This newsletter is a regular update to all our IP, solicitor and barrister contacts. It contains changes to our growing team, updates on the Manolete business model which we hope will be helpful to you, as well as key judgments and articles of interest.

In this issue:

• Two cases from Alison Kirby, Associate Director for the East

1. Robinson v Liverpool University Hospital NHS Foundation Trust and Mercier

2. Patisserie Holdings PLC and others v Grant Thornton UK LLP [2021] EWHC 3022 (Comm)

• New Manolete Associate Director in the North East – Alexandra Withers

• Timeline on a recent assigned case - Manolete working with Begbies Traynor and Parisi Solicitors

• Manolete named Insolvency Litigation Funder of the Year at the TRI Awards for the fifth time

• Charlotte May, Manolete Associate Director, becomes Chair of R3 in the South West and Wales

Robinson v Liverpool University Hospital NHS Foundation Trust and Mercier

Background
This is an unreported case from Liverpool County Court and is a reminder of considerations for any expert to apply when approached to act as an expert witness. In this case a third party costs order was made for wasted costs in the sum of £50,543.85 payable by the expert to the Defendant. It is a reminder for experts to accept only instructions of which they have recent, relevant expertise.

The Issues Before the Court
The Claimant (C) brought a claim for dental negligence against the Defendant (D) for hospital treatment that she received. C was referred from a General Dental Practitioner (GDP) to an oral and maxillofacial surgeon (OMS) who undertook the work. The OMS only removed two of the three teeth referred for extraction.

The Expert (E) argued that no reasonable dental surgeon could have concluded that the third tooth did not need extraction and was restorable. Following E’s evidence at trial C withdrew her claim.

Decision and Reasoning
D sought a third party costs order. The jurisdiction is found in Section 51(1) and (3) of the Senior Courts Act 1981 and is supplemented by CPR 46.2 and allows the Court to determine by whom and to what extent costs are to be paid. These provisions confer jurisdiction in respect of third party costs in the County Court, High Court and Court of Appeal.

The basis of the order sought against E was that D’s costs would have been avoided, but for E’s conduct. E was a GDP and had had no experience of the removal of teeth under general anaesthetic since 2000. As such, it was argued, he should not have been expressing expert opinion about the standard of care given by an OMS.

The Judge agreed, finding that upon receiving instructions, E should have recognised that he did not have the recent or relevant experience to comment upon whether an OMS, who was exercising a different role to a GDP, had made errors amounting to negligence.

The Judge found that E had shown a flagrant disregard for his duties to the Court and had done so from the outset in preparing a report, but for which, C’s claim would not have been brought.

The Judge made an exceptional ruling, that all of the costs sought in D’s costs budget had been caused by E’s disregard for his duty and would be paid by E to D to reimburse D for his wasted costs.

Commentary
Expert evidence, and the lack of assistance it provided the court, was also the subject of some paragraphs in the recent High Court case of Reynolds (as liquidator of CSB 123 Ltd) v Caroline Stanbury [2021]EWHC 2506 (Ch). The Applicant’s expert evidence “did not stand up to close scrutiny” and “his oral testimony failed to comply with his overriding duty to assist the Court”. Sections of this case are a ‘must have read’ for any expert witness.

Patisserie Holdings PLC and others v Grant Thornton UK LLP [2021] EWHC 3022 (Comm)

Background
In the continuing interlocutory skirmishes between these parties, there has been an unsuccessful application for disclosure of all audit files or working papers under PD 51U.5.11, PD 51U.9.4 or CPR 3.1(2)(m).

The Issues before the Court
The relevant sections of the procedural code as summarised as:

• PD 51U.5.11 requires a party to disclose documents to another party where it is necessary to understand the claim or defence they have to meet;
• PD 51U.9.4 allows the Court to make an order for Extended Disclosure in stages; and
• CPR 3.1(2)(m) gives the Court power to take any step or make any order to manage the case and furthers the overriding objective.
  Decision and Reasoning

The Judge drew the following conclusions:

• PD 51U.5.11 must be interpreted narrowly and in line with the overall purpose of PD 51U. The Claimants argued they needed the disclosure to formulate their reply and referred to the Defendant’s defence complaining of lack of particularisation. However, that was not replying to a substantive issue raised by the defence, but was part of the Claimant’s original case. To interpret PD 51U.5.11 broadly would cut across the structure of PD 51U which requires a focussed Initial Disclosure and after that the Court decides whether Extended Disclosure is reasonable and proportionate. Therefore, this application did not and could not fall within PD 51U.5.11.
• While PD 51U.5.11 requires parties to act constructively and seek to agree matters, however, this was premature. The application was premised upon PD 51U.9.4, on the basis that the disclosure model and the Issue had been agreed in the draft disclosure Review Document and therefore formed part of an Extended Disclosure Order. However, the Court decided that merely because the documents went to an Issue agreed between the parties, in making an order at this early stage would be failing in the Court’s obligation to manage the disclosure process as contemplated by PD 51U.
• It followed, that the Court’s inherent jurisdiction in CPR 3.1(2)(m) should not be exercised in a way that disapplied PD 51U and its specific purpose of achieving a structure and rules limiting disclosure to what is reasonable and proportionate.
  In a final conclusion, the Judge decided that even if she were wrong on the jurisdiction, on the facts and evidence the Claimants had not made out a case for disclosure of the documents sought either under PD 51U or the Court’s residual jurisdiction.

Alison Kirby
Associate Director

New Associate Director in the North East – Alexandra Withers

Manolete’s legal team has regularly increased in response to our rising workload. Our latest recruit Alexandra Withers joined Manolete on 10 January as an Associate Director in the North East.

Alexandra studied law at Northumbria University. She was previously an associate solicitor at a commercial firm in Newcastle upon Tyne where she specialised in contentious insolvency – she has a decade of experience in all aspects of insolvency law.

Alexandra is also chair of the North East arm of the insolvency and restructuring trade body R3. She is recognised in the Legal 500 as a ‘Rising Star’ in the field of insolvency and corporate recovery, as well as a ‘Key Lawyer’ in the field of commercial litigation. In 2021 Alexandra was appointed to sit part-time as a Deputy District Judge and an Employment Tribunal Judge.

Timeline on a recent assigned case - Manolete working with Begbies Traynor and Parisi Solicitors

Manolete, Begbies Traynor and Stephen Baylis from Parisi Solicitors have recently worked together on an assigned case to achieve a significant settlement via online mediation. Below is the timeline:

• The company had entered into liquidation in autumn 2020.
• Begbies Traynor undertook initial investigation work immediately upon their appointment.
• The office holders identified a number of suspicious transactions and claims which appeared to arise in breach of duty, wrongful trading and ODLA.
• The proposed claims against the individual directors were purchased by Manolete four months after liquidation.
• Stephen Baylis was instructed to act for Manolete at the request of Begbies Traynor as is typical in such cases.
• A letter before claim was sent – later it became apparent the property (which we had identified was owned by one of the target directors) had been sold.
• Begbies Traynor undertook a search of the index of proprietors’ names which revealed the purchase of an additional property which was unencumbered and worth in excess of £1m.
• A response to our letter before claim was received - this revealed no substantive issues but required further correspondence to deal with it.
• Meanwhile investigations continued and further issues were identified by the office holders.
• Eventually a six figure WP offer was received by Manolete and rejected - we proposed online mediation which was accepted.
• After an online mediation, a settlement figure of £300,000 was achieved and paid in full within three working days of the conclusion of the mediation.
• Overall costs were circa £25k and circa £140k is available for return to the insolvent estate. The whole process took 15 months.

Dave Broadbent from Begbies Traynor said:
“We are delighted to be working closely with Manolete Partners PLC across a number of cases. They have a fantastic reputation and proven track record for financing insolvency litigation.

“Their size, financial backing and in-house dedicated senior insolvency lawyers running cases with external lawyers means that introducing them to a case will often bring settlement or success which might not otherwise be achievable.

“In this particular case we were impressed to see a significant cash return within 15 months of our appointment. The overall costs of £25,000 were modest and proportionate. The overall speed of result and outcome for the estate would have undoubtedly been different if we had taken the case forward on pay from realisations terms."

Click here to view a larger version of the timeline

Andrew Cawkwell
Associate Director

Manolete Named Insolvency Litigation Funder of the Year at the TRI Awards for the Fifth Time

Manolete Partners was named Insolvency Litigation Funder of the Year for the fifth time at the 2021 Turnaround, Restructuring and Insolvency (‘TRI’) Awards last month.

The TRI Awards, now in its fourteenth year, is firmly established as the landmark awards ceremony for the turnaround, restructuring and insolvency profession.

Steven Cooklin, CEO of Manolete Partners, said: “We are absolutely thrilled to be recognised again by our peers in the insolvency sector. I feel very proud for the Manolete team to be named ‘Insolvency Litigation Funder of the Year’ for the fifth time. I would also like to thank Shard Financial Media for their excellent delivery of the annual conference and awards ceremony.

“This accolade reflects the hard work undertaken by our dedicated team and the outstanding partnerships we have built with IPs and their legal teams across the UK. We have continued to invest in a high level of cases and at the same time our case completion rate has remained at a high level.

“It has been a turbulent time for the whole economy over the last two years - 2022 is expected to be a very challenging year ahead for many businesses, large and small. The insolvency and restructuring sector has a central role in helping the economy recover and re-shape it after the impact of the pandemic and restrictions on business. Manolete will be playing its part to support those great many committed professionals.”

Manolete was also headline sponsor for the very successful TRI Conference for 2021 also held on 9 December at the Bankside Hilton. Highlights included a keynote speech from Kevin Hollinrake MP setting out the case for a single regulator for the insolvency industry. There were well-attended sessions from Gordon Brothers, Howard Kennedy and Wedlake Bell. Delegates were very engaged in discussions particularly around the sector’s response to the economic recovery.

Manolete Associate Director Charlotte May becomes Chair of R3 in the South West and Wales

Charlotte May, Manolete Associate Director, has been appointed as Chair of the insolvency and restructuring trade body R3 in the South West and Wales.

In her new role, Charlotte will work with R3 to plan and deliver events and conferences for its members and support the representation work it carries out on the profession’s behalf.

Charlotte said, “I’m delighted to be taking over as Chair of R3 in the South West and Wales. As we emerge from the worst of the pandemic, the key message to businesses and individuals in the South West and Wales remains: seek advice at the first sign that your business could be financially distressed.

“In recent years, Brexit and the Coronavirus pandemic have held directors back from making decisions but seeking qualified advice when faced with financial difficulty is a decision that cannot be put off – and those businesses that do seek help are the ones that have the greatest chance of survival.”