Melanie Chell reviews recent cases and notes a welcome shift against no-win, no-fee
Five months after implementation, how are the Jackson Reforms affecting the leasing industry? There can be no doubt that many judges have taken compliance with court rules very seriously. The message is clear: those who fail to comply with the rules and court orders do so at their own peril.
In the case of Venulum Property Investments Ltd v Space Architecture and others (2013), Justice Edwards-Stuart refused an application by the claimant for permission to serve its particulars out of time, stating ‘delay is bad for justice’ and ‘enough is enough’.
In the more recent case of Mitchell v News Group Newspapers Ltd (2013), the High Court limited the claimant’s costs to court fees only, as a sanction for failing to exchange and file the costs budget. The application for relief from sanctions was robustly refused.
However, some judges have at least tried to take a more balanced approach. In Ian Alan Wyche v Careforce Group Plc (2013), the applicant had failed to comply with its disclosure obligations under an ‘unless’ order due to human error.
The court took the view that the applicant, having realised its error, had acted promptly, and while delay and non-compliance was not acceptable, this did not mean the court would not make allowances for human error.
So where does that leave us?
Quite simply, while you may be lucky to find a more lenient judge, it is by no means guaranteed. Parties should take the view that they must always comply with the rules and any court orders, without exception.
This is good news for lessors when dealing with a litigant in person. It is no longer the case that the court should be extra lenient and bend over backwards to assist a litigant who fails to comply with the court time-table.
So how have the new rules affected how asset finance cases are run?
I would suggest the biggest impact on lessors has been the increase in the small claims limit to £10,000. If a case falls within the small claims track and is defended, costs are not recoverable. A large number of small-ticket shortfall claims will fall into this
Lessors are responding by agreeing fixed fees with their legal suppliers, and we have seen an increase in the utilisation of our bespoke asset finance collections team in order that lessors can try to avoid the legal route altogether.
The removal of the right to recover ATE premiums and success fees in claims against lessors by claims management companies and the like has been positive.
There will no longer be cases where the costs of the litigation are greater than the claim itself due to claimants’ solicitors acting under no-win, no-fee arrangements with 100% success fees.
Paying out on unmeritorious claims to avoid costs risks will now be a thing of the past.
Melanie Chell is a partner is Shoosmith’s asset finance practice