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25.06.2004 TRINTY TERM ISSUE

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A Better Future for Legal Aid Provision That legal aid is under threat is the constant refrain of both practitioners and professional bodies, including the Law Society and the Bar Council. The inevitable challenge from critics is that this is a view not based necessarily on hard facts but on anecdotal evidence.

So the Law Society decided to conduct some research of its own into legal aid to understand better what the real picture was on the ground.

One of the issues we wanted to look at in particular was the question of whether new practitioners were choosing to go into legal aid or whether low rates of pay were turning them away.

The results of our research show that fewer than one in ten trainee solicitors think legal aid is a good career option. Deterred by debt and a perception that a career in legal aid holds few opportunities, large numbers of students and trainees are turning away from work that

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in different circumstances they would gladly do.

The survey revealed that fifty percent of trainees and fifty nine percent of law students said they would work in legal aid, Janet Paraskeva, Chief if all things Executive, Law Society were equal.

However, in reality, where all things are not equal, only seven percent of 1,522 trainee solicitors and seventeen percent of 2,123 law students questioned could see their way to working in legal aid.

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Bar Council backs Government commitment to focus legal aid spending on those in need.

The new Criminal Defence Service Bill will introduce a means tested element for criminal legal aid in the magistrates’ courts, releasing £70 million of resources for use elsewhere in the system.

The Government has also made public the fact that it is undertaking a fundamental review of the legal aid system.

Commenting, Bar Chairman Stephen Irwin QC said: ‘We welcome means testing for those convicted in the magistrates’ courts if it releases more resources into the system.

‘The Government’s own research has shown that the Community Legal Service is desperately

ISSN 1468-926X

under funded, and that cuts in legal aid rates mean solicitors are experiencing problems finding suitably qualified barristers to take on cases.

‘The proper targeting of legal aid and efficiency in the administration of justice are worthwhile goals so long as they do not deprive people of access to justice.’

Senior barristers are currently awaiting the outcome of a short-term review of a new system of fixed-price contracts for the most serious criminal cases. Stephen Irwin QC said: ‘There is a Review of Criminal High Cost Cases (CHCCs) with which the Bar is cooperating. It is essential that Ministers make workable proposals for a contracting system swiftly, at the end of the Review.’

3 DIVERSITY “Towards A New Approach On Diversity” By Karl King, Barrister, Hardwicke Building and Chairman of the South Eastern Circuit’s Minorities Committee DOCUMENT DISCOVERY 10 DIGITAL The process of Document Discovery has become a well worn tool in the litigator’s bag of tricks

By Robert Brown. Technical Director & Senior Forensic Analyst, Datasec Ltd

12 MARKETING Getting the Most Out of Your Marketing Budget

By Stephen Bedford BA MA DipM MCIM MIPR

24 MEDIATION How the Inquiry system could learn from mediation

By Professor Karl Mackie, CEDR Chief Executive and Tony Allen, CEDR Director

28 MEDIATION Halsey – The most comprehensive guidelines on mediation yet.

By Michael Lind, Operations Director ADR Group

News p.30 Government contributes to public debate on inquires p.30 Review of the Framework for the Regulation of Legal Services p.31 Tough new system of assessment for legal aid asylum advisers

Editor: Nigel Simmonds 020 8208 2193 email: info@barristermagazine.com Publishers: Media Management Corporation Ltd Publishing Director: Derek Payne Design and Production: Alan Pritchard Cambridge Printing Park Tel: 01223 423000

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Pay, chances of promotion and

p.1 working conditions all play a part in deterring those surveyed from entering legal aid work. The size of student debt is a related concern. 84 percent of trainee solicitors reported they are in debt with most at least ten thousand pounds in the red. This research graphically indicates the risk that there may not be enough legal aid lawyers in the future to provide advice to some of the most vulnerable members of society.

launched their fundamental legal aid review to look at the long-term future. We have argued that such a review would need, in particular, to: •

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• The Law Society has not been alone in carrying out research in this important area.

April saw the publication of the Independent Review of the Community Legal Service that had been conducted at the request of the Department of Constitutional Affairs

by Matrix Research and Consultancy. The Matrix report made fascinating – though not exactly surprising – reading.

The authors of the review noted that the provision of services across England and Wales is uneven, with some regions completely lacking publicly funded legal services in some areas of law. Other providers of legal services are frustrated that they are not able to provide funded advice to everyone that needs it, because they have already used up the allocations awarded to them. And the Community Legal Service faces further problems because its budget is so vulnerable to changes (or, more accurately, increases) in spending on criminal legal aid.

Welcome to our world. None of this is new – and the Law Society has been reporting these problems regularly to the DCA and the Government. However, while it may not be news to the legal profession, at least now these problems have been confirmed to the DCA in an objective review that the Department itself commissioned and I hope that they will now take real notice.

The Review also makes some very useful recommendations about how to improve the delivery of civil legal aid.

The fact that the DCA commissioned the Matrix review reflects the progress that has been made in pushing the issue of legal aid up the agenda. But this is really just a start. Having pressed the government to undertake a wide-ranging review of legal aid, we are really that they have now

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address how to protect the civil legal aid budget and improve the forecasting of the impact of justice initiatives; investigate the possibility of a new contract which would reduce bureaucracy and enhance the quality of delivery; explore new methods of delivery and greater use of alternative dispute resolution; and consider how to develop schemes which will encourage new lawyers to pursue legal aid as a career.

We believe that the government’s proposed review encompasses these issues.

The Law Society will need to continue its work, together with practitioner groups, to address the problems facing publicly funded legal services. When in 2003 we carried out extensive consultation with members of the profession about the problems facing legal aid, we tried not simply to revisit old territory, but to look in new directions. The result was a set of detailed proposals in a paper which was approved by the Law Society Council in the autumn of 2003.

These proposals included looking at the GPs’ and Dentists’ contract as a potential model for solicitors as well as the possibility of a salaried service and much more extensive use of IT and telephone services.

Our approach is now broad and much more open-minded than in the past – and focussed on the needs of the client rather the lawyer. Addressing the overall needs of the system rather than just solicitors’ remuneration has helped us to talk more frankly and more usefully with those able to help change things – colleagues in the DCA, the LSC, the Treasury and the Government’s Social Exclusion Unit. This is not to say that the question of remuneration is ignored – getting that right will be an important part of any reformed system, but in the search for an improved legal aid system it would be naïve to think that this could simply be predicated on an across the board increase in funding.

That said, we have recently secured a

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package of measures with the DCA and the LSC. About £10million over two years will improve the arrangements in some areas of publicly funded work. In criminal cases, the provision of one hour’s post charge advice and assistance, which the Government had planned to discontinue after 17 May, has been restored. And for some housing matters there will be improved rates for solicitors appearing in these cases in the County Courts. There will also be an additional £1million a year for training grants for students wishing to enter legal aid practice, which, given the results of our own research, is an extremely welcome move.

Any effective legal aid system must aim to provide equal access for all to high quality legal services, and focus particularly on combating social exclusion. The Law Society remains concerned that unless the resources available for civil legal aid are protected, we will be left with a situation where, for millions of people, the ability to enforce and defend their legal rights will depend more on the depth of their wallet than on the merits of their case.

For some it may depend on their postcode too. In a society which prides itself on the excellence of its justice system, this is surely unacceptable and I hope that any Government review will address this.

The Law Society welcomes the government’s fundamental review of legal aid. We hope that it leads to significant improvements in legal aid to ensure that the justice system is fair, effective and accessible to all. The Law Society looks forward to working with the Government to develop a long term plan to ensure an adequate supply of good quality advisers so that the most vulnerable people in society know their rights and how to get legal aid advice.

The moves we are beginning to see could herald a new and more rounded approach by government to this issue and one that recognises the important role that legal aid plays, both in protecting people’s rights and in preventing the descent into social exclusion that faces too many. It must also acknowledge the central role of the lawyer in that aim and the continued need for appropriate remuneration.

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“Towards A New Approach On Diversity”

By Karl King, Barrister, Hardwicke Building and Chairman of the South Eastern Circuit’s Minorities Committee

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tatistics don’t lie but they often mask the truth. In 2001 of the 86,603 solicitors with practising certificates approximately 37% were women and approximately 6.5% were from an ethnic minority. By December 2003, there were 11,248 Barristers in private practice in England and Wales. Of that number 21% were women and approximately 10% from a mixed or ethnic minority background. Approximately 49% of those enrolled on BVC courses in 2002/2003 were from a mixed or ethnic minority background.

Despite those figures retention, progression and promotion of both women and ethnic minorities remains a problem that the profession must grapple with. It might be said that the legal profession has so far failed to deliver effective and meaningful approaches that would give confidence to ethnic minority entrants that their prospects are not to be inhibited merely because of their backgrounds.

Though the profession as a whole presents itself as a meritocracy in which individual success is based on individual ability, there persists a seemingly intractable perception that medium to large City firms remain closed shops. In those firms the principle of success based on merit is alive and well but it would appear, only for those who are white, male and/or present with the right university credentials.

A similar assessment is often made of the Bar as a whole. In particular it is said to apply to those sets of chambers that are perceived to be in the premiership or magic circle or those specialist sets of chambers whose practitioners work in what is seen as the more lucrative areas such as company and commercial, chancery, property or tax law.

The criticism that the profession is lagging behind on the issue of diversity extends to the governance and administration of the profession - those in positions of influence and leadership, charged with guiding and directing the profession are perceived as being predominantly male and white and to

come from the same club.

The concerns about continuing inequalities affecting certain groups in the wider labour market are still present. Surveying the whole of the labour market in 2000, Kirton and Green stated, “If aggregate labour market data are only cursorily examined, it can be seen that certain social groups are disproportionately represented among those employees who are low status and low paid – women, minority ethnic, disabled and older people.” [The Dynamics of Managing Diversity]. Some might say that it inevitably follows that the legal profession would itself be subject to the same pressures as is experienced in other areas of society.

Moreover, these patterns are not restricted to the United Kingdom but are found in the United States and Canada. In the United States a study in 2002 conducted by MCCA Creating Pathways to Diversity on The Myth of the Meritocracy, found that women and minorities in the legal profession faced three principle obstacles that were key barriers to recruitment and advancement within the profession. Lack of flexibility in working patterns was an important feature that prevented women achieving a realistic work-life balance. Secondly, the profession seems still riddled with outmoded but pernicious and negative stereotyping.

The report found that “Stereotypes and assumptions about women and minorities still exist, stifling their career growth and a firm’s diversity progress... Such stereotypes within law firms often do become ‘self fulfilling prophecies’”. Finally, there exists a prevailing myth of a meritocracy that is itself be an obstacle to advancement and diversity.

Progression and success may work for those selected but if the selection process is flawed and if the pool from which selection is made is drawn narrowly then it undermines and confounds the very notion of merit being the basis of success.

The factors identified as restricting entry into and promotion within the profession appear to be directly relevant to the experience of ethnic minority entrants and practitioners in the United Kingdom.

Ethnic minority entrants to the profession consider that, when compared to their white counterparts, they have reduced prospects

of being recruited by or promoted within these City firms. Even when recruited, training and career development that would result in exposure to work as advisers for large institutional or commercial clients seems to be restricted. The consequence of this is the very low numbers of partners from ethnic minorities that can be found in these firms. Barristers chambers operating in the same practice areas as these firms seem to show no greater commitment to achieving diversity. This state of affairs can only lead to disillusionment amongst minority practitioners and inevitably to a greater attrition rate than is healthy for the profession.

Given that broad assessment, the charge that the profession has failed to match the rhetoric of its policies with real action would seem irresistible. It would seem from the statistics quoted above that there is and will be a ready and able pool from which these chambers and firms could select. The figures do not explain why there is concentration of both ethnic minority practitioners and women in such very narrow practice bands. Ethnic minority practitioners are overwhelmingly employed by smaller firms that are involved in areas of practice that rely upon public funding – in crime and family work. The same is true of those that wish to pursue careers at the Bar where criminal and family work are very largely the areas that minority practitioners will find themselves steered into. These are practice areas that are often seen as low paid with limited career prospects. Recent government approaches to public funding has done nothing to build confidence on the part of minority practitioners that even these areas are now suitable areas for pursuing a career even if they desired to do so.

Whilst many women and ethnic minority practitioners make choices to build careers in criminal and family work, their overrepresentation in these areas and underrepresentation in others cannot be put down

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to individual choice. There is a real sense that, for example, women and ethnic minority practitioners whose aspirations lead them to wish to pursue careers in commercial areas of work, face considerable obstacles that militate against them realising those ambitions.

The reason for this imbalance may in part be that the profession has not hitherto applied a dynamic approach to their equal opportunities policy or implemented an effective and comprehensive diversity policy. It may not yet be fully appreciated that the mere existence of an equal opportunities policy does not eliminate pernicious discrimination, disadvantage and unfair treatment. The development and implementation of an equal opportunities policy is the start, not the end, of the process by which those problems are tackled. In seeking to appoint on merit and successfully attracting and retaining the most able and talented, the profession needs to go further than point to the existence of an equal opportunities policy. The profession needs to place at the centre of its practices and procedures, and the centre of its very business ethic a diversity policy that incorporates equal opportunity measures that will identify the “brightest and the best” and which does not artificially limit the pool from which selection might be made.

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Those who automatically associate discussions about equal opportunities and diversity with some misconceived idea that there is a call for a watering down of standards or some form of positive discrimination need not worry. This dynamic approach to diversity is about building more responsive and robust procedures - the aim is to eliminate those practices and procedures in recruitment and selection that so narrows the pool of talented individuals that the whole selection process itself becomes impaired. Diversity is about establishing consistent policies, systems, practices and procedures that enable the most talented to be identified, selected and promoted. Diversity is about enriching the profession. A strong diversity policy that informs selection and systems for training and career development is to the advantage of the profession and serves the public interest. A strong diversity policy will be the backdrop against which flexible working practices can be developed, it will, on the one hand serve to remove the perceptions that breed narrow ill-informed stereotyped views about women and minority entrants to the profession. On the other hand it will serve to remove and replace the myth of the

meritocracy with the reality of meritocracy.

An effective policy on diversity will be both dynamic and responsive. Such a policy is incapable of succeeding unless it is incorporated as an integral part of an organisation’s business culture. The approach to diversity must be enshrined in all the aspects of the decision-making processes of individual firms and each set of chambers.

Increasingly public scrutiny will become focused on how the profession addresses these issues with communities looking to see how the profession’s commitment to equal opportunities is being put into effect. It is often said that the professional at all levels and in all areas should reflect the society and communities that the profession serves.

This should not be taken to mean that diversity is merely about marketing aimed at achieving a structural synchronisation between the outward-facing parts of our businesses with that of our with that of our respective clients. Achieving diversity is about achieving success through the effective identification and nurturing of talent. Those that the profession serve whether in business, industry or government are working towards establishing successful policies on diversity. The legal profession is uniquely placed to show leadership in this area with innovative proactive approaches that genuinely reflect the shift in thinking that is required to achieve diversity. The wider public indeed deserve such an approach from the profession.

Whilst there is much work to be done there are a few initiatives that demonstrate that some within the profession recognise the problem and understand that the solution can be found in a dynamic diversity policy. A number of these large City firms have joined forces with the Bar to tackle these issues, to challenge the negative perceptions about the selection and recruitment process that might result in many self-selecting themselves out of competition, to share knowledge and develop policies on diversity. It signals a new commitment on the part of these firms to engage in the process of change that hopefully will be embraced by those involved in strategic decision making for other firms, whether small or large.

The Bar Council in dealing with the many challenges affecting the profession, including ensuring that a successful and vibrant independent referral Bar is able to attract the very best candidates, whatever their background, must set diversity at

the core of future policy. The present and past Chairman has reiterated the Bar’s commitment to achieving this aim. The Circuits too are increasingly aware of the need to strengthen their representative roles by ensuring that the diverse composition of their membership is reflected in the leadership and the management of Circuit affairs. There are other encouraging signs too emanating from the professional associations (notably, the Family Law Bar Association and the Criminal Bar Association) that the emergence of a dynamic diversity policy is of vital importance for the future of the profession.

This view is one that would benefit other professional associations, particularly those operating in the commercial sector, seeking to make a positive contribution to the debate on the issue of the openness of the profession as it affects their particular areas.

These initiatives are the start. They recognise the importance for the future development, consolidation and growth of the profession of a system of selection, recruitment and promotion anchored in a business ethic that has diversity as one of its central tenets. Dynamic proactive views of diversity can only enhance the profession.

Having unmasked the truth behind the statistics it is clear that those committed to building and maintaining public confidence in the integrity of the profession can achieve that goal in part by implementing dynamic policies on diversity that will serve to dispel the myth about the meritocracy.

Karl King, Barrister, Hardwicke Building Karl King is in Chambers at Hardwicke Building and has been a practicing Barrister since 1985. Karl’s practice is entirely civil, the main focus being in property but including commercial and residential landlord and tenant work and housing. Karl is head of Chambers Housing Team. In 2000 Karl became an elected member of the South Eastern Circuit and is Chair of the South Eastern Circuit’s Minorities Committee representing the interests of practitioners on the wide range of issues that impact on professional life.

Karl is also a member of a recently formed Steering Group that has been established to examine and advise on diversity in the legal profession. Chairing the Steering Group is Brenda King, Chair of African & Caribbean Diversity and other members include Stephen Hockey (Managing Director, Michael Page Legal) and HR practitioners from Clifford Chance, Baker & McKenzie and other leading law firms.

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Why Africa?

By Sir Bob Geldof, delivered at St Paul’s Cathedral on 20th April 2004 as the Bar Human Committee Bi-Annual Lecture

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hen I returned from my last trip to Africa I asked the Prime Minister to commission a new version of the Brandt Report. Dismayed at the continuing chaos of Africa and our confused response to the many tragedies I had witnessed yet again I felt that an attempt to understand the newer factors at work in Africa was necessary before we could even begin to compose a workable solution to the terrible conditions of the lives of the poorest and most wretched people on our planet.

Willy Brandt along significantly with Britain’s Ted Heath had written the seminal development document of his time. He had tried to analyse the structural and economic differences between our world the successful North and theirs, the impoverished South. It is possible to argue now that Brandt’s task was perhaps easier than our own. He lived in a political world of fixed certainty. A stasis of terror. The apparently predictable solidity of the Cold War powers, where the agreed battleground would be us in Europe but the battle would be held in abeyance for now under the damocletian threat of what was called Mutually Assured Destruction, with the wry but perfect acronym MAD. A rare example of Pentagon humour.

Whatever pertinence Brandt had for his time - and it was significant, the unfortunate reality was that at that point of their lives, although all of Brandt’s commissioners had influence, none held power. Brandt could only suggest, he could never implement.

Besides, the fixed world of which Brandt spoke soon dissolved in the collapse of the Soviet Union and a newer stranger more fluid, less predictive world emerged from the generally benign chaotic aftermath of the unlamented Cold War and our own murderous 20th century.

It was into that world that I stepped when I returned again to Africa. 20 years ago when I had first pitched up in Ethiopia almost by accident and frightened by what I was doing and feeling out of my depth and sickened by what I saw, I still understood that this was Brandt’s world. Here was the tyrannical Marxist regime, here a civil war played out by competing proxy interests, here

was grotesque environmental degradation and here the biblical millions, huddled in their hungry misery suffering under the common historic whip of the African condition.

It was difficult to see a resolution to the slow crucifixion of a continent then. What influence could one possibly have upon the great powers. How were the Kremlin walls to be broken down, the Pentagon to be breached. Live Aid was a decent attempt at a Jericho like trumpet blast but although we then began talking seriously at the highest level about Africa (and it seems almost ridiculous now that the first time the UN debated Africa was in 1986), very little could be moved, conditions could be temporarily tempered, but African thug puppets or racist regimes would remain in power bankrupting their people, we could ameliorate some of the effects of our onerous trade policies, but Africa that almost overwhelmingly beautiful continent would stay in a convenient chaotic state enabling us to shrug and turn, and leave it to its misery, removed from the stately progress of the rest of our world. And that can be no longer tenable.

20 years ago next year I stood in the death camps of northern Ethiopia. As far as I could see in the denuded and blasted moonscape about me, people, often naked streamed out of the hills and plains in long lines to a place they’d heard others had come to sit and wait and die perhaps, until someone found them and could maybe help. Often they were tiny scraps of humanity, aged 5 or 6 whose parents had long since collapsed on the unmarked trails but had urged them to continue on.

In the camps nations huddled. Elders tried to look after the youngsters until they died of the many diseases rampaging through the weakened immune systems of the starving.

Grain was consumed whole. For the tiny ones in the throes of starvation and dehydration the effect of the unhusked grain was to tear the lining of the stomach walls so that in the next spasm of diarrhoea the child would shit its stomach directly onto the dirt floor in a violent, bloody and agonising purge.

These wizened old men and women aged 2 or 3 died about me in a thick stew of foul stench and a pandemonium glut of delirious flies. Pity was too soft, too, too indulgent that people should die of want in a world of surplus seemed so intellectually absurd, so morally repulsive that an absolute rage, an entirety of anger, a consuming shame in my and our complicity was the appropriate response. This was not the happenchance of environment, nor the accident of an indifferent God, this was the malignant hand of humanity laid bare. That anger has lasted 20 years.

I tell you this and describe it thus not to shock but to engender again that shame within me. Long years of becoming acquainted with the theories and statistics of development serve ultimately only to numb the senses to the agonising end of those small 3 year olds.

For in order to help us live, the mind must censor the senses. And this had become my awful, unwanted expertise. So tonight I need to recharge again those batteries of shame, in order to be able to speak to you.

On my most recent visit to Africa journalists would ask ‘Was it worth it, nothing has changed in the 20 years since Live Aid? It was a decent if inevitable question. But things had changed utterly, it was of little interest to the poor and weak, because the consequences of change - death for the poorest and weakest - remained the same.

But in those 20 years things had got worse.

Africa had uniquely grown poorer by 25%.

A typical African country today has the GDP of a town of 20,000 in the UK. Half of its people subsist on 65 pence or less a day, this at a time when we grotesquely pay each individual cow in the EU $2.50 per day in subsidy. The U.N. was spending $1.3billion a year on peacekeeping but a fifth of all Africans lived in countries riven by civil war.

This instability helped spread Aids which unknown in 84 was now killing 6000 a day.

The dead can’t plant so people were starving again. Only one in 400 victims was taking anti-retrovirals. Net investment south of the Sahara was a pathetic $3.9 billion and was worse than in the past 6 years. Why? The conditions I encountered 20 years ago were largely those of the Cold War. Proxy states in Africa were doing the dying for us. If they had Mengistu, we had Mobutu;

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and all had the ancient hunger, poverty and instability still with them.

But now amongst the southern peoples of Ethiopia last year I felt a different, newer despair. Here everything was green, but about me the ruined people of a ruined land. They were used to the irregular rain falls, and would normally allow for the subsequent crop failures and food shortages by profitably selling their coffee on the world market and buy in whatever food they needed to make up that year’s shortfall.

Except this year coffee had collapsed by 70% because Vietnam, a country they had never heard of, had entered the market a continent away and depressed the world market price.

They began to starve. Donors responded generously enough to allow the government to feed them 68 percent of what is required for human beings to live, but is in fact a policy of slowly managed dying. So far so normal.

The superhuman heroics of the few young African doctors and nurses in the ill- lit shed they called a hospital defies description.

This shack served a million people with no equipment or medicine of any note.

This then was a people in trauma. They were utterly bewildered. They had never heard of this new economic fetish everyone outside called globalisation and which in theory should help them. But now the old certainties - yes even hunger, seemed hopelessly out of kilter.

There was a terrible natural metaphor to this place. You see it everywhere. It appears huge and green and bountiful and yet it is barren. They call it the False Banana, It looks like it, feels like it, grows like it but it produces nothing. Like the pregnant women about them carrying life but giving birth to death. The fertile ground with nothing to eat. The cash crop that produces no money.

The men making all the decisions and doing nothing. One big False Banana.

In the years of hunger they strip the bark of the False Banana, pound it into a stringy mass of inedible fibre and cellulose then bury it for a year to soften it. Then they dig it up, clean it and grind it into a stringy flour.

Then they eat it. It fills your stomach but it has no nutrients whatsoever. Another false banana. Food that doesn’t feed you, We want to stop this happening to others, we ask for it to be stopped, and to mollify us rather than alleviate them, our institutions offer the false banana of “Development”. We toss them the token of aid that helps no-one.

When I returned I began to write some pieces for the newspapers outlining ideas as to why perhaps none of what we had tried had any effect whatsoever. Indeed did we actually mean any of the, to me now tired rhetoric of aid. Was it there to hide our indifference, or simply mask our failures.

I could not think of a single project implemented by any NGO that had lasted longer than 10 years or longer than the designated time of the project itself.

I could not think of a single example where the imposed bromides of the IMF had had anything other than a net negative outcome.

Not a single project. What were we all doing? I suggested that what we needed was a new Brandt report. To which correctly there were loud groans from all and sundry.

And frankly yes none of us need another ineffectual, document, report, analysis etc., the Tony and Bob show as some wag called it last week.

But what Brandt did back in the late 70’s was to begin to define the clear disparity that had emerged between us and them.

What he defined as the North-South divide.

What we needed was a re-definition for this different age.

It is well to pause here and remember that Brandt himself emerged from the wreck of another ruined, bankrupt and starving continent of just 40 years previously. Our own. He had borne witness to savageries, and genocides and mad ideologies and mass murder, that put anything that happened in Africa into a brutal context.

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In his later years, and in his retirement he paused and took stock and realised that within a tiny space of time Europe had come from utter devastation to being a continent with the highest standards of living and the second largest economy in the planet.

But Africa, and the rest of the third world, remained mired in a hopeless poverty.

He set out to see what could be done to introduce a measure of social equity between the ever richer us and the ever poorer them. The Brandt report was often incisive, brilliantly intuitive and prophetic but ultimately futile. Neither Brandt nor his co-writers including Ted Heath held power any longer. They could no longer influence nor implement and though the report was widely read and became a benchmark for development it was ultimately instantly redundant within a short space of time by the revolution of glasnost and the demise of the Soviet empire. Everything changed.

Except I don’t think our mindset has. I don’t think we have fully grasped that we are in a wholly different universe to the one which formed the intellectual ideas through which we live, act and view the world. As such everything we determine or enact is by definition bound to fail. To be specific we imagine the world to be governed essentially around the notions of the 1960’s\70’s. Like we are all actually living in the Brandt Report. But that was 40 years ago. We live in other times and it requires new definitions and ideas.

The full version of Sir Bob’s speech can be down loaded at www.barristermagazine.com

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Digital Document Discovery: The process of Document Discovery has become a well worn tool in the litigator’s bag of tricks

By Robert Brown. Technical Director & Senior Forensic Analyst, Datasec Ltd

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ule 31.4 of the Civil Procedure Rules defines a document as “Anything” in which information of any description is recorded”. If we apply this rule to the digital domain, the potential reach offered to the litigator can be substantial. When you consider that by 2007 it is estimated some 35 billion Emails will be sent every day and, on average, around 92% of all the information created during 2002 was held on computers (while a mere 0.01% of the total was held on paper) the quantity of available data is staggering. With so much information, how do we go about separating the digital wheat from the digital chaff?

More to the point, how do we work out where to find the wheat in the first place?

The process of Document Discovery has become a well worn tool in the litigator’s bag of tricks. It is a popular belief that if someone has, thought or said something they shouldn’t, somewhere there was likely to be a piece of paper with it written down.

Even though we continue to march toward the long held ideal of the paperless office, we still find row upon row of filing cabinets stuffed to the gunnels with potentially incriminating evidence. However, with the current reliance on technology; computers, PDAs, mobile phones and, sometimes, even printers can offer up far more potentially valuable bounty. Digital Document Discovery is, quite simply, the discovery of documents that were created electronically and/or stored digitally.

What You See, Isn’t Always What You Get The increasing awareness of the value of digital evidence in both civil and criminal matters brings with it many new challenges, not least of which is the concept of what digital evidence actually is. In its most fundamental form, digital evidence is exactly what it says on the tin, digital! It is simply a stream of ones and zeros. But, by using software tools and a little knowledge we can turn this data into information. Quite simply, what we see when we open a document in software such as Microsoft Word is an interpretation of the data that forms the document. This information can be found in word processing documents, spreadsheets, emails and database files to name but a few.

However, the information we see when we use the appropriate software is often just the tip of the iceberg. The deeper value of

digital evidence can often be found in the information that is normally hidden from the viewer. For example, a Word document may contain details such as the name of the original author, the owner of the software used to create the document and even previous versions of the document while an Excel spreadsheet might contain hidden cells and formulae. These are all examples of the valuable evidence hidden within the data that is known as metadata, or “information about the information”. It is only possible to recover this metadata, which might be just the “smoking gun” we are looking for, electronically.

As a result of the way we work with and store this digital information, the next challenge that faces us is that of possible spoliation. Digital evidence brings with it a unique potential for spoliation. Simply opening a Word document and printing it can alter document content such as dates, or metadata such as user details and information about the last printer to be used. Other potentially vital information such as the last date the file was accessed or modified can also be changed. Because of this, the discovery and disclosure process must be carefully controlled and monitored if we are to maintain the evidential integrity of the documents in our case.

Tell Me When To Stop The sheer quantity of available information can also create difficulties for us. The extent to which the discovery and disclosure of material is increased through the inclusion of digital evidence can be both a blessing and a curse. In a recent case of IPR theft, DataSec recovered more than 6000 relevant documents from 330 gigabytes of data seized during the execution of an Anton Pillar order. The search, equivalent to a review of more than 630,000 documents was completed in only 41⁄2 days. Whilst the quantity of recovered documents and the time in which the search was completed would put most paper discoveries in the shade, the client’s lawyers still had significant quantity of documents to assess.

As a result of the ease with which data can be distributed between computers, multiple copies of a document may exist throughout an organisation. Distribution can occur through everything from the humble floppy disk to the use of writeable CDs to the sending of files as attachments to Email. Such

proliferation needs to be identified and filtered out unless, of course, it is pertinent to the action we are pursuing!

Proliferation also highlights another problem. Where do we look for the documents?

Most modern offices, from the smallest SOHO through SMEs and on to the big Corporations now employ some kind of network with which to connect their computers. These networks may hold documents centrally on dedicated computers known as Servers. These computers may be located in other countries and consequently other jurisdictions. Even the Internet can be a potential store for documents relevant to our case. Space can be rented on computers anywhere in the World on which documents can be stored and accessed via the Internet and Email services, such as HotMail, are Internet based (HotMail’s servers are located in the USA).

Another digital benefit is the ability to recover documents that have been deleted.

Because of the “way computers work”, if a document has been stored or manipulated on a computer, even though the User may have deleted it, fragments or even complete copies can be routinely recovered. Kenneth Withers, in his article “Is Digital Different?

Electronic Disclosure and Discovery in Civil Litigation”, describes this as the “Vampire Effect”. In other words, no matter how hard you try to kill it, it will always return.

Work Smart For the Digital Document Discovery process to produce manageable results the scope of the discovery needs to be carefully defined.

Part 31 of the Civil Procedure Rules attempts to direct the definition of this scope through the “Rules of Disclosure and Inspection”. For example, Rule 31.6 requires that a party disclose only the documents on which he relies or that may “adversely affect his own case”, while Rule 31.12 provides for “specific disclosure or specific inspection” which allows searches according to a defined extent.

However, as always rules are subject to interpretation and can fall under the heading of “Legal Argument”. So what can we do to better control the process?

Perhaps the most obvious approach is to make the technology do the hard work for us. As we are in a digital environment we can make use of the power of computers.

We can search thousands of documents for

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words or phrases that are relevant to our case in a matter of minutes. We can create “digital fingerprints” of specific documents we may be looking for. We can investigate the extensive “audit trail” that is created whenever a computer event, such as the creation or opening of a document occurs (remember, these audit trails are themselves potentially “documents” under rule 31.4).

The engine that drives this technology is intelligence. In much the same way that we need a sound briefing to develop our knowledge of what we should be looking for in a paper discovery, the creation of a solid intelligence picture can help identify where we should be looking, the “keywords” we should be searching for, the documents we should be “fingerprinting” etc. From this we can start to develop an appropriate strategy for discovery and disclosure.

Where Do We Go From Here?

Evidence that we discover from digital sources has the potential to remain digital throughout the litigation process. Indeed, some “documents” lose so much relevant detail if printed that they become incoherent and unusable. As a result, this type of

data can only be effectively presented in an electronic format. A draft Practice Direction produced by the Society for Computers and Law provides advice on how to identify and deal with such issues and reach agreement on their resolution. There are obvious benefits to be gained by keeping digital documents in an electronic environment.

The entire results of a Document Disclosure can be stored on one or more CDROMs instead of dozens of lever-arch files. The savings in paper and ink alone can be quite substantial (not to mention environmentally friendly!).

The power of digital examination and presentation is not only restricted to documents that have always existed in electronic format. The benefits can be extended to paper evidence. Paper documents can be scanned to create electronic versions that can be indexed and catalogued to allow searches for words and phrases. The ordeal of preservation and access can be greatly simplified bringing the same benefits that we see with purely digital evidence with obvious efficiency and cost savings.

The traditional paper discovery and disclosure process will always be with us but, the benefits to had from Digital Document

11

Discovery are clear and unambiguous. The digital age is not just coming, it is here with us now. Meet the challenges that it brings with open arms and reap the benefits because the future isn’t just bright, it’s digital!

Civil Procedure Rules http://www.dca.gov.uk/civil/procrules_fin International Data Corporation, “Worldwide Email Usage Forecast, 2003-2007” http://www.idc.com University of California, “How Much Information 2003” http://www.sims.berkeley.edu/research/ projects/how-much-info-2003 Ken Withers 1999, “Is Digital Different?

Electronic Disclosure and Discovery in Civil Litigation” http://www.kenwithers.com/articles/bileta/ Society for Computers and Law, “Draft Practice Directions for the use of IT in Civil Proceedings” http://www.scl.org

12

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Getting the Most Out of Your Marketing Budget Barristers have largely embraced the need for marketing, but there remains a sense of unease as to some of the output and activities of those responsible for marketing a Chambers. By Stephen Bedford BA MA DipM MCIM MIPR

T

his is not surprising because in some cases the output is inappropriate, ineffective and lacking focus! These observations are drawn from personal experience and from a recent report published by Conical on Barrister sector marketing practices.

Our experience and our survey work reveals that the dominant factors affecting the ability of a Chambers to win and retain clients are as follows; reputation of the Chambers, reputation of individual Barristers and referral.

For most Barristers this is not a surprise and for most marketing professionals with some experience of professional services marketing this information is not particularly new. So one has to ask then why so much marketing budget gets diverted to lower importance activities such as advertising, overly complex websites and sponsorship? One might also ask some serious questions about the costs of some rebranding exercises. All of the above can be used as a means of raising brand awareness, which is an important objective, but they are somewhat low ranking when it comes to winning new clients or retaining existing clients.

Marketing is perhaps best seen as a management process for anticipating and meeting client needs profitably. Marketing has a whole range of tools and techniques available for use. All of these tools have a strategic application and can achieve a desired outcome, but mistakes are often made in the application of these tools.

This misunderstanding of how marketing tools are used is the root cause of the misapplication of marketing budgets.

The Link between Marketing and Human Resources The issues of reputation and referral are driven by the experiences clients have when they work with Barristers and Chambers support staff. It is assumed that all Barristers need to be kept up to date with changes in the law and Continuing Professional Development is taken for granted. However, the client experience is also influenced by the way support is delivered, the general attitude of the Barrister and support staff to the client and the client or account management skills of the Barrister. These skills should not be assumed and should be actively evolved and developed. Other skills that impact upon the general marketing of Chambers include presentation skills and networking skills. As such it is important that human resource and marketing disciplines are seen as linked within the context of a Chambers.

Business Development Skills By definition most Barristers have developed communication skills. However, it would

be wrong to assume that just because a Barrister is skilful presenting in Court he/she is equally comfortable attempting to win new work in front of a new client. Law firms are quite used to having to respond to formal tenders and in so doing often have the support of Business Development personnel to create proposal documents and electronic presentations. One might expect law firms to continue to push these disciplines down the supply chain into Chambers. Even if this does not happen there is no doubt that solicitors expect Chambers’ support staff and Barristers to have professional business development skills.

On a Chambers wide basis there is an opportunity to adopt business development tools and techniques. Obvious initiatives include the adoption of ‘key account management’ techniques and lead tracking.

Key account management techniques are many and varied but the core assumption here is that there are some clients who are of strategic significance to an organisation and the loss of their work would be quite damaging. Experience of Chambers suggests that the Pareto 80:20 principle often applies whereby a large slice of work comes from a limited number of client law firms. Where this is the case a plan for retaining this work should be put in place and initiatives launched to apply ‘golden handcuffs’ on the client. A passive, inactive approach is dangerous. It is widely recognised that one of the main reasons for clients switching to other suppliers is ‘perceived indifference’. It is also widely recognised that winning new additional work from an existing satisfied client is much easier than winning new work from a new contact.

Potential new clients also need to be identified and initiatives launched to make the target client aware of the capability of a Chambers or individual Barristers and then opportunities sought to make direct contact with the target client. Barristers in general often baulk at this approach in that it has the ‘feel’ of direct selling about it and this is in some way a grubby inappropriate activity for a lawyer. This perception of lead tracking is largely based on a misconception that sales and marketing activity has to be brash.

The creation of a target client database that identifies potential sources of instruction and ensures that these individuals are tracked and initiatives put in place to communicate with them would be a step forward for many Chambers. The database need not be overly complex but it should allow for capture of multiple decision makers, multiple departments, multiple addresses within a single organisation and allow that data to be sensibly interrogated to produce useful lists and information. Any activities in marketing a Chambers should then be tracked using the database. Those that have such a system benefit greatly from this approach since

it allows them to target their marketing by discipline, firm and region if required.

For Chambers as a whole, or indeed individual Barristers, there is cost effective software available that can assist with lead tracking initiatives. At a simple level a bespoke Access database can prove to be very useful and there are also plenty of ‘off the shelf’ packages that can sort data and record campaign information.

Time to re-direct the Budget?

It is difficult to make general conclusions about where marketing budgets should be spent because different Chambers have different objectives. A recently merged Chambers for example could quite legitimately be prioritising brand awareness initiatives, whilst others might prioritise general profile raising activities. However, for most Chambers client retention, referral and winning new business from existing clients will likely appear at the top of the list of marketing objectives. As such it is suggested that marketing activities should be devised to support these objectives.

Tools that are often used to achieve these objectives include: • Detailed client perception monitoring through semi-structured interview ideally including a feedback loop for the client • Creating a network of referral bodies and initiating activities to foster referral • The adoption of key account management techniques that help maximise the total revenue a Chambers can generate from a client firm.

• Prioritising marketing skills training within the HR plan • Highly focused PR activities • Highly focused and interesting (ideally fun) hospitality and seminar events.

Unfortunately, these sorts of activities can fall down the list of priorities and be squeezed out of the marketing plan by the more glamorous components of the marketing mix.

Author Details Stephen Bedford BA MA DipM MCIM MIPR is a Director of Conical, a marketing and PR consultancy which specialises in outsourced marketing, training and PR services for the legal sector. Stephen also leads ‘Marketing Masterclasses’ for lawyers he can be contacted on 01727 844000 or via sjb@conical.co.uk

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Getting the most from your expert – the Top Ten tips

By Paul D Smethurst, Head of forensic and investigation services at the London office of Begbies Traynor

H

ow things have changed. It’s not too long since the hired gun or pay per view expert was a common feature of the litigation landscape – if the evidence wasn’t there get someone near retirement with a lot of letters after their name to proclaim loudly that white really was just a particularly light shade of black. In contrast, I recently asked a litigation partner at a well known firm what he wanted from the experts he engaged. His response; “I want someone who is going to help me get the best sustainable result for my client in light of the evidence available”. His next comment was the basis for this article; “So – I’ve told you what I want, now – you tell me how I get this ?”

I am a forensic and investigation accountant – I have given evidence as an expert accountant in Court and arbitration hearings and I have worked with some excellent legal professionals. Set out below are my top ten tips for getting the most from your expert : 1. Go through a tender process It takes up time but a well organized tender process can make all of the difference to finding the right person when putting your team together. A single telephone call requesting details of hourly rates is not a tender process.

On a confidential basis give whatever information you can regarding the case to, say, three experts you might use. The potential appointee should be required to explain the approach they would propose and their thoughts about key issues. Other questions might be put to the proposed expert – the tender meeting provides an excellent opportunity to see how an individual might perform under pressure and effectively get some free advice.

Of course, you need to know about fees, staff who might work on the assignment and also obtain a copy of a proposed Letter of Engagement (more about Letters of Engagement below).

2. Ask your expert for referees comprising other lawyers or advocates they have worked with and take up references Many experts might well know a great deal about their field but have never or rarely been involved in a legal case.

Nothing wrong with this – but you need to know about it before appointing. Ask for references including, if possible, one for a matter where there was a hearing.

3. Does your expert have the right expertise?

This may seem obvious but is often an issue. I have heard of accountants in personal injury matters who do not know how to calculate Income Tax (“My tax partner usually does that for me”); experts

opining about audit negligence who have never been registered auditors. In one case I attended I heard an “expert” give evidence about the value of second hand aircraft. On cross-examination it transpired that the basis for this expertise was an historic subscription to Aircraft for Sale Monthly or some such publication – one could almost hear cross- examining Counsel mutter; “Thank you and good night”.

when a meeting does take place a senior or some other manager also attends ostensibly to take notes. It soon becomes apparent that the named expert has little or no idea about the case and the work that has been completed and that the report has actually been written by the manager.

4. Could you work with your proposed expert ?

Your appointed experts must be part of the litigation team – by this I do not mean partial but capable of working as a part of a team with other people. The expert diva – one who wishes to appear aloof and in some way set apart from the general hoi - polloi of the case (“you are very lucky that I am here giving you my opinion about this as I am very busy”) is unlikely to win the trust or sympathy of either your client or the Court.

The Letter of Engagement you agree with your expert should set out inter alia: • What work will be done; • Who will do the work; • How much the work will cost or the basis upon which fees will be charged; and When the work will be completed.

Similarly, if your expert is agitated or annoyed at having to justify or explain their position or possibly appears reluctant to take other factors into account you would do well to consider the likely reaction to working under pressure or being challenged in a hearing.

5. Experience giving evidence If the matter you are dealing with could end up at a formal hearing you should find out before appointment whether your expert is experienced in giving evidence or has received appropriate training. We all know stories of professionals who appear confident and have the necessary credentials but who, quite unexpectedly, perform poorly when giving evidence. The truth of the matter is that you can read and go on as many courses as are available but either you have given evidence and are comfortable with that type of environment or you have not.

6. Consider whether you will get your expert’s opinion or that of his / her Manager Most well known experts will be inundated with work or opportunities to tender for work. If you are considering a big “name” for your report make sure you gain some comfort or commitment that the expert will be able to devote the necessary time to the assignment. I have been involved with a number of cases where a meeting and liaison between experts has proved almost impossible due to the diary commitments of the well known “name”. Furthermore,

This state of affairs can be disastrous if the situation extends to a court or other formal hearing. I have seen this happen once – it was embarrassing and resulted in a well known accountant losing all credibility with the Court.

7. Letter of Engagement The rule here is really quite simple – get one at the beginning of each assignment.

There are plenty of template Letters of Engagement available and agreement before work is undertaken will help in establishing the relationship with the expert.

8. Fees – agree a reporting structure It appears that many experts – regardless of their profession – have not helped themselves by what might most generously be described as aggressive billing practices.

There are many stories of papers being sent for a quick preliminary review on a; “Do you think you can help?” basis and being returned with a terse, negative response plus a request for payment of a substantial “review of papers” fee account.

On other occasions experts have substantially exceeded budget and the first that any client or advisor knows of this is when a much larger than expected fee account arrives in the post.

Agree a budget with your expert and insist on fortnightly or some other form of regular reporting of costs together with details of work done. Make it clear that if there are likely to be problems in achieving budget then you need to be told as soon as they are identified together with reasons why the budget is threatened.

9. Understand your expert’s report You should be able to understand and follow any expert report. If it is not clear to you what approach is being adopted or where various assumptions or numbers have come from then it will most likely be equally indecipherable to a judge or arbitrator.

Be prepared to challenge the approach used and offer alternatives – if nothing else this process will provide you with some insight into how capable your expert is of explaining

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and defending a position in a clear helpful manner or how reasonable the expert is in terms of accepting alternative approaches.

Many barristers that I have worked with have focussed almost exclusively upon testing the particular words that I have used – the bigger picture relating to the actual approach used has often not been considered at all.

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10. Find an expert who can use the telephone By this I don’t mean to imply that most experts have graduated from the Luddite school of technology; rather, you should ensure that your expert either has or knows that you require a commercial approach to work. If there is a problem – you need to know about it as soon as possible, not read it at the end of a 200 page report that has cost the better part of the damages being claimed.

I hope that the points I have set out above will be helpful. Always bear in mind that it is amazing how many straight forward matters such as; “How much ?” and “Call me if there is a problem” seem to go out of the window when dealing with experts.

Paul D Smethurst is head of forensic and investigation services at Begbies Traynor’s London office. He has worked as a forensic accountant for the past 14 years in both the UK and in North America. He has been involved in nearly all aspects of this work.

The views expressed in this article are his own.

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16

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Rethinking Compensation: The government needs to explicitly restate the principle of ‘full compensation’

By David Marshall, President APIL

T

he Courts Act received royal assent in November 2003.

Amongst the multitude of provisions relating to criminal justice are two sections which are intended to produce a fundamental change to the system of damages for personal injuries. Put briefly, Section 100, by way of amendment to the Damages Act 1996, provides that a Court may impose an order for periodical payments for future loss. Section 101 provides for these to be adequately secured, in particular by amendments to the Financial Services Compensation Scheme.

Structured settlements have been available in appropriate cases for many years - so what is new? Up until these sections come into force (which is expected in the autumn of 2004) neither party can insist upon the damages claim being satisfied of by way of a regular stream of payments until death.

Unless the other side agrees to a structure, a lump sum has to be ordered. And many structured settlements have been ‘top down’ – taking the lump sum and purchasing an annuity with it – rather than ‘bottom up’ payments reflecting the cost of specific needs. The Department for Constitutional Affairs made it clear in prior consultation that they see the new periodical payments order as a bottom up mechanism to provide for needs for life. Lord Irvine said “This should help ensure that injured people receive the compensation to which they are entitled for so long as it is needed, without the worry of the award running out if they happen to live longer than was expected.”

On the face of it, periodical payment orders for future loss are attractive. The main disadvantage of a lump sum is that it will inevitably be the wrong sum. The future loss element will have been calculated using a multiplicand reflecting the present day value of the loss and a multiplier calculated using life expectancy tables and assumptions about investment returns. However, life

expectancy is the key driver and as no one will live precisely to the estimated date of their death the lump sum will either be too little or too much. Periodical payments remove this uncertainty and are particularly appropriate in cases where there is genuine doubt as to whether a claimant’s expectation of life is significantly impaired.

However, there remain issues of principle which mean that periodical payments will be a problematic remedy. Although the government stated during the course of consultation “indexing can make allowancae for the effects of inflation under the various heads of damage”, in the course of debate in Parliament the government accepted amendments which provided that normally the appropriate index for increases in periodical payments will be the Retail Prices Index. So far as payments for care are concerned this is a significant problem. As was highlighted in the 2003 Court of Appeal decision in Sheppard v Stibbe, increases in care costs are rising well ahead of rises in retail prices. If one assumes that the healthcare costs index is rising at, say, 8% per annum compared to RPI at, say, 3% per annum, it is not difficult to calculate that the periodical payment for care will soon be inadequate to pay for the care regime ordered by the Court if it is indexed to RPI. It is, of course, argued that this is no different to the position under the current system of lump sums where the discount rate used to calculate the multiplier is also underpinned

by RPI. However, the multiplier, following the House of Lords decision in Wells v Wells and the subsequent setting of the discount rate by the Lord Chancellor at 2.5% allows for investment in gilts. Injured people receive a lump sum and, although they should not need to take additional risks to make up shortfalls in their anticipate returns, they do at least have that option.

With periodical payments that option will be severely limited because they will not have such a substantial lump sum available for investment. Also the fact that the current system does not work well is not a

good a reason for introducing a new system with the same flaw. It might also be argued that the new Act does make provision for the Court to order a linkage to a different index if it considers it appropriate. However, similar powers apply to the discount rate to be applied in calculations of lump sums under the Damages Act 1996. And as became clear in Sheppard v Stibbe, the Court is unwilling to depart from the rates approved by the Lord Chancellor. As Andrew Dismore MP said in the Commons Debate on the Bill “We are back to where we started. It is a circular argument”.

The other concern of principle relates to the concept of reviewable periodic payments.

Originally, the government touted this as a new mechanism to ensure that damages are not a once and for all remedy. With the sole limited exception of provisional damages, the Judge awarding a lump sum is obliged to guess at future contingencies and make an award at trial as best as he can. The government believed that the new system of periodical payments could be tailored flexibly to allow these to go up or down as may be appropriate as circumstances did in fact change. However, the draft Order that has been recently unveiled for consultation reveals a proposed regime which is very similar to provisional damages, limiting the effect of the new regime to very similar limited circumstances. It will only be significant medical deteriorations or improvements foreseen at the time of the original order which are susceptible to variation. Of course, reviewable periodical payment orders were strongly opposed by insurers who feared claims remaining on which their books might never be closed, but it does appear to have been a radical opportunity missed.

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As well as concerns of principle, there are serious practical concerns about the new regime. It has perhaps been unfortunate timing that a fundamental shift from lump sums to annuities has been introduced at a time when the annuity market is in such a bad way. There are few providers in the annuity market who are interested in providing appropriate products, particularly on unimpaired young lives where the claimant might live for seventy or more years. The government will self fund and presumably welcomes the reduction of the annual cash drain of significant clinical negligence awards. Insurers had expected to purchase annuities in the market, but more are now expected to self fund which is not necessarily ideal from either their point of view or from that of the claimant (who is linked for life to the insurer of the wrongdoer). It is possible that a market will be created by increased demand, but the signs are not hopeful.

It is also unfortunate that no draft Civil Procedure Rules or Practice Directions have yet been published. There is discretion as to whether to order periodical payments needs

to be rule based, but practitioners have no idea what the rules will be. Judges need guidance and training. There is great risk of negligence and/or injustice if periodical payments are to be ordered where they should not be or indeed are not ordered where they should be. Questions such as the weight to be given to the claimant’s (or defendant’s) wishes, the extent to which there must be a contingency lump sum in addition, the effect of findings of contributory fault or reductions for litigation risk are all complex and will need careful thought in each case. Assuming that RPI will be the normal index, an expert financial report weighing up the downside of likely income shortfalls against the upside of removing life expectancy uncertainties will presumably be necessary in most cases.

Solicitors are not financial advisers and will not be in a position (either in practice or in law) to provide investment advice without expert advice. Judges could do so legally, but would be ill-advised to do so in the interest of justice for the individual claimant before them. There is a clear case here for widespread, open consultation before implementation. Instead the whole process

17

seems veiled in secrecy and it appears likely that final versions will be produced immediately before implementation. I hope that I am wrong, but I strongly suspect there will be another fiasco like that of the Regulations and Rules supporting the funding changes implemented in the Access to Justice Act; but with far worse consequences as here we are talking about compensation for the most severely injured claimants, and not costs.

It is not too late for necessary action. The government needs to explicitly restate the principle of ‘full compensation’ in tort and accept that here this means proper linkage of periodical payments to an appropriate index. It is also essential that in such a novel arena rule-makers consult widely so as to ensure that we all end up with a workable system that is fair to both claimants and insurers. If not, an opportunity to modernise our compensation system for the 21st Century will have been squandered.

David Marshall APIL President Partner, Anthony Gold Solicitors

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the barrister

Modern Chambers – Staffing Issues

T

he method of recruiting

A well run chambers has quality standards

Martin explains: “A good CV becomes the

staff for barristers’ cham-

which need to be monitored, as well as Bar-

key to the door – if the CV is well planned

bers has changed over

mark, Qualitymark, ISO 9002 and Investors

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practice development matters to experienced

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20

the barrister

Intellectual Property Theft Barristers and lawyers are becoming more and more aware of both the requirement for evidence that is based on a computer and the compelling value that it has as forensic evidence

By Simon Janes International Operations Manager Ibas Group and formerly of Scotland Yard

I

nformation Communication

a page more than

there is no “intent to permanently deprive

Technology is a term that not many

24 years to read

the other of it”. So although copying

people would have been familiar

this amount of

valuable data is described as “IP Theft”,

with 20 years ago.

information. But

which may reflect the level of hurt it inflicts,

volume alone does

it cannot currently be prosecuted as a

not create value. It

criminal offence under the Theft Act.

Back then offices were full of grey

four-drawer filing cabinets. We employed

is the processing

filing clerks and typists. We bought box

ability of the

We recently investigated a case where an

after box of carbon paper. And all of the

simplest computer

allegation had been made that several

information that we considered valuable or

that enables that information to be used to

employees of Company A had stolen

commercially sensitive was locked up in the

save time and effort.

intellectual property from Company B, their former employer. The property in question

safe in the boardroom behind the picture of the Chairman.

Technology has also enhanced the ease at

was in various parts as a number of

which such data can be copied and removed

Microsoft Word documents. Although there

Fast forward two decades and it’s a

from its owner’s premises. Floppy disks

were a number of issues in this case, one

different story. Almost all commercial

remain the popular choice of data thieves

of the most interesting was the revelation

information is now stored electronically

even though their capacity is comparatively

that although Company A did posses, or

on computer systems and can be instantly

very low at a tiny 1.44 megabytes.

had possessed, the questioned documents,

accessed by authorised staff. The trouble is,

However, sophisticated USB storage devices

the forensic examination uncovered that

that it’s much harder to keep it under ‘lock

are now readily available storing up to

originally these documents belonged to

and key’ and prevent unauthorised staff

5,000 times more than a floppy disk. These

Company X. This raised the issue that, if

gaining access.

devices are small enough to appear on

we did keep the Theft Act analogy, can you

key rings and have been made to appear

steal property that is already stolen?

Information-thieves don’t even have to leave

as credit cards, pens and even a fully

their desk, let alone snoop around in the

functional wristwatch.

The Copyright Designs and Patents Act, although it includes material stored

boardroom.

The combination of the increase in value

electronically, addresses only material

A recent survey commissioned by the ibas

and the increase in opportunity has made

that is considered to be a work of art.

Group www.ibas.com revealed that 69.6%

commercial information an attractive

Although a work of art represents a great

of business professionals have stolen some

commodity that is illicitly traded.

deal of intellectual property I do not believe that the spirit of the act would allow it

form of corporate intellectual property (IP) from their employer when leaving a job.

The most common case that we investigate

to be extended to include commercial

is the “theft” of customer information -

information.

The information stolen may not necessarily

whether in a database or even as an email

be our top corporate secrets (the secret

address book. This information amounts

The Data Protection Act is, in my opinion,

sauce recipe, for example), but it certainly

to the lifeblood of a company and can

clearly intended to deal with the protection

represents the investment of numerous

make the difference between corporate

and processing of personal information.

hours of hard work to create and maintain.

survival and unemployment. Over 54% of

Although contact information and details

To give that hard work to a competitor is no

respondents to ibas’ survey said that they

found in email address books and customer

different to giving away our most valuable

had taken an email address book and/or a

databases may arguably be included within

company assets.

contact database with them when they left

the Data Protection Act, the remainder

their previous employer.

of commercial IP in the form of projects,

Rapid developments in computer technology

manuals, proposals, research and

enables us to store larger and larger

Information or data cannot be construed

development almost certainly would not fall

amounts of data. A typical 60 gigabyte hard

as “property” within the meaning of the

within its protection.

disk drive can store the equivalent of 30

Theft Act as it cannot be measured and

million sheets of A4 paper. It would take

is intangible. In addition to which, the

Nearly all crime requires some form of

ten people reading at a rate of 60 seconds

information is only copied and therefore

motive as well as a physical ability to

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21

commit the act. With computer crime and

encountered these tools in 56% of cases.

for the Courts. Commerce and Industry

computer related incidents there is an

Understanding and detecting these tools

will undoubtedly place greater investment

added requirement for the technical ability

are one of the basic skills required by

on ICT for its infrastructure and supply of

and knowledge to gain access to the data

computer forensic investigators. The bad

critical information.

and create the copy in such a manner that

guys believe that it is unlikely that security

is undetected. Ten years ago a computer

managers and corporate investigators,

Several weeks ago, at the House of

criminal was undoubtedly very technically

who are not dedicated to this type of

Commons, the All Party Internet Group

competent. All today’s data thieves need is

investigation, will be in a position to

(APIG) listened to evidence from a number

access to the Internet.

recognise or detect these programs.

of leading experts in the field of computer crime with a view to establishing whether

We maintain a library of tools and

Not only is information held on a computer

there is a need to review the Computer

utilities that we have encountered in our

becoming more valuable it is becoming

Misuse Act. The theft of information does

investigations, or have discovered on the

more easier to access and to copy.

not comfortably sit within the spirit of the Computer Misuse Act, Copyright Designs

World Wide Web, that enable a user to access sensitive or valuable information, to

I think there is very little doubt that the

and Patents Act or even the Data Protection

hide it from owners, security managers or

theft of information within the commercial

Act. If changes need to be made then,

even the police and, most of all, to remove

environment has risen dramatically in the

in my opinion, I believe they should be

traces and evidence of the deed. In our

last five years. Barristers and lawyers are

made in an attempt to reduce the threat

library we have more than 400 of these

becoming more and more aware of both the

that commerce in the UK faces through

tools. All of them can be obtained either

requirement for evidence that is based on

the constant loss and leakage of valuable

free of charge or at a cost of less than ÂŁ50.

a computer and the compelling value that

intellectual property.

it has as forensic evidence. Our computer In 1999, while conducting computer

forensic colleagues and partners in the

Simon Janes

forensic investigations I encountered these

United States are working less and less

International Operations Manager

tools in less than 5% of cases. In 2003, I

for law enforcement but more and more

Ibas Group

22

the barrister

Ethical Investment: A Growing Concern

By Susan Wallace, Marketing Analyst, Ethical Funds at Standard Life

T

esting cosmetics on animals,

ingly engaged with companies to discuss the

Most funds use both negative and positive

the late Dolly the sheep, arms

company’s activities and their effect on the

criteria to screen companies before invest-

production. These are just

environment and this, along with a number

ing in them. Negative criteria means that

a few of the ethical concerns

of shareholder resolutions, put greater pres-

if a company is involved in those activities,

that have been raised by the

sure on companies to be transparent about

the company will not be invested in. For

public in recent years. These, and other

their social and environmental impacts.

example, if alcohol production was a nega-

activities, have caused an increasing number

In the infancy of the new millennium the

tive criterion and a company was involved

of investors to consider the option of “ethi-

DTI (Department of Trade and Industry) will

in this activity, the fund would not be able

cal” investment; that is investment in funds

soon publish regulations requiring more

to invest in it. Positive criteria means that if

that consciously invest in companies that

than 1,000 of Britain’s largest companies to

a company is involved in an activity that re-

are seen to make a positive contribution to

report on social and environmental impacts.

sults in social or environmental benefits, the

society and avoid companies that are seen to

Pressure is coming not just from non-gov-

company is a preferred company to invest

harm society.

ernment organisations now, but also from

in. For example, if a company produces or

the government itself. This is truly an indica-

promotes products that benefit the environ-

But ethical or socially responsible invest-

tor of how important social and environ-

ment or human life.

ment is not a recent phenomenon. It can be

mental issues are becoming.

traced back to the 19th century to religious

With thousands of companies to choose

organisations such as the Methodists and

Ethical investment is a growing market.

from, how does a fund provider find out if a

Quakers who were concerned with temper-

According to a recent survey by EIRIS, fund

company passes or fails the criteria? Screen-

ance and fair employment issues. The Pio-

managers throughout Europe expect ethical

ing is a method that is used by a number of

neer Fund was launched in 1928 in America

investment to become much more important

fund providers. This involves either in-house

and excluded investments linked to tobacco

to them over the next few years. Indeed

or external research teams analysing large

and alcohol.

EIRIS have recently reported that there are

amounts of information from surveys, ques-

now more than 60 retail ethical investment

tionnaires and company reports, then rank-

The World Pax fund launched in 1971 has

funds in the UK and assets in these funds

ing the company against the fund provider’s

been described as the first ‘modern’ ethical

have hit an all-time high of £4.2 billion.

fund. It was set up in reaction to the Viet-

criteria. The companies that pass the criteria then make up the universe from which the

nam War and avoided investments linked to

So, how can an investor be sure that their

fund manager can pick the companies to

the war. Most of the seventies and eighties

money is being invested according to their

invest in. In addition, many fund providers

socially responsible investment interest was

wishes? Of the 60 or more retail ethical

meet with companies to discuss their activi-

taken up with the apartheid system in South

funds that are available, some funds focus

ties and agree on any improvements that

Africa. A number of environmental disasters

primarily on the environment, others on

could be made.

such as Chernobyl also saw concern grow-

human rights and social factors. What might

ing.

be an acceptable investment for one inves-

Another question for a potential ethi-

tor could be abhorrent to another. Some

cal investor is that of fund performance.

The first UK retail ethical fund was launched

investors are strongly against gambling for

Does restricting the universe of companies

in 1984 and by the end of the decade there

instance, whilst others don’t see this as a

that the fund can invest in mean that the

were 44 ethical funds worth £2.6 billion ac-

big issue. They are perhaps more concerned

fund performance will suffer? EIRIS have

cording to the Ethical Investment Research

with water pollution or nuclear power.

conducted research that indicates investing

Service (EIRIS). In 1999, the London Stock

according to ethical criteria seems to make

Exchange adopted the Turnbull Commit-

Different fund providers use different

little difference to fund performance, de-

tee recommendations that companies take

methods, from independent committees to

pending on the ethical policy applied. They

account of “environmental, reputation and

customer research, to determine what cri-

created five ethical indexes, which produced

business probity issues” within their control.

teria they should use when deciding which

financial returns roughly equivalent to

companies they should or shouldn’t invest

returns from the FTSE All-Share Index. De-

in.

pending on the abilities of the fund manager

During the nineties, fund managers increas-

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23

and the team of supporting researchers

issues surrounding overseas suppliers’

350 firms have acted seriously on chal-

and market conditions, it is possible for an

labour standards, is particularly prominent

lenges such as climate change, waste and

ethical fund to outperform an average, total

at the moment. There have been several

poverty.

universe, fund from the same sector. Please

articles published recently accusing large

note however that past performance is not a

well known companies of using sweatshops

In conclusion we can say that ethical invest-

guide to future performance.

in developing countries where for example

ment is a ‘growth industry’ with more and

staff may be forced to work overtime or who

more of us concerned with what we do

may have a restricted number of breaks.

with our money while at the same time not

So what is the future for ethical investments? The concerns which ethical

wanting to compromise the financial return.

investors have are not static but, like most

However, businesses that have good social

It is an evolving and exciting market, with

things, are subject to change. For example

and environmental policies and who can

positive and negative investment criteria

as previously mentioned, investment in

show that they have systems in place to

shifting all the time.

South Africa by ethical funds was for a long

manage those policies may have a better

Susan Wallace, Marketing Analyst, Ethi-

time avoided. However, with the abolition

chance of being the businesses who do

cal Funds, The Standard Life Assurance

of apartheid and the transition to major-

well in the future. Being subject to damn-

Company

ity rule, this is no longer such a concern.

ing press coverage and boycotting for poor

An area that may be an ethical concern in

social and environmental business practices

the future is genetic engineering (such as

is bad for business, for share prices and

Dolly the sheep). Very few companies are

ultimately for investors and the economy.

involved in this area but, as it grows, it may

Despite this, businesses are still reluctant to

become a serious ethical concern.

grasp social corporate responsibility. Recent research from Article 13 consultancy has

Supply chain management, in particular

found that fewer than 3 per cent of FTSE

24

the barrister

How the Inquiry system could learn from mediation

By Professor Karl Mackie, CEDR Chief Executive and Tony Allen, CEDR Director

T

he spectacle generated by the publication of Lord Hutton’s findings is the very familiar one of the successful and unsuccessful litigant who both put their trust in a third party to resolve the differences between them, only for one of them to find that the decision was deeply unacceptable.

The really interesting irony was that the successful party (which after all had total control over which process to use and who the neutral should be) found that success proved to be rather elusive and perhaps could not really be described as success at all. The public were themselves virtually a party to the inquiry, and both they and the other very important further stakeholder, namely Dr. Kelly’s family, all appear to have been less than satisfied with the Hutton Inquiry’s outcome.

This has led the Commons Select Committee on Public Administration to launch its own investigation into ‘government by inquiries’.

Chairman Tony Wright favours revisiting the whole process. We would advocate that, in doing so, their starting point should be to acknowledge that the process itself is fundamentally flawed by its adversarial nature and lack of serious analysis of how objectives can be properly identified and then achieved. Without this, the ensuing vacuum diminishes the chances for dealing with serious and complex issues and misses the chance to reach a practical solution that all parties will support. There is also the issue of the individual, eminent in their field though they may be, but is that person equipped to deal with the specialist skills of consensus building expertise we believe is crucial? And is that person perceived truly independent?

In fact, the Select Committee could do a lot worse than to look at developments happening to the inquiries nearest relative – the litigation system – which has recently begun to integrate mediation into civil procedures.

A series of recent mediations in which CEDR Solve has been involved have led us to ponder on the lessons to be learned from the Hutton Inquiry. Our view as mediators is that no party to the inquiry, especially

the Government and the BBC, can feel any surprise about what Lord Hutton did. They hired a judge who did a very ordinary and ‘judge-like’ thing, namely deciding what facts were true and false, who he believed and where blame in his view lay as a consequence. With such a process, one party will almost certainly emerge with a sense of disappointment or often worse. Victory too can be painful often in terms of the huge commitment in time and cost required for full preparation, and sometimes when the outcome develops a hollow ring.

pre-litigation behaviour, leading to pistols at a very early dawn.

What we had was a full-blown demonstration of the adversarial system, and we are entitled to ask ourselves (or perhaps the parties with their differing senses of success) whether they think it has worked. Does the BBC feel now that Lord Hutton merited the praise given to him from all sides during the proceedings?

Their recently published internal enquiry reports suggest the contrary. Was it worth it all, or would a lower key inquiry by the Oxfordshire Coroner have done just as well? Or would an entirely different kind of process have been better?

These alternative means are helpfully specified by the protocol as including:

Consider what happened stage by stage. The dossier (now shown by entirely separate disclosures to be almost certainly materially wrong in content) was published. A journalist raised a story about it based on an unimpeachable source who was somewhat misquoted. This was taken as in effect a libel on the Government. An apology was demanded and declined. The parties became entrenched. The temperature and the stakes rose as a result. Apologies were demanded and rebuffed. There was no attempt to seek anything as sordid as compensatory damages. But victory was required at all costs, and the parties went straight to trial, not even pausing to deal with pleadings and disclosure, almost all of which happened at trial. What those costs for BBC and Government will ultimately turn out to be hardly bears contemplation. But the whole escalation was a perfect model of aggressive

Did anyone think to ring a mediator before firing off the letters, before action and before the fierce rebuttals? Did the Treasury Solicitor or the BBC legal team consult the Defamation Pre-Action Protocol, paragraph 3.7 of which reads: “Both the claimant and defendant will be expected by the court to provide evidence that alternative means of resolving their dispute were considered.”

•

determination by an independent third party

•

mediation or any other form of ADR

•

arbitration.

Was an alternative scenario for the parties to send for the modern equivalent of Lord Goodman - perhaps Senator George Mitchell - to thrash out their differences before the positions became entrenched, before hurt pride took control of judgement to such an extent that both parties trusted that an adjudicator would vindicate their respective positions, given a good old-fashioned piece of trial by intellectual combat? If that had happened early enough, there might have been no real imperative to disclose to each other who the BBC’s source was, as both sides knew then or very soon after, and maybe Dr. Kelly would not have needed to be ‘outed’ by anyone. Of course in this case there was a public interest that the confidentiality of a mediation might have been seen to be covering up. It would have been hard to privately negotiate an agreed statement as to whether the dossier was dodgy or not.

Is this old-fashioned way of resolving disputes any longer acceptable in contemplation, or, in the event, satisfying

the barrister

in its outcome? An alternative scenario is surely worth more than a moment’s consideration before asserting that there has to be a public trial. Mediators who were able to lead parties from positions of deep distrust in places as disparate and disputatious as Northern Ireland and the Middle East could surely have a chance of sorting out a piece of soon-admitted exaggerated reporting.

Of course advocates settle cases and mediation sometimes fails to settle cases, at which point cases pass back to the advocates for further forensic attention. Sometimes it is the advocates who cause the failure of a mediation, a topic about which it is difficult for mediators to be specific without breach of the fundamental confidentiality that is the foundation stone of their process.

Sometimes the mediation process actually helps to break the litigious habits of lawyers.

At one recent mediation, following highly acrimonious, mutually and competitively disparaging correspondence between lawyers, the process led to apologies being exchanged between them at having perhaps

got in the way of their client’s respective case. A co-operative approach then led to settlement of a difficult case where there were undoubted difficulties of a thoroughly principled nature on each side.

But negotiations are not only fouled by aggression. In another mediation of a high value personal injury quantum claim, there is little doubt that the senior lawyers for each team felt frustrated by the other side’s apparent reluctance to move enough and probably blamed the process as a result.

The principal reason for the breakdown of negotiation at the mediation was that neither lawyer wanted to discuss the details of the damages claims with each other either through the mediator indirectly or directly across a table, and thus confront whether they were truly as strong as they hoped they were. The defendants were reluctant to hire the mediator as reality-tester, and the claimant wanted the defendant to keep bidding until reaching an area of interest, not wanting to signal the level at which a later Part 36 offer might be uncomfortable at a trial. The case settled two days before

25

trial at the figure offered but refused by the claimant at mediation.

That kind of defensive (and in fact adversarial) bargaining approach makes settlement remote, the mediator’s role very difficult and the mediation process vulnerable to criticism. Such cases can sometimes, even often, settle later when change of position seems to involve less loss of face.

No one knows how the course of the Hutton Inquiry might have been changed if other decisions had been made. There is just a general sense (however justifiable) that what was decided was in many respects wrong.

But we are left with the chance to learn and to test more creative ways of tackling social crises. Perhaps too, the adverse publicity surrounding the Inquiry has shown the model of adversarialism to be ineffective and those cohorts in support of moderating Dunnett v Railtrack may diminish.

26

the barrister

Give the IT expert a chance, please...

Dr Stephen Castell offers a helpful mini-handbook of suggestions to solicitors for instructing him as computer expert witness in complex software implementation contract disputes...

I

n a recent article in The Times, Law Section (23.09.2003), Daniel Barnett, barrister, supplied a handy solicitors guide to preparing the perfect brief for Counsel. As an expert witness in over 100 major IT cases worldwide over the past fifteen years, the following ‘expert’ tips occur to me, to add to Mr Barnett’s in the cause of assisting instructing solicitors to help us, the client, and the court...

appreciation of and insight into the knotty ‘technical-legal-factual-financial matrix’ which is the hallmark of the typical complex IT systems dispute. There is surely no need for the Particulars of Claim, or Defence and Counterclaim, to be settled and expressed comprehensively, clearly and most effectively at the outset, on a sound technical basis.

Where would be the joy in leaving no opportunity to make us all look a bit silly in front of the client at some future Case Management Conference?

Appoint me as late as possible

Do ask me to assist Counsel with really late Amendments to Pleadings

I love the challenge of being asked, just a few weeks before trial, to examine and test from cold the multi-user computer system in dispute. That is, to investigate the complete software, databases, clients/ servers and networks for functionality, performance and usability, and give my opinion as to its ‘fitness for purpose’. And all this by reference to the complaints as to software/system defects, deficiencies, delays etc still only superficially expressed in an inadequately particularised Scott Schedule (the latter containing over 200 Items, and clearly having taken a team from one of the parties many months to prepare). At the same time, being required to take into account thousands of pages and several CDROMs full of technical requirements and design specifications, system test results, project management minutes and other critical documents (some still trickling-in as, whoops, ‘late disclosure’). I really do need to read the mountain of emails exchanged between the parties during the course of the system implementation project – they had the effect of constantly changing the original contractually certain definition, scope and acceptance criteria of the requirements for the disputed computer system. Although you have had them for weeks (months?), it is such good fun to ask me to try and absorb them at breakneck speed.

Do not let me discuss the case with Counsel before Pleadings are settled Barristers are so expensive – often even more costly than experts. No-one wants the enormous cost of having us both sit down together for days at the very start, trying to achieve a common, harmonised

Counsel and I prosper in dealing with the very expensive challenge of re-working the initial 100-page pleadings extremely late in the day, when I have been frantically appointed and have barely had chance to form some preliminary idea of what the technical issues are in this particular case.

We do so enjoy working furiously together against impossible deadlines to draft the major and fundamental amendments to the pleadings now needed to reflect properly the client’s real technical case. Heck, we don’t need to worry – we are assured that the other side is in even poorer shape!

Do not photocopy the expert’s initial reference set of all the pleadings, case disclosure documents etc onto a distinctive colour paper (like lemon yellow) It’s such wild fun to arrive at the position, when you are up against tough time limits trying to produce several hundred pages of firm, clear, coherent expert’s report, not to know quite whose comment was whose, scribbled - when? - on yet another white A4 piece of paper. It would be too boringly straightforward simply to be clear by colour-coding that the document was one originating within the actual IT project in dispute (i.e. it is disclosed documentary evidence), and not one produced recently, during and for the litigation, as a working/ discussion paper by someone in the client, legal or expert team (i.e. it is confidential, privileged, non-disclosable).

Make sure that the client has not secured a complete, re-installable system image of the software in dispute

As you know, the court routinely orders without prejudice experts’ meetings ‘to identify and define the software and other material which experts need to examine, what system testing should be done and how the results should be presented to the court; to isolate, and attempt to narrow, the technical issues; and, where possible, to reach agreement and take technical matters out of issue...’.

At such meetings I really enjoy agonising fruitlessly with the expert on the other side over whether or not there are any correct versions of the software preserved, recreatable and available for joint inspection and testing – not to mention of a proper standard of evidential probity. It’s great that the parties (and their solicitors) permit us such time-consuming, lucrative activity simply by having omitted to preserve an agreed reference system image on reinstallable backup media (e.g. DAT tape, or CDROM) – and/or not depositing a secure copy with a third-party escrow agent – at the critical time when the system dispute first crystallised or escalated. What a pleasurable ordeal it is later for the experts if the ‘best evidence’ rule is ignored, and the crucial point that the software which is being litigated over is itself going to be the ‘best evidence’ is forgotten!

Do allow the Judge to make Orders at Case Management Conferences essentially enjoining the IT experts on each side to ‘get together and sort this highly technical case out’ I really do try, My Lord... But one of the really thrilling ‘frustration highs’ I get as an expert is when, without strong directions from the bench to mandate and assist me, I find I cannot drive through any technical simplification of the case (let alone a settlement!) when the lawyers who have ‘care and control’ of its process and progress want to do something else, tactically (and quite properly), to their own agenda, in the interests of their clients.

the barrister

Do give me tightly-reined instructions at odds with my independent primary duty to the Court I really enjoy being glared at by the Judge in a CMC – or, even more pleasurably, at trial!

– when I have not been able to do something he and I both know is right, but which I have not been given formal instruction (or budget) to do properly, or even at all.

In particular, I have now evolved a rigorous methodology (in consultation with many instructing solicitors and Leading Counsel over dozens of cases, in the UK and internationally) for arriving at a key opinion which is almost invariably asked of me in software development/implementation contract disputes. This is: what was the quality of the software, was it fit for purpose, and, if there were defects, were they material defects justifying rejection of the software and termination of the contract? My illuminative ‘material software defect test’ is based upon a careful, objective assessment of: • the nature and magnitude of the business consequences of the defect; and • the time or difficulty to fix it;

and

• the (un)availability of any practical workarounds.

But I cannot arrive at a compelling and well-grounded opinion based on this ‘tried and proven’ test, if you won’t vigorously pursue an Order – when needed – for actual live testing of the system in dispute! But, of course, I do understand that you want to save costs and not have me and my team operationally and exhaustively test the software – let alone have me take the system into court and demonstrate it to the Judge.

All right, maybe you weren’t going to choose to instruct me along the above lines, or even at all. No matter. I’ll probably be there anyway, doing my serious best to discharge my primary duty to the court (but, of course, without as many nerve-racking thrills and spills) – doubtless instructed by the lawyers for the opposition, who – with any luck – will ignore all of the above tips...

Dr Stephen Castell Chairman, CASTELL Consulting Tel: +44 1621 891 776 Mob: +44 7831 349 162

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the barrister

Halsey – The most comprehensive guidelines on mediation yet.

In a landmark decision handed down by the Court of Appeal on 11 May 2004, it was decided that the courts do have jurisdiction to impose costs sanctions against successful litigants on the grounds that they refused to engage in Alternative Dispute Resolution (“ADR”).

By Michael Lind, Operations Director ADR Group

U

pon invitation by the Court of Appeal, ADR Group was granted permission to intervene and make oral submissions in the co-joined appeals of Halsey –v- Milton Keynes NHS Trust and Steel –vJoy. Michel Kallipetis Q.C. and Philip Bartle Q.C. of Littleton Chambers were instructed to represent ADR Group. The Law Society gave oral submissions. CEDR and the Civil Mediation Council provided written submissions.

The key areas of the judgement were as follows: Court Orders The Court of Appeal acknowledged that parties sometimes need to be encouraged by the court to embark on mediation. The court approved of those court orders which encouraged mediation and it is likely that as a result of this decision more such orders will be made.

The court referred to the various ADR orders ranging from those with the strongest form of encouragement (Admiralty and Commercial Court Guide, Appendix 7) to those with a less strong form of encouragement.

In the latter category, the court singled out an order devised by Master Ungley, which is used frequently in clinical negligence cases, although the court could not see any reason why such an order could not be used more routinely in other litigation. The relevant parts of this order provide: “The parties shall by consider whether the case is capable of resolution by ADR. If any of the parties considers that the case is unsuitable for resolution by ADR, that party shall be prepared to justify that decision at the conclusion of the trial, should the judge consider that such means of resolution were appropriate, when he is considering that appropriate costs order to make.

The party considering the case unsuitable for ADR shall, not less than 28 days before the commencement of the trial, file with the

Court a witness statement without prejudice save as to costs, giving the reasons upon which they rely for saying that the case was unsuitable.”

The court was of the view that this order (a) recognises the importance of encouraging the parties to consider whether the case is suitable for ADR and (b) it is calculated to bring home to them that, if they refuse to even consider that question, they may be at risk on costs even if they are ultimately the successful party.

The court did however emphasise that even those orders which fall into the category of the strongest form of encouragement are not orders compelling parties to undertake ADR. This position will be welcomed by many practitioners, although one should tread with caution if ignoring this ‘encouragement’.

The court was at pains to point out that where a successful party refuses to agree to ADR despite the court’s encouragement, that is a factor which the court will take into account when deciding whether the refusal was reasonable.

Unwilling parties The Court of Appeal decided that the courts do not have jurisdiction to order truly unwilling parties to mediate and in so doing relied on Article 6 of the European Convention on Human Rights. In reaching this decision the court was of the view that nothing would be achieved by compelling a truly unwilling party to mediate because it would only add to the costs to be borne by the parties and possibly delay the time when the court determined the dispute and may even damage the perceived effectiveness of the ADR process.

However, the court went further by saying that it was not enough for a party to simply express opposition to ADR. If the judge (on the evidence currently before the court) considered that the case may be suitable for ADR, enquiries should be made by the judge

into the resistance to engage in ADR. This presents a significant hurdle for practitioners: be prepared to given a well reasoned response to the judge for your client’s refusal to engage in ADR on the understanding that the reasons will most probably be reviewed when the question of costs arises.

An outline of areas for consideration when determining if it is reasonable to refuse a proposal of mediation was provided and is discussed below.

This element of the judgement is encouraging in that the court is very clearly leaving the decision to mediate with the parties and their legal advisers. If a party truly does not wish to mediate they do not have to but they must be prepared to explain their decision to the court with the understanding that if their reasons for turning down an offer to mediate are not held to be reasonable then they may be penalised on costs.

Cost sanctions and the unreasonableness to engage in ADR Central to the whole judgement was the thorny and predictably difficult subject of “reasonableness of a refusal to mediate” and which party has the burden of proving if such a decision was reasonable or unreasonable. The question of reasonableness impacts directly on costs recoverable at the conclusion of a trial. The current rules provide that a successful party may be deprived of some or all of his costs on the grounds that he refused to agree to ADR – this is an exception to the general rule that costs should follow the event.

The Court of Appeal decided that the burden is on the unsuccessful party (the party who proposed mediation) to show why there should be a general departure from the rule.

The unsuccessful party needs to satisfy the court that the successful party (the party who refused the offer to mediate) acted unreasonably in refusing to engage in ADR. The Court of Appeal provided guidance as to some of the factors that should be considered by the court in deciding whether a refusal to agree to mediation is unreason-

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able, whilst emphasising that in many cases no single factor will be decisive, and that these factors should not be regarded as an exhaustive check-list: the nature of the dispute the merits of the case the extent to which other settlement methods have been attempted whether the costs of the ADR would be disproportionately high whether any delay in setting up and attending an ADR would have been prejudicial whether the ADR had a reasonable prospect of success.

In providing this guidance the court modified the observations set down by Lightman J in Hurst –v- Leeming, but importantly did not overturn that judgement. Although the question of whether a mediation had a reasonable prospect of success would often be relevant to the reasonableness of the refusal, it was not necessarily determinative of the fundamental question which is whether the successful party acted reasonably in refusing to engage in ADR. The Court was of the view that this test was not an unduly onerous

burden on the unsuccessful party as they were not being required to prove that the mediation would in fact have succeeded.

The Court did not accept that, as suggested

by Lightman J, it is appropriate for the court to confine itself to a consideration of whether viewed objectively, a mediation would have a reasonable prospect of success. This approach appeared to leave out the parties willingness to compromise and the reasonableness of their attitudes.

In the course of the judgement the Court of Appeal also decided in more detail: All members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR Mediation is an effective process and that most cases are suitable for mediation Public bodies should not be treated any differently to other litigants. Irrespective of whether or not one of the parties is a public body to which the Government’s ADR pledge applies, the parties will still be subject to the same test, namely that if a case is suitable

29

for ADR, then it is likely that the party refusing to engage in the process will be acting unreasonably The court accepted and acknowledged the integrity and confidentiality of the process and confirmed that parties are entitled in an ADR to adopt whatever position they wish, and if as a result the dispute is not settled, that is not a matter for the court.

The implications of this judgement are likely to be far reaching and this article only touches on the surface of a number of very important issues addressed in this landmark judgement. The European Commission is currently drafting an ADR Code and Directive (ADR Group is a member of the working party) and this judgement will be of interest to those countries and organisations engaging in business in the UK. Two final points in summary: The Courts in the UK do not have jurisdiction to compel parties (unwilling or not) to engage in mediation.

The Courts do have jurisdiction to impose an adverse costs order where a party unreasonably declines to mediate.

NEWS ROUND UP

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Government contributes to public debate on inquires 0n 6 May 2004 the government published a consultation paper on official inquiries, which widens the debate, started by the Public Administration Select Committee (PASC), through their current investigation into the commissioning of inquiries into issues or events that have caused public concern.

The government welcomes the PASC’s timely investigation, and has provided a detailed Memorandum, at the Committee’s request, that looks at various questions examining the value of inquiries and proposed procedures for carrying them out. With the agreement of the committee, the government is publishing a consultation paper based on its Memorandum, in order to widen the debate and bring the general public into it.

The Government wants to consider whether current legislative and administrative arrangements can be improved, so that recommendations flowing from inquiries can be implemented more quickly and economically than has sometimes been the case.

Current legislation is piecemeal and does not provide a statutory basis for inquiries in all subject areas. Many inquiries are set up on a non-statutory, ad hoc basis and whilst this often works well, the lack of formal powers to ensure co-operation from witnesses can make it more difficult for the inquiry to complete its work.

Secretary of State for Constitutional Affairs, Lord Falconer, said:“Many inquiries have helped bring about valuable and welcome improvements to public services. However, we need to consider whether the current legislation is a suitable basis for effective inquiries, which provide useful recommendations in reasonable time and at reasonable cost.

“The legislation used for the most substantial inquiries, such as the Bloody Sunday and Shipman Inquiries, dates back to 1921.

Other legislation that has grown up over the years does not provide a complete statutory basis for inquiries in all the areas in which they may be needed.

“A new statutory framework is an option to be seriously considered. “ “We welcome the timely investigation into inquiries by the Public Administration Select Committee. I am looking forward to giving evidence to the committee and moving forward the debate on this important topic.”

The barrister magazine cannot accept responsibility for information supplied by other parties, views expressed may not necessarily be that of the editor or publishers.

New Safeguards For EU Defendants Backed By Law Society A long-awaited EU proposal to protect the interests of defendants and suspects in criminal proceedings has been backed by the Law Society.

Janet Paraskeva, Chief Executive of the Law Society, said: “Until now the EU has only focussed on crime-fighting initiatives and raising sentencing levels in Member States. It is now easier to transfer, prosecute and convict someone for a crime in another Member State, but there is little regard for their rights.

evaluation and monitoring of compliance with the standards set out in the new legislative proposal.

Janet Paraskeva said: “Judges, who are required to enforce judgements made in other Member States, must have confidence in each others’ judicial systems, that fair trials are given and that defendants’ rights are protected.

“We are pleased that the proposal makes provision for the European Commission to monitor whether Member States are respecting the rights of defendants. The “We therefore back this new proposal, which is the first attempt Commission’s ability to name and shame Member States will act at redressing the balance by as a strong incentive for each to providing equality of arms for defendants.” ensure it is meeting its obligations and giving fair trails to all.”

The Law Society particularly supports the provision for

New Permanent Secretary for Department for Constitutional Affairs The Prime Minister has approved the appointment of Alex Allan to succeed Sir Hayden Phillips GCB, as Permanent Secretary of the Department for Constitutional Affairs.

The Secretary of State for Constitutional Affairs, Lord Falconer of Thornton, said: “I am delighted Alex Allan has been appointed to be my Permanent Secretary.

This is a further step in the direction of the new Department. He brings with him great skills, formidable experience and an excellent reputation. I am looking forward to working with him to drive forward my Department’s ambitious programme of criminal justice delivery and constitutional reform.

I have thoroughly enjoyed working with Hayden Phillips since the Department’s creation last summer. Hayden will be a hard act to follow, but I am confident that under Alex’s leadership the Department will go from strength to strength.”

Review of the Framework for the Regulation of Legal Services The government has asked Sir David Clementi to review the framework for the regulation of legal services in England and Wales and to report by December 2004.

As part of his review, Sir David has issued a www.legal-servicesreview.org.uk “blank” consultation website seeking the views of the public and the legal profession

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NEWS ROUND UP

Violence, Torture and Brutality by the Police Force in Zimbabwe Increases The International Bar Association (IBA) is appalled that police brutality and politically motivated violence in Zimbabwe is increasing.

The number of lawyers denied access to their clients or who suffer threats and attacks by members of the police force as they try to protect citizens’ rights has risen over the last month.

On 22 April 2004 students taking part in a peaceful demonstration suffered violent attacks at the hands of the police who were deployed to break up the meeting. Lawyer Otto Saki attended the scene to represent Tinashe Chimedza, one of the detained students. Saki was denied access to his client.

Saki stayed at the scene and

later witnessed the torture of his client. Chimedza was handcuffed whilst the police assaulted him using booted feet, batons, open hands and a broken broom handle. Chimedza was later rushed to a clinic to receive treatment for his injuries.

Two other human rights lawyers, Advocate Bhatasara and Jacob Mafume, who also attended the scene, were subjected to abuse and threats as they tried to secure the release of their clients. Advocate Bhatasara was threatened by one Police officer who shouted ‘...I respect the flag more than anything and anyone! Today someone is going to die! Shots will be fired today!’ The police then detained Advocate

Bhatasara for allegedly refusing to remove his cap.

He was later released.

Zimbabwean human rights lawyer Beatrice Mtetwa, who has herself suffered a violent assault at the hands of the police, stated, ‘I am appalled at the increasing number of violent attacks suffered by lawyers defending their clients in Zimbabwe. How can we possibly talk of rule of law existing here when such attacks continue?’

‘The IBA reminds the authorities in Zimbabwe that the role of the police force is not to obstruct justice but to protect it. The police force must not identify lawyers with the politics or acts of their clients, and police officers are obligated

Office of High Commissioner for Human Rights and International Bar Association agree on cooperation on Justice and Rule of Law The Office of the United Nations High Commissioner for Human Rights (OHCHR) and the International Bar Association (IBA) have agreed to develop further their close cooperation in the enhancement of human rights protection systems at the national level.

In a meeting held in Geneva on 30 March, OHCHR and the IBA agreed to focus their joint action on areas such as the role of courts in the protection of human rights, human rights and counter terrorism jurisprudence and mechanisms, the administration of justice, transitional justice and national human rights protection systems. Acting High Commissioner for Human Rights Bertrand Ramcharan said the accord “strengthens an essential relationship that will be of immense use in the promotion of the rule of law and respect for human rights.”

In 2003, OHCHR and the IBA, in a joint project, compiled a Manual on Human Rights for Judges,

Prosecutors and Lawyers. The resource material, which consists of the Manual and a Facilitator’s Guide, seeks to familiarize participants with the international law of human rights and the decisions and views of international monitoring bodies through discussions, group work and individual activities to deepen understanding of those principles and norms. Hard copies, including a CDROM, are currently being distributed to legal actors around the world. The Manual can be found on the OHCHR website (http://www.unhchr.ch/html/ menu6/2/training.htm) and will soon be linked to other international websites.

Mark Ellis, Executive Director of the IBA, said, “the cooperation with OHCHR is considered one of IBA’s most important and meaningful partnerships. The recent success of our joint Manual on Human Rights has been the catalyst to furthering this cooperation”.

to allow lawyers access to their clients,’ said Mark Ellis, Executive Director of the IBA. ‘The authorities are obligated under international law to investigate cases of alleged police violence and torture, and bring charges where sufficient evidence is found. The Government’s complete silence on the use of police torture and violence gives tacit consent to these illegal practices’.

Tough new system of assessment for legal aid asylum advisers The Legal Services Commission and the Law Society have launched a new assessment scheme to raise standards of legal aid advice in immigration and asylum.

The Legal Services Commission now require all advisers - solicitors and non-solicitors - working in this field to be accredited.

Accreditation will consist of three levels. Accredited Caseworker, Senior Caseworker and Advanced Caseworker.

Advanced level advisers who demonstrate particularly high levels of knowledge and skills will be paid a 5% uplift by the Commission.

The Law Society has selected CLT, a leading provider of professional training, to run the new accreditation centres.

Janet Paraskeva, Law Society Chief Executive, says: “Many asylum seekers and immigrants are vulnerable.

We are determined to identify and root out poor quality advisers taking advantage of the legal aid system.

“This new system of assessment will ensure that everyone working in a solicitor’s office advising on asylum issues has the necessary skills and knowledge.”

Clare Dodgson, Legal Services Commission Chief Executive, said: “Impartial and rigorous accreditation underpins our belief that legal aid should be a first rate service that offers quality advice to people in need.

“It is also about rewarding those who drive up standards for immigrants and asylum seekers who are frequently forced to flee oppressive situations in their home countries.”

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Anti Money Laundering Regulations - Are you Complying?

The Government’s new anti-money laundering regulations came into force on 1 March 2004 and individuals, businesses and their advisers could be exposed to criminal sanctions if they are not complying.

By Jeremy Rowe senior manager in the Forensic Department at Pierce Chartered Accountants in Blackburn, Lancashire

T

here has been a plethora of

the fight against crime. The information

instructing solicitors can confirm that they

legislation to combat crime

available to NCIS will then be passed to

have verified the identity and address of

and terrorism over recent

the appropriate authorities including the

their client.

years with the most recent

police, H M Customs & Excise and the Inland

being “The Criminal Justice

Revenue.

Alternatively I have been instructed by

and Police Act 2001”,

solicitors defending individuals against

“The Anti-Terrorism, Crime and Security

Potentially all businesses and advisers

criminal proceedings - do I need to report

Act 2001” and “The Proceeds of Crime Act

- either in terms of reporting or in terms

when clearly the authorities are already fully

2002”.

of being reported - will be affected.

aware of potential criminal activity?

New Money Laundering Regulations came

So practically how does the legislation affect

There will have to be a certain amount of co-

into force on 1 March 2004. These new

advisers?

operation between professionals in dealing

Money Laundering Regulations significantly widen the impact of the legislation in terms

with the preliminary aspects of the Money There are three main areas:

of reporting responsibilities for profession-

Laundering Regulations, e.g. in confirming identities and addresses and in sharing

als in particular but also for many others,

(i)

especially high value dealers.

Officer and having the appropriate internal

Appointing a Money Laundering

systems and controls.

In the meantime, the Proceeds of Crime Act

documentary evidence of such issues.

However the nub of the issue is the reporting of suspicions of money laundering and

2002 widened the definition of Money Laun-

(ii)

dering. It is now an offence to “acquire,

clients identities and addresses have been

use, possess, conceal, disguise, convert,

verified.

Being able to demonstrate that

transfer or remove criminal property OR

the proceeds of crime. The offences covered are extremely wide ranging.

By way of example only, the type of situ-

to facilitate its acquisition, retention, use or

(iii)

control by or on behalf of another person

picions of money laundering and potential

reported include knowledge or suspicion of

OR the aiding, abetting or conspiring with a

criminal acts involving the proceeds of

tax evasion, non-commercial or unexplained

person to commit such offences”. The Act,

crime.

transactions, collusion in price fixing ar-

Recognising and reporting sus-

together with the new Money Laundering

ations affecting businesses which may be

rangements, any criminal activity as well as

Regulations, will mean that the knowledge

The first of these should already have been

or suspicion of almost any criminal activity,

dealt with by responsible firms and proce-

without any de-minimis limit, will be report-

dures should be in place which are clear for

When undertaking forensic assignments

able by professionals to NCIS (National

all firms to follow.

issues may arise which were not anticipated

Criminal Intelligence Service). The subject

drug trafficking and terrorism funding.

with the original instructions. For example

of the report cannot be advised or warned

However obtaining proof of identity and

in a matrimonial case one party may make

when such a report is or has been made.

address for clients is not always as simple as

allegations that there are undeclared tak-

it may appear. Furthermore it is not always

ings being retained by their spouse. This

clear precisely who is the client.

may represent a wild allegation or wishful

There is concerted national and international effort to combat the significant growth

thinking. Alternatively it may give rise to

in criminal and terrorist activity post 11

For example as a forensic accountant I may

real suspicion of tax evasion and/or theft

September 2001. These tighter laws are to

be instructed to assist in a matrimonial case

from the company. In such cases a Money

force the confidential reporting of known or

instructed by solicitors acting for say the

Laundering Report may be required.

suspected criminal activity to NCIS to enable

wife. Is the client the Court, the instructing

them to build up their knowledge base in

solicitors or the wife? It assists greatly if the

If a report is made then issues arise over

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33

whether the fact a report has made should be disclosed to the instructing solicitors and ultimately to the Court. To do so may be seen as tipping off whereas not to do so may restrict the Court from reaching a proper conclusion on the income and assets of the parties.

The difficulties surrounding this area were highlighted in the case of P -v- P [2003]

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EWHC 2260. This case involved the lawyers making a report to NCIS. It was ruled that they were entitled to tell their own client or their opponent that a report had been made.

This appears to contradict the general rule that clients cannot be tipped off that a report has been made.

All professionals need to be aware of their obligations under the Acts and be prepared to report ALL relevant suspicions to NCIS. Failure to do so might leave advisers with

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extreme problems with the authorities and the very real possibility of a criminal conviction and custodial sentence.

191-192 Fleet Street, London EC4A 2NJ Tel: (020) 7405 5711 - Fax: (020) 7831 9849

fleetstreet@hammicks.co.uk We all need to be on our guard.

Jeremy Rowe is a senior manager in the Forensic Department at Pierce Chartered Accountants in Blackburn, Lancashire. Jeremy is part of a team of five forensic accountants working in the areas of personal injury, matrimonial finance, commercial litigation, fraud, criminal work. Please telephone Jeremy Rowe on 01254 688100 if there are any matters you wish to discuss, alternatively you can email him j.rowe@pierce.co.uk.

Accountancy Expert Witness Stephen Harris & Co

Chartered Accountants • Forensic Accountancy Specialists • Cogent written reports for clients and/or the Court • Preparation of schedules of loss • Assistance in all aspects of quantum • Known for promptness and accessibility • Single Joint Expert, or party-appointed • Assistance with Part 35 Questions Stephen Harris is a member of the Expert Witness Institute and of the Academy of Experts. Since 1979 he has been instructed in personal injury & fatal accident, professional negligence, alleged theft & False accounting, losses arising from defamation, compulsory purchase, licensing law, fidelity, alleged fraud, deceit, matrimonial matters, business losses, urgent work for injunctions etc.

Further enquiries to:

Stephen Harris & Co Chartered Accountants Belgrave Place 8 Manchester Road Bury BL9 0ED

Tel: 0845 458 6680 • Fax: 0845 458 6682 e-mail: info@stephen-harris.co.uk

34

the barrister

The crash that wrecked a business – or a business already crashed?

Having spent 25 years investigating quantum in civil claims, my experience has shown the need for a careful examination. In many instances this may be completed quickly, but in others there may more to the situation than meets the eye. This of course is true whether instructed by defendant, by claimant or as single joint expert. Otherwise, entirely the wrong outcome could result.....

By Stephen Harris, Principal, Stephen Harris & Co, Chartered Accountants

O

ne late summer morning, Michael, aged 40, was tucking into his bacon & eggs in a roadside café.

Suddenly a car ploughed into the building from the nearby dual carriageway. Michael suffered very serious multiple injuries and was airlifted to hospital.

Until that moment, things had being going awell for Michael. He and his wife had set up a small manufacturing business 3 years earlier. They worked in partnership, sharing profits equally. His wife managed the business and supervised the employees.

Michael maintained and repaired the machinery and undertook the sales and delivery functions. He had been driving all over the UK and also to Europe, where export customers had been developed. The business was continuing to grow.

Following the accident, Michael spent more than 2 weeks in intensive care, with his wife at his bedside. Initially there were concerns that he would not survive. He was discharged home after 4 weeks, but had suffered a head injury and epilepsy was diagnosed. Much later it transpired that he would never be able to return to work (indeed, he was found to be unable to manage his own affairs).

Some 7 months after the accident, the business failed and the Official Receiver was appointed. Michael and his wife were declared bankrupt. The failure was attributed by Michael’s wife to the constant care she had to provide for her husband following the accident, and her inability to attend to the business.

In the meantime, she had consulted local solicitors. She was told that Michael should be entitled to substantial damages and a preliminary evaluation was made. She was

advised the amount that Michael should recover, which she regarded as inadequate.

In view of the serious nature of her husband’s injuries she changed solicitors. I was instructed by the new solicitors to carry out an investigation of Michael’s financial losses.

The matter was hampered somewhat by the fact that many of the business records had been destroyed in a fire at the Official Receiver’s office.

In the usual way, I summarised the business results from the available financial accounts.

Because of the accident, no accounts had been prepared for a period of almost 12 months before the Official Receiver was appointed.

Nevertheless, I was able to examine information from the sales records. My report showed that even after the accident, sales had continued to increase at an annual rate of 70%. This was notwithstanding the severe disruption to the business occasioned by the accident, only one third of the way through the financial year. The increase was of the same order as in the previous year and suggests that steps were taken to mitigate the loss of business.

I provided the usual projections of the claimant’s past and future losses of earnings, i.e. excluding his wife’s half-share of the losses, based upon the assumptions described in my report.

In the light of the trading results preaccident, as alternative (a) I projected further increases in sales, but for the accident, at the rate of 40% per annum for each of the first two years, with no further real increases (i.e. after allowing for monetary inflation) thereafter. As alternative (b) I allowed for a further increase in sales, but for the accident, of 40% in the first year

only, i.e. with no further real increases thereafter. I considered the projections to be conservative.

I was instructed to address various heads of claim in my report, but for the purpose of this article I shall summarise only the projected past and future losses of earnings (in round £’000):Alternative (a) Pre-trial loss Future loss

£46,000 £231,000

Alternative (b) Pre-trial loss Future loss

£39,000 £176,000

Subsequently, forensic accountants were instructed by the defendants. They did not accept my contentions. Their report argued that the business was already in a precarious financial state at the time of the accident and that given the vulnerable financial position it was not surprising that the business had ceased to trade a few months later. They projected an almost negligible loss of earnings.

In so doing, the defendants’ accountants prepared financial accounts for the business, covering the period of 4 months from the date of the last accounts up to the date of the accident.

In that exercise they made an assumption that the value of closing stocks and work in progress at the end of the 4 month period would have been the same as shown at the beginning of the 4 month period. They in fact stated that they were giving the Claimant “the benefit of the doubt”, pointing out that the value of opening stocks had been higher than at the end of previous financial years. They commented that their assumption “means we may slightly overstate the Claimant’s pre-accident profit”.

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Thus the accounts they prepared showed a gross profit percentage of only 18% (against the previous history over 3 years of 32%) and a net profit percentage of only 3% (15% historically).

It was therefore necessary for me to undertake a more extensive investigation.

Fortunately it transpired that, despite the loss of most of the business records in the fire at Official Receiver’s office a couple of years earlier, a substantial proportion had already been photocopied at some stage.

I was able to analyse in detail the raw material purchases in the 4 months immediately before the accident. It was found that such purchases had a significant seasonal element. Purchases had been much higher during the months of July and August and very high in the last few days in August (shortly before the accident).

With the assistance of wages records it proved possible readily to evaluate the level of stocks and work in progress on hand at the time of the accident. This was clearly

preferable to the simplistic assumption that they would have been of the same monetary value as at the end of the previous April.

Inevitably, an entirely different picture emerged. I was able to show that during the 4 months immediately before the accident the gross and net profit percentages, had financial accounts been prepared by the business owners, would have been the same as those shown by the accounts for the previous 3 years. (N.B. had the business records not been photocopied before the fire it would not have been possible for me to undertake this exercise, thereby making it more difficult to refute the defendants’ accountants’ contentions).

The outcome demonstrated once again that it is often insufficient simply to rely on financial accounts which have been presented.

A few months later, settlement of the claim was achieved with damages for the claimant of £850,000. This was a global figure, to include costs of care, etc. Whilst there was

35

no analysis to show the amount in respect of loss of earnings, this must have been substantial. Furthermore, the settlement was comfortably in excess of Michael’s original solicitor’s estimate of £20,000 (sic).

It should be borne in mind that I have necessarily had to condense for the purpose of this article what was a complex case.

Nevertheless, from my long experience there have been very many instances in which a proper forensic examination of the facts has proved essential in achieving access to justice.

Stephen Harris has specialised in the provision of forensic accountancy and litigation support services since 1979.

He can be contacted at Stephen Harris & Co, Chartered Accountants, Belgrave Place, 8 Manchester Road, Bury, BL9 0ED Tel. 0845 458 6680: e-mail: info@stephen-harris.co.uk.

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Redhill Chambers, High Street, Redhill, Surrey. RH1 1RJ Tel: 01737 779500 Fax: 01737 779548 e-mail: alex@alexandersca.co.uk

36

the barrister

European Evidence Warrant to Replace Mutual Assistance Regime Paul Garlick QC and Marisa Leaf discuss the concerns for the rights of the defence raised by the new proposal for a European evidence warrant.

K

ey developments in police and judicial criminal co-operation are taking place, and at an unprecedented pace, in European justice and home affairs (JHA). With the implementation of the European arrest warrant3, extradition between member states has been replaced by a simple surrender procedure. Hot on the tails of the arrest warrant, a draft framework decision on financial penalties4, a framework decision on confiscation orders5 and a framework decision on freezing orders to prevent the destruction or disposal of evidence6 are being negotiated or have already been agreed. The Commission proposal for a Council framework decision on the European evidence warrant for obtaining objects, documents and data for use in proceedings in criminal matters (EEW)7 is the latest in this series of judicial co-operation agreements.

The present proposal provides for the obtaining of evidence that already exists and that is directly available. It is not intended, at least at this stage in the development of this aspect of EU criminal law, to be used to initiate the interviewing of suspects, the taking of statements, or the hearing of witnesses. The taking of evidence from the body of a person, in particular DNA samples, is also excluded from the scope of the EEW. The EEW will not be used to initiate procedural investigative measures such as interception of communications and monitoring of bank accounts. However, the current proposal is envisaged by the Commission as just the first step towards a single mutual recognition instrument dealing with the obtaining of evidence which will, in due course, replace all of the existing mutual assistance regimes. The next stages foreseen by the Commission will cover: (i) evidence that does not already exist but that is directly available, such as interviews with suspects, witnesses or experts, and the obtaining of evidence by the monitoring of telephone calls and bank accounts; and (ii) evidence that already exists but that is not

directly available, for instance DNA samples. The present proposals for the EEW are intended to be implemented in all 25 member states by 1st January 2005.

Mutual recognition All of these measures implement the principle of mutual recognition of judicial decisions and judgments taken in other member states, expounded at the 1999 Tampere European Council. Enhanced mutual recognition is intended to ‘facilitate co-operation between authorities and the judicial protection of individual rights’. It relies on mutual trust between member states, which in turn rests on the presumption that the criminal justice systems of all EU member states provide comparable protection of individual rights.

However, the proposals have been developed without ensuring that this is in fact the case. This was a serious concern with the European arrest warrant, as evidenced by the fact that most member states failed to comply with the 1st January 2004 deadline for implementation. Regrettably, the current proposals for a European evidence warrant demonstrate the same failure to consider and put in place procedural safeguards to protect the rights of defendants and suspects and to guarantee fair trial rights.

Shortcomings The explanatory notes to the EEW emphasise that [I]n the ... field of judicial cooperation, in particular where coercive measures are envisaged, the Commission considers that the building of mutual trust should be fostered by specific action at the Union level in order to achieve a common minimum level of safeguards.

Such safeguards have so far, however, failed to receive the same attention as

moves to enhance the efficiency of investigations and prosecutions.

The long awaited Commission proposal on minimum procedural safeguards that was finally presented in April 2004, has failed to fulfil hopes that it would establish a high common level of defence rights.

Instead, it is questionable whether its provisions meet even the minimal standards of the European Convention on Human Rights (ECHR). It is therefore imperative that the individual EU JHA measures being developed incorporate adequate protections on the face of the instruments that establish them. A serious cause for concern, however, is that the present proposal for a EEW provides strikingly less human rights protection than the four other measures agreed or proposed in this area on the basis of mutual recognition.

Types of proceedings A EEW may be issued with respect to (a) criminal proceedings; (b) proceedings brought by administrative authorities in respect of acts which are punishable under the national law of the issuing member state by virtue of being infringements of the rules of law, and where the decision may give rise to proceedings before a court having jurisdiction in particular in criminal matters; and (c) proceedings referred to above which relate to offences for which a legal person may be held liable in the issuing state.

The extension of the EEW to proceedings brought by administrative authorities whose decision may give rise to proceedings before a court extends the ambit of the EEW to cases where criminal proceedings in a court may never take place. It is worth noting that the framework decision on freezing orders (with which the EEW proposal has a logical link) does not share this ambiguity and is clearly limited to criminal proceedings.

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It is also unclear whether use of the EEW will be confined to cases where criminal proceedings have already been instituted or whether it could be utilised during the investigation of a suspected offence.

As presently worded, this creates a

defence and of legitimate third parties where they have a genuine interest in preserving the evidence in the executing state. Article 19(6) wrongly assumes that a legal remedy after the fact can provide full compensation for unlawful state action.

danger that the issuing state could issue a EEW as a ‘fishing exercise’ to obtain sufficient evidence to justify the commencement of criminal proceedings.

Are the proposed protections in article 6 EEW sufficient?

Issuing authorities Article 2(c) EEW defines issuing authorities as ‘judges, investigating magistrates or prosecutors with competence under national law to issue a EEW’. There are, however, concerns that this open-ended definition could allow EEWs to be issued by persons who lack sufficient independence to prevent EEWs being issued in inappropriate cases.

The catalogue of improperly conducted investigations and prosecutions by HM Customs and Excise over the last five years shows how damaging to mutual recognition it would be to allow such a body to issue an EEW in one member state, particularly, as we discuss below, where it is proposed that there will be no method for challenging the substantive decision to issue the EEW in the executing member state.

Legal remedies Article 19 EEW requires the executing state to make legal remedies available to all interested parties, including bona fide third parties. However, this protection only applies where a EEW is executed using coercive measures. As presently drafted, those whose property or data has been obtained pursuant to a EEW, but using noncoercive means, will therefore be deprived of an effective legal remedy in breach of article 13 ECHR. Further injustice to the defence may also occur where a legal remedy is pending. The executing state has a discretion under article 19(6) to suspend the transfer of objects, documents or data obtained pursuant to a EEW. However, the issuing state may nonetheless require such objects, documents or data to be transferred after 60 days despite the fact that any challenge to the legality of the EEW has not been finally decided. It is lamentable that the present proposal makes no provision to ensure that the defence will have adequate access to any data, documents or objects obtained pursuant to a EEW prior to transfer. This will certainly prejudice the rights of the

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EEW (set out in the Annex to the proposal) that the Commission has simply omitted to consider the possibility that the procedure may be utilised by the defence as well as the prosecution.

The key protections of article 6 EEW require the issuing authority to be satisfied that (a) the objects, documents or data are

Grounds for non-recognition or nonexecution The present proposal for a EEW repeals the optional grounds for refusal in article 51 of the 1990 Schengen Agreement, namely double criminality and consistency with the law of the requested state, as well as

necessary and proportionate to the purpose of the criminal proceedings; (b) the objects, documents and data can be obtained under the law of the issuing state in similar circumstances if they were available in its territory, even though different procedural measures might be used; and (c) the objects, documents or data are likely to be admissible in the proceedings for which they are sought. However, what will inevitably lead to unfairness for the defence is the proposal that these key conditions (and the substantial reasons for issuing the EEW), may only be challenged in the issuing state.

article 2(b) of the 1959 Council of Europe Convention – where execution of a request is likely to prejudice the sovereignty, security, ordre public or other essential interests of its country, and the limited form of the political offence exception still allowed pursuant to article 9 of the 2001 Protocol to the 2000 EU Convention on Mutual Assistance.

Article 15(2) of the EEW only includes two optional grounds for non-recognition or nonexecution. These are (a) double jeopardy with respect to proceedings in a third state and (b) where there is an immunity or privilege under the law of the executing

This does not take adequate account of the linguistic, financial and technical barriers faced by individuals seeking to bring legal challenges abroad.

state which makes it impossible to execute a EEW. The only mandatory ground for refusal under article 15 EEW is double jeopardy as defined by the EU framework decision on double jeopardy.

Of equal concern is the fact that there are no provisions in the proposed EEW that guarantee access to legal counsel,

By contrast, the European arrest warrant includes as a ground for non-execution

interpretation/translation services or legal aid. The absence of these essential protections on the face of the EEW provide a striking illustration of the prejudicial effect on defence rights that the premature application of mutual recognition is likely to have.

Equality of Arms

double jeopardy, the existence of an amnesty in the executing state and the age of criminal responsibility in the executing state as mandatory grounds for refusal to execute a warrant. It also contains an optional ground for non-recognition or non-execution of a warrant on territorial grounds, that is where the offence was committed in part

Article 1 of the EEW proposal raises further concerns in respect of the equality of arms principle that underlies article 6 ECHR. In particular, it is not clear that a defence team could apply to a competent judicial authority to issue a EEW in the same way that a prosecutor could. Presumably existing mutual assistance arrangements would remain open to the defence but these are significantly less effective and expeditious than the procedure proposed by the EEW.

or in whole on its territory. There does not seem to be any principled reason for distinguishing these provisions in the EEW from those in the European arrest warrant.

It is therefore imperative that the EEW be amended to make it clear on the face of the EEW that the procedure will be available to both the defence and the prosecution.

It is clear from the present draft form of a

to a violation of a defendant’s or third party’s human rights. This would clarify, for implementation purposes, paragraph 19 of the EEW Preamble. An amendment could be modelled on section 21 of the UK Extradition

The authors also advocate the addition of a mandatory ‘human rights clause’ that would oblige the executing state to refuse to recognise or execute a EEW where there are objective and reasonable grounds to suspect that the execution of the EEW would amount

38

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Act 2003 which implements article 1(3) of the European arrest warrant, referred to above. The inclusion of such a provision would greatly enhance the certainty and consistency of implementation across the EU and, in turn, bolster the trust at the heart of mutual recognition.

mistrust, suspicion and uncertainty rather than fostering the culture of trust and cooperation necessary to effectively tackle cross-border crime.

Paul Garlick QC is a barrister practising in extradition, human rights and European Justice and Home Affairs at Outer Temple Chambers, 222 The Strand, London, WC2R 1BA.

Conclusion The introduction of the EEW scheme relies, as much as the other EU judicial co-operation proposals that preceded it, on the existence and application of adequate procedural safeguards in all 25 EU member states. The Commission’s recent proposal on procedural safeguards is not, however, bold enough to meet these criteria. Nor, if the delays to which it has already been subject are any indication, will it be agreed in time to apply in tandem with the EEW. The individual safeguards on which the success of the mutual recognition programme itself relies must therefore be incorporated on the face of the EEW. If not, the rights of the defence will be severely diminished and mutual recognition may instead breed

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Marisa Leaf is the EU Legal Officer for JUSTICE, 59 Carter Lane, London EC4V 5AQ. 3 OJ L 190/1 18.7.2002.

4 OJ C 278/4 2.10.2001 5 9098/04 LIMITE COPEN 56 29/30.4.2004.

6 OJ L 196/45 2.8.2003.

7 COM (2003) 688 final, 14.11.2003 Tampere European Council 15/16.10.1999, Presidency Conclusions, para 33.

At para 42.

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