Jackson v Thompsons Solicitors (A Firm) & Ors

This is the judgment of the court to which both members have contributed. The matter comes before the court by way of an application by Mr. David Jackson as assignee of a firm of solicitors called Greene, Wood and McLean LLP (“GWM”) for permission to appeal against the order of Simon J. (as he then was) dismissing his claim against Thompsons Solicitors (“Thompsons”). It has come before us for determination pursuant to the order of Longmore L.J., to whom it was referred for consideration on paper. In view of the number and complexity of the grounds of appeal, he directed that it be the subject of an oral application before two judges of the court. Since the applicant sues as the assignee of GWM it is convenient to approach the matter as if GWM themselves were the claimants.

The origin of the dispute which has given rise to the appeal lies in the administration of the British Coal Health Compensation Schemes (“the BCHCS schemes”), under which compensation was paid to miners in respect of industrial injuries in the form of respiratory disease (“COPD”) and ‘vibration white finger’ (“VWF”). British Coal had been found liable for both COPD and VWF in various judgments and, following the assumption by the Department for Trade and Industry (“DTI”) of the liabilities of British Coal, the DTI set up compensation schemes to deal with the large number of claims that were expected. One of these was the British Coal Respiratory Disease Litigation (“BCRDL”) scheme. From 1995 Sir Michael Turner acted as the judicial administrator of the BCRDL scheme.

Various firms of solicitors acted for individual miners in their pursuit of compensation under the BCRDL scheme. Most, if not all, of the miners were members of one or other of the mining trades unions, which traditionally supported claims by their members against employers for compensation for industrial injuries. It was the practice of the unions in accordance with the agreements with their members to retain a small part of any award of damages in order to support claims made by other members that ultimately failed. It was a feature of the BCRDL scheme that miners whose claims were unsuccessful would not be expected to bear any costs.

Miners who made claims under the scheme were represented by a number of different unions and a large number of different firms of solicitors. The DTI entered into detailed claims handling agreements (“CHAs”) with the miners’ solicitors, the purpose of which was, as far as possible, to settle the claims without recourse to the courts. The claimants’ solicitors set up a ‘Claimants’ Solicitors Group’ (“CSG”) as a body to represent them, which was in turn led by a much smaller ‘Co-ordinating Group’ (“CG”). The CHAs provided that the members of the CG were six firms of solicitors: Irwin Mitchell, Hugh James, Towells, Nelson and Co, Ross & Co and Thompsons, England. In practice most of the work of the CG was carried out by five individuals: Andrew Tucker (Irwin Mitchell), Roger Maddocks (at the material time with Irwin Mitchell), Lawrence Lumsden (Thompsons, Scotland, but who, at all material times, had a connection with Thompsons, England), Gareth Morgan and Peter Evans (Hugh James). Membership of the CG was individual rather than as a representative of the firm.

Although Andrew Tucker of Irwin Mitchell acted as secretary of the CG, and in that capacity sent out letters on its behalf, Mr Lumsden and others had a significant role in drafting those letters. Mr. David Allan Q.C. and Mr. Ivan Bowley were instructed by the CG as counsel.

In December 2003, and during 2004, questions were raised publicly about whether it was legitimate for solicitors to make deductions from amounts paid to miners under the BCRDL scheme in respect of trade union charges. During the course of 2004-2005, Thompsons itself had been the subject of three complaints to the Law Society made by clients in relation to the lack of information about deductions. These led the firm (at least by the beginning of 2006 and, in the case of many of the partners, earlier) to conclude that their practice of making contractual deductions in favour of their union clients was open to regulatory challenge on the grounds that they had failed to advise miners themselves that they could be represented in their claims under the CHAs by solicitors who would not make deductions from damages recovered under the scheme.

On 16^th January 2005 an article was published in The Sunday Times alleging that deductions from compensation awarded to miners had been improperly made by or on behalf of the trades unions of which they were members by solicitors acting on their behalf. It appears that a number of Members of Parliament for mining constituencies had already become concerned about such deductions and were encouraging miners to seek redress from their unions and from the solicitors who had acted for them in presenting their claims. The DTI advised miners to contact the Law Society if deductions had been made from their compensation payments and they had not been made aware that other representatives were processing claims without making any deductions.

The Sunday Times article was circulated internally within Thompsons with the following message:

“Raleys are highlighted. I’d guess that we clearly have had/have a lot of similar cases. Do we make the same payments?”

When thearticle was brought to his attention at a hearing on 2^nd February 2005, Sir Michael Turner asked Mr. Allan to look into the allegations and provide him with a report.

Mr Lumsden, together with Mr Firth at Raleys, and with the assistance of other members of the CG, was responsible for compiling the report for Sir Michael. There was clearly concern at Thompsons that not too much should be revealed to the judge about the details of the different funding arrangements.

In February 2005 the DTI published a newsletter in relation to Coal Health Claims headed “Speeding up the respiratory disease claims process". It included on its first page the following message:

“If your solicitor is making deductions from your compensation via an additional fee or a union fee and did not advise you that other representatives are processing claims without making any deductions, you should contact the Law Society to make a complaint on 0845 608 6565 or you may wish to speak to your MP.”

This clearly alarmed Mr Lumsden and his colleagues at Thompsons.

Against this background, and after various discussions within the CG, a report was compiled by Mr. Lumsden, with the assistance of other members of the CG, which was submitted to Sir Michael under cover of a letter dated 23^rd March 2005 from Mr Lumsden. At that stage the letter and report were not copied to other members of the CSG or to the DTI. The report effectively sought to justify the deductions which were made by solicitors in order to make payments to the relevant unions. The appellant says that it was materially misleading in a number of respects.

Sir Michael replied to Mr Lumsden by letter dated 24^th March 2005, in which he expressed himself satisfied that there was nothing in the article which, in the light of the report, required him to take any further steps or to report the matter to the Law Society. He said that he was content for the report to be released to other members of the CG. Sir Michael’s letter read as follows:

“Dear Mr Lumsden,

National Union of Mineworkers, Allegations in the “Sunday Times” – 16 January 2005

Miners COPD Litigation

Thank you for your letter dated 23 March and the report which accompanied it. As so often happens, a full investigation has shown a balanced picture which is, sadly, not always the case with a poorly researched article. Your report explains the well understood relationship of any trades’ union to its members where they may have suffered personal injury in the course of their employment. It would not appear that the relationship between the (locally based) NUM and the individual claimant is any different in principle from that which obtains in other fields. There is nothing in the article which, in the light of your thorough report, requires either to be considered by me or referred to the Law Society. If the Audit Office has decided to undertake its own investigation, it would be surprising if it came to conclusions other than your own.

From my point of view, the issue having been raised, I can see no objection to the release of your report to other members of the CG. It might serve to allay doubts which may have arisen in regard to conduct of the NUM, which as I have said, appear to be groundless.”

Although Sir Michael did not consider that any further action was required on his part, the Law Society had by this stage initiated investigations against Thompsons and another of the firms involved, Raleys, as a result of complaints it had received about deductions. Sir Michael was not informed of those investigations. Thompsons were obviously delighted with the judge’s response. On 6 May 2005 Mr Lumsden reported to his Scottish Equity partners in the following terms:

“The judge considered the report and before the second Sunday Times article, thankfully, wrote to us to indicate he was satisfied there was nothing wrong with union deductions and saw no reason to report any matter to the appropriate regulatory bodies.”

On 5^th July 2005 there was what Sir Michael referred to as “an extraordinary review Hearing” in order, as he said, “to consider the situation in the light of the events recently reported in the press concerning the actions of the UDM [Union of Democratic Miners], Vendside [claims handlers] and Beresfords [solicitors]. It appears that, as well as having a position statement from other members of the CG supporting the concept of deductions (including deductions paid over to trade unions), the judge also had before him written submissions on behalf of Towells, another member of the CG, dissenting from the CG’s position. The Towells’ submission included the following passage:

“As you are fully aware, since amendment of the Solicitors Introduction and Referral Code in March, 2004 the Trade Unions have been able to transform the liability of funding Members’ Litigation into a highly remunerative asset, whereby all Personal Injury and Industrial Disease Claims are being sold to their Panel Solicitors. Trade Unions are effectively adopting the UDM/Vendside model and selling Members’ Claims. In all of the circumstances, the CG’s Position Statement that “the need for continued Union funding is important”, is unsustainable. The concept of “Union backed Claims” brought under the CHA is a fiction, whereby Panel Solicitors mislead Claimants into agreeing to have “Administration Fees” deducted from their compensation and paid to the Trade Unions. In the circumstances, and as stated, I wholly disassociate myself from the CG’s Submission.”

Thus the judge was well aware by the hearing on 5^th July 2005 that serious questions had been raised in relation to deductions paid inter alia to unions and that not all members of the CG agreed with the position which had been presented in its report to him in March (namely, that deductions from claims payments paid to the unions were appropriate). According to an attendance note, the judge expressed the following views at the hearing:

“Last week press articles suggested that some claims have been subject to deductions. The CHA says the sums which are paid carry fixed costs to the representatives and unsuccessful claims attract no costs.

. . .

Last week’s press articles introduced a new element. The DTI have a separate agreement with the UDM and claims handlers operated by them. The arrangement has been the subject of police intervention. The UDM also refer cases to panel solicitors some of which have been referred in the press. It is not my job to look at the professional issues but the management of this litigation. According to the press reports, some of those individuals involved have agreed to stand down voluntarily for the time being but my concern is what is to happen to the claims which are proceeding with those organisations.

Claimants may not have followed the fine detail as to what has happened and for the claims involved with these organisations I am seeking assurances as to what will happen.

With the NUM it has been commonplace for a percentage deduction to be taken from client’s damages to cover costs of unsuccessful claims. Many cases here have been brought through the Union and there is no obvious financial benefit to the member who already enjoy the costs of protection of the CHA. In some cases substantial proportions of awards have been taken. It is a matter for the Union to consider whether their arrangements are compatible with the cost provisions of the scheme.

…

In the light of the statements made and the information which will be available to me in the near future it would be highly mischievous if there were any delay to the claims process. This would only be beneficial if the Court were satisfied that irreparable harm to the interests of Justice, claimants and the public was likely to result”. (Our emphasis.)

At that stage, therefore, Sir Michael appears to have accepted that it was not part of his function to address or determine questions of professional conduct relating to deductions from compensation claims.

Two important developments occurred in the summer of 2005. The first was the establishment of a body called the ‘Action Group for Miners’ (“AGM”) to represent those who considered that they had been let down by their former solicitors over deductions from their compensation. The second was a decision by GWM, then a recently established firm, to seek instructions from miners who wanted to bring proceedings against their former solicitors, claims handlers and trades unions for making wrongful deductions from their compensation. Individually the sums involved were small and did not justify the expense of litigation, but it was thought that a very large number of miners might wish to pursue claims, in which case the overall amount would justify the costs of proceedings. GWM’s plan, therefore, was to obtain a Group Litigation Order (“GLO”), to which a large number of miners could become parties.

In order to enable GWM to offer their services on a ‘no win, no fee’ basis without their clients’ incurring any liability for the defendants’ costs if their claims failed, it was necessary to obtain ‘After the Event’ (“ATE”) insurance in respect of disbursements and the defendants’ costs. In July 2005 Templeton Insurance Ltd agreed in principle to provide cover, but it failed to provide a policy document. On 15^th November 2005 it withdrew cover for various reasons, but later reinstated it on 15^th December 2005. Despite that, no policy document was ever issued. Templeton had a longstanding commercial relationship with Thompsons and it therefore insisted as a condition of providing cover that GWM should not pursue proceedings against them, at least in the first instance, but should instead offer to resolve claims by mediation.

On 4^th August 2005 GWM wrote to Sir Michael in the following terms:

“DTI “Coal Health” Compensation Scheme

I am sorry to write to you uninvited but would like to formally notify you, of my firm, Greene Wood and McLean LLP’s, intention to apply in the very near future to the High Court in London for a Group Litigation Order (“GLO”) on behalf of any miners who have been charged unnecessary fees by their Unions, and/or Solicitors or Claim Handling organisations appointed by the former, in connection with their compensation claims brought under the DTI “Coal Health” Scheme.

In the light of the above our firm would consider itself to be an interested party in respect of the issues which we understand were discussed at the hearing before you at the High Court on 5 July 2005.

We also understand that at the hearing the issue of lawfulness or otherwise of the DTI’s Claims Handling Agreement with the Union of Democratic Miners (UDM) and its subsidiary Vendside Ltd was debated. Clearly the lawfulness of this Agreement is significant to our clients in respect of their proposed claims. We would therefore wish as an interested party to be involved in any further discussions concerning this issue and the operation of the Scheme generally. To this end, we would be very grateful if you would kindly keep us abreast of any developments in this regard. In particular, we would welcome the opportunity to make representations at any further hearing concerning the Scheme.”

On 7^th August Sir Michael replied as follows:

“I have to acknowledge your letter dated 4 August in regard to the above compensation scheme. It is not immediately clear to me why you should be writing to me, except perhaps as a matter of courtesy. The issue of the legality, or otherwise of the agreements made between UDM, Vendside and any other claims handling organisation is not a matter which is of interest in the litigation of which I am the Managing Judge. If you were present at the meeting which was held on 5 July, you would appreciate that the enforceability of agreements between the named organisations and the individual miners is something which the Law Society was to investigate, and possibly litigate, with interested solicitors. It was not the intention or expectation that the BCRDL would be concerned directly with that issue.

I would be grateful to receive your assurance that you will send a copy of your letter to me to the Chief Executive of the Law Society.

If you should wish to be present and make representations to the Court in relation to any matters of true mutual interest, you should notify Nabarro Nathanson (DTI) and Irwin Mitchell (CG) of your intention so to do at the earliest reasonable opportunity, identifying the issue(s) which you wish to ventilate. I have taken the liberty of copying your letter to them so that they will already be aware of your potential involvement.” (Our emphasis.)

By 19^th October 2005 GWM had issued claim forms in respect of what were proposed to be the lead claims for the GLO. They included claims against five firms of solicitors, the UDM and Vendside. On 21^st October 2005 GWM also sent Thompsons a letter of claim informing them that GWM had been instructed to issue proceedings against them and were going to issue an application for a GLO the following week. Although the letter spelt out in great detail the circumstances of the specific claim by a Mrs Hardy against Thompsons, the letter stated that, if that application were granted and a GLO were made, “all miners who assert a claim against the defendants will be encouraged to participate in the action.” In accordance with its agreement with Templeton, however, GWM also suggested ADR as a mechanism for resolving the dispute. On the same date an AGM press release announced that an application for a GLO was being issued on 26^th October 2005.

On 24^th October Mr Lumsden wrote to Sir Michael asking for his permission to forward to the Law Society the CG Report and his letter of 24^th March 2005 in response. In his letter Mr. Lumsden said, among other things:

“At the Court Hearing in July this year, the Law Society reported that it has been discussing deductions from damages with a number of firms who do so under client authority. The Society will be meeting my colleagues in Thompsons England and Wales very soon.

My colleagues are anxious that all of the material that might be relevant to a full and proper consideration of matters should be available to the Society, including the CG report and your letter of 24 March which responds to it. I have attached the letter to this e-mail for your convenience.

Although your response was not designated a confidential item, you may recall that the report itself was submitted to you as a document which the NUM proposed should remain confidential, unless you were minded that it should be available to other parties, in which event the Union asked for the opportunity to be heard by the Court. As it transpired, this was not necessary.

Thompsons would now like to present the report and your letter of response to it as part of the paperwork that the Law Society will review and have asked me to write to you in case you have any difficulty with that.”

Sir Michael replied by email on 25^th October 2005 stating that he was content that his letter of 24 March 2005 should be released to the Law Society.

On 26^th October 2005 Mr Tucker of Irwin Mitchell wrote to Sir Michael on behalf of the CG in the following terms:

“I write following consultation with my colleagues and Counsel to provide you with a copy of a press release issued by an organisation called Action Group For Miners. It seems appropriate to draw this press release to your attention because this organisation, by its press release, is critical of the operation of the scheme and invites Claimants to transfer their instructions to AGM who in turn will put them in touch with “one of the team of leading solicitors firms”. In our view, the claims made by AGM, are inaccurate and misleading. Any significant transfer of claims from existing advisers to this organisation would cause dislocation to the scheme.

One firm of solicitors who are named in the press release, Greene Wood & McLean, have recently joined the CSG having informed us that they are acting for a number of former mine workers pursuing claims following the transfer of instructions. We have asked Greene Wood & Mclean to provide us with a copy of the Group Action application that it is said is being lodged with the High Court today.

It is, in our view, objectionable that Claimants who have no complaint with regard to the service provided by their current legal adviser are being induced to transfer instructions elsewhere. There is, of course, no objection if Claimants wish to transfer because they are dissatisfied with the service and/or because they may be concerned about charges that have been raised of them.

It seems to us that the activities of AGM as framed in this press release cross the line between the regulatory rules that affect solicitors that may be on their panel (there is no regulation of AGM) and potentially fall within the jurisdiction of the Court in view of the criticism made of the operation of the scheme. It is for this reason that we consider it appropriate to draw the press release to your attention. We will consider the position further as and when we receive a response from Greene Wood & McLean and we have had an opportunity to consider that which may be published in the media as a consequence of the press release and the offer to provide interviews.

I have copied this letter to the DTI.” (Our emphasis.)

The CG did not give a copy of that letter to GWM at the time, nor at any time before, or even at, the hearing of the GLO application, nor did Sir Michael instruct it to do so.

By email to Irwin Mitchell dated 26^th October 2005, Sir Michael responded to that letter as follows:

“To all interested parties

“Your letter by e-mail came as no surprise to me. As it happened, I heard an interview on radio 4 this morning in the course of which the purpose and activities of 'Action Group for Miners' (AG for M) was the subject of discussion. Again it comes as no surprise to me that Greene, Wood & McLean are involved, since they had threatened some months back that they were minded to seek a group litigation order for the very purpose which has been adopted by AG for M. They had sought my permission to appear at the review hearings as ‘persons interested’. I informed them that if they wanted to appear at the Review Hearings they would need to make the appropriate application. I heard nothing more from, or of, them until this morning.

These are matters of great concern to me as the developments are calculated, if not intended, to destabilise the scheme as it is running at present for what appear to be spurious reasons. One possible view of AG for M is that this is a thinly veiled attempt to circumvent Solicitors’ Practice Rules through the front of a company which claims to be a charity. Of course, I am unable to say that this is the case, but it is a matter in which the Law Society should interest itself as a matter of extreme urgency. You will be aware that I recently wrote to that organisation expressing my concern about the lack of overt action to challenge the legality and enforceability of deductions made by UDM/Vendside from miners’ awards. It is this area which the AG for M seek to exploit.

To the extent that AG for M claim that they are able to short circuit ‘bureaucracy and excessive charging’, this is almost certainly both misleading and mischievous.

What action the CG should take, is not at this stage for me to dictate. Suffice it that I would be sympathetic to any application to reconvene a further Extraordinary Review Hearing provided that a substantive basis for such an application can be found.

For reasons which will be self-evident, this letter is being copied to Nabarro Nathanson and the Law Society (Russell Wallman).” (Our emphasis.)

Again, the CG did not give a copy of that letter to GWM at the time, nor at any time before, or even at, the hearing of the GLO application. That was despite the fact that by this time both Sir Michael and the CG were aware that GWM had issued, or were intending to issue, an application for a GLO.

In the event, on 27^th October 2005, by which time only about 69 persons had asked to join the proceedings, GWM made an application to the Senior Master for a GLO against a number of solicitors who had previously acted for miners seeking compensation for industrial injury and against one trade union, the UDM. In the draft accompanying the application (dated 28^th October 2005) the following orders were sought:

“IT IS ORDERED that:

“1.

This order applies to claims which meet the following criteria:

(a)

the claimant is a coal miner, former coal miner or a relative of a coal miner who has brought a claim, either on his own behalf or on behalf of a relative, under one of the Department of Trade and Industry’s (DTI) claims handling agreements (CHA) in relation to compensation for an industrial injury or disease;

(b)

the claimant entered into an agreement with a trade union or claims handling company to represent or assist him or her in the making of a claim on his or her behalf under one of the DTI’s CHAs;

(c)

the claimant complains that he or she made a payment to the union or claims handling company out of the compensation he or she received from the DTI under one of the CHAs, or has been required by the union or claims handling company to make payment to it out of the compensation he or she has received from the DTI, or that a payment has been or is likely to be sought from him or her by the union or claims handling company out of the compensation he or she is due to receive from the DTI;

(d)

the claimant maintains:

(i)

that the union or claims handling company is not entitled to the payment because the agreement with the union or claims handling company under which it was or is required was and is unenforceable and/or the circumstances in which it was entered into were such as to render it unenforceable; and/or

(ii)

in a case where a claimant’s claim, made under one of the CHAs, was referred by a union or a claim handling company to a firm of solicitors, to be pursued by those solicitors on the claimant’s behalf, the claimant also complains that the solicitors acted in breach of their duty to him or her in requiring, causing or permitting him or her to make the payment to the union or claims handling company.

Claims which meet those criteria will constitute the group litigation.

2.

The Claimants are those individuals who have issued claims which meet the criteria set out in paragraph 1 and whose details are added to the Group Register in the manner and under the terms set out in paragraphs 5 to 7 below.

3.

The Claimants’ lead solicitors are Greene Wood & McLean LLP of 10 Old Bailey, London EC4M 7NG and are responsible for the management and co-ordination of the Claimants’ action and the Group Register.

…

8.

All claims which meet the criteria set out in paragraph 1 shall from the date of this order be issued in the Management Court.

9.

Any claim which meets the criteria set out in paragraph 1 and has already been issued and is proceeding in a court other than the Management Court shall be transferred without further order to the Management Court.”

From an internal “strategy email” circulated by Mr Lumsden within Thompsons on 27^th October 2005, it was clear that Thompsons were keen to get Sir Michael to determine any GLO application made by GWM. Thus, Mr Lumsden wrote:

“Our thinking is to ask judge to convene special hearing, citing damage to scheme, flush out opportunistic approach masquerading as outrage over miners, get the judge to deal with Vendside contract issue and stay GLO or refer to our judge, pending Vendside issue being determined. Flush out too, what their case is supposed to be in law - other than failures of various professional kinds that are for the Law Society and not the courts, to deal with - probably at bottom, an argument that union services being extended and level of deduction applied, under false pretences and solicitor complicit in this.”

The Senior Master gave preliminary directions for a hearing, but on 10^th November 2005, Mr. Tucker wrote to Sir Michael on behalf of the CG informing him that GWM intended to issue an application for a GLO and asking him to fix an extraordinary review hearing at which they could seek orders (i) that the application for a GLO should be listed before him; (ii) that any GLO should be stayed pending the determination of the various issues relating to deductions; and (iii) that the court should determine the terms on which claimants should transfer instructions to new solicitors. The letter, which Mr. Lumsden had a hand in drafting, was copied to GWM.

As a result of that intervention, Sir Michael immediately directed that the application be made to himself, as was confirmed by a letter from the Senior Master to the parties, including GWM, on 11^th November 2005. Sir Michael himself wrote to Mr. Tucker by email, in response to the CG’s request for him to hear the GLO application, but although his email was copied to the Law Society and the DTI, it was not copied to GWM, whose application it was. Sir Michael said that he had arranged for the application to be listed before himself.

In response to Sir Michael’s email, on 23^rd November 2005 Mr. Tucker wrote directly to the judge on behalf of the CG, explaining in detail its position in relation to the application. His letter was copied to GWM.

On 25^th November 2005 GWM themselves wrote to Sir Michael direct, attaching letters to Irwin Mitchell (in which GWM had expressed its surprise that Irwin Mitchell should be writing direct to the Judge). Having referred to the fact that GWM acted on behalf of 69 individuals who had applied for a GLO, the letter continued:

“We write directly to you with some hesitation as it would not normally be our practice to write directly to a judge dealing with a case. However by a letter dated the 23^rd November 2005 Irwin Mitchell wrote to you in relation to our application for a GLO and we consider it necessary to respond to their letter.”

The letter then went on to set out, in response to Irwin Mitchell’s submissions, detailed submissions relating to GWM’s position and why the making of a GLO was an appropriate thing to do in the circumstances.

Sir Michael responded to GWM’s letter on the same day (25^th November 2005) as follows:

“Your letters of today’s date have been forwarded to me. I write to acknowledge the receipt of both the substantive letters to Irwin Mitchell and myself.

So far as the former are concerned, they quite properly wrote to me to apprise me of their intentions. There is no question of their letter amounting to an attempt to circumvent the CPR. You may rest assured that over the period of ten years during which I have been managing this litigation Irwin Mitchell have shown their familiarity and competence with the CPR.

From my own perspective, you should be aware that one of the prime functions of the Managing Judge is to ensure the orderly disposal of claims after the principal judgment has been delivered. This is a function which I have been discharging ever since the CHA was made. The prime reason for the hearing on July 5th was an endeavour to restore stability to the process of assessing and paying just claims and to explore how that process might be imperilled as the result of the strong adverse publicity which had been generated by the alleged infractions by a minority of solicitors and some Trades Unions.

The hearing on 7 December has been convened at my request to consider how best to deal with the application which has been made by your firm for a GLO and to give directions in respect of that application if thought appropriate”. (Our emphasis.)

In December 2005 Sir Michael held a hearing for directions at which he ordered the GLO claimants to provide, among other things, detailed generic particulars of claim in advance of the hearing of the application, as well as a schedule of “generic issues”.

The application itself was heard over three days between 3^rd and 5^th April 2006. On 18^th May 2006 Sir Michael handed down a judgment dismissing the application in robust terms. He awarded costs against the claimants and directed that they make an interim payment of £600,000 on account of those costs. He also invited the respondents to apply for a wasted costs order against GWM, and reserved that matter to himself. In the event, when such an application was subsequently intimated, GWM conceded liability on the advice of their professional indemnity insurers.

Sir Michael’s judgment is available as Hobson & Ors v Ashton Morton Slack & Ors [2006] EWHC 1134. In it he set out in considerable detail the reasons why he considered it appropriate to dismiss the application. They are summarised in these terms in paragraphs 71 – 76:

“Summary and Conclusions

71.

For the reasons discussed during the course of, and summarised in, this section of the judgment, this application fails and must be dismissed. In summary, they are as follows:

1.

The court has not been persuaded that any, or any serious thought, was given to alternative means of adjudication of the underlying claims. This feature would hold good even if there were no other means available. Test actions and consolidation of the actions are two possibilities available for adjudication on the essential dispute. It has not been demonstrated that either method was either inappropriate or inaccessible. The reasons for rejection of the second alternative are nothing to do with the intrinsic merits of this procedure, but due to the extraneous circumstances of the insurance position in respect to the insurers involved and the solicitors Thompsons. [Nothing said in this judgment is any reflection adverse to this firm which has been at the forefront in assisting the court in the resolution of the claims in the main proceedings, known as Griffiths v. British Coal Corporation.]

2.

No group litigation issue has been sufficiently or precisely identified. Even if it had, there is no justification for the inclusion of any of the solicitor Respondents in this application, since it has been accepted that in the first instance, at least, the action should proceed only against the non-solicitor Respondents, UDM/Vendside. If the claims succeed against the union or its claims handlers, there is no reasonable likelihood of solicitors coming under any liability to the individual claimant, who will recover from UDM, or not at all.

3.

The claims made against Raleys have no natural affinity with the claims made against the other solicitor Respondents. The only unifying feature is that all Respondents are solicitors and all claimants are miners or ex-miners. This is plainly insufficient to a GLO support. The agreements made between individual claimants and the unions were in different form, being, as they were, made between different parties occupying different positions with regard to each other. Raleys acted as agents for the Yorkshire and Lancashire areas of the NUM in making the agreements with the individual claimants. In any event, the primary liability must be that of the union, on the assumption that claims will lie. It is inevitable that Raleys would issue third party proceedings against the union were the action to be brought only against them. But this leaves open the position of the other sections of the NUM which in other parts of the United Kingdom ‘used’ Thompsons as their panel solicitors.

4.

There are other unions and independent sections of unions who are not involved in the present application, which if it had validity ought to have been joined. The Applicants’ solicitors have stated openly that it is not their intention to proceed against any other non-union entity.

5.

The gross imbalance between the costs incurred and to be incurred and the sums to be recovered. On any costs benefit approach the court must reject the Group Litigation approach as a just means of resolving the dispute.

6.

Resolution of the validity and enforceability of the contract between the claimants and the UDM and the damages, if any, is a fact sensitive enquiry which a decision in the contractual issue alone cannot decide.

7.

The lack of any certainty about the sufficiency of the ATE insurance in terms of amount of cover and its enforceability.

Fallback position

72.

By way of reply to the submissions made on behalf of the Respondents, Counsel for the Applicants presented an exercise of what may fairly be called ‘damage limitation’. Expressly, Leading Counsel recognised the cogency of the arguments which had been marshalled in opposition to the application. He agreed that the issues which had to be resolved could proceed by way of test or lead cases. He accepted that the single most important question was how the court should facilitate the formulation and resolution of the underlying dispute and that the court “should consider what is wrong with the notion that the litigation should go forward as group proceedings”. It should by now be clear that any such approach is wrong in law as being the antithesis of what is required for group litigation. What is required before such an order is made is that there must be no other satisfactory means of resolving the dispute. Leading Counsel drew attention to the possible advantages of a GLO, namely the improved ability of the court to control proceedings and the publicity which would be an integral part of the process. There were also advantages which would flow from the existence of a claims register which would enable the court to fix the terms and timing of a cut¬off for the receipt of new claims. Leading Counsel also accepted that bringing test cases was a valid alternative to a GLO. Equally, a representative action would be available. The submission was that the claims which were contained within the Generic Particulars of Claim fell naturally within the rule in that they were “essentially addressing the same type of complaint(s)” which were

1.

that the union or its claims handling company was not entitled to payment;

2.

where the claim had been referred to solicitors, the complainant complained of a breach of duty on the part of the solicitor in failing to advise that no payment to the union was due.

73.

It was also accepted on the Applicants’ behalf that if a claim against the solicitors Respondents were to be brought as a consolidated action which could then be stayed, this would enable the potential problem in regard to limitation to be resolved. In the same way, Leading Counsel accepted that there were compelling reasons why solicitors should not be involved until the issue between the claimants and the union or its claims handlers had been settled.

74.

As must by now be obvious, the extent of the concessions made by way of reply effectively undermine the whole basis upon which the application was, and needed to be, made if the court was going to accede to it.

75.

The period which was allowed to elapse between the original threat of proceedings and the date of the application for a GLO raises questions about the motivation behind it, about which some of the Respondents have made submissions. These were to the effect that this application was brought in order to further the transfer of cases from solicitors who are instructed on behalf of clients in the main CHA litigation. There is no doubt that in some of the publicity material which was put out by or on behalf of the Action Group for Miners misleading information was published. Such information could have persuaded miners to transfer their cases from their existing solicitors to one of the four firms who are on the panel of solicitors instructed, or referred, by the AGfM. I make no finding about this, since it is not determinative of the present application. It is sufficient if I indicate that had it become necessary to determine this issue, there was enough suspicion concerning it, that it would have been necessary to have conducted an in depth enquiry, thus adding more costs to this already excessively expensive attempt to bring a group action.

Footnote

76.

As I have already indicated, these proceedings have done nothing to advance the cause of those claimants who may have had deductions made from their compensation in circumstances where there was no legal right for such deductions to have been made. Unnecessary delay has resulted by the adoption of a method of proceeding which was, from the outset unlikely to succeed. Any disinterested observer who had been present at the Directions Hearing would have been able to see, without the assistance of clairvoyance, what the outcome of a full scale application was going to be. It was characteristic of the manner in which the application has been pursued that no consideration appears to have been given to the overwhelmingly probable outcome. Much will have been wasted by way of costs, whether such may be recoverable from the insurers is neither here nor there. That there is some uncertainty about the recovery of those costs and the extent of such recovery adds weight to the charge that this is an application which ought never to have been made. Hopes may have been raised among those whose claims may have a sound basis that a ready solution was at hand for their resolution. Those hopes will have been encouraged by the imperfect appreciation of what could be achieved by the mistaken approach which has been employed. For this, a heavy burden of responsibility lies on the legal advisers who instituted the present application, which was, in my judgment, doomed from the start.”

The trial before Simon J

On 25^th May 2006, a week after Sir Michael Turner's judgment dismissing the GLO application, Templeton purported to avoid the ATE insurance policy. The events relating to the decline of GWM’s business, and its subsequent administration and liquidation, are rehearsed in paragraphs 325-339 of Simon J.’s judgment and need not be repeated here. On 29^th September 2009 the claimant, Mr Jackson, entered into a CFA with the administrators of GWM to act on their behalf in order to realise for GWM “the fullest possible potential for recoveries under claims against Templeton and Thompsons.” On 8^th June 2011 the liquidator assigned GWM's causes of action to the claimant, and on 10^th June the claim form was issued.

It was Mr Jackson’s case at trial before Simon J that the combination of the GLO decision and the subsequent avoidance of the ATE cover effectively destroyed GWM's business. Accordingly, in the action he sought to recover a principal sum of the order of £71 million as damages for conspiracy and other torts against Thompsons, the first defendants. There were also claims made against the second to ninth defendants, who were various present or former partners of the firm, and against the eleventh defendant, Lord Prescott. Templeton, formerly the tenth defendant, was released from the proceedings by a consent order dated 29^th February 2012.

As the case progressed the claimant dropped allegations against some of the defendant partners and concentrated his attention on the firm itself, one of its partners, Geoff Shears (the sixth defendant), and Lawrence Lumsden (the ninth defendant), a partner in the separate firm of Thompsons Scotland. The case against Lord Prescott also became considerably narrowed.

In summary, it was GWM’s case at trial before Simon J:

After a trial lasting 25 days, in the course of which he heard evidence from all those who had played a significant role in the events (apart from Sir Michael Turner himself), the judge dismissed the claim. He rejected GWM’s case that Sir Michael had been, or had appeared to be, biased; he rejected its case that the defendants had conspired to procure a biased judge to hear the application for a GLO; he rejected GWM’s case that the dismissal of the application had caused the failure of its business; and he rejected GWM’s case that the defendants had conspired to induce Templeton to break its contract. Most, if not all, of the judge’s conclusions were based on findings of fact made after hearing the relevant witnesses give evidence.

GWM now seeks permission to appeal against the judge’s decision on a number of grounds, which can, we think, be fairly summarised as follows:

Mr. Green Q.C. submitted that, in addressing the question of bias, Simon J. had failed to consider Sir Michael Turner’s conduct as a whole over the entire period from January 2005 to April 2006 from the perspective of a reasonable and informed person in the position of GWM viewing the matter at the date of the hearing of the application for a GLO. Mr Green’s argument that Sir Michael not only gave the appearance of being biased, but was actually biased against GWM and its clients, that he was opposed to the suggestion that there might be a GLO and that he was unduly concerned not to allow any interference with his management of the scheme, was based principally on the following:

For the purposes of this application we have considered with care and in some detail the whole course of events from January 2005 to the dismissal of the application for a GLO, including the correspondence and Sir Michael’s conduct generally throughout that period. We accept that there are arguments both ways about whether the prospects of a successful appeal against the findings of Simon J. in relation to bias are sufficient to justify giving permission to appeal, but we find it unnecessary to reach any final conclusion on that question, because we are satisfied that an appeal would be bound to fail on other grounds, to which we now turn.

However the case is put in relation to bias, GWM have to show a causative link between that bias and the loss which they seek to recover. As we have already mentioned, one of the interesting things about this case is that they have been unable to point to anything said or done by Sir Michael during the three days of the hearing, or to anything said by him in the course of his judgment, that is in any way evidence of bias, conscious or unconscious.

Both in relation to actual, and apparent bias, any appeal would in our view run into serious problems in establishing the necessary causal link between bias and loss. The argument based on actual bias proceeds on the proposition that bias led Sir Michael to make an order that he would otherwise not have made. In view of the terms in which he expressed himself in his judgment, however, we think that optimistic, to say the least. There were powerful reasons for refusing the application for a GLO, to which we shall come in greater detail in a moment, and we think it very unlikely that any unconscious sensitivity to criticism of the management of the scheme, or instinctive bias against GWM as a firm attempting to interfere with the orderly management of the scheme by experienced solicitors, could be shown to have swayed his decision on a matter lying within his discretion. In short, we do not think that there is a real prospect of persuading the court that Sir Michael dismissed the application for a GLO because he was biased against GWM or their clients.

Apparent bias is concerned with how a person conducts himself rather than with his actual state of mind. For the purposes of considering this ground of appeal, therefore, one must assume that Sir Michael was not actually biased, but that in the period leading up to the hearing he had behaved in a way that would suggest to a reasonable person in possession of all the relevant facts that there was a real possibility that he might be biased. However, we find it difficult to see how an appeal on this ground could ultimately succeed, because, if Sir Michael was not in fact biased, appearances to the contrary can have had no effect on his actual decision. It must be borne in mind that we are not here concerned with an application to Sir Michael to recuse himself, or even with an application to set aside his decision, but with a claim to recover damages for loss caused by a conspiracy to procure a tribunal that was apparently biased.

Mr. Green’s response to that objection was that if GWM had detected Sir Michael’s apparent bias in time, it could and would have objected successfully to his hearing the application for a GLO. It would then have been heard by another judge, who would have decided it differently. We are prepared to assume for present purposes that, despite the fact that Sir Michael had been involved with the scheme since 1995 and had had extensive experience of industrial injury litigation for many years before that, so that it could be said that he was exceptionally well placed to deal with the application, nonetheless he, or the Court of Appeal, would, in the light of the various events that had occurred during 2005, have considered it inappropriate for him to hear the application. It does not follow, however, that another judge would have come to a different conclusion.

In the course of argument there was some discussion about whether it would be necessary for these purposes for GWM to establish that another judge would on the balance of probabilities have made a different order, or whether it would be enough for them to show that he or she might have done so. In our view, the answer is clearly the former. GWM sought to put their case in a number of different ways, but in each case damage was an essential ingredient of the cause of action. In order to succeed on any appeal, therefore, GWM would have to establish that the defendants’ wrongful acts actually caused them damage, not merely that they might have done so; see, for example, McGregor on Damages, 19^th edition, paragraph 10-045. The concept of a loss of a chance, on which Mr. Green sought to rely, may have a part to play when it comes to deciding what would have happened to GWM’s fortunes if a GLO had in fact been made, but one does not get to that stage until it has been shown that another judge would have acceded to the application.

This seems to us to be a significant hurdle for GWM to overcome. In his judgment, part of which we have quoted above, Sir Michael identified a number of powerful reasons, both substantive and procedural, for not making a GLO in this case. He pointed out that by the date of the application there were still only a small number of claimants applying to join the action and that their claims amounted in all to less than £25,000. There were more than 20 autonomous union bodies which had entered into agreements with their members to retain part of any compensation recovered by them, but although the primary claim in each case to recover the sum in question lay against the individual miner’s union, only one union, the UDM, had been joined as a defendant. (GWM had by that time made it clear that they did not intend to join any other unions.) There was no reason to think that the UDM would be unable to meet any judgment against it, even if the number of claimants increased very significantly, so it was difficult to see on what basis any of the solicitors acting for the miners could be or needed to be held liable.

The procedural difficulties arose out of the need to identify common issues of fact or law suitable for determination by means of group litigation. Group litigation orders are designed to enable issues common to a large number of claims to be determined in one set of proceedings in a cost-effective way. In the present case the application identified the common issues in the most general of terms: in substance, that each of the claimants was a miner who had entered into an agreement with his union or claims handler under which he had been required to make a payment to the union out of any compensation he obtained from the DTI. However, the agreements between miners and their unions were not all in the same terms, so that although the issues relating to the claims against the unions were similar in each case, they were not truly common. Similarly, insofar as the miners were seeking to pursue claims against their solicitors, not only were the terms of engagement different, but allegations of misrepresentation in some cases meant that they gave rise to similar, but not common, issues.

Sir Michael was also, justifiably, very concerned about the arrangements made for funding the proposed litigation and in particular the arrangements for obtaining ATE insurance. Pressure to disclose the terms of the cover, and indeed the policy itself, had failed to produce a satisfactory outcome because, as subsequently became clear, Templeton had failed to issue a policy. At the hearing of the application, therefore, GWM was ordered to disclose its file relating to the cover. Without going into details, it is sufficient to say that there remained a significant degree of uncertainty over some aspects of the insurance, in particular, whether the policy would be enforceable if, as was apparently the case, the claimants would not be liable to pay the premium in any event. As a result of further orders for disclosure, Templeton’s unwillingness to support litigation against Thompsons and the earlier attempt to cancel its interest in the risk became known. Although by the date of the hearing Templeton had reinstated its agreement to provide insurance, the judge thought that there remained a lurking doubt about the efficacy of the insurance arrangements. He concluded that part of his judgment by saying that he had been left in doubt about the true scope of cover, whether the individual claimants were liable for the premium and whether the respondents would be adequately protected for their costs, in particular if the claim against the UDM succeeded and the claims against the solicitors failed.

Sir Michael was also, again justifiably in our view, very concerned about the costs which had been and were likely to be incurred in the future if the matter proceeded under a GLO; see in particular paragraphs 42 to 45 of his judgment. He was entitled to take into account, as he did in paragraph 71.5 of his judgment, that there was a gross imbalance between the costs incurred and to be incurred and the sums likely to be recovered, and that, on any cost-benefit approach the court should reject the GLO as a just means of resolving the dispute.

In our view the objections identified by Sir Michael were significant. There was no point in making a GLO against the solicitors unless there was reason to think that the unions, who actually received the money and who would be primarily liable to reimburse it, could not meet a judgment. Nor was there any point in making a GLO against a single union, the UDM, because the issues that arose in relation to the terms of the miners’ agreements with that particular union could have been more effectively resolved by a relatively small number of test cases. Insofar as the applicants were members of different union bodies, the issues to which the claim gave rise were not common and in any event it was the stated intention of GWM not to join other unions as defendants.

These considerations all point to the conclusion that Sir Michael’s decision to dismiss the application was entirely rational and well within the ambit of his discretion, but in seeking to persuade us to the contrary Mr. Green placed a good deal of reliance on the views expressed by Cooke J. in Greene Wood and McLean v Templeton Insurance Ltd [2010] EWHC 2679 (Comm). The case involved a claim by GWM against Templeton arising out of its avoidance of the ATE cover. GWM sought to recover damages for the breach of an implied obligation on the part of Templeton to honour the contract of insurance with their miner clients. Templeton brought a counterclaim against GWM seeking damages for negligence and breach of duty in relation to the handling of the GLO, in response to which GWM relied on the advice they had received from counsel.

Cooke J. rejected the allegation of negligence and in the course of his judgment expressed the view that experienced solicitors and counsel “could justifiably take the view that a GLO was an appropriate way of proceeding and indeed was the only way in which the miners’ claims could reasonably and properly be dealt with by the courts.” He concluded that, notwithstanding Sir Michael’s views as expressed in his judgment, it was clear to him that proper consideration had been given to whether a GLO was the appropriate way forward. In paragraphs 179-195 of his judgment Cooke J. addressed in some detail each paragraph of Sir Michael’s summary of his conclusions, all of which he criticised. It must be remembered, however, that Cooke J. was not concerned with whether Sir Michael’s decision was right or wrong, but with the question whether GWM and their counsel had acted negligently. Moreover, in our view some of his comments are themselves open to question, particularly those in relation to the existence of group litigation issues, which in some respects appear to confuse similar issues with common issues, and the desirability of including the solicitors as defendants. Although Mr. Green was prepared to submit that Sir Michael’s decision fell outside the ambit of his discretion, in our view that argument has no prospect of success whatsoever.

For these reasons we are not satisfied that there is a real prospect of persuading this court that, if another judge had heard the application, he or she would have reached a different conclusion.

The other limb of GWM’s appeal rests on the cancellation by Templeton of the ATE insurance cover. In our view, however, this part of the case ultimately leads nowhere. In the period leading up to the hearing for directions in December 2005 there had been attempts to obtain details of the insurance arrangements in respect of any liability the miners might incur for the defendants’ costs. In November 2005 Templeton had purported to withdraw from the cover as a result of its concern over its relationship with Thompsons, but later that same month had agreed to reinstate cover, which was therefore in place (as far as it ever had been) by the time the application was heard. However, the absence of a policy document created much confusion and suspicion and led to the various orders for disclosure to which we have referred. Although these events gave rise to doubts in Sir Michael’s mind about the efficacy of the insurance arrangements, it is apparent from his judgment that the real cause of anxiety at that stage related to the terms, rather than the existence, of the cover. It follows that the withdrawal of cover by Templeton in November 2005, as opposed to its failure to issue a policy document, had little connection with Sir Michael’s decision to dismiss the application for a GLO.

Although proof of conspiracy is logically the first step in the applicant’s case, we have deferred dealing with it until now because it calls for detailed consideration only if GWM can persuade the court that they have a real prospect of success on other essential aspects of its case. Since we do not think they can, we propose to say no more than this: that, if this were the only issue to which the appeal gave rise, we would have been willing to grant permission to appeal, at least in relation to the allegation that Thompsons acted in conjunction with others to ensure, so far as it lay within their power to do so, that the application was heard by Sir Michael Turner. That is not by any means to say that we think an appeal on that ground would succeed; simply that the prospects of success on that narrow issue are sufficient to justify giving permission. We have greater doubts in respect of an appeal in relation to procuring a breach of contract on the part of Templeton. In paragraphs 224 to 237 the judge set out the evidence relating to that issue (which was almost entirely oral) and gave reasons for preferring the evidence of one witness to that of another. He clearly formed a very unfavourable impression of Mr. Brunswick, Templeton’s chairman and managing director, and a favourable view of Mr. Shears, the partner of Thompsons who had primary responsibility for the litigation. We think the court would be very reluctant to overturn his findings of fact on that question, but in the event nothing turns on that.

For all these reasons we have reached the conclusion that an appeal in this case would have no real prospect of success. We therefore refuse permission to appeal.