Under the sea

City-based Rosenblatt Solicitors last week won a victory in the High Court on behalf of 1,000 servicemen who had argued that they suffered ill health as a result of nuclear testing carried out by the Ministry of Defence  (MoD) in the Pacific Ocean in the 1950s.

The MoD rejected the claims, saying that because the testing was carried out between 1952 and 1958 the Limitation Act (1980) should apply. It also argued that the claims were “doomed to fail” on the issue of causation and they had “no reasonable prospect of success”.

Mr Justice Foskett disagreed and granted permission for the veterans to sue the Government. While this is a major victory in itself, the case was among the largest ever funded on an after-the-event (ATE) insurance premium.

When the claimants first approached a solicitor about the possibility of pursuing compensation in 2001 they were entitled to legal aid. But when the legal aid rules were changed the claimants were left without the cash to fund the case.

As Rosenblatt senior partner Ian Rosenblatt states: “They were left high and dry.”

In 2004, the veterans approached Rosenblatt to seek an alternative funding arrangement. Together with funding broker The Judge the firm arranged an ATE insurance package with underwriters Brit Insurance and agreed to take the case on a conditional fee arrangement (CFA) basis.

“Others may be talking about doing this, but we’ve been doing it on reasonably high commercial cases for clients who can’t afford to take on the catastrophic risk of losing cases and having to pay the other side’s costs for some time,” said Rosenblatt partner Neil Sampson.

The Government will now have to pick up the £5m bill for the premium issued by Brit, which has helped pay for the legal costs built up throughout the case.

Major litigation practices have been talking about the possibility of working with CFAs for some time, but, especially now that litigation departments are expected to prop up recession-hit firms balance sheets, cashflow demands often make this a difficult option to consider.

There’s no getting away from the fact that litigation is a costly business, but alternative funding arrangements shouldn’t take a back seat just because firm finances are depleted. Just ask those 1,000 servicemen.