FAC |
Settlements thereby achieved included claims by clients of the respondent solicitors (Edmondson) arising from three motor accidents, all of whom retained the respondent firm on a particular type of identically worded CFA retainer, known in the trade as a CFA Lite, designed to ensure that in no circumstances would the c... |
Edmondson responded by a claim against Haven for wrongful inducement to the clients to breach their retainer contract, intentional causing of loss by unlawful means and, by amendment, seeking equitable enforcement of its solicitors lien. FAC |
Although the sums involved are individually modest, we were told that this practice by Haven had been repeated on a sufficiently large scale for the determination of the dispute to have financial consequences running to many millions of pounds. FAC |
The trial judge (HHJ Jarman QC) rejected the claims in tort and refused to grant permission to appeal in respect of those claims. RLC |
An application for permission was made to the Court of Appeal, but not dealt with because of its disposal of the claim to enforce the solicitors lien. RLC |
That claim was rejected by the trial judge because, in his view, there had been no collusion between Haven and the claimants to cheat the solicitors, and because Haven was not on notice of the terms of the retainers. RLC |
In the Court of Appeal [2015] EWCA Civ 1230; [2016] 1 WLR 1385 the main submission of Haven was that the particular terms of the CFA Lite retainers created no contractual liability of the claimants for Edmondsons charges, so that there was nothing upon which an equitable security could be founded. RLC |
The Court of Appeal agreed that there was no such contractual liability upon the true construction of the retainers. RLC |
Nonetheless it decided that the equitable jurisdiction to intervene could be extended far enough to enable the court to recognise and then enforce an interest of Edmondson under the RTA Protocol in receiving its fixed costs and charges as therein provided or, alternatively, an interest under an express provision in the... |
Accordingly the Court of Appeal ordered Haven to pay the charges allowable under the RTA Protocol to Edmondson, in addition to the settlement sums already paid to the claimants. RLC |
In this court Haven repeated its main submission that the retainers created no contractual liability to pay the charges upon which an equitable lien or charge could be founded, and submitted that the Court of Appeal had been wrong to extend the equity of intervention as it did, the extension being contrary to settled p... |
Edmondson countered first by asserting that the retainers did contain a sufficient contractual liability of the clients for their charges to support their equitable lien on conventional grounds. ARG |
Secondly, and in the alternative, Edmondson vigorously supported the extended power of equitable intervention in the absence of such a contractual liability, as devised by the Court of Appeal. ARG |
This court permitted The Law Society of England and Wales to intervene in writing, broadly in support of the solution devised by the Court of Appeal, and to submit written evidence about the widespread use of the CFA Lite, and the use of the RTA Protocol. ARG |
The court is grateful for the submissions both of the parties and of the Law Society. ARG |
This is, according to the researches of counsel, the first occasion for this court (or its predecessor) to consider the nature and effect of the solicitors equitable lien. Ratio |
It is therefore appropriate to describe its evolution in a little more detail than might otherwise have been necessary. Ratio |
Before doing so, I must first summarise the facts, set out the relevant terms of the CFA Lite retainer, and describe the terms and modus operandi of the RTA Protocol. Ratio |
The Facts FAC |
I must first describe the particular facts about each accident, and the steps taken to settle the claims arising from them. FAC |
I do so, with gratitude, from the summary given in the judgment of Lloyd Jones LJ in the Court of Appeal. FAC |
Ainsley Tonkin FAC |
Mr Ainsley Tonkin was involved in a road traffic collision on 10 April 2012. FAC |
Havens insured was also involved in the collision and on the 12 April 2012. FAC |
Haven, having obtained Mr Tonkins contact details from its insureds accident report form, contacted Mr Tonkin concerning a hire vehicle. FAC |
On 16 April 2012 Mr Tonkin entered into a CFA with Edmondson and on 17 April 2012 the case entered the Portal. FAC |
On 20 April 2012 Mr Tonkin telephoned Haven asking where they go from here. FAC |
He was told by Louise Richardson of Haven: ... What we can do is offer you a scheme to compensate you for your injury. FAC |
We can work out a sum of money and you can put it into your account as soon as you agree on that figure. FAC |
Mr Tonkin told Ms Richardson that he had his insurance solicitor and volunteered the information that there was a 14-day cooling off period. FAC |
They then negotiated on the telephone and Ms Richardson offered 2,200. FAC |
She said: So the offer stands at the moment at two thousand two hundred pounds and obviously [indecipherable] think about it but if you do ask your solicitors they will tell you that they can get you more ... but at the end of the day that offer will come from myself and we through solicitors we have to pay solicitor c... |
Mr Tonkin replied that he fully understood that and went on to raise other matters. FAC |
They eventually negotiated a settlement at 2,350. FAC |
Mr Tonkin asked what he should do about the solicitors he had instructed. FAC |
Ms Richardson said he should just call them and tell them that he did not want to deal with them any more and they could just close the claim. FAC |
On 23 April 2012 Haven sent a written offer of settlement to Mr Tonkin who on 24 April 2012 completed and signed the mandate of acceptance which was returned to Haven on 26 April. FAC |
The mandate of acceptance confirmed that the offer was accepted: in full and final settlement of my claim for Pain, Suffering & Loss of Amenity in respect of injuries sustained and any financial losses incurred in relation to the road traffic accident. FAC |
Michael Wheater, Dale Makey, Saul Mohsin and Rose Lunt FAC |
On 23 June 2012, Mr Michael Wheater, Mr Dale Makey, Mr Saul Mohsin and Ms Rose Lunt were all travelling in the same vehicle when it was involved in a road traffic accident. FAC |
On 20 July 2012 all four entered into CFAs with Edmondson and on 23 July 2012 their cases entered the Portal. FAC |
On 24 July 2012 Haven sent to each of them a letter containing an offer of settlement. FAC |
On 7 August 2012 Mr Mohsin telephoned Mr OConnell of Haven who told him that we offer services if you want to come to us to avoid going to the solicitors. FAC |
Mr Mohsin explained that he had actually gone to some solicitors but he was concerned that it was going to take a long time to get everything settled. FAC |
Later that day Mr Mohsin telephoned Haven again with the news that he had spoken to Mr Wheater, Mr Makey and Ms Lunt and that they were all going to accept the offer. FAC |
On the same day Mr Mohsin sent an email enclosing mandates of acceptance completed by all four claimants. FAC |
Daniel Grannell FAC |
Mr Daniel Grannell was involved in a road traffic accident on 30 August 2012. FAC |
On the following day he entered into a CFA with Edmondson and his case entered the Portal that day. FAC |
On 10 September 2012 Haven sent Mr Grannell a letter offering to settle the claim for 1,900. FAC |
On 14 September 2012 Haven received a completed mandate of acceptance signed by Mr Grannell on 13 September 2012. FAC |
Thereafter an impostor claiming to be Mr Grannell spoke by telephone with Haven and the compensation was paid to an account on his directions. FAC |
When Mr Grannell subsequently contacted Haven, Haven became aware that it had been defrauded. FAC |
In a telephone conversation on 6 November 2012 Mr Grannell stated that the mandate of acceptance dated 13 September 2012 was genuine. FAC |
Mr Ralph McClaren of Haven told him that the offer of 1,900 was still on the table and that he could arrange for that to be paid at once. FAC |
Mr Grannell replied that he would love that. FAC |
Mr McClaren then said that he would contact Edmondson and tell Edmondson what they had done. FAC |
He then added: As I say theyll probably when you speak to them theyll probably will tell you not to ya know or you shouldnt do that but for the to be honest with you if when they call you probably a bit less the reason we offer you a bit more is because of the fact the solicitors get kept out of it so we don't have to ... |
Mr Grannell said he was absolutely happy with that. FAC |
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