• A reputation for professional excellence with integrity

    A reputation for professional excellence with integrity

  • Accurate understanding and technical analysis

    Accurate understanding and technical analysis

  • National and International Experience

    National and International Experience

  • 34 years in private legal practice

    34 years in private legal practice

  • A focus on events and consequences, not gossip

    A focus on events and consequences, not gossip

  • Helping lawyers, brokers, accountants, surveyors and other professions

    Helping lawyers, brokers, accountants, surveyors and other professions

  • There when you need him

    There when you need him

Legal Viewpoint January 2018

18 Jan 18

 parties must usually obtain insurance against the adverse costs risks if their case fails – usually through a case-specific ‘After the Event’ [ATE] insurance policy. The tricky issue for other parties then is whether they can be satisfied that their opponents’ cover will respond, and so their costs will be recovered if they win; or whether they should seek a Court order requiring the opponent to provide more reliable ‘security for costs’. It has been legally uncertain whether ATE policies are by their nature adequate ‘security’ for the policyholder’s costs risks. The Court of Appeal has now clarified in Premier Motorauctions Ltd v Pricewaterhousecoopers LLP [2017] EWCA (23 November 2017) (link here) that ATE policies must offer ‘sufficient protection’ to constitute reliable security against other parties’ costs recovery prospects; and because in this case (and typically) the ATE insurers were entitled contractually to avoid payment in some circumstances beyond the opponent parties’ control – eg a non-disclosure or misrepresentation by the policyholder – the insurance could not be certain to respond. Unless the Insurers are prepared accordingly to provide guaranteed protection against adverse costs, which is not likely, impecunious litigants may be obliged to make further financial arrangements, adding to the many deterrents against bringing or contesting risky lawsuits.

No Valuer Accountability For Up-Stream Loans

A thorny technical issue in negligence claims by lenders against professional valuers has been whether lenders can successfully sue for all their losses where the loan in place when the music stopped was simply the latest of a sequence of secured loans, each being redeemed and in turn replaced by subsequent ‘re-finance’ transactions. There are compelling arguments that insofar as the earlier loans have been redeemed (by the re-finance), and the valuation advice in respect of the later re-finance loans was provided and relied upon only as regards the additional amounts being lent, the lender has no losses attributable to the valuation advice on the later re-finance transaction, save for net losses on the additional advances.   The Supreme Court has explored this conundrum twice recently: in Swynson Ltd v Lowick Rose LLP (in liquidation) [2017] 2 WLR 1161 (11 April 2017), in which the principle of non-recoverability for bad valuations concerning up-stream loans was upheld;  and again in Tiuta International Ltd v De Villiers Surveyors Ltd [2017] (29 November 2017), to similar effect. But the arguments will doubtless continue.

 

 

 

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Professional Risk Expertise

Mike Willis has worked with a diverse range of professions including...

The FMWL Approach …

  • Accurate understanding and technical analysis;
  • Focus on duty, causal event(s) and consequences; not gossip…
  • Sensitive but objective empathy;
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  • Clear aims, with vision where necessary to explore indirect routes to solutions.