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Legal Watch: Personal Injury 19th June 2015 Issue: 066

Legal Watch - Personal Injury - Issue 66

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Legal Watch - Personal Injury - Issue 66

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Page 1: Legal Watch - Personal Injury - Issue 66

Legal Watch:Personal Injury19th June 2015Issue: 066

Page 2: Legal Watch - Personal Injury - Issue 66

In this issue:

• Public Liability

• Expert Evidence

• Costs

• Jackson/Mitchell/Denton

• Article–Heavyfineslikelyinthefutureforlargecompaniesconvictedofcriminaloffences

Public LiabilityInaweekinwhichthefalloutfromtheAltonTowersaccidentisstillbeingfelt,thecaseofLowdon v Jumpzone Leisure UK Ltd (2015) EWCA 586 will no doubt attract interest.

The defendant/appellant operated a ride known as the‘Hyper Jump’, which involved customers being strappedintoaharnesswithelasticropesoneitherside.Theoperatorcounteddown from three and released the ropeswhen theridersignalledtheywereready.Oncereleased,theriderwaspropelledintotheairandbouncedupanddownforamatterof seconds. The claimant/respondent alleged that he wasreleasedwithoutwarningonhissecondride.Hesaidthathewasnotawareofany injuryat the time,but foundhisnecktobe stiff andpainful over the following fewdays.He thensuffered a loss of vision andwas found to have suffered adissectionofthevertebralartery.

The claimant claimed that the persons who had beenoperating the jump had acted negligently in releasing himwithoutwarning. The judge’s unchallenged findingwas thattheclaimanthadbeenreleasedwithoutwarningwhilehisheadwas down. She held that the injury was sustained as a result of thecompany’snegligentoperationof theequipment andfailuretogiveanadequatewarning,andthatsuchinjuryhadbeenreasonablyforeseeable.Shereferredtothefactthatthecompany’sguidelineshighlightedthepossibleriskofdeathifsecurityruleswerenotfollowed.Thoserulesincludedaskingthecustomeriftheywereready.

The judge assessed general damages for pain and injuryand loss of amenity at £17,000, which included £5,000 forbeingunable todriveacar for twoyears.Theclaimantwasalso awarded special damages of £6,500 for loss of profiton business mileage, plus interest, making a total sum of£25,616.34.

The defendant appealed and argued that the jump hadoperated without injury for many years with thousands of

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customers, and that it was not reasonably foreseeablethat a customer who was properly strapped in could be causedinjurybybeingreleasedwithoutwarningwhiletheirheadwasdown.Theawardforgeneraldamageswasalsochallenged.

DismissingtheappealtheCourtofAppealheldthatthejudgehadnotplacedtoomuchemphasisonthedefendant’sownguidelineswhen concluding that if nowarningwas giveninjurymightresult.Itsargumentthatthefailuretoadheretoitsownstrictguidelinesdidnotgive rise toa foreseeablerisk of injury was a late development; its pleaded caseadmitted that the guidelineswere intended to reduce theriskofinjurytorideparticipants.Itscasehadbeenthattheclaimanthadnotbeenlaunchedwithoutwarningandthathis head had not been thrown about violently. The judgeproperlyconsidered,andrejected,theargumentthatitwasnotabreachofdutyofcaretolaunchacustomerwithoutwarning.Sheconcludedthatthecompanynormallystrictlyfolloweditsguidelinesinthatrespect,thoughthatmightbemodified during the operation of a second ride to simplyaskingthecustomeriftheywerereadyratherthangivinga3,2,1countdown.

Therewas nothing in the expert evidence to support thedefendant’s thesis that risk of injury was not foreseeablein the absence of awarning.On the contrary, the expertevidence directly supported the proposition that there was anincreasedlikelihoodofinjurybeingcausedifthecustomerwasnotwarnedtobracethemselvesbeforelaunch.Inthecircumstances,itwasperhapsnotsurprisingthattherewasno broader analysis about the extent to which personal injury, or neck injury, was the foreseeable consequenceof an unexpected launch. The issue had not arisen as asignificantissuebeforetrial.Thepartieshadnotengagedinabroadassessmentoftheexperiencesofotherbusinessesoperatingtherideinsimilarcircumstances,andtheabsenceof anypreviously reported injuries in the operation of theridedidnottherefore,perse,demonstratethatsuchinjurywasnotreasonablyforeseeable.

‘The judge had been entitled to conclude that the risk of neck injury was a foreseeable consequence of launching a customer without warning…’A number of factors could have contributed to the factthat thedefendanthadnotbeen the recipientofpreviouscomplaints,includingthefactthatsoft-tissueneckinjuriesrarely presented themselves until several hours after anaccident andcustomersmight not complain about short-livedsymptoms.The judgehadbeenentitledtoconcludethattheriskofneckinjurywasaforeseeableconsequenceoflaunchingacustomerwithoutwarningwhennotbraced.Itwouldnot,therefore,beappropriatetointerferewithherfindingsoffactinrelationtoliability.

The judgehadbeenentitledtomakeanawardofgeneraldamageswhich reflected theclaimant’s lossofuseofhiscar,despitethefactthattheresultwasanincreasebeyondthe relevant guideline bracket. She was also entitled toconclude that a total general damages figure of £17,000accuratelyreflectedtheclaimant’slossofamenitybecauseofthespecialfeaturesoftheclaim.Itwasnotappropriatetointerferewiththatassessment.

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Expert EvidenceThereisasteadyincreaseinthenumberofreportedcasesconcerning the substitution of one expert witness foranother.ThecommercialcaseofCintas Corp No. 2 v Rhino Enterprises Ltd and others[Lawtel11/06/2015]isthelatestexample.

The parties were involved in litigation arising out of theapplicant’spurchaseoftherespondents’documentstoragecompany. A trial had been listed for October 2014, butwas adjourned twice because of illness and additionaldocumentsbecomingavailable.Theclaimanthadmade91allegationsagainsttherespondent,ofwhich46wereagreed,by the respondents’ expert and the applicant’s expert not to bebreachesofduty; 12wereestablishedasbreachesofduty;30were inconclusiveontheevidenceavailable;andsevenremainedthesubjectofdispute,astheexpertscouldnotagree.

The additional documents became available in March2015 and a second joint report was prepared; of the 30inconclusive issues,sixwereresolved in therespondents’favour and the remaining 24 were inconclusive. Theapplicant’sexpertsignedthesecondjointreporton11May2015andsentittotheapplicant’ssolicitors.Theapplicant’ssolicitors were surprised at the content. The expertsuggestedthathehadsignedthewrongversionbutthathehad sent the respondents’ expert the amended version and assumedthatthechangeswouldbeincorporated.However,theapplicant’s expert hadnot sent his amendments, andforwardedthemforthefirsttimeon11May.Theapplicant’ssolicitors had submitted witness statements referring tosomeofthecommunicationbetweenthemandtheirclient’sexpertinsupportoftheinstantapplication.

Theapplicantapplied forpermission tocall anewexperton fire safety and to vacate the existing trial window.The respondent applied for the disclosure of documentsconcerning communicationbetween the applicant and itspreviously-instructedexpert.

Theapplicantsubmitted that (1) therewasagoodreasonto adduce the evidence of an alternative expert; (2)any communication referred to in its solicitor’s witnessstatementspriorto11Maywastobetakenasbackgroundand the relevant ‘transaction’ related to the second joint reportof11May.Therespondentssubmittedthatthepointsmade in the solicitor’s witness statements could not be takentorelatetoatransactionsonarrowlydefined,asthesolicitorhadreferredtotheexpert’sadviceatstagesearlierthan11May.

‘…the current expert’s conduct had been improper and dishonest’Allowing the applications the High Court judge held thatthe court was disinclined to vacate the trial date as it had already been adjourned twice. Had the applicant soughtpermission for an alternative expert because the currentexperthadconcededmattersthatitdidnotwanthimto,theapplicationwouldhave failed.However, the situationwasquitedifferentand thecurrentexpert’sconducthadbeenimproperanddishonest.Althoughacourtcouldacceptanindividual’sevidenceononeissueandfindthattheyhadliedaboutanother,itwasnotreasonabletoexpecttheapplicantto continue to instruct its current expert.

It was noteworthy that the expert’s proposed amendments did not relate to the six issues resolved in the respondents’ favour.Therefore,therewasnoreasontothinkthathisviewsonthosesixortheearlier46issueshadnotbeenhonestlyandreasonablyreached.Onthose52issuestheexperthadformedaviewfavourabletotherespondentanditwouldnotberighttoallowtheapplicantasecondbiteatthecherryinrelationtothoseissues.Inrelationtothesevenareasofdisputeand the24 inconclusive issues,had theapplicantcontinuedtoinstructthecurrentexpert,hemighthavebeen

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required to give evidence on thosematters. Therefore, itwouldbeinappropriatetopreventanalternativeexpertfromadducingevidenceonthosepoints.

Notwithstanding the reluctance tovacate the trialand thefactthattherespondentswerenotatfault,theexceptionalcircumstances required that theapplicantbepermitted toadduce theevidenceofanalternativeexpert,butonlyonthe seven areas of dispute and 24 inconclusive issues. Itwasnotintheinterestsofjusticetoinsistthattheapplicantcontinuetoinstructthecurrentexpertorbeleftwithoutanexpert.

Therespondentswererighttoarguethatwaiverofprivilegecouldnotbeconfinedinthemannerinwhichtheapplicantsought.Theapplicanthad,throughitssolicitor,referrednotmerely towhat had happened on 11May and thereafter,but also to views expressed by the expert following thedisclosure of the additional documents inMarch 2015. Itmightwell be the case that the documents in respect ofwhichprivilegehadbeenwaivedwereof little importanceand that the expert’s opinion on the additional documents might have little significance, but those materials wererelevantandprivilegehadbeenwaived.Thedisclosurethatthe applicant hadmade through its solicitor’s statementshadnot exhausted theneed fordisclosure formaterial inrespectofwhichprivilegehadbeenwaived.

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CostsIfareceivingpartyfailstocommencedetailedassessmentproceedingswithinthreemonthsofaclaimconcluding,itisopentothepayingpartytogivenoticetothereceivingpartytodosoandindefaultanapplicationmaybemadetothecourtforanorder.ThecaseofFN and another v Secretary of State for the Home Department [Lawtel12/06/2015] looksatthecostsconsequencesofsuchanapplicationandtheresultingorder.

The appellant had been awarded its costs following asuccessful claim against the respondent. The detailedassessment proceedings should have commenced inSeptember 2012, but that had not happened. Costsschedules were served in May and June 2014 and theparties began negotiations, but without agreement. TherespondentmadeanofferinAugust2014andwarnedthat,intheabsenceofabillofcostswithinsevendays,anunlessorderwouldbesought.Theappellantrepliedthatnotherewasnodeadlinetoissueabillofcostsandthatitwastherespondent’sprerogativetomakeapplicationsasitsawfit.

In an email about another case, the appellant’s solicitorinformed the respondent that six to eight weeks wouldordinarily be required to commencedetailed assessment.Seven weeks after its warning, the respondent obtained,without notice, an order that, unless formal detailedassessment proceedings were commenced within sevendays,costswouldbeassessedatnil.Themasterprovidedtimefortheappellanttoapplytovary,stayorsetasidethatorderandmadeacostsorderinfavouroftherespondent.

The appellant applied to set aside the order and by thetime its application was heard, detailed assessment hadcommencedandtheonlyissuewasthecostsoftheunlessorder. The appellant contended that the respondent hadfailedtomakefullandfrankdisclosureofthecorrespondencebetweenthepartiesandhadmisledthemaster.Theemailabout a separate casewasnotplacedbefore themasterandhefoundthathehadnotbeenmisledandthat ithadnotbeenunfairorunnecessarytomaketheapplicationona without notice basis.

Theappellantsubmittedthattheemailshouldbeadmittedandthatthemasterhaderredinfindingthattherespondenthadmade full and frankdisclosureswhen the impressionhad been given that the appellant had taken no steps toresolve the matter.

Dismissingtheappeal, theHighCourt judgeheldthat theemailwas not fresh evidence as it had been available totheappellantatthetimeofthehearingandhadnotbeenputbefore themaster. Itwas verydifficult to seehowanapplicationtoadduceitonappealcouldbemade.Ifitwasimportant,itshouldhavebeenadducedbeforethemaster,anditwastoolatetoadduceitattheappealstage.

If the email could not be relied upon, the basis for theappealwasslender.Theemailhadstatedthetimewhichtheappellant’s solicitors required for an assessment.Withoutreferencetothattherewaslittlewhichindicatediforwhenthe appellant intended to commence detailed assessment. Themasterhadbeenentitledtoconcludethathehadnotbeenmisled.By the timeof theapplication,sevenweekshad passedwithout a clear statement from the appellantaboutwhenanassessmentwouldcommence.Evenif theemailwastakenintoaccount,theconclusionwouldbenodifferent.Theemailrelatedtoadifferentcaseandcouldnotbetakentorefertotheappellant’scase.Thesolicitorshouldhaveclearlystatedthatsixtoeightweekswererequiredintheappellant’scase.Theappellanthadbeenonnoticethatan application would be made and it had been incumbent on him to reply and state the time needed.

Iftherehadbeenmaterialnon-disclosure,theseriousnessof that breach had to be considered. If the respondenthad failed to refer to prior correspondence, that wasunderstandable.Theapplicationhadnotbeenforimmediaterelief, and it hadnot been intended that the unlessorderwouldtakeeffectuntiltheappellanthadhadanopportunitytoapplyforittobesetasideorvaried.Itwasnotacaseinwhichnon-disclosurehadhadanimmediateanddraconianeffect. Ifnon-disclosureoccurredasa resultoferroneous

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decisionmaking, that was not highly culpable behaviour.Themaster had taken the correct view that disclosure ofprior correspondence would not have made a material difference.

‘The general position under CPR 47.8 was that a party which had not commenced detailed assessment would be ordinarily required to pay the costs of consequent applications’Theorderhadbeenmadewhentheappellantwastwoyearsoutof timeandwherea furthersevenweekshadpassedsince the appellant had received notice that an application for an unlessorderwouldbemade. Thegeneral positionunder CPR 47.8 was that a party which had not commenced detailed assessment would be ordinarily required to paythecostsofconsequentapplications.Theappellant’sreplythat no deadline existed and that it was the respondent’s prerogativetomakeanyapplicationhadnotbeenthemostappropriateresponse.Ithadnotbeeninequitabletomakethe unless order and there was no reason why the costs order should be set aside.

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Jackson//Mitchell/DentonThe legal profession and the courts are facing increasednumbersof litigants in person (‘lips’). Lawyers havebeentoldthattheymusttakereasonablestepstoassistlips;thattheymustnottakeunfairadvantageofthem;andmustwarntheir own clients that these steps may lead to an increase in costs. It is therefore interesting to see how far a courtwillgotoassistalipwhobreachesacourtorder.ThiswasthesituationinthecommercialcaseofChadwick v Burling (2015) EWHC 1610 (Ch).

The claimant, a trustee in bankruptcy, had applied forpossessionanddeclarationsastohisbeneficialownershipof two properties, ‘Rayleigh Road’ and ‘Selwood Road’.Therespondentstothatapplicationwerethebankruptandhis former wife. The former wife was a litigant in personwho claimed that she had some interest in the properties. InMarch2014 thecourtdirectedher tofileherevidence.She did not do so, and inMay 2014 the courtmade anunlessordertotheeffectthatunlessshefiledandservedwrittenevidenceby5August,shewouldbedebarredfromrelyingonanysuchevidencewithoutthepermissionofthecourt.Thesubstantiveproceedingswereadjourneduntil6October. The formerwife did not complywith the unlessorder.On6October, sheattendedcourtwithabundleofdocuments which she sought to adduce by making anapplication for relief from sanctions under CPR 3.9. ThedocumentsprovidedsomeevidenceinsupportofherclaiminrespectofRayleighRoad,buttookherclaimnofurtherin respectofSelwoodRoad.Thedeputy registrar refusedto grant relief from sanctions. Applying the three-stagetest in Dentonhe foundthat the formerwifewaswayoutoftimeforcomplianceandhadgivennogoodexplanationforhernon-compliance.Heindicatedthatheneednotgoon to the third stage and consider all the circumstancesofthecase.However,hereferredtothedocumentswhichtheformerwifesoughttoadduce,saying“...if I am looking at all the circumstances of the case, I might be saying... these are terribly important documents and they throw a

completely different light on the whole thing and that might be something I would take into account but...I cannot even come to that conclusion”.

Theformerwifeappealedandsubmittedthatthejudgehaderred in lawby reachingaconclusionon thebasisof thefirst twostagesof theDenton testwithout contemplatingthe third.

The High Court judge held that in relation to RayleighRoad,thedeputyregistrar’sjudgmentdisplayedanerrorofprinciple.Whilehemighthavehadall the relevant factorsin mind, he failed to address them all in his judgment.Moreover,heappearedtohavetakenwhathesawastheweakmeritsoftheformerwife’scaseintoaccountaspartof “all of thecircumstancesof thecase”whenheshouldnot have done so. Some of the documents which shewas seeking to adduce suggested that she might haveaclaim.Theactualmeritof thatclaimwasnota relevantconsideration at the third stage of theDenton test: if thecasewasonewhichwouldotherwisequalifyforrelief,thenthe formerwifeshouldbepermitted toput inevidence insupport.

‘The fact that the court was dealing with a litigant in person could only be relevant at the margins…’Tothatextent,theappealwouldbeallowed.Nevertheless,itwasnotappropriateforthecourttoexerciseitsdiscretiontograntrelief.Whileshehadeventuallysoughtlegaladviceand the consequences of her non-compliance were notlikely to be significant in terms of delay and costs, theformerwifewaswelloutoftimeandhadgivennoproperexplanation.Thecourtwasnotobligedtoenquireintothestateofknowledgeandintellectualcapacityofeverylitigant

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in person who said that she did not understand the process orrealisethatshehadcertainrights.Thefactthatthecourtwasdealingwithalitigantinpersoncouldonlyberelevantatthemargins,where,forexample,therewassomeextremelycomplex factor or complicated order which a lay personmightfind itdifficult tounderstand.The instantdirectionswerestraightforwardandeasytounderstand.

Thedeputyregistrar’sjudgmentinrespectofSelwoodRoaddisplayednoerrorofprinciple,andhisconclusionwaswellwithintherangeofdecisionsopentohim.Hewasentitledto take account of themerits of the defendant’s case onthatproperty,becauseevenifalltheevidenceonwhichshesoughttorelyhadbeenadmitted,itdidnotprovideherwithan arguable caseon themerits. Even if the judge shouldhave taken into account other factors which he did notexpressly take into account, he could only properly havereached the conclusion he did.

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Article – Heavy fines likely in the future for large companies convicted of criminal offencesRvThamesWaterUtilitiesLtd(2015)EWCACrim960On 3 June 2015 the Court of Appeal, including the LordChiefJustice,handeddownjudgmentinthisappealagainstafineof£250,000.Theappealwasemphatically rejected,withtheLordChiefJusticestatingthatthecourtwouldhavenohesitationinupholdinga“very substantially higher fine”.

Although thiswasanenvironmentalprosecution, theLordChiefJustice’scommentsshouldbeseenasaharbingerofwhatcanbeexpectedwhenthedraftsentencingguidelinesforhealthandsafetyandcorporatemanslaughteroffences(‘thedraftguidelines’)areintroducedeitherlaterthisyearorearly2016.

The guidelines for sentencing environmental cases aresimilartothedraftguidelinesandtakeintoaccountfactorssuchasculpability,levelofharmandsizeoftheoffendingcompany. The starting points and ranges of fine aresignificantlylowerforenvironmentaloffences:-

Foralargecompany(turnoverof£50mandover)withveryhighculpability (deliberate)and involvingharmcategory1thestartingpointandrangesforfinesundertherespectiveguidelinesareasfollows:-

• Draftguidelines-startingpoint£4m;range£2.6-£10m

• Guidelinesforenvironmentaloffences–startingpoint£1m;range£450k-£3m

In this case, ThamesWater pleaded guilty to an offencearisingfromthedischargeofuntreatedsewageintoabrookonanaturereserve.Atfirstinstance,thesentencingjudgeassessed culpability as ‘negligent’,which is equivalent to‘medium’inthedraftguidelines.

Thiswasthefirstenvironmentalprosecutiontocomebeforeacourtsincetheguidelinesforenvironmentaloffenceswereimplementedandthejudgeatfirstinstancefacedadifficulttaskinassessingtheappropriateleveloffine.

TheCourtofAppealreaffirmedthesectionoftheguidelinesrelating to very large organisations, that states “wherea defendant company’s turnover or equivalent greatlyexceedsthethresholdforlargecompanies(£50mandover),itmaybenecessarytomoveoutsidethesuggestedrangeto achieve aproportionate sentence”. ThamesWater hada relevant turnover of £1.9bn (profit £346m) and as suchthecourtwantedtoprovidesomeguidanceforsentencingsocalled‘verylargeorganisations’.Theyindicatedthatthesize of a company becomesmuchmore importantwhenthe level of culpability is negligent (medium) or higher;eveninthecaseofcompanieswithanimpeccablerecordthefinehas tobesufficiently large tosendamessage tothedirectorsandshareholders; and in thecaseof repeatoffenders thefineshouldbe farhigherand rise tosuchalevelthatthecompanyreformsandensuresthatitmeetsitsstatutoryobligations.

DespitesignificantmitigationbyThamesWaterintheformofastatementfromaseniorofficerstatingthatthecompanywas taking the issue of environmental pollution seriouslyand was spending substantial sums to modernise andimproveits infrastructure,theLordChiefJusticeindicatedthatthefineof£250,000waslenientandtheywouldhavenohesitationinupholdingaverysubstantiallyhigherfine.

Themost concerning issues arising out of this judgment,however, are the Lord Chief Justice’s remarks in relationto the approach to be adopted in sentencing very largeorganisationrunforprofit:-

• theobjectofthesentenceistobringhometheappropriatemessagetothedirectorsandshareholdersofacompanyandsentencesimposedintheenvironmentalarenahithertohadnotbeenadequatetoachievethatobject;

• previousconvictionswillalwaysberelevantaggravatingfeaturesandinsomecasesseriouslyaggravating

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features.Bywayofexample,tobringhomethemessagetodirectorsandshareholdersoforganisationswhichhaveoffendednegligentlyonceormorethanoncebefore,asubstantialincreaseintheleveloffine,sufficienttohaveamaterialimpactonthefinancesofthecompanyasawhole,willordinarilybeappropriate.Thismayresultinfinesmeasuredinmillionsofpounds;

• in the worst cases -i.e.casesinvolvingcategory1harmcausedbydeliberateactionorinaction-theneedto impose a proportionate penalty will necessitate a focusonthewholeofthefinancialcircumstancesofthecompany.Insuchcasestheobjectivesofpunishment,deterrenceandtheremovalofgainmustbeachievedbythelevelofpenaltyimposed.Thismaywellresultinafineequaltoasubstantialpercentage,upto100%ofthecompany’spretaxnetprofitfortheyearinquestion,evenifthisresultsinfinesinexcessof£100m.

The Lord Chief Justice’s reference to fines in excess of£100m is startling and greatly exceeds anything that ismentioned in thedraftguidelines -e.g. for theoffenceofcorporatemanslaughterthetopendoftherangefor largecompanies is £20m. However, this should be seen as aclear warning to organisations that there are likely to beverysignificantincreasesinthelevelsoffinesimposedforH&Soffencesacross theboardwhen thedraftguidelinesare implemented. It is anticipated that there will also be a substantial increase in the level costs incurred defendingH&Sprosecutionsasexpert evidencemaybe required inrelation to the level of culpability which will impact uponthe starting point for any fine and in the case of largercompanies from forensic accountants todemonstrate thetruesizeofacompany.

Theguidelineswillberetrospectiveandthereforeitiscrucialthat, in appropriate cases, prosecutions are concludedbefore the draft guidelines are introduced in order tominimisethelevelofanyfines.

Forfurtherinformationaboutthearticlepleasecontact

Peter James

T:08442455319

E: [email protected]

Thomas Middlebrough

T:08442454132

E: [email protected]

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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 12 Dingwall Road, Croydon, CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.

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