Kerry Underwood

WHIPLASH TARIFF AND ROAD TRAFFIC ACCIDENT SMALL CLAIMS INCREASE – TUESDAY, 11 MAY 2021 AT 4PM – 5.30PM UK

with 2 comments


You can purchase the recording of the Zoominar for £50 plus VAT here.

Below are some of the issues that cropped up during the Zoominar.

If you knew all of this, then fine; if not you probably need to buy the Zoominar 😊.

If you do, then you can also have a free copy of Kerry on… Qualified One-Way Cost Shifting, Section 74 and Set-Off as well as my three-volume book Kerry on… Personal Injury Small Claims, Portals and Fixed Costs.

On 11 May 2021, published on 12 May 2021, the Master of the Rolls approved amendments to the new Road Traffic Accident Small Claims Limit Portal here, coming into effect pm 31 May 2021.

Below I deal with some issues that arose in the chat box during the Zoominar, as well as some matters raised in emails since, and I thought that I would share my views with all of you, as, whether or not you raised these matters, they may be of interest to you.

Small Claims Limit Increase

Any Road Traffic Accident Claim arising from an accident occurring on or after 31 May 2021 is subject to the new Small Claims Limit of £5,000, whether or not the injuries are whiplash injuries.

The Small Claims Limit has not risen for any other type of personal injury work, but the government has announced that with effect from April 2022 the Employers Liability and Public Liability Small Claims Limit will increase from £1,000 to £1,500.

These limits are in relation to general damages and the overall Small Claims Limit remains at £10,000, which means that in a Road Traffic Accident matter of any kind, the general damages must exceed £5,000, or the total damages exceed £10,000, for the matter to be cost bearing.

  • Specific Question: “If C suffers non- neck or back and wrist only say attracting £2000 award then will it proceed under the present portal and are we entitled to staged costs?”

Answer: No. it will proceed in the new Small Claims Portal and no costs will be recovered.

  • Specific Question: “Having read so much about the reforms I have actually come across a lot of conflicting information surrounding cases which enter this new portal and those which don’t. To clarify, if I have an under £5K PLSA but the injury is a knee – does this mean my £5k small claims limit will apply but it will go through the existing MOJ portal. If this is the case, do we simply conclude and the defendant simply pays costs, stage 1 and 2 no longer applicable?”

Answer: No, it will go into the new Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit in Road Traffic Accidents (The RTA Small Claims Protocol).

Accidents which occur before 31 May 2021 are unaffected.

  • Specific Question: “A hybrid injury – i.e. whiplash + STI to another area such as the knee is suitable for the OIC portal?”

Answer: That will depend on if the total of general damages is valued at £5,000 or less and the total of special damages is valued at £10,000.

The Portal is a Road Traffic Injury Portal, not a Whiplash Portal.

  • Specific Question: “We need £5k PSLA to get into Fast track on applicable cases. Presumably if we have £4k PSLA + £8k Specials we are still limited and stuck in small claims?”

Answer: No, the total is over the general Civil Litigation Small Claims Limit of £10,000, and therefore this matter goes into the existing Portal with stage costs and fixed recoverable costs etc.

Funding Methods

Nothing changes. My recommended method is a Pre-Action Contingency Fee Agreement under section 57 of The Solicitors Act 1974 combined with a Bridging Agreement and a Conditional Fee Agreement.

Please note that even in a small claim, you cannot use a Contingency Fee Agreement under section 57 once proceedings have been issued.

Please also note that in all personal injury matters the maximum that can be charged under a Damages-Based Agreement is 25% of damages.

  • Specific Question: “Post changes what do you think will be the best form of agreement with the client to be able to deduct 40% damages..DBA? contingency fee?”

Answer: As set out above, but you are free to have a Conditional Fee Agreement from the beginning. What you cannot do is to have a Damages-Based Agreement and seek to charge more than 25% of damages.

Answer: It does not need to be that combination. You could just have a Conditional Fee Agreement from the beginning; the key is not to have a Damages-Based Agreement.

The Bridging Agreement is necessary to act as a contract between solicitor and client, but if the matter becomes issued, then the Conditional Fee Agreement is retrospective effect from the day of instructions. This is lawful and has been sanctioned in a number of cases.

It is possible to have a single document dealing with all eventualities, but the courts are reasonably familiar with Contingency Fee Agreements, very familiar with Conditional Fee Agreements, and I do not want a single hybrid agreement, as this is not easy to follow, and is likely to open up challenges by former clients under the Solicitors Act 1974.

Market Rate

This, by definition, involves crystal ball gazing, but my advice is to charge 40% including VAT, for the reasons outlined during the Zoominar. I know some firms plan to do this.

  • Specific Question: “What do you think the market % will be that solicitors will charge & seek to deduct from damages, under the new tariff?
  • Specific Question: “Was that 40% plus ATE?”

Answer: No. I cannot see why ATE would ever be necessary in a Small Claim, but if you do feel it necessary, then my view is that the 40% market rate will include ATE.

Which Portal?

This has nothing to do with the injury, but purely the value of the claim.

If it is under £5,000 then it goes on the new Small Claims Portal; if not, it goes through the existing system.

  • Specific Question: “Sorry if I am going over old ground; as an example, if an adult occupant of a car (and not any of the exemptions) suffers only a non-whiplash injury (i.e. STI knee), the matter WILL progress via the new portal, but the tariff will not apply?”

Answer: The Whiplash Tariff will not apply as it is not a Whiplash Claim.

The new £5,000 Road Traffic Accident Small Claims Limit does apply, and so will depend upon the value of the claim as to whether or not it goes on the new portal.

The type of injury has no effect on which portal it will go onto, but obviously, for reasons discussed, a whiplash injury caught by the tariff will almost always be a small claim.

  • Specific Question: “If post May 2021 and if a claimant was to suffer a wrist and knee injury non orthopaedic but no neck back or shoulder then do you agree that the claim will fall under the present rules not the new rules?”

Answer: No. All Road Traffic Accident matters are subject to the new rules from 31 May 2021.

Valuation of Non-Whiplash Injuries

Valuation of Non-Whiplash Injuries remains the same, that is by reference to the Judicial College Guidelines.

  • Specific Question: “Are all “non whiplash injuries” e.g. soft tissue injury of foot, hand, knee etc calculated by reference to JC Guidelines?”

Answer: Yes.

  • Specific Question: “If you have a Claimant who was involved in an RTA and suffered whiplash injuries PLUS a wrist or ankle injury, is the whiplash injury tariffed and then the wrist or ankle injury assessed with reference to the JC guidelines?”

Answer: Yes – see section 3 (8) of The Civil Liability Act 2018.

If however, the soft tissue in jury is an injury which is a part of or connected to another injury and the other injury is not an injury of soft tissue in the neck, back or shoulder as defined, then that injury is excepted and is not subject to the Whiplash Tariff.

Thus your example of a wrist or ankle injury and a separate injury would indeed have the Whiplash Injury Tariff applied and the rest valued by reference to the Judicial College Guideline.

If however, for example, there was a non-soft tissue injury to the claimant’s neck, then any soft tissue injury to the neck would be exempted from the tariff.

Children

This is confirmed by the Civil Procedure (Amendment No. 2) Rules 2021 & 129th Practice Direction Update which specifically excludes children or protected parties from the new Road Traffic Accident Small Claims Track Limit and the new Road Traffic Accident Small Claims Protocol on the basis that they will not be able to sources their own medical report, which under the Civil Liability Act 2018 is required to settle a claim for Whiplash injuries, via the online service.

This shows that there is a separate procedure for children or protected parties who are subject to the new Whiplash Tariff, but shows that they are so subject to, and not excepted.

Please also note the amendment to the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents 31 July 2013 – that is the existing portal – wherein the definitions section, a new (19) is added as follows:

“(19)      ‘vulnerable road user’ – a road user is treated as ‘vulnerable’ where, at

the time the accident occurred, the claimant was—

(a) using a motor cycle;

(b) a pillion passenger on, or a passenger in a sidecar attached to, a motor

cycle;

(c) using a wheelchair, a powered wheelchair or a mobility scooter;

(d) using a bicycle or other pedal cycle;

(e) riding a horse; or

(f) a pedestrian;

and ‘vulnerable road user’ has that meaning in this Protocol; and”

You will notice no mention of a person being a vulnerable road user because they are a child or a protected party.

The relevant legislation is the Civil Liability Act 2018 and section 1 (4) reads:

(4)          For the purposes of this Part a person suffers a whiplash injury because of driver negligence if—

(a) when the person suffers the injury, the person—

(i) is using a motor vehicle other than a motor cycle on a road or other public place in England or Wales, or

(ii) is being carried in or on a motor vehicle other than a motor cycle while another uses the vehicle on a road or other public place in England or Wales,

(b) the injury is caused—

(i) by the negligence of one or more other persons, or

(ii) partly by the negligence of one or more other persons and partly by the negligence of the person who suffers the injury, and

(c) the negligence of the other person or persons consists in an act or acts done by the person or persons while using a motor vehicle on a road or other public place in England or Wales.

Thus, it will be seen that for the Whiplash Tariff to apply, the person suffering the injury, must be using or being carried in a motor vehicle other than a motorcycle.

That is the way that so called vulnerable road users are excluded, as they do not come within that definition and those exclusions include;

  • motorcyclists
  • pillion and sidecar passengers;
  • cyclists;
  • pedestrians;
  • horse riders;
  • those using mobility scooters;
  • those using wheelchairs, including powered wheelchairs.

It will be noted that the exclusions relate to what the person was doing on the road, or to put it another way, the inclusions relate to what a person was doing on the road.

They do not relate to the capacity or status of the individual.

Thus a family driving to a location who then get out and ride their bicycles are not vulnerable road users while they are in the car, are not vulnerable road users as they get out of the car [section 1 (6) of the Civil Liability Act 2018], but are vulnerable road users as they get on their bicycles and cycle off etc.

A child, or a protected person, is not a vulnerable road user as such.

  • Specific Questions: “I was under the impression that kids were excluded from these insurer propelled changes – is that not correct? please clarify thanks”

Answer: No, it is not correct.

  • Specific Question: “Children & protected parties can proceed via the new OIC portal but they will be allocated to the Fast Track so in a successful claim will generate fixed costs? If they settle pre-issue (with Part 8 used to approve and therefore not technically allocated) we are still going to get our fixed costs?  I am caught here as Table 6B is giving costs only for cases which settle over £1000. If we are on the tariff then the likelihood is that there are going to be a large proportion of sub £1k cases.”

Answer: No, they cannot. Paragraph 4.3 (d) excludes vulnerable users, (f) excludes children and (g) excludes protected parties. Nothing changes. The existing procedure applies.

Other Matters

  • Specific Questions: “Does the exclusion of children from the small claims track apply as at the date of the accident, or the date of litigation?  i.e. What if the claimant is 17 when they are injured but 18 when they start their claim/issue proceedings?”

Answer: The date of issuing proceedings, the specific exception being “where, on the date the proceedings are started, the claimant is a child or a protected party.”

Consequently, a claimant who is 17 when injured but 18 when proceedings are issued is not excluded from the new Small Claims Track Limit of £5,000.

Having said that, there is some confusion as the Civil Procedure (Amendment No. 2) Rules 2021 & 129th Practice Direction Update state that because children or protected parties are excluded from the new Small Claims Track Limit and the Road Traffic Accident Small Claims Protocol, they will not be able to source their own medical report, which under the Civil Liability Act 2018 is required to settle claims for whiplash injuries, via the online service. New rule 26.6B provides that where the claim arises from a Road Traffic Accident which occurs on or after 31 May 2021, and the claim is for, or incudes a claim or whiplash injury the normal track for that claim will be the fast track and the claim must not be allocated to the Small Claims Track.

Thus, as I read it, a child or protected party who suffers an injury subject to the whiplash tariff is not subject to either the new, nor the old Small Claims Track Limit, as the matter must be allocated to the fast track and not the Small Claims Track.

However, a child or protected party whose injury is not a whiplash injury is, nevertheless, subject to the old Small Claims Track Injury Limit of £1,000.

Minor Psychological Injury

  • Specific Question: “Is there a definition of “minor psychological injury”? To suggest when such a case may fall out.”

Answer: No.

  • Specific Question: “So if the courts can’t change the tariffs, what is Birkenhead CC going to do?!?!”

Answer: Good question 😊😊.

Without Prejudice

  • Specific Question: “As insurers cannot settle claims on a without prejudice to liability basis under the new process what does this mean for counterclaims made by the insurer’s client? Is any agreement binding and does the counterclaim have to be made in any proceedings issued under the new process?”

Answer: I was unaware of the rule. Please point to your authority for that statement and I will try and deal with the question😊.

Medical Evidence

  • Specific Question: “are the Rules the same for any subsequent medical reports e.g. GP report recommends a psychologist; will the initial report need to be disclosed beforehand prior to the instruction of the psych expert”

Answer: No.

As you correctly point out the current Road Traffic Accident Portal requires that a further medical report will only be justified where it is recommended in the first expert’s report and that report has first been disclosed to the defendant [paragraph 7.8B (2) (a) and (b)].

In the new Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit in Road Traffic Accidents (the RTA Small Claims Protocol), paragraph 7.6 provides that a further medical report will only be justified where it is recommended in the first expert’s report [paragraph 7.6 (1) (a)].

However, there is no requirement that the defendant be served with the first report, before a second report is obtained.

Paragraph 7.6 (5) reads:

“(5) paragraph 8.2 below explains the circumstances in which the claimant will be asked when obtaining a further medical report if they wish to disclose the first report to the compensator.”

Paragraph 8.2 (9) reads:

“(9) the claimant may also choose to release the medical report to compensator via the Portal when they request a further medical report under paragraph 7.6 above. The release of the medical report under this paragraph or under paragraph (8) above does not signify that the claimant is ready to settle the claim.”

Thus disclosure in the Small Claims Portal is voluntary, not compulsory.

Existing Scheme

  • Specific Question: “Thanks ..on the disclosure of 1st report before sub reports I have a present case and I argue that applies only if a stage 2  final offer is made and not interim is that right”

Answer: No, it is not right.

The existing Road Traffic Accident Portal differentiates between:

  • Medical Reports – all claims;
  • All claims other than Soft Tissue Injury Claims – subsequent Medical Reports;
  • Soft Tissue Injury Claims – Medical Reports.

I do not know what type of claim you are referring to.

The requirement to disclose the first report before obtaining further reports only applies in Soft Tissue Injury Claims and the relevant provision is 7.8B (2) (b).

As set out elsewhere in this email, that provision is not carried over into the new Road Traffic Accident Small Claims Protocol.

Bankrupt Claimants

  • Specific Question: “Bankrupt Claimants – if they fit all of the criteria but are identified as bankrupt at the outset would you simply bypass the OIC and MOJ portal, with a letter of claim? If the bankruptcy is shortly to be discharged do you think we would be criticised for remaining outside of the OIC process?”

Answer: It is not a question of bypassing the Portal; bankrupt claimants are excluded from the Portal process by paragraph 4.3 (h).

I do not understand the second part of the question. A bankrupt cannot bring any proceedings without the permission of the Trustee in Bankruptcy and it would be the trustee who would make that decision and as the trustee’s duty is to limit costs, as indeed is a solicitor’s general duty, this could cut both ways.

Issuing in the process is likely to be cheaper for the client in that the costs will be lower, but issuing outside means that there may be some costs recovery.

Please note that this problem exists already. Neither existing Portal applies where the claimant is a bankrupt – see current Road Traffic Accident Portal, paragraph 4.5 (5) and current EL/PL Portal, paragraph 4.3 (4).

I deal with this issue at great length in Chapter 23 of my book Kerry On… Personal Injury Small Claims. Portals and Fixed Costs which you have, or are entitled to, free of charge, as a delegate to the Zoominars.

  • Specific Questions: “Finally, you mention that there is scope for costs for representation if the matter proceeds to a hearing on a denied case. Could this be someone ‘in house’ – i.e. if we had a fee earner already in the firm who was competent in dealing with such matters they could attend. Or do we need a separate entity?”

Answer: I may not have made myself clear. Anyone can represent, for a fee, a party in the Small Claims Track. The person does not need to be a qualified lawyer and does not need to work for a law firm, so yes, it could be someone inhouse.

My point is that firms may consider setting up completely separate entities without the regulation and professional indemnity insurance etc. requirements of recognized bodies as their costs will obviously be much lower.  

Written by kerryunderwood

May 14, 2021 at 2:30 pm

Posted in Uncategorized

40 YEARS OF KERRY: THREE COSTS ZOOMINARS

with 2 comments


On 1 May Kerry will have been a solicitor for 40 years. What better way to celebrate than a few costs Zoominars (plenty actually but let that pass).

  •  Whiplash Tariff and Road Traffic Accident Small Claims Increase – Personal Injury Lawyers – Tuesday, 11 May 2021
  • Client Challenges to Bills – All Lawyers – Tuesday, 18 May 2021
  • Costs: Anything Goes: including Part 36, Damages-Based Agreements, Contingency Fees, Wasted Costs and So Much More – All Lawyers – Tuesday, 25 May 2021

Same KerryTime, Same KerryChannel                    4pm – 5.30pm

£50 for one Zoominar
£75 for two Zoominars
£90 for three Zoominars
Extra delegates £10 per person per session

Plus VAT. Price includes detailed notes and a recording of the Zoominar.

Book online here.

For the IT challenged, or insolvent, or for more information contact Kerry on kerry.underwood@lawabroad.co.uk or 01442 430 900.

The first 40 bookings will get a free copy of Kerry’s three-volume book Kerry on… Personal Injury Small Claims, Portals and Fixed Costs worth £50.

Subscribe to the newsletter Kerry On Costs… And So Much More…for 2021 for £500 plus VAT and all of these Zoominars are free for as many people as you want and you get the three-volume book as well as Kerry on… Qualified One-Way Cost Shifting, Section 74 and Set-Off and a shared Zoom catch up once a month with as many of your colleagues as you want.

Please see first Issue here.

There will be 35+ issues of the Newsletter; subscription includes 11 issues already published.

Written by kerryunderwood

April 23, 2021 at 7:47 am

Posted in Uncategorized

2 RECIPES FROM LOVE YOUR LEFTOVERS COOKBOOK

leave a comment »


Andy Wakeford, Head of School for Food Academy and Hospitality at West Herts College has produced, in conjunction with Watford Borough Council, Veolia and his students, a Cookbook – Love Your Leftovers – designed to cut food waste.

The Cookbook will be exhibited by the Gourmand World Cookbook Awards in June 2021.

Here is a preview of the cookbook, and below are two free recipes 😊.

It costs £10 – all going to charity. If you want it posted, rather than emailed, add £2.50 p+p.

You can contact Andy on Andrew.wakeford@westherts.ac.uk or call 01923 812345 and here is a link to the West Herts College website.

Written by kerryunderwood

April 20, 2021 at 2:25 pm

Posted in Uncategorized

25% CAP FITS: COURT STOPS INFORMED CONSENT CHALLENGE

with 4 comments


This piece first appeared in Kerry On Costs… And So Much More…

Subscription for 2021 is £500 plus VAT to include at least 30 Issues and a monthly Zoominar with Kerry.

To subscribe click here.

In

Swann v Slater and Gordon (UK) Limited 25 January 2021, Queen’s Bench Division Birmingham

District Judge Rouine, a Regional Costs Judge, held that a damages-based percentage cap on all costs to be taken from a client’s damages amount to “informed consent”, meaning the challenge to 400 Conditional Fee Agreements failed.

The court also held that no fiduciary duty was owed by a solicitor to a potential client whilst negotiating a retainer, thus declining to follow the judgment in

Belsner v Cam Legal Services Limited [2020] EWHC 2755 (QB).

All retainers had a 25% cap on all costs to be deducted and the court said that this had a “magnetic attraction” in terms of informed consent, and “is more than sufficient information… for the purposes of obtaining informed consent from a client for deductions to be made from their award of damages.”

The court distinguished the decision in Belsner, itself now subject to an appeal to the Court of Appeal, as there was no such overall costs cap in that case, which was “a very significant factual difference.”

52.         I am therefore drawn to the conclusion that in each of these cases, the claimant entered

               into the retainer, having given informed consent to the concept of a potential deduction from

               their damages of up to a maximum of 25 per cent of the damages awarded or agreed. I pause

               at this point to observe that I found noteworthy the wholesale absence of any evidence from

               any of the claimants in any of these cases, explaining what they had not been told or what

               they had not understood about the fact of a deduction from their damages or the potential

               level of the same. I also at this point confirm that the wording of the retainer documentation

               is sufficient, in my judgment, and I can reach the conclusions that I have without specific

               evidence in relation to each of the retainers being adduced as to the nature of the discussions

               and the advice given, and I confirm that that is the basis on which I have proceeded.

The court also found that CPR 46.9(2) displaces Section 74 of the Solicitors Act 1974, so an appropriate written agreement “puts in place an arrangement which expressly permits payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings”. (Paragraph 57)

Insofar as that finding is different from that in Belsner…. “I am not bound to follow a decision of a High Court judge in an earlier case.”

In relation to the Consumer Contract Regulations 1999 and the Consumer Rights Act 2015, the court said:

“I begin by saying that I find there to be real force in the submission that there is nothing unfair, per se, in the concept of an arrangement whereby a solicitor can charge a client, by reference to a deduction in damages, sums over and above that which have been recovered as inter partes costs from the tortfeasor. Indeed, there has been statutory provision in place for a number of years to allow such arrangements to be put in place.” ( Paragraph 74).

75.         The question here, however, is whether the specific provisions in these retainers fall

               foul of either the 1999 Regulations or the CRA. I have already made clear earlier in this

               judgment my view on the way in which the provision of the retainers is framed. To confirm,

               I have not, thus far in this judgment, taken any issue with the wording of any of the retainers

               or the ends which they appear to be seeking to achieve in the context of permitting the

               defendant to make a deduction from the client’s damages. I see no reason to depart from my

               previous views about such wording at this stage in this judgment. In my judgment, the

               deduction from damages is part of the package of remuneration to which the solicitor is

               entitled in return for the provision of professional services to the client in the context of the

               client’s pursuit of a claim for personal injury damages.

76.         In relation to all of the retainers in respect of these assessments, I have, as previously

               indicated, confirmed that I am satisfied that the clients have had explained to them, in a way

               sufficient to enable them to provide informed consent on the point, both the principle of

               deduction from damages and the maximum amount, in percentage terms, which might be

               taken from them. It seems to me that the deduction from damages is part of the price which

               the client has to pay to secure the solicitor’s service. Incidentally, I do not, in the context of

               any of these points of dispute, accept that there is an obligation on the part of any solicitor to

               explain to a prospective client that there may be different or alternative terms on offer from

               other alternative legal practices.

77.         The concept of a deduction from damages is, in my experience, widespread in the field

               of personal injury litigation and, as I have said previously, has been expressly catered for and

               principally in the historic statutory provisions. I also remind myself that I have already

               concluded that all of the clients in all of these cases gave informed consent to this provision

               in their retainer at the outset of the solicitor and client relationship. Given all that I have just

               said, I find myself unable to reach the conclusion that this particular provision, in these

               particular retainers, has created an imbalance, let alone a significant one, between the parties

               to these contracts. I therefore find myself unable to conclude that the term is unfair by

               reference to the 1999 Regulations. For the avoidance of doubt, I confirm that nothing in the

               non-exhaustive list of potentially unfair terms contained at schedule 2 to the 1999

               Regulations comes close to assisting the claimants’ submissions on this point.

78.         In relation to the CRA, I confirm that I accept the defendant’s submissions on the

               impact of section 64(1)(b) on these retainer terms, as, in my judgment, the question of total

               sums payable to the solicitor, including by reference to any deductions from damages, must

               form part of the assessment of the appropriateness of the price payable by the client for the

               legal services provided to them. There appears to be no issue between the parties that a

               solicitor retainer of this kind is, in fact, a consumer contract, for the purposes of the CRA; but

               my finding in relation to section 64(1)(b) of the CRA means that this particular provision of

               these retainers cannot be assessed for fairness under section 62. In summary, in relation to

               point of dispute two, I confirm that I have found in favour of the defendant in respect of all of

               the issues which I have determined in relation to that point of dispute in this judgment.

Comment

An outstandingly well-reasoned and argued judgment – perhaps the best in the history of Conditional Fee Agreements.

Right on every point.

Any other decision would have been deeply harmful to access to justice – a few quid back for opportunist clients but wrecking Conditional Fee Agreements which allow those without means access to justice.

Clients pass all risk to the solicitor. That solicitor is entitled to be rewarded for that risk.

I wonder if a single one of these 400 claimants would have pursued a personal injury claim if they had to pay full costs, win or lose.

I guess not.

Instead of getting 75% of damages, they would have gotten 0% of damages.

I trust that they are fully advised, so as to give informed consent, every time they are asked to challenge the fees of their former solicitors.

Written by kerryunderwood

March 31, 2021 at 11:40 am

Posted in Uncategorized

ONLY ONE CIVIL PROCEDURE RULE NEEDED SAYS SUPREME COURT JUSTICE – BUT NEW PORTAL HAS 1,684 RULES

with 6 comments


It is nearly 1 April, but this is not an April Fool’s joke.

Speaking at the Cyprus Judicial Conference on 10 March 2021, Supreme Court Justice Briggs – who has form for this sort of thing – said that the Online Court might have only one rule:

Do what it says in the electronic form.”

Fascinating.

The Justice referred to the new “low-value” – if sub £10,000.00 is “low-value” – Road Traffic Accident Online Portal for litigants in person, saying it will be the prototype for a radical recasting of the way in which most civil litigation will be conducted in England and Wales.

It runs to 168 pages and 1,684 rules, so not exactly an evidence based observation.

As can be seen this will be a very easy trail for a litigant in person to follow, provided that they are Einstein.

The Justice said that this single rule could be suitable for Family and Tribunal cases, as well as civil claims.

The effect would be to do away with the barriers thrown up by the Civil Procedure Rules and the White Book under which litigants in person “are simply unable to understand and then comply with the complex rules of the game.”

He added:

This does not mean that the wise litigant will take no legal advice on the merits, or even where necessary, to use a lawyer to argue a point of law or cross-examine a witness at trial. But it cuts out the huge expense of doing the Civil Procedural dance necessary under our present CPR regime to get there, every part of which usually has to be, or at least is, conducted by a lawyer”.

Comment

This is madness. Rules of Court are necessary to govern court procedures. The new online portal is virtually incomprehensible to me as a solicitor of 40 years’ standing, let alone litigants in person.

The whole idea behind the online court is to stop plebs having access to Justice.

I have a better idea. These multi-billion-pound claims in the Business and Property Courts serve no useful social purpose at all.

Let us switch immediately to a fully online system for, say, all claims over £1 million, but have a fully functioning court system for all claims under that sum.

Physical Hearings better than virtual ones says Supreme Court President

Lord Reed, President of the Supreme Court, said that physical court hearings are more effective than virtual ones:

“We do want to revert to physical hearings in the Supreme Court as soon as we can, because they do work better. Counsel find they work better and so do we because the whole experience is much more spontaneous and interactive than it becomes online.”

Agreed. Please have a word with One Rule Online SCJ Briggs.

Competition

Compose the words for “Just One CPR” to the tune of “Just One Cornetto”, or O Sole Mio, or to classicists – It’s Now Or Never.

Written by kerryunderwood

March 30, 2021 at 1:11 pm

Posted in Uncategorized

LAWYERS THREATENED WITH BANKRUPTCY AND DISCIPLINE FOR TAKING ON HOME OFFICE

with 3 comments


In a move which lawyers of all political views are likely to find very disturbing, the government is proposing to force the Immigration and Asylum Chambers of the First-tier Tribunal and Upper Tribunal to consider a Wasted Costs Order against the lawyers representing an unsuccessful applicant, with a presumption in favour of making one.

Addressing the House of Commons on 24 March 2021, having first told The Sun newspaper the previous weekend, the Home Secretary said that this would “tackle the practice of meritless claims which clog up the courts with last minute claims and appeals,” saying that  “for too long our justice system has been gamed”.

The basis of the proposal is that, by definition, if a person fails in an immigration or asylum claim, then they are likely to be deported and not around to satisfy any costs judgment in favour of the Home Office.

“To achieve this, we propose to introduce a duty on the Immigration and Asylum Chambers of the First-tier Tribunal and Upper Tribunal (FtTIAC) to consider applying a WCO in response to specified events or behaviours, including failure to follow the directions of the court, or promoting a case that is bound to fail. While the grant of a WCO is at the sole discretion of the judge we are considering introducing a presumption in favour of making one. In addition, as WCOs only cover the costs of the parties to the claim, we are also considering introducing a mechanism to cover the court’s costs.”

A Wasted Costs Order is made against a lawyer personally and Section 67 of the Criminal Justice and Courts Act 2015 requires a court to report to the regulator any lawyer against whom a Wasted Costs Order is made.

The power exists already throughout the Court and Tribunal system.

There can be little doubt that this move is designed to deter lawyers from taking on cases that currently would not put them at risk of a financial penalty and possible disciplinary action.

In effect, lawyers risk being penalised and disciplined for making an application where their client’s life may be at stake if they are deported back to their own country.

That is morally wrong and an afront to all traditional values, right or left, of the United Kingdom.

What is the next step? To make a presumption of a Wasted Costs Order against solicitors and counsel representing a person found guilty in a criminal matter, on the basis that the criminal in prison will be unable to satisfy any costs order.

This is very dangerous territory indeed.

Written by kerryunderwood

March 30, 2021 at 12:23 pm

Posted in Uncategorized

CROWD FUNDING, COST CAPPING AND TAXPAYERS

leave a comment »


A recent decision by the High Court to grant a cost capping order of £250,000 in a claim against the government, relating to the lawfulness of contracts for protective equipment awarded during Covid-19, has attracted publicity, with the claimants accusing the Government of bullying, by stating that it would cost £1 million to defend the claim.

The claimants had asked for a cost-capping order of £100,000.

The claimants are Crowd-funded and had raised around £250,000 through the CrowdJustice website to fund the case. It is probably no coincidence that that is the sum that the court ordered as the cap.

The assumption is that Crowd funding, costs-capping and not for profit equal good and worthy and that those apposing it here were trying to ensure that those bringing in the case were “bullied out by costs” (Good Law Project) and that the government was attempting to “intimidate” campaigners into dropping the case (Tweet by Every Doctor Chief Executive).

Whatever the rights or wrongs of cost-capping, and I am in favour of fixed recoverable costs for absolutely everything, the reality is that a cost-capping order in favour of a party acting against a government department simply means that any costs over and above that sum are borne by the taxpayer.

In that sense the claimants in the cost-capping case against the government are being provided with Legal Aid, in the sense that the taxpayer is to relieve the claimants of part of their costs by ability.

That may be right, and it may be wrong, but given that Legal Aid has been all up abolished in civil proceedings, it is highly questionable that this is the best method of determining government expenditure in relation to civil proceedings.

Crowd funding itself is a highly debatable issue. Let us be blunt – Crowd funding for a person charged with a serious criminal offence is unlikely ever to capture the public imagination, and nor is the case of a person appealing against refusal of their social security benefits or whatever.

To put it bluntly again, Crowd funding is attractive to middle-class people. I have nothing against that group, but if the effect of a Crowd-funded claim getting off the ground, and achieving a cost-capping order, is that less pocket money is available for the Civil Justice system generally and I question its worth and value.

“Not for profit” is also a term capable for the many nuances.

I am not for one second suggesting that anyone at Good Law Project or Every Doctor is paid one penny piece – I simply do not know – and it may well be that everyone in both organisations gives all their time free of charge.

However, that is certainly not the case with all “not for profit” organisations.

Many law firms, and many barristers, are struggling and making very little profit, and indeed many barristers are paid below the national minimum wage, even when being paid, or perhaps especially when being paid, Legal Aid rates by the state.

Yet, they are not for profit.

However, an offer profit company paying its Chief Executive £50,000, or whatever, but making no profit, can properly be described as “not for profit”.

I repeat that I am not suggesting for one minute that that was the case with these organisations, I am simply questioning the assumption of Crowd funding, cost-capping and not for profit are good things.


There may be, or there may not be, but the whole picture is more nuanced than generally reported.

Written by kerryunderwood

March 19, 2021 at 2:17 pm

Posted in Uncategorized

GUIDELINE HOURLY RATES: CONSULTATION, COVID AND OFFSHORING

with 8 comments


This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

This piece also appears in Issue 4 of Kerry On Costs…And So Much More…, a new newsletter subscription service costing £500 a year plus VAT, and that includes regular Zoom updates.

There will be at least 35 issues this year. You can find out more here , and order here.

In January 2021 the Civil Justice Council published its Report for consultation on Guideline Hourly Rates.

The 100 page Report is here and the consultation ends on 31 March 2021.

Guideline Hourly Rates have not risen since 2010 and the Report recommends increases ranging from 6.8% to 34.8% depending on grade and location.

The principles of hourly rates and summary assessment, as compared with the actual rates, were last published in 2005 – The Guide to the Summary Assessment of Costs.  Appendix J to the current Report is the draft new guidance.

In recent cases the courts have been applying their own upgrades to the 2010 rates – see GUIDELINE HOURLY RATES UP BY 35%: A CHRISTMAS PRESENT FROM THE HIGH COURT – from Issue 1 of Kerry on Costs … And So Much More…  –  here

The proposed new rates are:

The remit of the Working Group was very narrow – essentially a mathematical exercise – and so what follows is not a criticism of the Civil Justice Council; rather I am using the discussion to question the whole basis of Guideline Hourly Rates in the modern world.

The Council specifically rejected pausing the Report to consider the effects of COVID and also the extension of fixed recoverable costs -Paragraph 3.12 and 3.13:

3.12. Another suggestion was that the report be paused because of the effect Covid-19 was having on the business models of solicitors’ firms. It was not within our remit to pause the review. Nor did we believe it to be necessary or appropriate. We have taken this factor into account in our recommendation for a further review within a relatively short period of time.

3.13. Fixed Recoverable Costs (“FRC”) are still under review and are said to be likely to extend to cases of up to £100,000 in value. A pause of our review was therefore suggested to await the outcome of new provisions on FRC. Again, this is not within our remit; nor is it necessary or appropriate. We were required to report by Trinity term 2021 by conducting an evidence-based review of the basis and amount of GHRs.

The Report itself (page 14, footnote 22) refers to a correspondent expressing concern that “…using a dataset of historic hourly rates will only serve to “bake” into any new GHR the overheads and inefficient business practices of pre-COVID business models that are changing as a result of digitalisation and remote working”.

Add offshoring to that, which is remote working carried further to the extent that it is not remote at all; I will return to that concept.

Essentially the Guideline Hourly Rates are a combination of

  • seniority of lawyer; and
  • location of lawyer.

Seniority

Insofar as there are to be hourly rates – I would scrap them all and have fixed recoverable costs for everything- then there is logic in higher rates for more senior lawyers where the case warrants it.

Location

Why should location now be of any relevance whatsoever?

London offices have been shut for nearly a year; work has gone on from where the lawyers live, that is Hemel Hempstead or Reading or Kent or wherever.

Now lawyers and everyone else should be free to have offices wherever they want, but how can there be any justification now for a paying party to pay for very expensive London rents and salaries?

To put this in context, for a Grade A lawyer the Central London proposed recoverable rate is more than double that for National Band 2, which is where many of those lawyers live, and for the past year, where they have worked.

Do the paying clients care which location the lawyer is in? Of course not.

Remote working has been brought into sharp focus by COVID, but it existed before then.

Suppose a Central London firm has at any one time half of its staff working from home, and so has half the rent, half the rates, half the fuel bills etc., although of course not half the salary bill.

Should the hybrid situation not be reflected in a lower hourly rate? This is really only a refinement of the principle set out in

Wraith v. Sheffield Forgemasters Ltd, Truscott v. Truscott [1998] 1 WLR 132 (CA).

Most of the staff of Underwoods Solicitors work in Wellington in the Western Cape of the Republic of South Africa. That is where our secretarial work is done, our phones answered, and much of our routine legal work is done. It is where I am now.

Our overheads are lower; our operation is more efficient as we have qualified typists doing the typing, rather than two-fingered lawyers claiming lawyers’ hourly rates for typing badly.

We should get extra for our innovative approach, not less.

We have people studying in Wellington to qualify as Chartered Legal Executives, and no doubt, in due course, solicitors of England and Wales.

What will the Guideline Hourly Rates be for such people?

Will an entirely unqualified person in England and Wales be able to recover more for their work than a fully qualified solicitor who happens to be based in South Africa?

What about me personally?

Am I suddenly worth less because I am sitting in an office in Wellington in the Western Cape rather than in Hemel Hempstead?

What hourly rates do I charge for my colleagues sitting with me here in the office in South Africa?

If I am working on a file and I travel from Hemel Hempstead to the Western Cape via Qatar, as I have just done, do I charge different rates depending on where I happen to be?

Do I have a break when the plane is flying over Central Africa on the basis that I would get really low hourly rates there?

Logically, is there now not an argument for punishing firms who maintain expensive offices in City of London when COVID-19 has demonstrated that this is entirely unnecessary?

You have the regulators in their usual way saying that in matters such as conveyancing, clients should look to instruct solicitors hundreds of miles away if the clients live in the south of England, so as to save money because fees are lower elsewhere.

The end game of that is to instruct English qualified lawyers in South Africa or India or wherever.

Of course, to my clients the value is exactly the same, and they are happy to pay the same fee wherever I am.

This piece has been entirely researched, written, and typed in the Western Cape. Would it be more valuable if it had all been done in Hemel Hempstead?

Will we shortly see a Costs Master sharply cutting the hourly rate for 100 hours of document review in Central London, on the basis that it could have been done at a third of the price in South Africa by lawyers qualified in England and Wales? If not, why not?

Unsurprisingly, Underwoods Solicitors and the five firms we carry out work for in South Africa have the fixed costs work done here – no issue of Guideline Hourly Rates – and keep the open costs work in England and Wales.

That is madness. Guideline Hourly Rates by reference to location is the equivalent of taking into account the increased costs of quill pens and carrier pigeons.

I mentioned above remote working, but 19 people in an office here in Wellington does not feel like remote working; it is just economic common sense – saving on the cost of delivering the service – just as it makes economic sense to have clothes made in cheaper jurisdictions.

Why should the legal profession be any different?

Written by kerryunderwood

February 3, 2021 at 9:58 am

Posted in Uncategorized

KERRY ON COSTS…AND SO MUCH MORE…: A NEW SUBSCRIPTION NEWSLETTER

leave a comment »


This month I have started a new newsletter – KERRY ON COSTS…AND SO MUCH MORE…, and happily this is going well.

Issue 3 has just come out and is available here.

THIRTY ISSUES IN 2021

I will produce at least 30 issues in 2021, which promises, or threatens, to be a memorable year with major costs reforms, including the increase in the personal injury small claims limit and the introduction of fixed recoverable costs in all civil claims of £100,000 or less, and the Whiplash Tariff and the new Official Injury Claims Service due in May 2021.

GET THE BOOKS

Subscription to the Newsletter includes a free copy of my three-volume book – Personal Injury Small Claims, Portals and Fixed Costs – and my book Qualified One-Way Costs Shifting, Section 57 and Set-Off.

CATCH UP ONCE A MONTH

It also includes a Zoom/Microsoft Teams catch up once a month with as many of your colleagues as you want; this will be jointly with other firms; all of your staff also get 10% off any course I do in 2021.

HOW TO SUBSCRIBE

The cost of a subscription for 2021 is £500 plus VAT and you can book here. It is in electronic form, so can be shared with your colleagues.

WHAT PEOPLE SAY …

“When it comes to costs and funding, Kerry always has his finger on the pulse. Better still, everything he writes is informed by experience of what it’s actually like to run a solicitors’ practice – there’s not an ivory tower in sight. Kerry on Costs… And So Much More will be indispensable reading for busy fee earners trying to keep on top of a rapidly developing market.”

– Benjamin Williams QC

“Kerry has an unparalleled grasp of the fine detail of costs and procedural law and an uncanny ability to spot the pitfalls lurking for the unwary solicitor”.

– Roger Mallalieu QC

“Over the years, several solicitors have sought guidance on charging and making litigation pay. I have always suggested Kerry because he is both a very well informed litigator but also a most astute businessman. He combines those strands to deliver pragmatic advice. He just gets it.”

– Professor Dominic Regan

“Kerry is one of the people who started me blogging in the first place. There is no doubt he is the “go to” expert in relation to costs, retainers and conditional fees. He is not afraid to give straight, robust, advice to practitioners and clients alike. His input is essential to those attempting to earn a living from litigation in these difficult times.”

– Gordon Exall, author of Civil Litigation Brief

Please subscribe here.

Written by kerryunderwood

January 28, 2021 at 12:28 pm

Posted in Uncategorized

CONDITIONAL FEE AGREEMENTS

with 4 comments


Kerry Underwood sells the documents listed – please contact him at  Kerry.underwood@lawabroad.co.uk or 01442 430900 for details.

This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

General Principles and No Win No Fee Agreements

In this first section I look at the general principles of Conditional Fee Agreements and specifically No Win No Fee Conditional Agreements, and below I look at No Win Lower Fee Conditional Fee Agreements, which are a useful and popular method of funding for commercial disputes.

Conditional Fee Agreements are allowed in all work except family work and criminal work and are a form of contingency fee, but much more heavily regulated than contingency fee agreements under Section 57 of the Solicitors Act 1974, which I looked at in last month’s post.

Conditional Fee Agreements have been allowed since 1995 and in certain areas of work, such as personal injury claims, this system of funding totally dominates the market.

There has been a very much lower take up in general civil litigation, but for law firms who know what they are doing, both in terms of the type of work and funding, Conditional Fee Agreements offer an opportunity to get much more work in, to have happy clients and to earn more money. It is a virtuous circle.

The basic concept of a Conditional Fee Agreement is that in return for the client paying nothing, or a lower fee, in the event of defeat, the solicitor charges the client an extra fee, known as a success fee, in the event of success.

Unlike the position with a Contingency Fee Agreement or a Damages-Based Agreement, the solicitor and client are not free simply to agree a charge of a percentage of damages on success, although this can be achieved by appropriate drafting.

Rather, the solicitor’s bill has to be calculated in the usual way, that is with an hourly rate and the numbers of hours worked and emails sent etc., and the success fee, which is  on top of these ordinary charges, is a percentage uplift on those charges.

The success fee can never exceed 100% of the basic charges calculated in the usual way, but the success fee is based on the total of solicitor and own client costs, not the shortfall between solicitor and own client costs and recovered costs.

In personal injury work alone, there is also a cap on the success fee by reference to damages, and that is that the success fee, including VAT, must not exceed 25% of damages, and even that damages pool is restricted so that future loss cannot form part of the damages fund for the purposes of that maximum 25% success fee.

Thus, the success fee in personal injury Conditional Fee Agreements is capped at the lower of 100% of base costs or 25% of the Allowed Damages Pool.

In all other areas of work there is no damages-based cap on the success fee.

A Conditional Fee Agreement where the client is paying no costs for work done in the event of defeat, can still properly be described as a No Win No Fee Agreement, even if the solicitor is charging for disbursements, and those disbursements can include counsel’s fees, provided that the proper wording is used in the Conditional Fee Agreement.

Success is whatever the solicitor and client decide upon. For example, if acting for a defendant, success may be defined as keeping any damages award or settlement below, say, £250,000, or whatever.

As in all agreements, the key is that the solicitor and client are clear in advance as to what has been agreed and the consequences of any particular result.

Although there is no damages-based cap outside the field of personal injury, the solicitor and client are able to agree a damages-based cap without offending the indemnity principle.

Let us look at an example.

In a commercial case, the solicitor and client have a no win no fee agreement whereby the solicitor charges no legal costs in the event of defeat, with a 100% success fee in the event of success, but with the total charges to the client limited to 50% of damages.

The matter settles for £500,000.

Costs are as follows:

Solicitor and own client costs:    £300,000
Less recovered from other side:               £200,000
Balance:£100,000
               
Add success fee:£300,000
                              
Total:£400,000
  
But capped at 50% of damages:

 
£250,000

Thus, in this example the solicitor will earn £450,000 as follows:

Recovered from other side:£200,000
Paid by client as above:£250,000
  
Total:


£450,000


Had the matter been on an ordinary basis, rather than a conditional fee basis, the solicitor would have earned £300,000 as follows:

Total costs:£300,000
Less recovered:£200,000
  
Balance payable by client:

£100,000

The success fee is not recoverable from the other side; it is always paid by the client.

What has happened in this example is that the client has ended up paying an additional £150,000 in return for paying nothing if the case is lost.

Thus, as far as her or his own legal costs are concerned, there is no risk.

If the matter is lost, nothing is paid and if it is won then there is a fund of money out of which the client can pay the solicitor.

There is a problem in general civil litigation, and that is, to adapt the old phrase, the defendant may be a person of straw. The parties are free to agree that success is defined as recovering money, rather than simply winning the case, and that is obviously attractive to clients.

That still leaves the client exposed to an adverse costs order if the case is lost, and that can be covered by After the Event Insurance.

Many such policies are so-called silver bullet schemes, whereby if the case is lost, the insurance premium is not payable, and so the losing client is at no risk.

However, if the case is won, the client must pay the After the Event Insurance Premium out of damages, as well as the success fee to the solicitor.

That means the litigation is genuinely risk-free for the client, but they will end up paying a significant sum out of damages in the event of success. For commercial clients this is often attractive as it means they can plan and budget accordingly.

In Part 2 I will look at No Win Lower Fee Agreements, and as the name suggests that means that the solicitor gets a fee in any event, win or lose, but that the fee is lower in the event of defeat.

In general civil litigation, this is in many ways a much more attractive option for the solicitor, and whilst not eliminating risk for the client, it does limit that risk.

A word of warning if you have never dealt with Conditional Fee Agreements. There are considerable regulatory hurdles to overcome, but these can all be dealt with by having proper procedures in place and properly worded agreements.

In Part 3 of this series I will list all the types of general civil litigation Conditional Fee Agreements that I have written and in Part 4 I set out a list of all types of potential funding for civil litigation.

No Win Lower Fee Agreements

The general principles in relation to Conditional Fee Agreements are set out above; there I considered no Win No Fee Agreements in detail; the same principles apply to No Win Lower Fee Agreements.

It is important to note that in a No Win Lower Fee Agreement, as in a No Win Fee Agreement, you must have a full hourly rate as the main, standard rate in the Conditional Fee Agreement, just as you would if you were acting on an old-fashioned hourly rate basis, win or lose.

It is that full rate which is then discounted, in the event of defeat, to nothing in the case of a No Win No Fee Agreement, and to a lower fee in relation to a No Win Lower Fee Agreement.

So if, for example, the main full rate is £400 an hour, with a 100% success fee, but discounted to £200 an hour in the event of defeat, then that is fine.

Very obviously you are getting four times the fee for winning as compared with losing – £800 an hour and not £200 an hour – but because the success fee is based on the standard full rate of £400 an hour, you are not falling foul of the rule that the success fee cannot exceed 100% of ordinary solicitor and own client costs.

However, if the agreement was expressed as £200 an hour, but increased to £400 an hour in the event of a win, then that is the 100% already used up and there could be no further success fee.

There is no problem at all, provided that the Conditional Fee Agreement is drafted properly, and in Part 3 of this series I list the different types of Conditional Fee Agreements I have prepared for general civil/commercial litigation.

The full standard rate is the rate that the client will never pay; in the event of defeat they pay the discounted hourly rate, and in the event of success there is a success fee added to that full hourly rate.

The benefit to the solicitor of a discounted Conditional Fee Agreement is that the solicitor is guaranteed a fee win or lose. In the event of defeat the fee will be lower than normal, but in the event of victory it will be higher than normal, and therefore it is not all or nothing.

Above I have set out a scenario where the discounted fee is simply a lower hourly rate, but solicitor and client are free to agree anything by way of discounted rate, as long as the winning rate is the full hourly rate, so as to justify recovery from the other side under the indemnity principle.

An option that can be attractive to solicitor and client is to have the discounted fee being a fixed fee, for example ‘’£400 an hour discounted to a fixed sum of £50,000 in the event of there being no success.’’

The parties are free to define what success is, but for claimants a common definition is that there is a settlement or court award for damages or costs in favour of the claimant.

The benefit of a fixed sum as the discounted fee is that the client has certainty which is not achieved by a lower hourly rate, as the fee will still depend upon the number of hours worked and how long the case goes on.

From the solicitor’s point of view, as it is a fixed fee payable in any event, the full discounted sum can be charged immediately and thus there are cashflow benefits.

If charging by the hour, the discounted fee can be charged each month in the usual way, as that fee will be payable in any event. Care should be taken not to deliver a statute bill for the work done to date, as that potentially prevents a further charge to the client for that work if the case is won; there are conflicting authorities on this point, and it is not worth taking the risk.

Let us look at the example in Part 1, but on the basis that if the case is lost, the client pays 50% of the normal charges, rather than nothing.

In return, the solicitor charges a success fee of 50%, rather than 100%.

It then looks like this:

Solicitor and own client costs:    £300,000
Less recovered from other side:               £200,000
Balance:£100,000
               
Add success fee of 50%:£150,000
                              
Total:

£250,000

Thus, in this example, the solicitor will earn £450,000 as follows:

Recovered from other side:£200,000
Paid by client as above:£250,000
  
Total:

£450,000

It will be seen that in fact the solicitor is earning exactly the same on this No Win Lower Fee agreement, as on the No Win No Fee Agreement, due to us choosing to cap the charge to the client on the No Win No Fee Agreement  at 50% of damages.

I have made the example work like this, but it will in fact often be the case in practice and, in the market, it is attractive to cap the total charge to the client at a percentage of damages; otherwise the client can end up with nothing even in the event of a win.

Thus, in both examples the solicitor paid £450,000 for winning, with the big difference that with the No Win Lower Fee Agreement the solicitor would receive £150,000 in the event of failure.

Thought through, and discussed in detail with the client, discounted Conditional Fee Agreements can be a very attractive option for both the solicitor and the client.

There is now no need to inform the other side that you are acting under a Conditional Free Agreement, as no element of the success fee is recoverable, except in the very limited case of  mesothelioma claims.

Tactically, it is a good idea to notify the other side as it shows that the solicitor is sharing the risk, and  believes in the strength of the case.

There is no need to inform the other side that it is a No Win Lower Fee Agreement, as opposed to a No Win No Fee Agreement, and as many people in civil litigation and commercial work have little knowledge of Conditional Fee Agreements, it is often assumed that the solicitor is acting on a no win no fee basis.

Indeed, in a claim where a solicitor feels the prospects of success are not great, you can enter into a Conditional Fee Agreement for say £400 per hour in the event of a win and £350 an hour in the event of a defeat.

The solicitor is risking just 12.5% of the fees, but tactically it puts pressure on the other side.

There are almost endless alternatives to the old-fashioned hourly rate win or lose and in Part 4, I provide a checklist of alternative funding methods.

Part 3: List of Conditional Fee Agreements Suitable For General Civil/Commercial Litigation

1. No Win No Fee – Without Success Fee

2. No Win No Fee – Without Success Fee; no charge to client beyond recovered costs

3. No Win No Fee – Without Success Fee; charge to client capped at [   ]% of damages including After The Event Insurance Premium

4. No Win No Fee – Without Success Fee; Charge To Client Capped At [   ]% Of Damages Excluding After The Event Insurance Premium

5. No Win No Fee – With Success Fee

6. No Win No Fee – With Success Fee; All Charges To Client Capped At [   ]% Of Damages Including After The Event Insurance Premium

7. No Win No Fee – With Success Fee; All Charges To Client Capped At [   ]% Of Damages Excluding After The Event Insurance Premium

8. No Win Lower Fee – Without Success Fee – No Charge to Winning Client Beyond Recovered Costs

9. No Win Lower Fee – Without Success Fee – Charge To Winning Client Capped At [   ]% Of Damages Including After The Event Insurance Premium

10. No Win Lower Fee – Without Success Fee – Charge To Winning Client Capped At [   ]% Of Damages Excluding After The Event Insurance Premium

11. No Win Lower Fee – With Success Fee

12. No Win Lower Fee – With Success Fee; All Charges to Winning Client Capped At [   ]% Of Damages Including After the Event Insurance Premium

13. No Win Lower Fee – With Success Fee; All Charges to Winning Client Capped At [   ]% Of Damages Excluding After the Event Insurance premium

Part 4: Charging Options in Civil Litigation

1. Hourly Rate – Uncapped

2. Hourly Rate – Total Capped at Fixed Sum

3. Hourly Rate – Total Capped by Reference to Damages

4. Conditional Fee Agreement – No Win No Fee – With Success Fee Not Capped by Reference to Damages (cannot be used in personal injury work)

5. Conditional Fee Agreement – No Win No Fee – Success Fee Capped by Reference to Damages

6. Conditional Fee Agreement – No Win No Fee – Success Fee Capped at Fixed Sum

7. Conditional Fee Agreement – No Win No Fee – No Success Fee – costs not capped

8. Conditional Fee Agreement – No Win No Fee – No Success Fee – costs capped at fixed sum

9. Conditional Fee Agreement – No Win No Fee – No Success Fee – costs capped by reference to damages

10. Conditional Fee Agreement – No Win No Fee – Recovered Costs Plus Percentage of Damages

11. CFA Lite: Costs Limited to Those Recovered from The Other Side

12. Fixed Fee

13. Fixed Initial Fee – then Hourly Rate with All Above Combinations

14. Fixed Initial Fee – then Conditional Fee Agreement with All Above Combinations

15. Conditional Fee Agreement – No Win Lower Fee – with all above combinations

16. Conditional Fee Agreement – No Win Lower Fee – Lower Fee Capped at Fixed Sum

17. Credit – Or Not – For Fixed Initial Fee in The Event of Success

18. Contingency Fee Agreement Under Section 57 Solicitors Act 1974 (pre-issue work only)

19. Damages-Based Agreement (not recommended)

20. Underwoods Method: Contingency Fee Agreement/Bridging Agreement/Conditional Fee Agreement

Other Factors

21. Who Is Paying Disbursements?

22. After the Event Insurance

23. Are Counsel’s Fees Including in Deal, Or Payable on Top?

24. Who Gets Interest?

25. Higher Hourly Rate to Reflect Solicitor Funding Case

26. Part 36: Who Is Taking the Risk?

27. The Retainer

28. Right to Interim Bill

29. Solicitors Act 1974 Explanation

30. Getting the Solicitors Act 1974 Bill Right 

Written by kerryunderwood

October 26, 2020 at 12:45 pm

Posted in Uncategorized

ROYAL COURTS OF JUSTICE COURT FEES PAYABLE BY CREDIT OR DEBIT CARD FROM 5 OCTOBER 2020

with 2 comments


The

Royal Courts of Justice Fees Office  

has published updated guidance for court users;  from 5 October 2020 you can pay a court fee by debit or credit card, by contacting the Fees Office on 0207 073 4715 between 10.00 am and 4.00 pm on Mondays to Fridays (except bank holidays) or by emailing RCJfeespayments@justice.gov.uk.

Once the payment has been made, court users will receive a receipt which they can submit with the claim form or application form to the relevant jurisdiction.

The notice also:

  • Confirms the arrangements for attending the Fees Office counter in person, which is still by appointment only. As in earlier updates, contact details are provided for making an appointment, and there is some information about which entrance and exit to use and what to expect when you are there.
  • Provides information about applying for a fee remission. You should go to the Help with Fees (HWF) website and complete the application process. You will be given an “HWF” reference, which you should forward to the Fees Office (by emailing feesrcj@justice.gov.uk), together with a copy of your claim form or application form. The Fees Office will contact you about the outcome of your HWF application and advise on next steps.
  • Provides contact details for general fee-related enquiries: you can either call the Fees Office on 0207 947 6825 between 10.00 am and 4.00 pm, Monday to Friday (except bank holidays) or email feesrcj@justice.gov.uk. For case-specific queries, you should contact the relevant department, using the email addresses set out in the guidance.

Written by kerryunderwood

October 1, 2020 at 12:35 pm

Posted in Uncategorized

COSTS MANAGEMENT: NEW PRACTICE DIRECTION 3E: EFFECTIVE TOMORROW 1 OCTOBER 2020

leave a comment »


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

A new Costs Management Practice Direction 3E comes into force tomorrow Thursday 1 October 2020 and the text is set out below.

Paragraph 13 is likely to cause some interesting satellite litigation:

“13. Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate”

PRACTICE DIRECTION 3E – COSTS MANAGEMENT

This Practice Direction supplements Part 3

CONTENTS OF THIS PRACTICE DIRECTION

Title           Paragraph number
A. Production of costs budgetsPara. 1  
B. Documents to be lodged for costs budgeting purposesPara. 3  
C. Budget formatPara. 4  
D. AssumptionsPara. 10  
E. Budget discussion reportsPara. 11  
F. Costs management ordersPara. 12  
G. Oppressive behaviourPara. 13  

A. Production of Costs Budgets

1. In cases where the Claimant has a limited or severely impaired life expectation (5 years or less remaining) the court will ordinarily disapply cost management under Section II of Part 3.

2. An order for the provision of costs budgets with a view to a costs management order being made may be particularly appropriate in the following cases—

(a) unfair prejudice petitions under section 994 of the Companies Act 2006;

(b) disqualification proceedings pursuant to the Company Directors Disqualification Act 1986;

(c) applications under the Trusts of Land and Appointment of Trustees Act 1996;

(d) claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975;

(e) any Part 8 or other claims or applications involving a substantial dispute of fact and/or likely to require oral evidence and/or extensive disclosure; and

(f) personal injury and clinical negligence cases where the value of the claim is £10 million or more.

B. Documents to be lodged for costs budgeting purposes

3. (a) Save in exceptional circumstances or where the court orders otherwise, the parties are not expected to lodge any documents other than Precedent H and the budget discussion report. Both are annexed, to this practice direction. If the Excel format precedent on the MOJ website is used, the calculation on page one will calculate the totals automatically and the phase totals are linked to this page also.

(b) Precedent T, also annexed to this practice direction, is to be used in the event of variation of a budget pursuant to rule 3.15A.

C. Budget format

4. (a) Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction. It must be in landscape format with an easily legible typeface.

(b) In cases where a party’s budgeted costs do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H.

(The wording for a statement of truth verifying a budget is set out in Practice Direction 22.)

5. In deciding the reasonable and proportionate costs of each phase of the budget the court will have regard to the factors set out at Civil Procedure Rules 44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard.

6. The table below identifies where within the budget form the various items of work, in so far as they are required by the circumstances of your case, should be included. The time estimated may have to be justified on the budget hearing along with the grade of fee earner doing the work.

7. Allowance must be made in each phase for advising the client, taking instructions and corresponding with the other party/parties and the court in respect of matters falling within that phase.

8. The time spent in preparing the budget and associated material must not be claimed in the draft budget under any phase. The maximum figures permitted under rule 3.15(5) should be inserted once the costs budget has been approved by the court.

9. The ‘contingent cost’ sections of this form should be used for anticipated costs which do not fall within the main categories set out in this form. Examples might be the trial of preliminary issues, applications to amend, applications for disclosure against third parties or (in libel cases) applications re meaning. Costs which are disputed (such as the need for a particular expert) should be set out in the appropriate phase of the budget and if necessary marked as disputed. Only costs which are more likely than not to be incurred should be included.

(Variation of an approved or agreed budget is dealt with in rule 3.15A.)

D Assumptions

10. (a) The assumptions that are reflected in the table below are not to be repeated. Include only those assumptions that significantly impact on the level of costs claimed such as the duration of the proceedings, the number of experts and witnesses or the number of interlocutory applications envisaged. Brief details only are required in the box beneath each phase. Additional documents should only be prepared in exceptional circumstance and, where they are disregarded by the court, the cost of preparation may be disallowed.

(b) Written assumptions are not normally required by the Court in cases where the parties are only required to lodge the first page.

TABLE

PhaseIncludesDoes NOT include
Pre-actionPre-Action Protocol correspondence  

Investigating the merits of the claim and advising client  

Settlement discussions, advising on settlement and Part 36 offers  

All other steps taken and advice given pre action  


Any work already incurred in relation to any other phase of the budget  
Issue/statements of casePreparation of Claim Form  

Issue and service of proceedings

Preparation of Particulars of Claim, Defence, Reply, including taking instructions, instructing counsel and any necessary investigation

Considering opposing statements of case and advising client

Part 18 requests (request and answer)  

Any conferences with counsel primarily relating to statements of case  

Updating schedules and counter schedules of loss  

Amendments to statements of case
 

 
CMCCompletion of DQs

Arranging a CMC

Reviewing opponent’s budget

Correspondence with opponent to agree
directions and budgets, where possible  

Preparation for, and attendance at, the CMC

Finalising the order

Any further CMC that is built into the proposed directions order
 

Preparation of costs budget for first CMC
DisclosureObtaining documents from client and advising on disclosure obligations

Reviewing documents for disclosure, preparing disclosure report or questionnaire response and list

Inspection  

Reviewing opponent’s list and documents, undertaking any appropriate investigations

Correspondence between parties about the scope of disclosure and queries arising

Consulting counsel, so far as appropriate, in relation to disclosure


Applications for specific disclosure  

Applications and requests for third party disclosure
Witness StatementsIdentifying witnesses

Obtaining statements  

Preparing witness summaries  

Consulting counsel, so far as appropriate, about witness statements  

Reviewing opponent’s statements and undertaking any appropriate investigations

Applications for witness summaries


Arranging for witnesses to attend trial (include in trial preparation)
Expert ReportsIdentifying and engaging suitable expert(s)  

Reviewing draft and approving report(s)

Dealing with follow-up questions of experts

Considering opposing experts’ reports  

Any conferences with counsel primarily relating to expert evidence  

Meetings of experts (preparing agenda etc.)

Obtaining permission to adduce expert evidence (include in CMC or a separate application)  

Arranging for experts to attend trial (include in trial preparation)
PTRBundle  

Preparing and agreeing chronology, case summary and dramatis personae (if ordered and not already prepared earlier in case)  

Completing and filing pre-trial checklists
 
Correspondence with opponent to agree directions

Preparation for and attendance at the PTR


Assembling and/or copying the bundle (this is not fee earners’ work)
Trial PreparationTrial bundles

Witness summonses, and arranging for witnesses to attend trial Any final factual investigations Supplemental disclosure and statements (if required)  

Counsel’s brief fee

Agreeing brief fee

Any pre-trial conferences and advice from counsel

Pre-trial liaison with witnesses


Assembling and/or copying the trial bundle (this is not fee earners’ work)  

Counsel’s refreshers
TrialSolicitors’ attendance at trial  

All conferences and other activity outside court hours during the trial

Attendance on witnesses during the trial  

Counsel’s trial refreshers  

Dealing with draft judgment and related applications


Preparation for trial
 
Counsel’s brief fee for trial (include in trial preparation)
ADR/SettlementAny conferences and advice from counsel in relation to settlement

Work directed to settlement negotiations and meetings between the parties and any other ADR (including mediation), to include Part 36 and other offers and advising the client  

Approval of settlement if needed  

Drafting settlement agreement or Tomlin order  

Advice to the client on settlement (excluding advice included in the pre action phase)

 

E. Budget discussion reports

11. The budget discussion report required by rule 3.13(2) must set out—

(a) those figures which are agreed for each phase;

(b) those figures which are not agreed for each phase; and

(c) a brief summary of the grounds of dispute.

The parties are encouraged to use the Precedent R Budget Discussion Report annexed to this practice direction.

F. Costs management orders

12. When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.

G. Oppressive behaviour

13. Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.

Written by kerryunderwood

September 30, 2020 at 8:53 am

Posted in Uncategorized

JUDGES AND EMPLOYMENT LAW: KEEP OUT OF POLITICS

with 4 comments


The Ultimate Judicial Irony: How can you be a Court of Appeal Judge and say this?

The case of

Tabidi v British Broadcasting Corporation [2020] EWCA Civ 733

is not particularly interesting from a legal point of view.

However, it contains the most ironic statement recently made by a member of the Senior Judiciary:

“I agree that if the customary “second appeals” criteria had applied to this jurisdiction, as they do to virtually all others, permission to appeal would have been refused. In my judgment, it is high time that that the legislation was amended to enable that test to be adopted for appeals from cases which have already had the attention, not only of the expert ET, but also of the expert EAT. I can see no rational reason for the continued exception from the “second appeals” test for cases of this character.” (Paragraph 45) –

(McCombe LJ – Sedbergh School: annual fees: £34,854.)

You allowed the appeal in part: the “expert” ET and “expert” EAT, both expertly got it wrong, so, on your logic, a wrong would have gone un-righted, on a key issue, that is that Employment Tribunals are generally cost free zones.

Also, you cannot just trot off to the Court of Appeal. You need permission, which your own colleague, Bean LJ, sensibly and correctly gave.

You also need to go through a filter system even to have a full hearing in the EAT and Judge Eady allowed the matter to proceed.

Consequently, there is already a filtering system in place that simply does not exist in the ordinary court system and thus it is harder already to bring an employment appeal than it is to bring any other type of appeal.

Parliament chose to set up the highly unusual extra appeal layer of the Employment Appeal Tribunal and Parliament chose entirely to ban the High Court from having any say in any shape or form over the employment tribunal system, to the extent that findings of the employment tribunal, for example in relation to constructive dismissal and fundamental breach in any given case, are binding on the High Court.

Parliament, not you, makes the law; these remarks show exactly why Parliament made this law, and that is because Parliament did not trust the courts to deal with employment matters fairly.

The courts do not exist for your convenience; the courts exist to do justice in accordance with the will of Parliament.

Lord Justice Underhill, – Winchester College – fees £41,708 a year -:

“I would add, finally, that this is precisely the kind of case in which permission to appeal would have been refused if a second appeals test of the kind which applies in most other fields were in place.”

So, again, Lord Justice Underhill prefers less work and an injustice as compared with the peasants being allowed to appeal.

I wonder if trade union history was on the syllabus at Sedbergh School or Winchester College.

This was the Judge who said that the High Court in UNISON – the Employment Tribunal Fees case –  was not obviously wrong in saying that a claimant left with £200 a month after essential living expenses had the “opportunity to accumulate the necessary sums over a period of months before the issue of the claim…”

Unison, R (On the Application Of) v The Lord Chancellor [2015] EWCA Civ 935

Leaving aside the fact that the time limit in Employment Tribunals is three months less a day – not much time to save is you are unemployed as a result of being unfairly dismissed – the amount left in a month for a working person covers the fees of Winchester College for approximately 1.7502637 days.

This is posted on the day that a recently retired Supreme Court Judge suggested we feel free to treat the law on Covid 19 restrictions as “ a secondary consideration” and that the Lord Chancellor said he would quit if he has broken the law in “an unacceptable manner”, suggesting that we can all break the law if it is in an acceptable manner.

Just off to rob a bank – in an acceptable manner of course.

Enough is enough.

NB –  “The second appeals test means that the court of appeal will not give permission unless it considers that the appeal would have a real prospect of success, and that it raises an important point of principle, or a practice or there is some other compelling reason for the Court of Appeal to hear it.”

Written by kerryunderwood

September 14, 2020 at 2:21 pm

Posted in Uncategorized

VIDEO LOGS

leave a comment »


I set out below, with links, the 10 video logs that I have posted so far.

Title
DurationDate
CONVEYANCER WANTED


2 minutes

7 September 2020
COSTS REGIMES: CONFUSION BETWEEN COURTS AND TRIBUNALS  


9 minutes

4 September 2020
DATA PROTECTION AND LEGAL PROCEEDINGS


6 minutes

4 September 2020
PROPORTIONATE COSTS ORDERS


5 minutes

31 August 2020
MY RUBBISH CASE STRUCK OUT: I WANT COSTS: 3 CRAZY CASES: 3 CORRECT DECISIONS


6 minutes

28 August 2020
DETAILED ASSESSMENT: SOME TIPS


3 minutes

28 August 2020
LITIGANTS IN PERSON: WHY I THINK THEY SHOULD BE BANNED


5 minutes

27 August 2020
INTEREST ON COSTS


10 minutes

27 August 2020
FOOTBALL MEETS THE LAW: PART 36 OFFERS IN FOOTBALL


5 minutes

26 August 2020
LEGAL SERVICES CONSUMER PANEL: SCRAP ALL THE WATCHDOGS SAYS KERRY UNDERWOOD5 minutes

25 August 2020

Written by kerryunderwood

September 7, 2020 at 12:09 pm

Posted in Uncategorized

CONVEYANCER WANTED

leave a comment »


Below is a 2-minute video which is a job advert for a Conveyancer for the Hemel Hempstead office of Underwoods Solicitors.

For more information contact Robert Males on 01442 430 900 and please send your CV with a covering email to Tarryn van Graan at tarryn.vangraan@lawabroad.co.uk .

Written by kerryunderwood

September 7, 2020 at 10:25 am

Posted in Uncategorized

COSTS REGIMES: CONFUSION BETWEEN COURTS AND TRIBUNALS

leave a comment »


This is a 9-minute video looking at the confusion between the Costs Regimes in courts and in tribunals, especially where they have joint jurisdictions, such as in employment and judicial review.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Written by kerryunderwood

September 4, 2020 at 3:29 pm

Posted in Uncategorized

DATA PROTECTION AND LEGAL PROCEEDINGS

leave a comment »


This is a 6-minute video looking at Data Protection and Legal Proceedings, and in particular the fact that legal proceedings are largely exempted from the Data Protection Act 2018 and the video considers a recent Court of Appeal case.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Written by kerryunderwood

September 4, 2020 at 3:17 pm

Posted in Uncategorized

CIVIL LITIGATION FUNDING AGREEMENTS: PART 2: DAMAGES-BASED AGREEMENTS

leave a comment »


This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

The single potential benefit of Damages-Based Agreements is that it is a form of out and out Contingency Fee Agreement, that is taking a percentage of damages, which is available for contentious work, and thus can be used once proceedings have been issued, in contrast to a Contingency Fee Agreement under Section 57 of the Solicitors Act  1974, which cannot be used once proceedings have been issued.

It also allows for one agreement to be used from the moment the client comes in until the case is resolved, in contrast to the Underwoods Method which involves a Contingency Fee Agreement, a Bridging Agreement and a Conditional Fee Agreement, and which also involves the fact that under a Conditional Fee Agreement you cannot just take a straight percentage, but rather the lawyer’s bonus for taking the risk of not getting paid is calculated by reference to an uplift on ordinary costs.

I deal with conditional fees generally in the second part of this blog.

If it was as simple as that, then I would advise using Damages-Based Agreements all the time, but in fact I advise never using them.

There are two central problems which mean that almost no Damages-Based Agreements have been used since their inception in civil proceedings in 2013; they are compulsory if working on a contingency base in Employment Tribunal matters.

Firstly, credit must be given to the client against the contingency fee for all costs recovered from the other side, which is not the case with a Contingency Fee Agreement, and is not the case with a Conditional Fee Agreement, where the risk-based element, that is the success fee, is specifically not recoverable from the other side, and so there can never be any costs to set off against the full success fee chargeable to the client.

Under Damages-Based Agreements, but not Contingency Fee Agreements in personal injury and other civil work, there are statutory caps on the percentage damages to be charged, and these are:

Personal Injury  25%
Employment  35%
Other Civil Work  50%

All of these percentages include VAT, and in any civil case that goes the distance, or anywhere near the distance, the costs recoverable from the other side are likely to exceed 50%, and therefore the client pays nothing, and the solicitor gets not a single penny for taking the risk of no pay in the event of defeat.

Thus the solicitor is worse off in two ways as compared with charging by the hour win or lose; the first and obvious one is that the solicitor does not get paid in the event of defeat, but the second one is that even on victory and having taken the risk of getting no fee on defeat, the solicitor earns less than on the traditional hourly rate, win or lose.

This madness is known as the Ontario principle.

The second main, and related, problem is that the indemnity principle applies, and therefore the recoverable costs from the other side are limited to the amount charged in the Damages-Based Agreement, which is itself limited by Parliament.

Let us take a civil claim worth, say, £100,000 in damages and which is won.

Let us say that the recovered costs are £60,000 and the unrecovered solicitor and own client costs are £15,000.

Hourly Rate

Under the old-fashioned hourly rate, win or lose, basis the solicitor will charge £75,000 costs as follows:

                                                                                            

Recovered costs  £
60,000
Unrecovered costs payable by client  15,000
Total  75,000

Consequently, the client receives £85,000 being the damages of £100,000 less the unrecovered costs payable by the client of £15,000.

Damages-Based Agreement

The client will receive £100,000 damages as the indemnity principle limits recoverable costs to £50,000 and so that is all that the solicitor can charge, and as the whole sum is recovered from the other side, the client pays nothing at all.

Thus, the solicitor gets £50,000, rather than £75,000, even though the solicitor has taken all of the risk.

The client who has taken no risk in relation to its own lawyer’s fees, gets the full £100,000.

You could not make it up.

Damages-Based Agreements: Still Never Use Them

LEAVE TO APPEAL GRANTED BY COURT OF APPEAL

The Court of Appeal has now given permission to appeal against the decision set out below and in granting permission Lord Justice Lloyd stated:

“Although the purposive interpretation arrived at by the judge seems more likely than not to prevail in the end, the appellant’s construction is arguable, and the issue is of sufficient general importance to merit consideration by the full court.”

In

Lexlaw Ltd v Zuberi [2020] EWHC 1855 (Ch)

the Chancery Division of the High Court held that a Damages-Based Agreement which required the client to pay for time and expenses to date if the client terminated the Agreement, was a valid agreement under the Damages-Based Agreements Regulations 2013.

Here, the client sought to terminate the Agreement and the claim settled and the claimant firm of solicitors sought to recover its fees based on that settlement, under the usual principles of Damages-Based Agreements.

The client argued that as the Agreement provided for “an amount to be paid by the client” which was other than the payment calculated by reference to Regulation 4(1) of the 2013 Regulations, it was unenforceable.

The court rejected that argument.

The decision confirms what most of us thought anyway, that is that if the Agreement is terminated by the client before a right to share in any proceeds has arisen, then the solicitor can charge for work done to date on any basis specified in the Agreement, including the hourly rate.

Regulation 4 limits a solicitor’s charge to an agreed percentage of damages, not to exceed the permitted cap, plus expenses recovered from the other side.

The Chancery Division held that it was an obvious consequence of preventing representatives getting their time costs on a client determination that those representatives would be reluctant to enter into Damages-Based Agreements and that would be contrary to the purpose of making such agreements lawful, so as to facilitate access to justice.

That would have the knock-on effect of creating less choice for clients wanting to bring civil litigation claims.

Comment

This is a welcome and sensible decision, but I must admit I had always assumed that this must be the case, as it was the case under the original 2010 Regulations and there was no suggestion that different laws should apply for other civil work outside the employment jurisdiction.

It does not mean that Damages-Based Agreements are worth entering into; there are very few circumstances where a Damages-Based Agreement is to be preferred to the Underwoods Method of a pre-Action Contingency Fee Agreement under Section 57 of the Solicitors Act 1974, followed by a Conditional Fee Agreement.

The key disadvantage of Damages-Based Agreements is that the damages cap not only limits the charge to the client, but due to the indemnity principle limits recoverability from the other side.

For example, in a general civil claim the percentage limit in a Damages-Based Agreement is 50%. That means that a successful client cannot recover more than that sum from the other side.

In sharp contrast, Conditional Fee Agreements can limit the amount to be paid by the client without causing indemnity principle problems.

Furthermore credit must be given to the client for costs recovered, which in any substantial litigation means that the client will pay nothing, due to the combination of the cap, the indemnity principle and having to give credit.

In stark contrast the risk-based success fee in conditional fee agreements is not recoverable, so there can never be anything to offset against it.

Written by kerryunderwood

September 1, 2020 at 11:25 am

Posted in Uncategorized

COSTS MANAGEMENT: NEW PRACTICE DIRECTION 3E: IN EFFECT 1 OCTOBER 2020

leave a comment »


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

A new Costs Management Practice Direction 3E comes into force on Thursday 1 October 2020 and the text is set out below.

Paragraph 13 is likely to cause some interesting satellite litigation:

“13. Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate”

PRACTICE DIRECTION 3E – COSTS MANAGEMENT

This Practice Direction supplements Part 3

CONTENTS OF THIS PRACTICE DIRECTION

Title           Paragraph number
A. Production of costs budgetsPara. 1  
B. Documents to be lodged for costs budgeting purposesPara. 3  
C. Budget formatPara. 4  
D. AssumptionsPara. 10  
E. Budget discussion reportsPara. 11  
F. Costs management ordersPara. 12  
G. Oppressive behaviourPara. 13  

A. Production of Costs Budgets

1. In cases where the Claimant has a limited or severely impaired life expectation (5 years or less remaining) the court will ordinarily disapply cost management under Section II of Part 3.

2. An order for the provision of costs budgets with a view to a costs management order being made may be particularly appropriate in the following cases—

(a) unfair prejudice petitions under section 994 of the Companies Act 2006;

(b) disqualification proceedings pursuant to the Company Directors Disqualification Act 1986;

(c) applications under the Trusts of Land and Appointment of Trustees Act 1996;

(d) claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975;

(e) any Part 8 or other claims or applications involving a substantial dispute of fact and/or likely to require oral evidence and/or extensive disclosure; and

(f) personal injury and clinical negligence cases where the value of the claim is £10 million or more.

B. Documents to be lodged for costs budgeting purposes

3. (a) Save in exceptional circumstances or where the court orders otherwise, the parties are not expected to lodge any documents other than Precedent H and the budget discussion report. Both are annexed, to this practice direction. If the Excel format precedent on the MOJ website is used, the calculation on page one will calculate the totals automatically and the phase totals are linked to this page also.

(b) Precedent T, also annexed to this practice direction, is to be used in the event of variation of a budget pursuant to rule 3.15A.

C. Budget format

4. (a) Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction. It must be in landscape format with an easily legible typeface.

(b) In cases where a party’s budgeted costs do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H.

(The wording for a statement of truth verifying a budget is set out in Practice Direction 22.)

5. In deciding the reasonable and proportionate costs of each phase of the budget the court will have regard to the factors set out at Civil Procedure Rules 44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard.

6. The table below identifies where within the budget form the various items of work, in so far as they are required by the circumstances of your case, should be included. The time estimated may have to be justified on the budget hearing along with the grade of fee earner doing the work.

7. Allowance must be made in each phase for advising the client, taking instructions and corresponding with the other party/parties and the court in respect of matters falling within that phase.

8. The time spent in preparing the budget and associated material must not be claimed in the draft budget under any phase. The maximum figures permitted under rule 3.15(5) should be inserted once the costs budget has been approved by the court.

9. The ‘contingent cost’ sections of this form should be used for anticipated costs which do not fall within the main categories set out in this form. Examples might be the trial of preliminary issues, applications to amend, applications for disclosure against third parties or (in libel cases) applications re meaning. Costs which are disputed (such as the need for a particular expert) should be set out in the appropriate phase of the budget and if necessary marked as disputed. Only costs which are more likely than not to be incurred should be included.

(Variation of an approved or agreed budget is dealt with in rule 3.15A.)

D Assumptions

10. (a) The assumptions that are reflected in the table below are not to be repeated. Include only those assumptions that significantly impact on the level of costs claimed such as the duration of the proceedings, the number of experts and witnesses or the number of interlocutory applications envisaged. Brief details only are required in the box beneath each phase. Additional documents should only be prepared in exceptional circumstance and, where they are disregarded by the court, the cost of preparation may be disallowed.

(b) Written assumptions are not normally required by the Court in cases where the parties are only required to lodge the first page.

TABLE

PhaseIncludesDoes NOT include
Pre-actionPre-Action Protocol correspondence  

Investigating the merits of the claim and advising client  

Settlement discussions, advising on settlement and Part 36 offers  

All other steps taken and advice given pre action  


Any work already incurred in relation to any other phase of the budget  
Issue/statements of casePreparation of Claim Form  

Issue and service of proceedings

Preparation of Particulars of Claim, Defence, Reply, including taking instructions, instructing counsel and any necessary investigation

Considering opposing statements of case and advising client

Part 18 requests (request and answer)  

Any conferences with counsel primarily relating to statements of case  

Updating schedules and counter schedules of loss  

Amendments to statements of case
 

 
CMCCompletion of DQs

Arranging a CMC

Reviewing opponent’s budget

Correspondence with opponent to agree
directions and budgets, where possible  

Preparation for, and attendance at, the CMC

Finalising the order

Any further CMC that is built into the proposed directions order
 

Preparation of costs budget for first CMC
DisclosureObtaining documents from client and advising on disclosure obligations

Reviewing documents for disclosure, preparing disclosure report or questionnaire response and list

Inspection  

Reviewing opponent’s list and documents, undertaking any appropriate investigations

Correspondence between parties about the scope of disclosure and queries arising

Consulting counsel, so far as appropriate, in relation to disclosure


Applications for specific disclosure  

Applications and requests for third party disclosure
Witness StatementsIdentifying witnesses

Obtaining statements  

Preparing witness summaries  

Consulting counsel, so far as appropriate, about witness statements  

Reviewing opponent’s statements and undertaking any appropriate investigations

Applications for witness summaries


Arranging for witnesses to attend trial (include in trial preparation)
Expert ReportsIdentifying and engaging suitable expert(s)  

Reviewing draft and approving report(s)

Dealing with follow-up questions of experts

Considering opposing experts’ reports  

Any conferences with counsel primarily relating to expert evidence  

Meetings of experts (preparing agenda etc.)

Obtaining permission to adduce expert evidence (include in CMC or a separate application)  

Arranging for experts to attend trial (include in trial preparation)
PTRBundle  

Preparing and agreeing chronology, case summary and dramatis personae (if ordered and not already prepared earlier in case)  

Completing and filing pre-trial checklists
 
Correspondence with opponent to agree directions

Preparation for and attendance at the PTR


Assembling and/or copying the bundle (this is not fee earners’ work)
Trial PreparationTrial bundles

Witness summonses, and arranging for witnesses to attend trial Any final factual investigations Supplemental disclosure and statements (if required)  

Counsel’s brief fee

Agreeing brief fee

Any pre-trial conferences and advice from counsel

Pre-trial liaison with witnesses


Assembling and/or copying the trial bundle (this is not fee earners’ work)  

Counsel’s refreshers
TrialSolicitors’ attendance at trial  

All conferences and other activity outside court hours during the trial

Attendance on witnesses during the trial  

Counsel’s trial refreshers  

Dealing with draft judgment and related applications


Preparation for trial
 
Counsel’s brief fee for trial (include in trial preparation)
ADR/SettlementAny conferences and advice from counsel in relation to settlement

Work directed to settlement negotiations and meetings between the parties and any other ADR (including mediation), to include Part 36 and other offers and advising the client  

Approval of settlement if needed  

Drafting settlement agreement or Tomlin order  

Advice to the client on settlement (excluding advice included in the pre action phase)

 

E. Budget discussion reports

11. The budget discussion report required by rule 3.13(2) must set out—

(a) those figures which are agreed for each phase;

(b) those figures which are not agreed for each phase; and

(c) a brief summary of the grounds of dispute.

The parties are encouraged to use the Precedent R Budget Discussion Report annexed to this practice direction.

F. Costs management orders

12. When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.

G. Oppressive behaviour

13. Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.

Written by kerryunderwood

September 1, 2020 at 9:53 am

Posted in Uncategorized

PROPORTIONATE COSTS ORDERS

leave a comment »


This is a 5-minute video on Proportionate Costs Orders.

This is not about proportionality, but rather where the court orders a percentage of costs, and not full costs, to the winner on the basis that they have failed on some issues.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Written by kerryunderwood

August 31, 2020 at 12:06 pm

Posted in Uncategorized

MY RUBBISH CASE STRUCK OUT: I WANT COSTS: 3 CRAZY CASES: 3 CORRECT DECISIONS

with 6 comments


Here I look at 3 decisions – all absolutely correctly decided – where losing parties argued against paying costs, or even sought them, on the basis that their cases were so weak that the winning defendants should have applied to strike them out.

Happily the courts rejected such bizarre arguments; as I point out in the video had they not done so then this would have created a whole new sector – No Lose – No Fee, where solicitors would only take on the worst cases in the hope that they would get costs for them not being struck out.

It is a 6-minute video examining the cases and also looking at the harm that such applications do to the arguments of those representing genuine personal injury claimants with genuine injuries.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Written by kerryunderwood

August 28, 2020 at 12:16 pm

Posted in Uncategorized

DETAILED ASSESSMENT: SOME TIPS

leave a comment »


In this 3-minute video I look at a case where costs were disallowed in full due to misconduct during the assessment proceedings and give some tips on how to avoid problems on assessment.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Written by kerryunderwood

August 28, 2020 at 9:00 am

Posted in Uncategorized

CIVIL LITIGATION FUNDING AGREEMENTS: PART 1: CONTINGENCY FEE AGREEMENTS

with 2 comments


This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Many general civil litigators are unaware of the range of funding options open to clients and lawyers in such proceedings, and tend to stick limpet-like to an hourly rate, win or lose, which is deeply unattractive to most clients, and is not necessarily the most profitable method for the solicitors either.

I know only too well that civil litigation can take all sorts of unexpected twists and turns, but generally payment by the hour rewards the inefficient and punishes lawyers who get a good result early on, often because of their reputation and knowledge of the law.

Here I look at two species of Contingency Fee, that is a payment of a percentage of damages, with no costs if the case is lost, and in the next piece I will look at Conditional Fee Agreements, where it is not all or nothing as solicitors and clients can have No win, Lower Fee Agreements.

Contingency Fee Agreements

Contingency Fee Agreements have been allowed in non-contentious work since at least 1729 – see the Solicitors and Attorneys Act 1729.

The current governing legislation is Section 57 of the Solicitors Act 1974.

The Pre-Issue Contingency Fee Agreement

Pre-issue work in all matters is classed as non-contentious business within the meaning of Section 57 of the Solicitors Act 1974, and therefore can be carried out under a contingency fee agreement.

However, once the case is issued then that pre-issue work retrospectively becomes contentious and thus the contingency fee agreement is of no effect.  The solution is to enter into a conditional fee agreement and a contingency fee agreement from Day One.

The agreement with the client will be that the contingency fee agreement operates until proceedings are issued at which point it drops away and the conditional fee agreement is deemed to have been in place from the beginning.  This is achieved by a bridging agreement.

Absent contractual agreement with the other side there is no right to costs pre-issue and therefore it does not matter that the conditional fee agreement is not in place.  Costs are only payable by agreement; if they are agreed then there is no problem and if they are not agreed then proceedings will need to be issued at which point the conditional fee agreement comes in to force with effect from the beginning of the case.

The potential problem is that fees on an hourly basis, even with a success fee, may be significantly less than the contingency fee would have been.  That will depend upon a combination of the settlement figure and the contingency fee percentage on the one hand and the time spent and the hourly rate on the other hand.

Thus where there is a contingency fee agreement you should have a high hourly rate in the conditional fee agreement.

Solicitor and own client rates can and should be very much higher than the rates that you are likely to recover on a between the parties basis, on the standard basis.

This is for two reasons:

(i) to maximize the alternative “take” to the contingency fee; and

(ii) to maximize the indemnity costs received if, as a claimant, you match or beat your own Part 36 offer.

Such agreements cannot be used in employment tribunal work, where you must use a Damages-Based Agreement if working on a contingent basis, even in relation to pre-issue work.

Apart from employment cases, such agreements are specifically excluded from the provisions of The Damages-Based Agreements Regulations 2013 by Regulation 1(4) of those same Regulations:

“(4) Subject to paragraph (6), these Regulations shall not apply to any damages-based agreement to which section 57 of the Solicitors Act 1974 (non-contentious business agreements between solicitor and client) applies.”

The paragraph (6) exception reads:

“(6) Where these Regulations relate to an employment matter, they apply to all damages-based agreements signed on or after the date of which these Regulations come into force.”

As the Explanatory Note to The Damages-Based Agreements Regulations states:

“…section 58AA(9) of the [Courts and Legal Services] Act provides that, where section 57 of the Solicitors Act 1974 (c.47) applies to a DBA (other than one relating to an employment matter) it is not unenforceable only because it does not satisfy the conditions in section 58AA (4), under which these Regulations are made. Accordingly article 1(4) [sic – should read Regulation 1(4) – articles apply to Orders not Regulations] excludes those DBAs to which sections 57 of the Solicitors Act 1974 applies from the scope of these Regulations.”

Section 57 of the Solicitors Act 1974 has itself been amended by section 98 of the Courts and Legal Services Act 1990 and sections 117 and 221 of, and schedule 16 to, the Legal Services Act 2007, and now reads:

“57 Non–contentious business agreements

(1) Whether or not any order is in force under section 56, a solicitor and his client may, before or after or in the course of the transaction of any non–contentious business by the solicitor, make an agreement as to his remuneration in respect of that business.

(2) The agreement may provide for the remuneration of the solicitor by a gross sum or by reference to an hourly rate, or by a commission or percentage, or by a salary, or otherwise, and it may be made on the terms that the amount of the remuneration stipulated for shall or shall not include all or any disbursements made by the solicitor in respect of searches, plans, travelling, taxes, fees or other matters.

(3) The agreement shall be in writing and signed by the person to be bound by it or his agent in that behalf.

(4) Subject to subsections (5) and (7), the agreement may be sued and recovered on or set aside in the like manner and on the like grounds as an agreement not relating to the remuneration of a solicitor.

(5) If on any assessment of costs the agreement is relied on by the solicitor and objected to by the client as unfair or unreasonable, the costs officer may enquire into the facts and certify them to the court, and if from that certificate it appears just to the court that the agreement should be set aside, or the amount payable under it reduced, the court may so order and may give such consequential directions as it thinks fit.

(6) Subsection (7) applies where the agreement provides for the remuneration of the solicitor to be by reference to an hourly rate.

(7) If, on the assessment of any costs, the agreement is relied on by the solicitor and the client objects to the amount of the costs (but is not alleging that the agreement is unfair or unreasonable), the costs officer may enquire into—

(a) the number of hours worked by the solicitor; and

(b) whether the number of hours worked by him was excessive.”

It will be seen that section 57(2) specifically sanctions remuneration by way of a percentage.

There is no statutory cap on the percentage that may be charged to a client under a pre-issue contingency fee agreement but solicitors have a duty not to exploit clients and a duty to conduct themselves in a way that does not bring the profession into disrepute. Charging an unfairly high percentage risks putting a solicitor in breach of these duties.

The agreement must be in writing and must be signed by the client (section 57(3) Solicitors Act 1974).

We insert a default hourly rate of £480 including VAT as that is now our standard rate for most types of work, including work in preparation for multi-track cases. Solicitors can put in the figure that they think fit, but this must be discussed and agreed with the client. You can have different rates for different levels of lawyer and work, but one of the benefits of contingency fee agreements is their simplicity.

The protection and value to the client is that they pay nothing in the event of failure to obtain damages.

The client is guaranteed a fixed percentage of anything recovered.

A Contingency Fee Agreement gives greater protection to clients than a conditional fee agreement, as recognized in a an interesting, accurate and telling part of the High Court’s judgment in Bolt Burdon Solicitors v Tariq & Ors [2016] EWHC 811 (QB) (13 April 2016)

“156 Mr Mallalieu submitted strongly that the questions of fairness and reasonableness were not to be tested by the outcome, but by reference to the reasonable perception at the time the agreement was entered into. He submits that any analogy or comparison with a conditional fee agreement is wholly inappropriate. By way of illustration, assume a conditional fee agreement with an uplift of 100%. Solicitors incur costs of £200,000, which with the mark up of 100%, entitles them to £400,000. If the sum recovered in the proceedings is £1million, this may be a satisfactory outcome for the client. But if instead, after the same amount of work, the recovery in the proceedings is only £50,000, there would still be the same liability to pay costs of £400,000. This is because in a conditional fee agreement costs are always tied to the work done, whereas in a contingency fee agreement costs are always proportionate to recovery. Mr Mallalieu submits that to grant the relief sought in this case would be to destroy the commerciality of contingency fee agreements of this kind.”

For example, if the contingency fee is 40% then the fixed percentage of damages to the client is 60% and if it is a 30% contingency fee then it is 70% and so on.

Detailed guidance is given by the Court of Appeal in Rees v Gately Wareing [2014] EWCA Civ 1351.  Note that once proceedings are issued you must not use a contingency fee agreement, even if you are not on the record, or are merely assisting another solicitor.

Written by kerryunderwood

August 28, 2020 at 8:15 am

Posted in Uncategorized

LITIGANTS IN PERSON: WHY I THINK THEY SHOULD BE BANNED

with 10 comments


This is a 5-minute video on why I say litigants in person should be banned from courts, just as patients are not allowed to operate on themselves in hospital. These videos are meant to be thought-provoking and debate stimulating😊

See my other video logs:

LEGAL SERVICES CONSUMER PANEL: SCRAP ALL THE WATCHDOGS SAYS KERRY UNDERWOOD

FOOTBALL MEETS THE LAW: PART 36 OFFERS IN FOOTBALL

INTEREST ON COSTS

Written by kerryunderwood

August 27, 2020 at 12:05 pm

Posted in Uncategorized

INTEREST ON COSTS

with 2 comments


The cases discussed in this video log are dealt with in my written blog post –

INTEREST ON COSTS: COURTS MAKING IT UP AS THEY GO ALONG.

This video is 10 minutes long. It contains proposals for unifying and changing the law in relation to interest on costs.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

See my other video logs:

LEGAL SERVICES CONSUMER PANEL: SCRAP ALL THE WATCHDOGS SAYS KERRY UNDERWOOD

FOOTBALL MEETS THE LAW: PART 36 OFFERS IN FOOTBALL

LITIGANTS IN PERSON: WHY I THINK THEY SHOULD BE BANNED

Written by kerryunderwood

August 27, 2020 at 8:32 am

Posted in Uncategorized

SOCIAL SECURITY: MISCELLANEOUS: UPPER TRIBUNAL CASES 2019/20

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Social Security.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Social Security: Miscellaneous

CitationPartiesJurisdictionCommentary
[2019] UKUT 144 (AAC)NA v Secretary of State for Work and Pensions (BB)Social SecurityThe Upper Tribunal decided that the surviving partner of a religious marriage recognised in Pakistan, but not recognised in England and Wales, was entitled to a bereavement payment and widowed parent’s allowance. The State’s refusal to provide the appellant with a bereavement payment is contrary to Article 14 of the European Convention on Human Rights read in conjunction with Article 1 of the First Protocol and the difference in treatment was not objectively justified and proportionate as per Re McLaughlin [2018] UKSC 48. For the purposes of entitlement to both bereavement payment and widowed parent’s allowance, the relevant secondary legislation (the Social Security and Family Allowances (Polygamous Marriages) Regulations 1975 (SI 1975/561)) can be read down under section 3 of the Human Rights Act 1998 so as to be Convention-compliant.    

[2019] UKUT 203 (AAC)JB v Secretary of State for Work and Pensions (PIP)Social SecurityThe Upper Tribunal decided that the First-tier Tribunal had erred by failing to adequately enquire into and through failing to make any findings about the claimant’s ability to follow the route of an unfamiliar journey without another person, even if it can be assumed that the entirety of any such journey could be undertaken by driving. It follows that even where the bulk of the journey may be accomplished by driving there must be at least small parts of it, which will have to be accomplished by other means.  
 
[2019] UKUT 207 (AAC)RT v Secretary of State for Work and Pensions (PIP)Social SecurityThe Upper Tribunal decided that the First-tier Tribunal had failed to consider how to facilitate the giving of evidence by a vulnerable adult as required by the Practice Statement; First Tier and Upper Tribunal – Child, Vulnerable Adult and Sensitive Witnesses. Such consideration must be undertaken consciously and it is good practice for the tribunal to note in the record of proceedings that this has occurred, and failing that, at the least, any written statement of reasons must refer to the fact that the tribunal considered how to facilitate the giving of evidence by the claimant and explain what the tribunal had decided giving a brief explanation.    

[2019] UKUT 361 (AAC)AM v Secretary of State for Work and Pensions and City and County of Swansea CouncilSocial SecurityThe Upper Tribunal decided that there was no “secondary” or contingent right to reside under European Union law as the primary carer of an under school age child where that child’s right to reside is based on his being the family member of the other parent, who has a right to reside, but where the child’s primary carer is not a family member of that other parent. It further decided that there was no right of residence arising as an extended family member when there was no residence document in place. The Upper Tribunal also decided that there is no power for the Upper Tribunal to award costs on an appeal from the Social Entitlement Chamber of the First-tier Tribunal.    

[2020] UKUT 28 (AAC)BN v (1) Liverpool City Council (2) Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal decided that the First-tier Tribunal had erred in law and the claimant is entitled to housing benefit to cover the payments by way of service charge on the property which her late father occupied as his home. It decided that the tenancy of the property is a shared ownership tenancy granted by a housing association and is within the exception in paragraph 12(2)(a) of the Housing Benefit Regulations 2006 to the prohibition on payment of a rent allowance in respect of periodical payments made under a long tenancy.    

[2020] UKUT 48 (AAC)Secretary of State for Work and Pensions v AJ (UC)Social SecurityThe Upper Tribunal considered this appeal by the Secretary of State in a universal credit case where the claimant had been sentenced to a term of imprisonment. It decided that a claim to universal credit made on release fell within regulation 22 of the Universal Credit (Temporary Provisions) Regulations 2014 so that the Limited Capability for Work Related Activity element of the award ran from three months after the date of claim and the effect of imprisonment on entitlement to income support was suspensory.

[2019] UKUT 415 (AAC)SW v Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal decided that a reconvened hearing in the First-tier Tribunal must be before exactly the same panel or a completely different one.  

Written by kerryunderwood

August 26, 2020 at 12:02 pm

Posted in Uncategorized

FOOTBALL MEETS THE LAW: PART 36 OFFERS IN FOOTBALL

with 2 comments


In this 5-minute video, I suggest introducing Part 36 offers into Professional Football.

Football fans – be patient – your time comes at about 1 minute 50 seconds 😊

See my other video logs:

LEGAL SERVICES CONSUMER PANEL: SCRAP ALL THE WATCHDOGS SAYS KERRY UNDERWOOD

INTEREST ON COSTS

LITIGANTS IN PERSON: WHY I THINK THEY SHOULD BE BANNED

Written by kerryunderwood

August 26, 2020 at 10:00 am

Posted in Uncategorized

SOCIAL SECURITY: CHILD SUPPORT: UPPER TRIBUNAL CASES 2019/20

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Social Security in Child Support cases.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Social Security: Child Support

CitationPartiesJurisdictionCommentary
[2019] UKUT 149 (AAC)EA v Secretary of State for Work and Pensions and SA (CS)Social SecurityThe Upper Tribunal considered shared care under Regulation 46 of the Child Support Maintenance Calculation Regulations 2012 and whether shared care should be determined on the basis of provisions for contact in a court order, even though the specified overnight contact had not been happening. It decided that although the tribunal must consider the terms of the court order, it is not obliged to determine shared care in accordance with its terms.    

[2019] UKUT 151 (AAC)AR v Secretary of State for Work and Pensions, Her Majesty’s Revenue and Customs and LR (No.2)Social SecurityThe Upper Tribunal considered the meaning of “latest available tax year” and whether regulations 4 and 36 of the Child Support Maintenance Calculation Regulations 2012 were in conflict. The non-resident parent was subject to PAYE real time information procedures but also required to lodge P11D and self-assessment return (SAR). There was no change to tax liability following such lodgement. It decided the key point is that regulation 36 is the primary provision in defining what is meant by the “Her Majesty’s Revenue and Customs figure”; regulation 4 is merely a subsidiary definition provision. It follows that regulation 4(1) must be read in such a way that it is consistent with the purpose of regulation 36(1), namely the focus on all sources of income charged to tax for the same “latest available tax year”.    

[2019] UKUT 199 (AAC)GC v Secretary of State for Work and Pensions & AE (CSM)Social SecurityThe Upper Tribunal decided that the appellant’s liability for Child Support in respect of one son should be recalculated to take into account his liability to support his other son who lived in Denmark, under an informal arrangement made without a court order. The Upper Tribunal considered the operation of regulation 52 and regulation 48 of the Child Support Maintenance Calculation Regulations 2012 and decided that there was a clear policy intent to encourage parents to come to mutually agreed effective arrangements outside the statutory scheme.    

[2019] UKUT 289 (AAC)WC v Commissioners for Her Majesty’s Revenue and CustomsSocial SecurityThe Upper Tribunal decided that child benefit can be exported under Article 7 of Regulation (EC) 883/2004 and the priority rules for overlapping family benefits in Article 68 of that Regulation do not apply when the claimant is receiving benefit in only one State.    

[2019] UKUT 314 (AAC)BB v Secretary of State for Work and Pensions and CB (CSMSocial SecurityThe Upper Tribunal decided that in considering a claim for child support under the third child maintenance scheme established by the Child Support Act 1991 and as amended by the Child Maintenance and Other Payments Act 2008, a redundancy payment was not to be treated as part of a non-resident parent’s current income for the purpose of assessing his child support liability.    

[2020] UKUT 65 (AAC)MZ v Commissioners for Her Majesty’s Revenue and CustomsSocial SecurityThe Upper Tribunal considered family benefits where the father had not claimed child benefit and the mother and daughter had never lived in the United Kingdom. The mother did not qualify for family benefits in Poland on account of her income. She did not qualify for child benefit either under domestic law read alone or in conjunction with EU law. The Upper Tribunal explained the scope of EU family law provisions.  

Written by kerryunderwood

August 26, 2020 at 7:16 am

Posted in Uncategorized

LEGAL SERVICES CONSUMER PANEL: SCRAP ALL THE WATCHDOGS SAYS KERRY UNDERWOOD

leave a comment »

Written by kerryunderwood

August 25, 2020 at 1:00 pm

Posted in Uncategorized

SOCIAL SECURITY: PERSONAL INDEPENDENCE PAYMENT: UPPER TRIBUNAL CASES 2019/20

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Social Security and Personal Independence Payments.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Social Security: Personal Independence Payment

CitationPartiesJurisdictionCommentary
[2019] UKUT 179 (AAC)JB v Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal decided two procedural issues in an appeal against the refusal of a Personal Independence Payment (“PIP”) claim. Firstly, the extent of the Registrar’s powers in the First-tier Tribunal when determining which papers should be included in the appeal bundle before the First-tier Tribunal and secondly the admissibility of an audio recording of a consultation with an Health Care Professional made covertly by the appellant and whether it should have been admitted by the First-tier Tribunal. The Upper Tribunal decided that in this case the Registrar had exceeded her powers and that the First-Tier Tribunal had been wrong to avoid the issue regarding the covert recording and transcript in its decision.
   
[2019] UKUT 270 (AAC)PA v Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal decided that the First-tier Tribunal had erred in law in respect of daily living activity 2 (taking nutrition) in the Social Security (Personal Independence Payment) (“PIP”) Regulations 2013. It had made insufficient findings of fact to support its decision that the claimant didn’t require prompting to take nutrition, it misunderstood the proper meaning of “take nutrition”, it failed to consider regulation 4(2A) of the PIP Regulations in sufficient detail and the reasons for its decision were inadequate.  

[2019] UKUT 320 (AAC)DA v Secretary of State for Work and Pensions (PIP)Social SecurityThe Upper Tribunal decided that the First-tier Tribunal had applied the correct test and reached the inevitable conclusion that a bottle and sterilised water used to wash after going to the toilet was not an “aid” in respect of the definition of “aid or appliance” in the Social Security (Personal Independence Payment) Regulations 2013 because the claimant had no impaired function relating to the activity of cleaning herself, and because the process was a preventative therapy rather than something which made it easier or possible for her to clean herself. It also stressed the importance of identifying the “impaired function” in order to apply that definition properly.  

[2020] UKUT 22 (AAC)TK v Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal considered the Social Security (Personal Independence Payment) Regulations 2013 and decided that activity 3 can apply where a person needs assistance because of the nature of the tasks involved in therapy rather than because of a physical or mental impairment in performing the tasks. It considered the meaning and application of “limited by a person’s physical or mental condition” in section 78 Welfare Reform Act 2012. Furthermore activity 2 can apply where, due to lack of appetite, a person needs prompting to eat a sufficient quantity of food.    

Written by kerryunderwood

August 25, 2020 at 12:00 pm

Posted in Uncategorized

SOCIAL SECURITY: EMPLOYMENT: UPPER TRIBUNAL CASES 2019/20

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Social Security in the Employment context.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Social Security: Employment

CitationPartiesJurisdictionCommentary
[2019] UKUT 114 (AAC)JW v Her Majesty’s Revenue & CustomsSocial SecurityThe Upper Tribunal decided that the First-tier Tribunal had erred in law in finding that the business of the “self employed” appellant as defined in the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 was not carried out on a commercial basis as a trade, profession or occupation because it was unprofitable applying a test of “genuine and effective”. There was also a subsidiary issue as to the circumstances in which the Upper Tribunal will hear an appeal against a decision of the First-tier Tribunal in a case challenging a decision under Section 16 of the Tax Credits Act 2002 when a Section 18 decision has subsequently been issued.

[2019] UKUT 118 (AAC)SA v Secretary of State for Work and Pensions (ESA)Social SecurityThe Upper Tribunal considered regulations 23 and 24 of the Employment and Support Allowance Regulations 2008 and the meaning of “good cause” in respect of failure to attend a medical examination. It decided that regulation 24 which requires that the claimant’s “state of health at the relevant time” be considered means the time at which the claimant was required to attend and submit to the medical examination. The requirement to consider the claimant’s “state of health” relates to the degree of the claimant’s health problems at that time. Regulation 24(c) requires the decision maker or tribunal to consider “the nature of any disability the claimant has”. This could include, in relation to a condition that does not affect the claimant all the time, the pattern of the claimant’s symptoms so does not preclude an approach looking beyond the day of the appointment.

 
[2019] UKUT 135 (AAC)JS v Secretary of State for Work and Pensions (IS)Social SecurityThe Upper Tribunal decided that “Saint-Prix” retention of worker status in respect of “right to reside” may extend to other situations where a claimant has needed temporarily to cease working. It also considered the correct approach to proportionality and “lacuna filling” after Mirga. The circumstances of this case were whether the appellant had a right to reside at the time he made his claim for income support in March 2011 and whether his personal circumstances in March 2011, having given up his employment in February 2011 to care for his very young (and in one case seriously disabled) children because they otherwise would be ‘taken into care’, conferred on him a right to reside under EU law.  

[2019] UKUT 220 (AAC)LG v Secretary of State for Work and Pensions (ESA)Social SecurityThe Upper Tribunal decided, on an appeal about Income Related Employment and Support Allowance (ESA (IR)), that some payments from a trust should have been taken into account rather than others in determining whether the claimant met the financial conditions for ESA (IR).  

[2019] UKUT 284 (AAC)CM v Secretary of State for Work and Pensions (ESA)Social SecurityThe Upper Tribunal decided that EI v Secretary of State for Work and Pensions (ESA) [2016] UKUT 397 (AAC) was wrongly decided on two points. The first concerned the powers of the First-tier Tribunal on an appeal from a decision made by the Secretary of State under Regulation 30 of the Employment and Support Allowance (“ESA”) Regulations 2008 on a second or repeat claim. The second concerned the wording in Regulation 30(1) “to be treated as having limited capability for work until such time as it is determined whether or not the claimant has limited capability for work”.  

[2019] UKUT 374 (AAC)IR v Secretary of State for Work and Pensions (PIP)Social SecurityThe Upper Tribunal allowed the claimant’s appeal and decided that as a general rule the Secretary of State should have produced the letter arranging the assessment interview with a Health Care Professional so that the First-tier Tribunal could be satisfied that attendance was a requirement and failure to attend would have consequences. In this particular case the Upper Tribunal was not persuaded that the letter from Atos imposed a mandatory legal requirement to attend.  

 
[2020] UKUT 50 (AAC)KH v Bury MBC and Secretary of State for Work and Pensions (HB)Social SecurityThe Upper Tribunal decided that the “genuine chance of being engaged” test under regulation 6(2) (b)(ii) of the Immigration (EEA) Regs 2006 is contrary to European Union law in respect of those with retained worker status under Article 7(3)(b) of Directive 2004/38/EC and considered whether European Union law differs in this context between mere workseekers and those seeking to retain worker status by jobseeking. It also decided that the appeal was not correctly a referral case under section 9(5) b) of the Tribunals, Courts and Enforcement Act 2007.  

[2020] UKUT 53 (AAC)AH v Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal decided that an insured person under Regulation (EC) 883/2004 is not necessarily someone who has rights by virtue of insurance or contributions. Article 21 applies to those persons and members of their family even if the benefits in question are not ones that the claimant is claiming in their own right and not by virtue of being a member of the family. An insured person who is pursuing employment has priority over one who is not. It further decided that this result is consistent with freedom of movement and is not inconsistent with EU law. In this the Upper Tribunal rejected the argument that the child’s best interests could override Article 21 or be used to interpret it.    

[2020] UKUT 59 (AAC)PPE v Secretary of State for Work and PensionsSocial SecurityThe Upper Tribunal considered the requirement in respect of employment and support allowance to attend a medical examination under Regulation 23(2) of the Employment and Support Allowance Regulations 2008 and the meaning of “fails … to attend”, whether “failure” can occur in the absence of a legal obligation to attend and whether the standard Medical Services appointment letter imposes a legal obligation to attend. The Tribunal also considered whether the First-tier Tribunal can properly dismiss an appeal against a decision treating a claimant as not having limited capability for work under regulation 23 of the Employment and Support Allowance Regulations 2008 without evidence of the terms of the appointment letter.    

[2020] UKUT 66 (AAC)DD v Her Majesty’s Revenue and Customs & Secretary of State for Work and Pensions (CB)Social SecurityThe Upper Tribunal considered the adequacy of the HM Revenue and Customs’ (HMRC) guidance on how to apply the “genuine chance of being engaged in employment” test in relation to a jobseeker’s right to reside for the purposes of entitlement to child benefit. The Upper Tribunal found that the wrong version of regulation 6 of the Immigration (European Economic Area) Regulations 2006 had been applied both by HMRC in its appeal response to the First-tier Tribunal and by the First-tier Tribunal in its decision.  
 

Written by kerryunderwood

August 25, 2020 at 8:34 am

Posted in Uncategorized

REPRESENTATIVE ACTIONS

with 2 comments


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Jalla and others v Royal Dutch Shell plc and others [2020] EWHC 2211 (TCC)

the High Court held that the claimants in a representative action did not satisfy the “same interest” requirement under CPR 19.6(1) and struck out the representative elements of the proceedings, leaving only the personal claims of the two lead claimants.

CPR 19.6(1) provides:

“Where more than one person has the same interest in a claim –

(a) the claim may be begun; or

(b) the court may order that the claim be continued,

by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.”

The proceedings were brought by the two lead claimants “and others” in 2017, after an oil spill in Nigeria. “Others” included thousands of individuals and hundreds of communities, all allegedly exposed to the oil spill.

Here the court carried out an exhaustive review of the authorities, many of which were decided under the previous incarnation of CPR 19.6(1) which was contained in RSC Ord 15, r12 (1).

In particular the court examined in detail, the leading case of

The Duke of Bedford v Ellis and others [1901] AC 1

which remains good law.

Here, in Paragraph 60, the court set out the principles drawn together from the case law:

“i) Representative proceedings are not the only vehicle for multi-party litigation: see the citation from Zuckerman at [52] above;

ii) The requirement in CPR r. 19(6)(1) that persons have “the same interest” is statutory and is not to be abrogated or substituted by reference to the overriding objective. That said, the rule is to be interpreted having regard to the overriding objective and should not be used as an unnecessary technical tripwire: see [44]-[45], [53] above;

iii) The purpose of a representative action is to accommodate multiple parties who have the same interest in such a way as to go as far as possible towards justice rather than to deny it altogether. This is done by adopting a structure which can “fairly and honestly try the right”: see the citation from page 10 of the Duke of Bedford case at [31] above;

iv) It is for this reason that representative proceedings may be appropriate where the relief sought is in its nature beneficial to all whom the lead claimants propose to represent: see the citation from page 8 of the Duke of Bedford case at [31] above and see [47] above;

v) The “same interest” which the represented parties must have is a common interest, which is based upon a common grievance, in the obtaining of relief that is beneficial to all represented parties: see [47] above. It is not sufficient to identify that multiple claimants wish to bring claims which have some common question of fact or law;

vi) It is not necessary that the claims or causes of action of all represented parties should be congruent, provided that they are in effect the same for all practical purposes: see [39] and [49] above;

vii) The existence of individual claims over and above the claim for relief in which the represented parties have the same interest does not necessarily render representative proceedings inapplicable or inappropriate: see [38] above. The question to be asked is whether the additional claims can be regarded as “a subsidiary matter” or whether they affect the overall character of the litigation so that it becomes or approximates to a series of individual claims which raise some common issues of law or fact: see [33] above;

viii) Similarly, while the court will pay little attention to potential individual defences that are merely theoretical, the existence of potential defences affecting some represented parties’ claims but not those of others tends to militate against representative proceedings being appropriate. One reason for this is that it may be procedurally difficult or impossible to accommodate individual defences in representative proceedings, though the rules make provision for affected parties to be protected: see [53] above. Another is that if a defence is available in answer to the claims of some but not others of the represented class they have different interests in the action: see [56] above. Adopting slightly different language, I would add that the existence of individual defences calls into question whether the action really is a claim for relief that is beneficial for all or is a collection of individual claims sharing some common issues of fact or law;

ix) If the criterion of “the same interest” is satisfied the Court’s discretion to permit representative proceedings to continue should be exercised in accordance with the overriding objective.”

The judge also clarified the test to determine whether a person is in a particular represented class, suggesting that the touchstones should be ability to clearly define the class without internal conflicts, ability to evidence inclusion within the class, whether by self-certification or otherwise, and sharing the same interest in the outcome (Paragraph 68).

Applying the relevant principles, the judge found that these were individual claims because each claimant needed to prove that the oil spill caused them damage.

Estoppel

The court also considered the law of estoppel including:

(a) estoppel by convention;

(b) litigation estoppel and the doctrine prohibiting approbation and reprobation; and

(c) issue estoppel.

The court dealt with these matters at paragraphs 81 to 83:

“81. Litigation estoppel or the doctrine prohibiting approbation and reprobation may arise where a party adopts two inconsistent attitudes towards another party. In appropriate cases “he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance”: see Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320 at 1329 per Lord Browne-Wilkinson VC. It reflects “the unwillingness of the courts to countenance inconsistent conduct by one party where this is prejudicial to the other”: see Benedictus v Jalaram Ltd (1989) 58 P. & C.R 330 at 344-345 per Bingham LJ. As the explanatory example given by Bingham LJ in Benedictus illustrates, it is founded upon the Court’s view that for a party to take unfair litigation advantage of another by founding on the truth of an assertion of fact but subsequently to deny that fact in order to obtain further litigation advantage is (or may be) unconscionable.

82. The third type of estoppel upon which the Claimants rely is based on the concept of abuse of the process articulated by Wigram VC in Henderson v Henderson (1843) 3 Hare 100, 115. As such it may stretch wider than a “pure” issue estoppel such as described in Arnold v National Westminster Bank plc [1991] 2 AC 93,105E:

“Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant, one of the parties seeks to reopen the issue.”

83. The Henderson v Henderson line of authority has been helpfully summarised by Pepperall J in Mansing Moorjani v Durban Estates Limited [2019] EWHC 1229 (TCC) at [17.4]:

“Even if the cause of action is different, the second action may nevertheless be struck out as an abuse under the rule in Henderson v. Henderson where the claim in the second action should have been raised in the earlier proceedings if it was to be raised at all. In considering such an application:

a) The onus is upon the applicant to establish abuse.

b) The mere fact that the claimant could with reasonable diligence have taken the new point in the first action does not necessarily mean that the second action is abusive.

c) The court is required to undertake a broad, merits-based assessment taking account of the public and private interests involved and all of the facts of the case.

d) The court’s focus must be on whether, in all the circumstances, the claimant is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.

e) The court will rarely find abuse unless the second action involves “unjust harassment” of the defendant”.”

Written by kerryunderwood

August 25, 2020 at 8:17 am

Posted in Uncategorized

SPECIAL EDUCATIONAL NEEDS AND DISABILITIES: UPPER TRIBUNAL DECISIONS

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Special Educational Needs and Disabilities.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Special Educational Needs and Disabilities

CitationPartiesJurisdictionCommentary
[2019] UKUT 223 (AAC)L v Governing Body of Cherry Lane Primary School (SEN)SENDThe Upper Tribunal decided that Rule 12(3)(a) of the Health, Education and Social Care Rules cannot be relied on to extend the six-month time limit for making a claim under the Equality Act 2010. In this case the First-tier Tribunal erred in law in its approach to the 2010 Act’s provisions by allowing an application for an extension of time to be considered.

[2019] UKUT 240 (AAC)Derbyshire County Council v MooreSENDThe Upper Tribunal decided that there was no absolute requirement for all Education and Healthcare Plans to specify a particular school or other institution in section 1 even where section 61 of Children and Families Act 2014 applies (“education otherwise than in school”) and that M & M v West Sussex County Council (SEN) [2018] 347 (AAC) was incorrectly decided on that point.  

[2019] UKUT 243 (AAC)Nottinghamshire County Council v SF and GDSENDThe Upper Tribunal decided that the First-tier Tribunal had not erred in its construction of section 37 of Children and Families Act 2014 and in particular its approach to whether an Education, Health and Care plan (“EHC”) plan is necessary for a six-year-old with diagnoses of Autism Spectrum Disorder, Developmental Coordination Disorder and hypermobility, who attended a maintained mainstream school.  

[2019] UKUT 259 (AAC)Proprietor of Ashdown House School v (1) JKL (2) MNPSENDThe Upper Tribunal decided that the school had discriminated against a child on the basis of his disability under section 15 of the Equality Act 2010 and ordered that it withdraw its exclusion of him and reinstate him with support and extra tuition for lost learning as well as an apology.

Written by kerryunderwood

August 21, 2020 at 7:33 am

Posted in Uncategorized

MENTAL HEALTH: UPPER TRIBUNAL DECISIONS

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Mental Health.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Mental Health

CitationPartiesJurisdictionCommentary
[2019] UKUT 172 (AAC)JS v South London and Maudsley NHS Foundation Trust and the Secretary of State for JusticeMental HealthThe Upper Tribunal provided guidance and explained the structured approach to be followed by a tribunal when considering whether to allow a party to reinstate their case. The appellant in this case was a patient liable to be detained under the Mental Health Act 1983. He applied to the First-tier Tribunal for this liability to be discharged and then withdrew that application. It also explains why Hospital Trusts are correctly respondents on appeals by mental patients to the Upper Tribunal.

[2019] UKUT 323 (AAC)SLL v (1) Priory Health Care and (2) Secretary of State for JusticeMental HealthThe Upper Tribunal set out the proper test for deciding whether the discharge of a restricted patient should be absolute or conditional where at least one of the section 72(1)(b) of the Mental Health Act 1983 criteria is not met as well as the factors that the Tribunal must consider when assessing whether it is “appropriate” for the patient to continue to be liable to recall to hospital for further treatment.  

Written by kerryunderwood

August 21, 2020 at 7:29 am

Posted in Uncategorized

LETTINGS AGENCY: UPPER TRIBUNAL DECISIONS

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Lettings Agency.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Lettings Agency

CitationPartiesJurisdictionCommentary
[2019] UKUT 110 (AAC)London Borough of Newham v Samson Estates LtdLettings AgencyThe Upper Tribunal decided that a residential leasehold property manager must belong to a redress scheme that specifically covers the relevant activity in compliance with the requirements of The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014.  


[2019] UKUT 139 (AAC)G Crawford Management Services Ltd v London Borough of Tower HamletsLettings AgencyThe Upper Tribunal decided that the appellant company was in breach of the requirements of The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014. The appellant company was established to minimise liability for tax and national insurance purposes. As a matter of law, if any of the activities of the appellant was done “in the course of a business”, then there was a duty to belong to a redress scheme. The fact that there was (and was only ever intended to be) only one client or customer did not prevent the activities being done “in the course of a business”.  

Written by kerryunderwood

August 21, 2020 at 7:24 am

Posted in Uncategorized

DAMAGES-BASED AGREEMENTS: THE LEXLAW CASE: COURT OF APPEAL GRANTS LEAVE TO APPEAL

leave a comment »


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

The Court of Appeal has now given permission to appeal against the decision set out below and in granting permission Lord Justice Lloyd stated:

“Although the purposive interpretation arrived at by the judge seems more likely than not to prevail in the end, the appellant’s construction is arguable, and the issue is of sufficient general importance to merit consideration by the full court.”

In

Lexlaw Ltd v Zuberi [2020] EWHC 1855 (Ch)

the Chancery Division of the High Court held that a Damages-Based Agreement which required the client to pay for time and expenses to date if the client terminated the Agreement, was a valid agreement under the Damages-Based Agreements Regulations 2013.

Here, the client sought to terminate the Agreement and the claim settled and the claimant firm of solicitors sought to recover its fees based on that settlement, under the usual principles of Damages-Based Agreements.

The client argued that as the Agreement provided for “an amount to be paid by the client” which was other than the payment calculated by reference to Regulation 4(1) of the 2013 Regulations, it was unenforceable.

The court rejected that argument.

The decision confirms what most of us thought anyway, that is that if the Agreement is terminated by the client before a right to share in any proceeds has arisen, then the solicitor can charge for work done to date on any basis specified in the Agreement, including the hourly rate.

Regulation 4 limits a solicitor’s charge to an agreed percentage of damages, not to exceed the permitted cap, plus expenses recovered from the other side.

The permitted caps are as follows:

Personal Injury  25%
Employment  35%
Other work  50%

The Chancery Division held that it was an obvious consequence of preventing representatives getting their time costs on a client determination that those representatives would be reluctant to enter into Damages-Based Agreements and that would be contrary to the purpose of making such agreements lawful, so as to facilitate access to justice.

That would have the knock-on effect of creating less choice for clients wanting to bring civil litigation claims.

Comment

This is a welcome and sensible decision, but I must admit I had always assumed that this must be the case, as it was the case under the original 2010 Regulations and there was no suggestion that different laws should apply for other civil work outside the employment jurisdiction.

It does not mean that Damages-Based Agreements are worth entering into; there are very very few circumstances where a Damages-Based Agreement is to be preferred to the Underwoods method of a pre-Action Contingency Fee Agreement under Section 57 of the Solicitors Act 1974, followed by a Conditional Fee Agreement.

The key disadvantage of Damages-Based Agreements is that the damages cap not only limits the charge to the client, but due to the indemnity principle limits recoverability from the other side.

For example, in a general civil claim the percentage limit in a Damages-Based Agreement is 50%. That means that a successful client cannot recover more than that sum from the other side.

In sharp contrast, Conditional Fee Agreements can limit the amount to be paid by the client without causing indemnity principle problems.

Furthermore credit must be given to the client for costs recovered, which in any substantial litigation means that the client will pay nothing, due to the combination of the cap, the indemnity principle and having to give credit.

In stark contrast the risk-based success fee in conditional fee agreements is not recoverable, so there can never be anything to offset against it.

Written by kerryunderwood

August 20, 2020 at 2:43 pm

Posted in Uncategorized

SITE OF SPECIAL SCIENTIFIC INTEREST: UPPER TRIBUNAL DECISIONS

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Site of Special Scientific Interest.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Site of Special Scientific Interest

CitationPartiesJurisdictionCommentary
2019] UKUT 300 (AAC)Natural England v Warren (MISCMISCThe Upper Tribunal decided in respect of a Site of Special Scientific Interest (“SSSI”) that the Firsttier Tribunal was not bound by the requirements of Regulation 63 of the Conservation of Habitats and Species Regulations 2017 and thereby Article 6(3) of Directive 92/43 in terms of assessing the implications of a plan or project on a special area of conservation or a special protection area. The tribunal was not a competent authority on which the Regulations imposed such obligations. However, it was bound to apply the principles governing the competent authority’s assessment, including the precautionary principle.

Written by kerryunderwood

August 20, 2020 at 11:39 am

Posted in Uncategorized

ARMED FORCES: UPPER TRIBUNAL DECISIONS

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Armed Forces.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Armed Forces

CitationPartiesJurisdictionCommentary
[2019] UKUT 154 (AAC)KF v Secretary of State for Defence (WP)Armed ForcesThe Upper Tribunal decided that the tribunal should apply its own consideration of the admissibility of expert evidence in the particular circumstances of the case before it, given the general rule in relation to the admission of evidence.

Written by kerryunderwood

August 20, 2020 at 11:35 am

Posted in Uncategorized

INFORMATION RIGHTS: UPPER TRIBUNAL DECISIONS

leave a comment »


Here I look at Upper Tribunal decisions, that is decisions on appeal, in relation to Information Rights.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

Administrative Appeals Chamber: Information Rights

CitationPartiesJurisdictionCommentary
[2019] UKUT 185 (AAC)Davies v 1. The Information Commissioner; 2. The Cabinet Office (GIA)Information RightsThe Upper Tribunal considered Section 36 of the Freedom of Information Act, the standard of reasons required for a decision as to the reasonableness of the qualified person’s opinion and the duty of a tribunal to give closed reasons where the required standard of reasons cannot be met in open. It gave guidance as to the duty of tribunals to address the principal issues raised in closed proceedings even where the issues were subsequently agreed by those privy to the closed proceedings. The Upper Tribunal remade the decision in this case, finding that the qualified person’s opinion was not reasonable and, in any event, the public interest favoured disclosure.  


[2019] UKUT 247 (AAC)Vesco v (1) Information Commissioner and (2) Government Legal DepartmentInformation RightsThe Upper Tribunal considered an appeal concerning a request for environmental information within the Environmental Information Regulations 2004 (“EIRs”) which implement obligations under EU Council Directive 2003/4/EC which in turn falls to be interpreted in accordance with the Aarhus Convention. It decided that the First-tier Tribunal erred in law by failing to apply all applicable tests under Regulation 12 of the EIRs.  


[2019] UKUT 269 (AAC)Sygulska v (1) The Information Commissioner (2) The Ministry of DefenceInformation RightsThe Upper Tribunal decided that the First-tier Tribunal had not erred in law in deciding that disclosure of Second World War service records would be unfair under section 40 of the Freedom of Information Act (FOIA) and that condition 6(1) of Schedule 2 of the Data Protection Act 1998 (DPA) was not satisfied. In the absence of proof of death such as a death certificate or equivalent document, the Ministry of Defence was entitled to ask for and receive a declaration of death from the relevant legal authorities before disclosing a serviceman’s record unless 116 years had passed since his date of birth.  

Written by kerryunderwood

August 20, 2020 at 11:28 am

Posted in Uncategorized

QUALIFIED ONE-WAY COSTS SHIFTING APPLIES TO CLAIMANTS, NOT PROCEEDINGS

leave a comment »


These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Anne Morgan (on behalf of herself and of the estate of Mr Christopher John Morgan) v Dr Chongtham Singh, Sheffield County Court, (unreported)

a Circuit Judge on appeal considered whether Qualified One-Way Costs Shifting (QOCS) applied to the whole proceedings, or could be split between different claimants, the significance being that a claimant with a Conditional Fee Agreement with a recoverable additional liability is disqualified from QOCS protection, and this is generally known as a pre-Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) funding agreement.

Here Christopher Morgan had such a pre-LASPO Conditional Fee Agreement with a recoverable success fee and After-the-Event insurance premium, and such an agreement disqualifies a claimant from the protection of QOCS.

He died.

His widow entered into a post-LASPO Conditional Fee Agreement, without a recoverable success fee, both in relation to the action on behalf of the estate in her capacity as executrix, and in relation to her own action as a dependant.

She lost and a costs order was made against her in the usual way and the issue was whether or not she was entitled to the protection of QOCS, which would make the order unenforceable.

It was agreed that Mr Morgan did not have QOCS protection, but Mrs Morgan had neither a recoverable success fee, nor a recoverable ATE insurance premium. The post death premium was an unrecoverable new premium for a new policy and not a top-up.

Consequently, had Mrs Morgan won, she would not have been entitled to recover either the success fee or the insurance premium from the date of her husband’s death.

Mrs Morgan argued that that meant that she was not disqualified from the protection of QOCS.

The defendant relied on the concept that QOCS applied to the whole proceedings, or not at all, and that as the pre- death part of the proceedings was not QOCS protected, none of the proceedings was.

The District Judge, in a finding upheld by the Circuit Judge on appeal, held that QOCS applied to individual personal injury claimants and not proceedings, and consequently Mrs Morgan, not having the benefit of recoverability of the additional liabilities, was protected by QOCS.

 

The protection applies not to the proceedings, but to:

 

“… the enforcement of orders for costs made against a claimant’’

 within those proceedings (CPR 44.14).

 

There was nothing in the Civil Procedure Rules to prevent a finding that Mr Morgan was the claimant in the proceedings up to his death and Mrs Morgan thereafter in her capacity as executrix in the same proceedings, as well as on her own behalf as a dependant.

It was the status and legal entity of the claimant, and not the proceedings themselves, which had altered.

“Proceedings” can have different meanings in the context of different situations.

 

On appeal the defendant argued:

 

  • QOCS applies or does not apply to “proceedings” and that this was (as the respondent conceded) one set of “proceedings”. QOCS has to apply to all of the defendant’s costs or none of those costs.
  • QOCS had been treated as applying or not applying to a particular claimant when there was no basis in the rules for such an approach.
  • The decision gave the effect that a single costs order in favour of one party and against another party is partially enforceable and partially unenforceable. There is no basis for such a result in the QOCS rules.
  • CPR 44.17 should be construed so that it caught Mr Morgan’s pre-commencement funding arrangements even while Mrs Morgan was the claimant.
  • The decision imposed the worst of both regimes on the appellant in that he would have been liable to pay a success fee and for an ATE insurance premium had the claim succeeded, but he cannot recover the bulk of his costs now that it has failed.

 

The Circuit Judge rejected the appeal:

 

“The parties were new. The CFA was new. The constituent components comprising the balance of risk were new.”

 

He accepted that the Civil Procedure Rules did not deal with this point. (Holy Civil Procedure Rule Clarity- well there is a surprise Batman).

 

“It seems to me that the purpose of QOCS regime is to give protection to individuals rather than to the somewhat ethereal concept of ‘proceedings’. It is not ‘proceedings’ which require QOCS protection. It is individual claimants. It is not ‘proceedings’ which enter into pre-April 2013 CFAs and ATEs. It is individuals. It is not ‘proceedings’ against which costs orders are made. It is claimants. That is surely why CPR 44.14(1) and (2) speak of ‘orders for costs made against a claimant”.

 

A claimant cannot use QOCS to gain an advantage. That was not the position here.

 

Comment

A considered, sensible and just decision.

As I said at the outset, to overturn several hundred years of costs rules in half a page of Civil Procedure Rules was unlikely to introduce clarity.

When it comes to court rules, brevity = litigation.

Written by kerryunderwood

August 19, 2020 at 10:01 am

Posted in Uncategorized

EMPLOYMENT: KEY CASE LAW 2019/20

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Kerry Underwood is a former Employment Tribunal Judge.

This selection of key cases is taken from the Senior President of Tribunals’ Annual Report 2020 which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

In

Curless v Shell International Ltd [2019] EWCA Civ 1710

the Court of Appeal explores the application of the iniquity principle in the context of the admissibility of emails in ET proceedings to which legal advice privilege might otherwise have attached.

 

The right to rest breaks under the Working Time Regulations was considered by the Court of Appeal in

Network Rail Infrastructure Ltd v Crawford [2019] EWCA Civ 269.

It is not necessary for an equivalent period of compensatory rest to amount to an uninterrupted period of 20 minutes.

Whether the rest afforded was equivalent is a matter for the informed judgment of the specialist employment tribunal.

 

In

BMC Software Ltd v Shaikh [2019] EWCA Civ 267

the Court of Appeal rules that, while the Employment Appeal Tribunal (EAT) can require an ET to state its reasons for a judgment under appeal at the sift stage or at a preliminary hearing (the Burns/Barke procedure), it cannot do so as part of its final disposal of the appeal.

 

An equal pay claim is a claim for arrears of pay, permitting an employee to make a claim for an unpaid debt against the National Insurance Fund in the context of insolvency, ruled the Court of Appeal in

Graysons Restaurants Ltd v Jones [2019] EWCA Civ 725.

 

Important guidance on the application of rule 50 and the Sexual Offences (Amendment) Act 1992 when restricted reporting orders are sought in connection with allegations of sexual offences made in claims before an employment tribunal is provided by the EAT in

A and B v X and Times Newspapers Ltd [2019] IRLR 620.

 

It is not unlawful sex discrimination for employers to pay men on shared parental leave less than women on statutory maternity leave:

Capital Customer Management Ltd v Ali; Chief Constable of Leicestershire Police v Hextall [2019] EWCA Civ 900   (Court of Appeal).

 

In

Kuteh v Dartford & Gravesham NHS Trust [2019] EWCA Civ 716

the central issue was whether a Christian nurse was unfairly dismissed for alleged gross misconduct in initiating religious discussions with patients despite reassuring management that she would not do so.

Was her conduct protected by article 9, European Convention on Human Rights (ECHR)?

The Court of Appeal held that it was not, drawing a distinction between the manifestation of a religious belief and the inappropriate promotion of that belief.

 

The Court of Appeal decision in

FCO v Bamieh [2019] EWCA Civ 803

is an unusual illustration of whether the employment tribunal had extraterritorial jurisdiction in an international law context of two co-workers seconded to the EULEX mission in Kosovo and where the claim by one co-worker against the other derived from the whistleblowing provisions of the Employment Rights Act 1996.

It did not.

 

How should an employment tribunal accommodate the needs of a disabled person participating in its proceedings?

Helpful guidance on this difficult issue is beginning to emerge from the higher courts, not least in the Court of Appeal decisions in

J v K [2019] EWCA Civ 5

and

Anderson v Turning Point Eespro Ltd [2019] EWCA Civ 815.

 

East of England Ambulance Service NHS Trust v Flowers [2019] EWCA Civ 947

explores whether voluntary overtime should be accounted for in the calculation of holiday pay against the background of a collective agreement (the NHS Agenda for Change).

The effect of the collective agreement was to ensure a contractual entitlement to holiday pay based on voluntary overtime. The Court of Appeal also grapples with counter-intuitive language on voluntary overtime in the CJEU decision in Hein.

Section 145B of the Trade Union & Labour Relations (Consolidation) Act 1992 is an example of an area of the ET’s jurisdiction that spills over into collective labour law. It is concerned with “inducements relating to collective bargaining”.

 

The Court of Appeal overrules both the ET and the EAT in their interpretation of the section in

Kostal UK Ltd v Dunkley [2019] EWCA Civ 1009.

 

The Court of Appeal confirms that the recast definition of direct discrimination in the Equality Act 2010 has the effect that a disability discrimination claim can be brought by a claimant who is perceived to be disabled even though she is not:

Chief Constable of Norfolk v Coffey [2019] EWCA Civ 1061.

 

In a case originating in an unfair dismissal claim in the ET arising from a complaint of harassment the European Court of Human Rights (ECrtHR) considers the application of article 8 ECHR privacy rights to evidential material relating to the employee’s mobile phone, email and WhatsApp messages provided to the employer by the police:

Garamukanwa v UK [2019] IRLR 853.

 

On the first occasion that the Court of Appeal has considered regulation 5(1) of the Agency Workers Regulations, it holds that the Regulations do not entitle agency workers to work the same number of contractual hours as a comparator:

Kocur v Angard Staffing Solutions Ltd [2019] EWCA Civ 1185.

 

The defence of statutory illegality in relation to employment contractual claims, and where reliance was placed by the employer on the Immigration, Asylum and Nationality Act 2006, was considered by the Court of Appeal in

Okedina v Chikale [2019] EWCA Civ 1393.

 

In

McNeil v HMRC [2019] EWCA Civ 1112

the Court of Appeal reviews how the principles of indirect discrimination apply in equal pay claims.

The appeal is of particular interest because of how the court addresses the arguments based upon statistical analysis that were presented to it.

 

In

L v Q Ltd [2019] EWCA Civ 1417

the Court of Appeal rules that the ET has no power in its procedural rules (apart from national security cases) to prohibit the online publication of a judgment.

 

The Court of Appeal in

Harpur Trust v Brazel [2019] EWCA Civ 1402

decides that there is no basis for calculating holiday pay on a pro rata basis for a part-time worker who worked part of the year.

 

The putative status of judges as workers under employment rights legislation is explored by the Supreme Court in

Gilham v Ministry of Justice [2019] UKSC 44.

 

The difficulty of establishing a philosophical belief as a protected characteristic under the Equality Act 2010 (here belief in the statutory and moral right to copyright) is illustrated in

Gray v Mulberry Company (Design) Ltd [2019] EWCA Civ 1720.

 

In an unfair dismissal claim where there is both an invented reason and a hidden reason for dismissal, it is the hidden reason that falls to be tested says the Supreme Court:

Royal Mail Group Ltd v Jhuti [2019] UKSC 55.

 

The latest guidance on the application of disciplinary procedures in the workplace is provided by the Court of Appeal in

Sattar v Citibank NA [2019] EWCA Civ 2000.

 

In whistleblowing claims the test of whether a disclosure was made “in the public interest” is a two-stage test which must not be elided. The claimant must (a) believe at the time that he was making it that the disclosure was in the public interest and (b) that belief must be reasonable:

Ibrahim v HCA International Ltd [2019] EWCA Civ 2007.

 

A claimant in a whistleblowing case must be able to show that they have suffered a detriment in the employment field and not, for example, as a resident vis-à-vis a council’s powers as a local authority rather than as an employer:

Tiplady v City of Bradford [2019] EWCA Civ 2180.

 

When does time limitation start to run in the judicial pensions litigation? From the date of retirement when a pension might otherwise fall due to be paid, rules the Supreme Court in

Miller v Ministry of Justice [2019] UKSC 60.

Written by kerryunderwood

August 19, 2020 at 8:27 am

Posted in Uncategorized

EMPLOYMENT: LEGISLATION 2019/20

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Kerry Underwood is a former Employment Tribunal Judge.

 

Primary Legislation

There was no primary legislation in relation to employment law in 2019/20.

 

Secondary Legislation

Set out below is the Secondary Legislation passed by Parliament in relation to employment matters in 2019/20. 

 

Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019;

Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019;

Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019;

Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019;

Agricultural Wages (Wales) Order 2019;

Employment Rights (Amendment) (EU Exit) Regulations 2019;

Employment Rights (Amendment) (EU Exit) (No 2) Regulations 2019;

Agency Workers (Amendment) Regulations 2019;

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019;

Employment Rights (Miscellaneous Amendments) Regulations 2019; and

Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019.

Written by kerryunderwood

August 19, 2020 at 7:20 am

Posted in Uncategorized

CONDITIONAL FEE AGREEMENTS: NO WIN, LOWER FEE: LUMP SUM DISCOUNTED FEE: PAYMENT OUT BY COURT IN FRAUD LITIGATION

leave a comment »


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

The consultancy includes the drafting of Funding Agreements, including the type of Conditional Fee Agreement used in this case, and Kerry Underwood has written over 50 different types of Conditional Fee Agreements.

In

Skatteforvaltningen (The Danish Customs And Tax Admin) v Solo Capital Partners LLP & Ors [2020] EWHC 2161 (Comm)

a fraud case where where both the claimant and some defendants claimed a proprietary interest in monies held in court, the Commercial Court allowed the defendants a limited payment for legal fees, balancing the competing interests by adopting an approach that reduced the risk of the funds being exhausted by payments of legal fees which exceeded those reasonably incurred to date.

The defendants’ legal team were retained on a no win lower fee conditional fee agreement with an agreed total discounted base fee which became due on signature of the Conditional Fee Agreement, which contained rights of termination for non-payment.

Applying

Marino v FM Capital Partners [2016] EWCA Civ 1301

and

Kea Investments Ltd v Watson [2020] EWHC 473 (Ch),

the court had to ascertain whether the defendants had access to other assets to meet legal fees and, if not, weigh the apparent injustice of releasing the funds against the possible injustice to the defendants of not doing so.

The defendants currently had access to no other assets, but certain assets, not subject to legal restraint, might be liquidated over the next 18 months.

The court declined to order payment out of the entire sum due under the Conditional Fee Agreement, as this would immediately be consumed, regardless of the reasonable value of the work done to date.

One of the defendants’ investments was maturing in January 2021. The judge therefore ordered payment out of a sum to cover certain outstanding fees and incurred costs, plus the estimated legal costs to be incurred under the Conditional Fee Agreement, calculated on a conventional charging basis, up to 31 January 2021, plus disbursements outside the Conditional Fee Agreement.

Although the judge did not know what effect his order would have on the defendants’ legal team’s willingness to continue under the Conditional Fee Agreement, that did not lead him to conclude that the balance of interests he had struck was unfair.

The defendants’ Conditional Fee Agreement was “an unconventional mechanism to funding High Court litigation” and the contractual terms agreed between the defendants and their lawyers could not be allowed to trump the court’s decision.

 

Comment

An interesting example of an extremely substantial piece of litigation described by the court as “one of the largest and most complexed pieces of litigation to be heard in the Commercial Court” being dealt with by way of a conditional fee agreement.

It is also an interesting example of a defendant being represented under a Conditional Fee Agreement and, unsurprisingly, on a no win, lower fee basis, a model that I recommend in commercial proceedings.

It is further interesting in that the lower fee is calculated as a lump sum, rather than by work done, and again this is very much my model for acting on a No win, Lower fee Conditional Fee Agreement for a defendant.

Written by kerryunderwood

August 18, 2020 at 8:55 am

Posted in Uncategorized

EMPLOYMENT APPEAL TRIBUNAL : SIX IMPORTANT DECISIONS

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In this, the second of a series of posts setting out brief summaries of key tribunal decisions in the last year, I set out 6 decisions of the Employment Appeal Tribunal.

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

 

Employment Appeal Tribunal

Citation Parties Jurisdiction Commentary
UKEAT/0304/18Richard Page v Lord Chancellor and Lord Chief Justice EATThe claimant was a magistrate who objected on religious grounds to children being adopted by same-sex couples and was ultimately removed from office following a BBC interview. Choudhury P and members upheld the employment tribunal’s rejection of his claims arising from his removal from office, in particular (a) rejecting his victimization claim because the statement to the BBC relied on did not involve any allegation of breach of the Equality Act 2010 by the Respondents or was not the cause of his removal and (b) rejecting his case under Art 10 of the European Convention on Human Rights because that Art was not engaged on the facts or because his removal from the magistracy was in any event a proportionate limitation on his to right to freedom of expression.

UKEAT/0247/18 [2020] IRLR 4  Bessong v Pennine Care NHS Foundation Trust   EATSince the repeal of ss 40(2)(4) of the Equality Act 2010 by the Enterprise and Regulatory Reform Act 2013, there is no express provision in the 2010 Act to the effect that an employer’s failure to prevent racial harassment by third parties would itself amount to harassment under the 2010 Act unless the employer’s failure was itself related to the protected characteristic of race. Choudhury P decided that neither the Race Directive (2000/43/EC) nor the Charter of Fundamental Rights of the EU required a different interpretation of s 26(1) of the 2010 Act, which on its face requires the employer’s conduct (ie failure to prevent harassment) to be related to race.

UKEAT/0007/19                         Watson v Hemingway Design Ltd (in liquidation) and others EATKerr J decided that the employment tribunal had jurisdiction to determine a claim under the Third Parties (Rights against Insurers) Act 2010 against an insolvent employer’s insurer in a case where the underlying claims against the employer arose under the Employment Rights Act 1998 and the Equality Act 2010.

UKEAT/0236/18Sophia Walker v Wallem Shipmanagement Ltd EATKerr J and members decided that on its proper construction regulation 4 of the Equality Act (Work on Ships and Hovercraft) Regulations 2011 excluded a claim of sex discrimination under the Equality Act 2010 by a woman applying in UK to a recruitment agency operating here for work on a foreign registered vessel, notwithstanding that the agency admitted direct discrimination in refusing to consider a female applicant for the job. The Tribunal considered that it was doubtful that the regulation in question conforms to the Equal Treatment Directive and recommended that the Secretary of State revisit the scope of the Regulations.

UKEAT/0223/19Basfar v Wong EATSoole J decided that a Saudi diplomat was entitled to rely on the Diplomatic Privileges Act 1964 to resist a claim by a domestic servant claiming wrongful dismissal, failure to pay national minimum wage and breach of the Working Time Regulations 1998 in circumstances alleged to amount to modern slavery. Although the Court of Appeal’s decision in Reyes v Al-Maliki [2015] ICR 289 on the ambit of the “commercial activity” exclusion to the privilege was not binding authority because the Supreme Court’s had decided the case on other grounds [2017] ICR 1417, it was nevertheless highly persuasive and, combined with the observations of Lords Sumption and Neuberger in the Supreme Court, represented the true legal position.

UKEAT/0234/19HMRC v Middlesborough Football and Athletic Company (1986) Ltd EATHHJ Auerbach decided that reductions from certain employees’ weekly pay made by Middlesbrough football club in respect of season tickets provided to them counted as “deductions” in calculating their pay for the purposes of the National Minimum Wage Regulations 2015 and that the club was therefore in breach of the Regulations, and in particular that for the purposes of regulation 12, the reductions could not be classified as “payments” by the employees, were for the “use and benefit” of the club and were not made under a relevant contractual provision under regulation 12(2)(a).

Written by kerryunderwood

August 14, 2020 at 8:44 am

Posted in Uncategorized

CRIMINAL INJURIES COMPENSATION

leave a comment »


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In this, the first of a series of posts setting out brief summaries of key tribunal decisions in the last year I set out 3 decisions of the Social Entitlement Chamber (Criminal Injuries Compensation).

All of the information in all of these posts is taken directly from the Senior President of Tribunals’ Annual Report 2020, which is an invaluable and free resource dealing with all aspect of the work of tribunals as well as setting out these summaries of key cases.

The whole report can be accessed here.

 

Social Entitlement Chamber (Criminal Injuries Compensation) 

CitationPartiesJurisdictionCommentary
[2019] UKUT 15 (AAC)R (CICA) v Ft TCriminal Injuries CompensationUTJ Rowland reviewed the authorities as to whether an injury is directly attributable for a crime of violence. The Tribunal also commented that whilst a tribunal was not bound to accept an expect medical report it may consider the evidence to be compelling in the absence of any other medical evidence, but it must still give reasons. It doubted that the tribunal was required to record a dissenting view.

[2019] CSOH 79Lord Advocate v F-t T (SEC)Criminal Injuries CompensationThe Outer House of the Court of Session decided that nasal bones were not part of the skull and accordingly as a matter of statutory interpretation a fracture to nasal bones was not a fracture of the skull. Giving judgement Lord Brailsford gave guidance on rule 2(2)(d) of the First-tier Tribunal (SEC) Procedure Rules 2008. The use of the special expertise of a tribunal member is intended to assist the tribunal in reaching a view on the evidence, including matters of technical difficulty or complexity within their expertise. It is not to provide evidence.

[2019] UKUT 322 (AAC)T D v Ft T and CICACriminal Injuries CompensationUTJ Markus QC quashed an interlocutory decision striking out the appellant’s appeal. The Judge highlighted errors in HMCTS administration and emphasised the importance of providing a complete and accurate appeal bundle. This error was compounded by misadvising the appellant about his right to apply for reinstatement.

Written by kerryunderwood

August 14, 2020 at 8:13 am

Posted in Uncategorized

SOME CIVIL AND FAMILY FEES REDUCED FROM 3 AUGUST 2020

with 2 comments


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

HMCTS  has published updated Form EX50 (Civil and Family court fees leaflet) and the Ministry of Justice published updated Form EX50A (a full list of court fees in fees orders) to reflect revisions to the Family Proceedings Fees Order (SI 2008/1054) and the Civil Proceedings Fees Order (SI 2008/1053) made under the Court Fees (Miscellaneous Amendments) Order 2020 (SI 2020/720) (SI).

The forms reflect the following reductions in application fees for certain civil and family proceedings from 3 August.

For family proceedings, fees for the following applications have been reduced:

  • Third party debt orders or the appointment of a receiver (£100 to £77).
  • Charging orders (£100 to £38).
  • Judgment summons (£100 to £73).
  • Attachment of earnings orders (£100 to £34).

Reduced fees are also payable for the service of certain documents by bailiff, and on filing a request for detailed assessment of costs where the person filing the request is legally aided, funded by the Legal Services Commission, or a person for whom civil legal services have been made available under the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

For civil proceedings, fees for the following applications have been reduced:

  • Witness summons (£50 to £21).
  • Variation of a judgment or suspension of enforcement (£50 to £14).
  • Certificate of satisfaction, or cancellation of a judgment debt (£15 to £14).

The Explanatory Memorandum to the SI explains that the Ministry of Justice carried out a review of civil and family fees for 2018/19 and mapped each fee to the cost of that particular service, using volume and cost data for that period.

The review identified that the fees for a number of court fees were set higher than the actual administrative cost of the service. The SI regularises the position by reducing the fees identified to the appropriate level.

The government has not launched a refund scheme in respect of the fees reduced by the SI, because it does not consider that there would be any negative impact on the groups who would typically pay these fees.

In response, the House of Lords Secondary Legislation Scrutiny Committee has recommended that further information about the decision not to launch a refund scheme should be sought, as well as ascertaining the number of people affected, and what the total cost would have been had a decision been made to refund those affected.

Written by kerryunderwood

August 13, 2020 at 12:55 pm

Posted in Uncategorized

NO LETTER BEFORE CLAIM: WRONGLY ISSUED AS PART 8: NO STRIKE OUT

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Halal Meat Sellers Committee Ltd & Anor v HMC (UK) Ltd [2020] EWHC 2190 (Comm)

the Commercial Court, part of the High Court, struck out the claim on the facts pursuant to CPR 3.4(2)(a) on the ground that the claimants’ Claim Form disclosed no reasonable grounds for bringing the claim.

What is interesting and significant about the case is the grounds on which the High Court refused to strike out the claim.

Here it was common ground that the claimants had failed to comply with the Civil Procedure Rules Pre-Action Protocol in that they had failed to issue a letter before action.

The claimant had also served a Part 8 Claim Form in circumstances where there were substantial issues of fact between the parties, and therefore the proceedings should have been issued under Part 7 and here the claimants had applied to have the proceedings transferred from Part 8 to Part 7.

CPR 3.4(2) empowers a court to strike out a statement of case, including a Claim Form if it appears to the court that:

 

(1) The statement of case discloses no reasonable grounds for bringing or defending the claim.

(2) The statement of case is an abuse of the Court’s process or is otherwise likely to obstruct the just disposal of the proceedings.

(3) There has been a failure to comply with a rule, practice direction or Court order.

 

In relation to the failure to issue a letter before action the High Court said that it would require “the most extreme circumstances” to warrant striking out a Claim Form for that reason:

 

“84. In my judgment, a failure to issue a letter before action should not be penalised by striking out the Claim Form. The absence of such a letter other than, perhaps, in the most extreme circumstances would not warrant such a drastic step. If the claim were clearly or arguably a meritorious one, such a step would be unduly disproportionate and any absence of a pre-action letter can be dealt with, if necessary, by other sanctions. If the claim were a plainly an unmeritorious claim, the claim itself would no doubt be exposed to striking out or summary judgment.”

 

In relation to issuing Part 8 proceedings instead of Part 7 proceedings the court had this to say:

 

“85. The second ground relied on by HMC that the Part 8 procedure was inappropriate again is not sufficient in my judgment to warrant striking out a claim, especially as in the present case the Claimants have applied to alter the Part 8 Claim Form to a Part 7 Claim Form.”

 

Comment

Quite right.

Such misconduct can be punished in costs.

In relation to Part 8 and Part 7, the Civil Procedure Rules themselves allow for a claim to be transferred from Part 8 to Part 7 and there can never be any justification for striking out a claim in such circumstances, where no one is prejudiced and the matter can simply be transferred to the right Part, again with costs consequences.

A refreshing decision taking an overall view and doing justice, rather than a nit-picking decision.

Written by kerryunderwood

August 12, 2020 at 12:47 pm

Posted in Uncategorized

NO COSTS FOR SOLICITOR ACTING FOR HIS OWN COMPANY: ANOTHER WRONG COSTS DECISION

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Financial Solutions (Euro) Ltd v The Financial Conduct Authority: [2020] UKUT 0243 (TCC)

the Tax and Chancery Chamber made an order in favour of the applicant and against the Financial Conduct Authority on the ground of its unreasonable decision making, and then went on to assess those costs.

The judge was dealing with a not uncommon situation where the client’s solicitor was the sole director of the applicant limited company.

Fairly obviously a solicitor who is the sole director of a limited company is likely to instruct her or his own firm.

It has been well established since the 19th century that a solicitor acting for herself or himself can claim costs as a solicitor for doing that work, for the very obvious reason that otherwise additional time and money would be spent on instructing outside solicitors – see

The London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872.

The Court of Appeal recently held that this principle holds good under the Civil Procedure Rules – see

Halborg v EMW Law LLP [2017] EWCA Civ 793 

where the Court of Appeal confirmed that a solicitor who acts for himself as a party to litigation can recover not only his out of pocket expenses, but also his profit costs, but he cannot recover for anything which his acting in person has made unnecessary.

 

“The reason is not because of some special privilege but on the purely pragmatic grounds that (a) there has actually been an expenditure of professional skill and labour by the solicitor party, (b) that expenditure is measurable, (c) the solicitor party would otherwise employ another solicitor and, if successful, would be entitled to recover the costs of that other solicitor, and (d) since he cannot recover for anything which his acting in person has made unnecessary, the unsuccessful party will have the benefit of that disallowance and so would pay less than if the solicitor party had instructed another solicitor.”

 

Although tribunals are not subject to the Civil Procedure Rules, and generally costs are not awarded, it must be the case that once a tribunal has decided, as here, that a party’s conduct warrants a costs order,  then it should apply the common law principles allowing a solicitor who acts for himself or herself to recover costs.

In a strange decision that turned logic on its head the judge said:

 

“62. I question the appropriateness of a firm of solicitors allocating as a fee earner in respect of Tribunal proceedings a person who is also the principal witness in the proceedings. In my view that creates scope for significant conflicts of interest and the ability to draw the line between those costs that are properly characterised as fees charged by the legal firm and costs which are not properly characterised because they relate to the time spent by Mr Markou in his capacity as the person giving instructions to the legal firm and its Counsel on the matter. I therefore disallow the costs claimed in respect of Mr Markou.”

 

Very obviously the costs would be much greater if the party/witness had to instruct an outside firm of solicitors.

If an individual acting for herself/himself can claim costs as a solicitor, then surely a solicitor acting for the separate legal entity of a limited company, of which she or he happens to be the sole director, must also be able to claim costs.

 

Comment

A wrong decision.

Also can we change the citations of TCC, which means both the Technology and Construction Court and the Tax and Chancer Chamber? Better still, confine initials to the same legal dustbin as Latin tags.

Res ipsa loquitur.

Written by kerryunderwood

August 12, 2020 at 10:53 am

Posted in Uncategorized

HIGH COURT SCRAPS COUNSEL’S FIXED COSTS IN EX-PORTAL CLAIMS: A VERY UNFORTUNATE DECISION

leave a comment »


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Finsbury Food Group Plc v Dover [2020] EWHC 2176 (QB)

the Queen’s Bench Division of the High Court considered counsel’s fees in ex-portal fixed costs cases.

This case was not about whether counsel’s fees were recoverable as a disbursement on the basis that they were reasonably incurred due to a particular feature of the dispute, pursuant to CPR 45.29I(2)(h).

That controversial issue was dealt with by me very recently in my blog –

FIXED COSTS: TWO RECENT CASES .

The case here related to the quantum of the fee for counsel, or a specialist solicitor, and in particular whether or not it was fixed.

Specifically, the issue was whether CPR 45.29I(2)(c) fixes any such fee at £150 plus VAT, as per CPR 45.23B, read with Table A, or whether such a fee falls outside CPR 45 altogether and is subject to assessment in the usual way; in other words are counsel exempt from fixed fees?

This was an Employer’s Liability claim which fell out of the portal.

CPR 45.29I(2)(c) allows recoverability of “the cost of any advice from a specialist solicitor or counsel as provided for in the relevant Protocol.”

The court held that CPR 45.23B and Table 6A do not apply to ex-portal claims as CPR 45.16 states that:

“This Section applies to claims that have been or should have been started under Part 8 in accordance with Practice Direction 8B (“the Stage 3 Procedure”).”

That was not the case here.

The court rejected the submission that it must have been intended, in what was undoubtedly a fixed costs case, that counsel’s fees be fixed, and fixed at Type C level that is £150 plus VAT.

Rather, the court held that the reference to “as provided for in the relevant Protocol” in CPR 45.29I(2)(c) was a reference to the principle therein, and not the amount therein, which some may find a somewhat surprising conclusion.

The court applied the logic that the fees for expert reports are not fixed, and so counsel’s fees do not need to be fixed either, and that in some cases the protocols do fix the costs of medical reports and could have done so in relation to counsel’s fees.

Consequently, counsel’s fee in an ex-portal claim is not fixed and is subject to assessment in the usual way, and here the court assessed the fee at £500 plus VAT.

So the law now is that in an ex-portal case involving a minor, where the law requires the advice of counsel or a specialist solicitor, you will recover no fee for such advice, even though required by law – see

Aldred v Cham [2019] EWCA Civ 1780

for a detailed write-up of that Court of Appeal decision – see my blog

FIXED COSTS AND COUNSEL’S FEES: SUPREME COURT REFUSES LEAVE TO APPEAL .

Neither does counsel recover a fee where s/he has prepared and served a skeleton argument, pursuant to a court order, where the case settles the day before trial – see

Coleman v Townsend, SCC Senior Court Costs Office, 13th July 2020, Case No: PHW 1806767.

However, where there is no court order, no requirement to obtain counsel’s advice etc etc, you are free to do so and its open costs time!

 

Comment

Perhaps this singular most ill-informed decision in the short life of fixed costs, and one that seriously undermines them.

At Paragraph 25, which I set out in full at the end of this piece, the court shows a misunderstanding of the concept of fixed costs, stating that claims which have fallen out of the portal are a mixed bag.

That may be true, but Parliament has chosen to adopt a swings and roundabouts approach, or a rough with the smooth approach, and that is the whole rationale of fixed costs.

If counsel’s fee can vary according to the nature of an ex-portal case, then why not the solicitor’s fee?

What was the point of the Court of Appeal, stating in

Qader & Ors v Esure Services Ltd & Ors [2016] EWCA Civ 1109

see my blog –

FIXED COSTS DO NOT APPLY TO ALL EX-PORTAL CLAIMS: QADER OVERTURNED: PARLIAMENT IGNORED

that an ex-portal claim is subject to fixed costs forever, whatever the complexity and value, unless and until it is allocated to the multi-track?

What was the point of Parliament subsequently clarifying the Civil Procedure Rules to confirm this?

The court here, without any hint of the irony of the point it was making, said that the rules allow for an amount exceeding fixed costs if there are exceptional circumstances – see CPR 45.29J.

Yes, that is the whole point!

There have to be exceptional circumstances, and those open up the whole bill, including solicitors’ fees, and is subject to fairly elaborate procedure, with severe costs penalties on those who seek, and fail, to show special circumstances.

A court cannot use that reference to pick and choose to allow extra costs without a CPR 45.29J finding of exceptional circumstances.

At Paragraph 25 of the judgment here is almost a parody of what fixed costs are all about, and is perhaps the most ill-informed paragraph of any superior court in the short life of fixed costs.

 

Advice to Solicitors

Just get any new case automatically forwarded to counsel.

Do nothing at all.

Claim your fixed costs for doing nothing.

Claim as high a counsel’s fee as you can – after all you will have done nothing whatsoever and counsel will have done all of the work.

You do not need special circumstances; you do not need a particular feature of the dispute; you need nothing at all.

 

Further Comment

Very obviously this decision is wrongly decided, per incuriam, in conflict with a Court of Appeal decision on point, and the will of Parliament.

Expect other courts to ignore it.

2021 will be fun when fixed costs come in for all claims up to £100,000, and where counsel’s fees will be fixed.

Did the High Court here really believe that it was intended to fix counsel’s fees in a claim worth say £95,000, but not in one worth, say, £10,500?

CPR 45.29F(2) limits defendant’s costs to those which would have been payable to the claimant at the same stage of the proceedings, so claimants are now at much greater risk in personal injury proceedings.

Denis Defendant instructs counsel on a no win lower fee basis £100 plays £1,000. Claimant fails to beat Part 36 offer – now liable for £1,000 – or whatever sum the court assesses. Few cases go to trial but the chilling effect of a defendant’s Part 36 offer in a fixed costs case, which effectively disapplies QOCS, is now glacial.

It also introduces a whole new level of uncertainty; as counsel’s fee is to be assessed a claimant will have no idea, by accepting a Part 36 offer late, what they will be paying – which sort of defeats the point of fixed costs.

I am not a great fan of the way the Civil Procedure Rules are written, but in fairness, it is very clear here what the Civil Procedure Rules Committee, fortified by the Court of Appeal and Parliament, meant, and this decision defies common sense, Parliament, and the Court of Appeal.

Parliament will re-visit this – expect a cut in fixed costs.

“25. I accept all that Mr Roy says concerning the impetus for the fixed costs regime and the underlying rationale of certainty and proportionality. However, claims which have fallen out of the Protocol are a mixed bag. Some small straightforward claims may fall out of the Protocol as a result of the failure by the defendant to respond to the CNF. But there are other reasons for a claim falling out of the Protocol including notification by the claimant that the claim has been revalued at more than the upper limit; where liability remains in dispute and where contributory negligence is alleged. As Stewart J recognised in Ferri v Gill [2019] Costs LR 367, these factors are likely to be associated with a much greater level of complexity, so making quantification of the claim all the more difficult. I see nothing absurd in the costs of such an advice on valuation not being fixed in those circumstances. Indeed, it might be said that the converse is true. It would be odd if the same fixed fee were to be recovered for valuing a straightforward claim worth £15,000 as for a claim which, as it turns out, includes a high claim for loss of earnings or handicap on the labour market the quantification of which may involve considerable skill and expertise. Further, the costs allowed will not be unchecked. Just as in this case, they are subject to assessment and may be reduced on assessment.”

Written by kerryunderwood

August 11, 2020 at 3:02 pm

Posted in Uncategorized

SET-OFF OF INTERIM COSTS ORDER AGAINST JUDGMENT SUM

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Ridley v Dubai Islamic Bank PJSC [2020] EWHC 2088 (Comm) (31 July 2020)

the court refused an application by the defendant bank for set-off of a costs order made in the proceedings in favour of the claimant, against a judgment debt the claimant owed to the bank from a previous action; the court has a discretion to order set-off of judgment sums, CPR 40.13 and inherent jurisdiction, and the test is whether it is just and equitable – see

Fearns v Anglo Dutch Paint and Chemical Company Ltd [2010] EWHC 2366 (Ch).

The judgment debt had been outstanding for several years but the application had to be considered in light of the circumstances in which the costs award had arisen.

The claimant had brought the proceedings to challenge his continued imprisonment in Dubai, which he claimed was the result of the wrongful actions of the bank and arose out of the underlying facts giving rise to its judgment debt.

The costs award had resulted from an unsuccessful protracted challenge by the bank to an order for service out which had delayed the substantive proceedings for over a year.

The court also had to consider whether set-off could adversely affect the just conduct of the proceedings.

Although the bank submitted that an order for set-off would not set a precedent, the judge doubted that and felt that if she ordered set-off, the bank would use that to support subsequent applications.

The risk of an adverse costs order was one of the few sanctions which could deter parties in litigation from bringing unmeritorious applications; that could be weakened or removed here, given the parties’ relative financial resources.

The bank would be able to resist the claimant’s claim, regardless of cost constraints, in circumstances where it had no apparent interest in pursuing its defence to the proceedings expeditiously.

It would not be consistent with the overriding objective to allow the bank not to pay the costs order for an unsuccessful application as the overriding objective requires the court to ensure that the parties are on an equal footing so far as practicable and that litigation is dealt with expeditiously and fairly.

The bank would suffer no prejudice if set-off was refused as the amount of the costs award was relatively modest, compared to the judgment debt, and the bank had some security over land.

Written by kerryunderwood

August 11, 2020 at 8:02 am

Posted in Uncategorized

%d bloggers like this: