Law firms making ‘wildly inflated’ costs claims, standards body finds

Costs lawyers should be more widely retained to stop firms from inflating their costs when they are working on a contingency basis, according to a new report by the Costs Lawyer Standards Board. One litigation funder told researchers that costs never came in on budget and were often overestimated. A specialist professional negligence insurer said they were ’desperate for claims to be presented honestly, based on evidence’. The message from both was that, in their view, solicitors’ firms were often presenting wildly inflated claims based on their interests in a CFA and this was not always acting in the best interests of the client.’

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Litigation funder jointly liable for indemnity costs, court rules

Litigation funder Therium should be jointly and severally liable for indemnity costs after a specialist currency debt management firm unsuccessfully sued HSBC, the UK High Court has ruled. The funder agreed to back the claim by ECU Group against a number of HSBC entities over allegations that traders used knowledge of ECU’s foreign exchange orders to make a profit between 2004 and 2006, in a practice known as ‘front running’. However, ECU’s claim was ruled to be time barred by Mrs Justice Moulder, who held that the company had ‘sufficient knowledge’ to plead its case in 2006.

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Axiom fund set up to fill legal aid ‘black hole’, court hears

A solicitor accused of dishonestly funnelling nearly £20m of investors’ money from a legal financing fund into his own pocket has told jurors the fund was set up to fill ‘the big black hole in the market’ after access to legal aid was reduced. Timothy Schools is said to have received ‘just over £19.5m’ from the Cayman Islands-registered Axiom Legal Financing Fund before it collapsed in 2012. He allegedly used some of the money to pay for an estate in Cumbria, a personal trainer and football season tickets.

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Exclusive: Solicitors probed over client loans to fund divorce cases

Solicitors are coming under the spotlight amid growing concern about how vulnerable clients were sold loans to fund family litigation. More than a dozen people have claimed to the Gazette they felt compelled to take out the loans with Novitas, now a subsidiary of merchant banking group Close Brothers, to fund proceedings in the last 10 years. They borrowed from £20,000 to £350,000 at an annual interest rate set between 18% and 30%. Both financial and legal regulators are understood to be investigating allegations – so far unfounded – of misconduct.

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