Archive for November 2013
In Procter v Raleys Solicitors, Leeds County Court, 6 November 2013 HH Judge Gosnell held that the defendant firm of solicitors had been negligent in under-settling a claim after it failed to have a face-to-face meeting with its client, the successful claimant.
Raleys Solicitors settled a vibration white finger case for £11,141 but failed to take in to account activities that Mr Procter, a miner for 17½ years, could no longer perform including DIY, car repairs and gardening.
The court awarded Mr Procter half of the extra that he would have recovered had he been successful in the missed claim on the basis of loss of a chance. This reinforces the point that the victims of solicitors’ negligence virtually never recover the sum lost, as such claims are always loss of a chance claims. This principle is dealt with at length in the judgment.
The solicitor’s defence was that Mr Procter failed to tell them about his need for services due to his inability to perform certain domestic tasks, even though the solicitor had recorded on a file note that “there is a potential services claim”.
The advice to Mr Procter was contained in three letters. He was never seen. It appears he was never advised on the telephone.
The Judge, at paragraph 10, said:
“These three letters are crucial to this claim as they appear to contain the sum total of advice that the claimant received. The claimant claims that he never had any face-to-face meeting with any lawyer employed by the defendants and the defendants have not called any witnesses to give evidence that they actually gave any particular advice. The defendants have relied on Mr Barber who was a partner at the relevant time who can give evidence that the file shows that the letters were sent and that, in his view, the contents of the letters represent sufficient advice”.
At paragraph 20 the Judge, commenting on the evidence of Mr Barber, said:
“In relation to the letters which had been written to the claimant he was not prepared to accept that they were anything other than clear and I felt he was attempting to defend his own work as it was he who drafted the letters. That in itself was not too surprising but the fact that he appeared to suggest that the letters contained all the information which the claimant needed and did not seem troubled that there were no file notes to show that any relevant advice had been given to the claimant other than in those letters was not what I would have expected of a solicitor who was managing those fee earners at the relevant time. The answer I would have expected was that the client should have been advised in addition to the letters, the advice should have been recorded in a file note and the advice then confirmed in writing to the client”.
The Judge was not too impressed with the fact that the firm’s training included reference to a fictitious client – Mr Thikas Toosh Ortplanks.
The Judge went on to consider whether the sending of the three letters was sufficient to comply with the solicitor’s obligation properly to advise the client about his claim.
“What would a reasonably competent practitioner specialising in this type of work have done? Would he or she send out a series of long standardised letters to their client and expect him to tick the correct boxes on the tick box form to reflect his instructions or should they have a discussion with the client and try to ensure that he has not only read but understood the correspondence. “
The Judge held that the solicitors should have done more to ensure that the client actually understood the advice he was receiving.
The Judge set out a three stage process for when a solicitor takes instructions:
- The solicitor must obtain information from the client about the nature of his claim and the facts which surround it.
- Once the solicitor has all of the relevant information he or she should advise the client.
- The solicitor should discuss with the client what action the client would like the solicitor to take on the basis that advice.
Here the information was contained in the questionnaire, the advice was in the initial letters and the instructions were by tick box form.
The Judge held that it was reasonably foreseeable that a client may not understand the system and what claims he could or could not make, and that whether the particular mistakes were foreseeable is not relevant if those mistakes could have been avoided by the taking of full instructions.
The Judge was also critical of the fact that the standard letters were not adjusted to take account of the particular facts of the case.
The judgment, which is a first instance County Court one in any event, does not go as far as to say that failure to see a client, or at least speak to them on the telephone, is of itself negligent.
However the Judge did say that it was “not too much to ask” that a solicitor consult with his or her client direct. He added:
“The system set up by the defendants involving, as it did, the extensive use of questionnaires and standardised letters with very little personal contact with the client enabled them to deal with a very high number of claims at limited cost.
“The disadvantage however of such a system is that it is heavily reliant on the client carefully reading all the correspondence and filling the questionnaires in accurately”.
However, this was a relatively straightforward claim with liability not in dispute and the solicitors were held to be negligent.
Solicitors who routinely refuse to see clients clearly face an increased risk of negligence proceedings and may now find it hard to get professional indemnity cover.
Those solicitors how do see clients should take a very careful look at any case management system and the way it is operated by staff. Computer generated standard letters are no substitute for advice.
This decision could turn out to be more significant than many of the Jackson reforms. It may be the beginning of the end for factory firms whether they be law firm on Alternative Business Structures.
That must be a good thing.
In October 2013 the Government announced that there would be no increase in the personal injury Small Claims limit “at this stage”.
However this should be regarded as a stay of execution rather than a change of mind. The issue is dealt with in paragraphs 38-45 of the Ministry of Justice publication:
“Reducing the number and costs of whiplash claims: A Government response to consultation on arrangements concerning whiplash injuries in England and Wales.
Cost of motor insurance: Whiplash : A Government response to the House of Commons Transport Committee”,
which won’t win any prizes in the Snappy Title competition.
As the issue of the personal injury Small Claims limit is crucial to the survival of many personal injury firms I set out the full text of the MoJ’s response at the end of this piece.
At paragraph 40 the Ministry of Justice says that:
“The Government is also keen to ensure that raising the Small Claims limit does not lead to any unscrupulous CMCs taking advantage of any resulting increase in self representing litigants and entering the market to offer services which might not be in claimants’ best interests”.
The Ministry of Justice seems unaware that earlier in 2013 it sponsored legislation and a Statutory Instrument – the Damages-Based Agreement Regulations 2013 – which gave CMCs precisely that opportunity by empowering them to enter in to Damages-Based Agreements direct with clients in personal injury matters and charging them up to 25% of damages.
Regulation 1(2) of The Damages-Based Agreements Regulations 2013 provides…..
“client” means the person who has instructed the representative to provide advocacy services, litigation services (within section 119 of the Act) or claims management services (within the meaning of section 4(2)(b) of the Compensation Act 2006) and is liable to make a payment for those services;
“representative” means the person providing the advocacy services, litigation services or claims management services to which the damages-based agreement relates.
Thus it is clearly envisaged that Claims Management Companies represent claimants and the only person who can pay for those services is the client as such charges are not recoverable from the other side, as compared with a lawyer’s charge in a cost-bearing case, that is a case that does not fall within the Small Claims Track.
Most of us assumed that the whole point of allowing CMCs to enter into DBAs direct with clients was to let them take up any slack caused by lawyers being unwilling to act in small claims matters.
Were we all wrong? Or is the Ministry of Justice a basket case that should be put out of its misery? Obviously it would not just be lying would it?
Remember that prior to these Regulations being approved it was only in employment cases that DBAs could be used and anyone, qualified or not, has always been able to represent, and charge, clients in employment tribunal matters.
Indeed the Explanatory Note says:
“DBAs are a type of “no win, no fee” agreement under which a representative (defined in these Regulations as a person providing the advocacy services, litigation services or claims management services to which the DBA relates) can recover an agreed percentage of a client’s damages if the case is won (“the payment”), but will receive nothing if the case is lost”.
So on 1 April 2013 the Government empowered CMCs to act for clients in civil and personal injury matters for a fee, yet now months later that same Government fears that they will “offer services which might not be in clients’ best interests”.
Well why did you pass the Regulations then?
Thus the policy in April 2013 was to encourage CMCs to act direct for clients; seven months later that is apparently a danger to be avoided although there is no proposal to amend the DBA Regulations.
The Ministry of Justice should also note that the correct term for those without lawyers is Litigants in Person; its Orwellian attempt to re-name those self-representing litigants, as in self-operating patients, was rejected by the judiciary.
The Ministry of Justice continues to plumb new depths of incompetence.
“Part Three – The Small Claims Track Threshold
38. Having taken account of views expressed during consultation, the Government remains of the view that extending the Small Claims track would be beneficial in providing a low cost route to bringing a claim through the courts, with each side bearing its own costs.
39. It could result in significant savings to defendants as the claims go through the Small Claims track rather than the more expensive Fast Track process. This may make it easier for defendants who admit liability for an accident, but who are unable to agree quantum, to challenge exaggerated claims.
40. In saving the defendants’ costs and enabling them to challenge exaggerated and fraudulent claims, extending the Small Claims threshold would enable the Government to keep up the momentum on insurers to reduce the cost of motor insurance premiums to the benefit of motorists and their families. The Government believes that there are good arguments for extending the Small Claims limit generally for personal injury claims.
41. However, the Government has also carefully considered both the full range of consultation responses and the Transport Committee’s report. Given those views, we are persuaded that, on balance, it would not be appropriate to increase the Small Claims limit for RTA-related personal injury at this stage.
42. The Government accepts that currently extending the Small Claims limit may have an adverse effect on genuine victims of RTA injuries. In particular, the Government will seek to ensure that adequate safeguards are developed to protect genuine claimants from any detrimental effects relating to access to justice or to the under-settling of claims from any future rise in the limit.
43. The Government is also keen to ensure that raising the Small Claims limit does not lead to any unscrupulous CMCs taking advantage of any resulting increase in self representing litigants and entering the market to offer advice services which might not be in claimants’ best interests. With the help of Government reforms through the ban on payment of referral fees in personal injury cases and a separate ban on CMCs offering financial or similar rewards as a potential inducement to make a claim, the number of CMCs operating in the personal injury sector has fallen significantly – from 2300 at the start of 2013 to just over 1400 at the end of September this year. Annual CMC turnover for this sector for the year 2012–13 was down by 22%.6
44. We also consider that much remains to be done, not only by insurers but across the industry as a whole, to address existing behaviours and disincentives which do not do enough to discourage fraudulent and exaggerated claims. More information is given in Part Two about how we propose to work with both the insurance and claimant sectors on this.
45. Therefore, while the Government believes that an increase in the Small Claims limit in this sector would provide additional benefits, it regards it as sensible and pragmatic to consider the combined impact of earlier reforms before embarking on any further change now. As detailed elsewhere in this response, the Government has already taken a number of significant steps to tackle the over-inflated personal injury claims market. We also wish to take further time to consider how best to mitigate any negative impacts which might arise as a result of increasing the Small Claims track limit. The Government will though keep this issue under consideration for implementation when appropriate”.
SMALL CLAIMS AND THE ROAD T RAFFIC ACCIDENT PORTAL
A claim which, had it been issued, would normally have been assigned to the small claims track is not covered by the fixed costs scheme (CPR 45.9(2)(d)) and thus costs are not recoverable in small claims.
Note that the small claims limit is £1,000 in relation to personal injury but £10,000 otherwise. Thus either the
damages for personal injury must exceed £1,000 or the total settlement must exceed £1,000.
|Damages for personal injury||900.00|
|Other damages (eg car)||9,000.00|
Neither threshold is crossed, thus this claim would have been assigned to the small claims track and fixed costs are not recoverable.
|Damages for personal injury||1,005.00|
Personal injury threshold is crossed and thus this claim would not have been assigned to the small claims track and fixed costs are recoverable.
|Damages for personal injury||900.00|
Overall threshold of £10,000 is crossed and thus this claim would not have been assigned to the small claims track and fixed costs are recoverable.
Now that the small claims track has been increased to £10,000 it is less likely that the threshold will be crossed if the personal injury element is under £1,000; if it is above £1,000 the issue does not arise.
CPR 45.9(2) is not happily drafted as there is no definition of ‘agreed damages’ here or anywhere else in the rules.
A particular problem arises where agreement is reached as to a quantum figure that exceeds the small claims limit but agreed contributory negligence takes the cash sum below the limit, for example agreed damages of £1,500 subject to agreed 50% contributory negligence reducing the sum paid to £750.
CPR 26.8(2)(d) states that in assessing the financial value of a claim for the purposes of track allocation, the court will ignore any contributory negligence.
A literal interpretation of CPR 45.9(2)(d) suggests that if a claim had been issued for the agreed amount of £750 then the claim would have been allocated to the small claims track and thus should not fall within the fixed costs regime, and thus contributory negligence is taken into account.
On the other hand, it is not clear that ‘agreed damages’ should mean ‘damages payable’ rather than ‘agreed damages suffered’, particularly where the draftsman chose to define the lower limit of the regime by reference to allocation rules for the small claims track.
What is the point of the reference to CPR 26.8(2) in the Practice Direction if the usual rules on track allocation (ie that contributory negligence should not be considered) are to be ignored for these purposes?
The point was considered by HHJ Stewart QC in Parveen v Farooq 30 June 2009 where the judge decided that the literal interpretation was the correct one, the rule itself being the starting point, rather than the Practice Direction.
It was held that this outcome promoted certainty because an examination of the cut and thrust of negotiation might not reveal any consensus on the pre-contributory negligence level of damages. So, for example, a settlement figure could be arrived at despite the parties valuing contributory negligence and quantum differently between them. Thus the dispute in Parveen did not fall within the regime.
The result reached in Parveen is not straightforward, and its practical impact depends on what happens to those cases which do not make it in to the fixed costs regime. The judge appears to have proceeded on the basis that small claims costs should apply. If so, a great many cases which claimant personal injury solicitors take on (usually on CFAs) may have become highly unattractive; why take the risk on a £10,000 to £12,000 case where there is a risk of a 90% finding of contributory negligence? Relatively substantial cases might result in no substantial costs recovery at all.
The surprising effect of the decision in Parveen v Farooq arises from the fact that cases which do not fall within the fixed costs regime because the ‘agreed damages’ are reduced by contributory negligence to an amount below the small claims threshold, would never have been allocated to the small claims track.
On allocation contributory negligence would have been ignored, and the claims would have ended up in the fast track – leading to fixed trial costs but otherwise, costs at large. Thus it is open to claimant solicitors, where such a claim is settled with an agreement as to costs, to seek recovery of their costs at large (ie subject only to standard assessment under CPR 44.3), on the basis that the claim would not have been allocated to the small claims track and is not a fixed costs case.
Claims for an amount of costs exceeding fixed recoverable costs
Claims for an amount of costs exceeding fixed recoverable costs is dealt with by CPR 45.29J which states as follows:-
(1) If it considers that there are exceptional circumstances making it appropriate to do so, the court will consider a claim for an amount of costs (excluding disbursements) which is greater than the fixed recoverable costs referred to in rules 45.29B to 45.29H.
(2) If the court considers such a claim to be appropriate, it may—
(a) summarily assess the costs; or
(b) make an order for the costs to be subject to detailed assessment.
(3) If the court does not consider the claim to be appropriate, it will make an order—
(a) if the claim is made by the claimant, for the fixed recoverable costs; or
(b) if the claim is made by the defendant, for a sum which has regard to, but which does not exceed the fixed recoverable costs,
and any permitted disbursements only.
If that applicant fails to achieve costs that are greater than fixed recoverable costs then CPR 45.29K applies, that is where the costs are assessed in accordance with the fixed recoverable costs or where the court assesses that the costs are not more than 20% greater than the amount of fixed recoverable costs.
The court will make an order for the party who made the claim to be paid either the fixed recoverable costs or the assessed costs, whatever is less, where they have failed to achieve costs that are greater than fixed recoverable costs.
Costs of the costs-only proceedings or the detailed assessment
Where the court makes an order for costs in a claim for costs exceeding fixed recoverable costs, whether the claim is successful or not, the court may decide not to award the party making the claim the costs of the costs only proceedings or detailed assessment and may make orders in relation to costs that may include an order that the party making the claim pay the costs of the party defending those proceedings or that assessment in accordance with CPR 45.29L.
Please see my related blog:-
GAGA LAW – slogan – The More They Dribble The Less They Quibble – has spotted a gap in the legal market and is seeking to exploit this by becoming an ABS.
The gap is for those lacking capacity or already dead.
Chairman Charlie Cadaver, 132, himself long dead, criticized traditional law firms saying that dead people and those lacking capacity were not catered for.
“Solicitors simply will not take instructions from those lacking capacity. They insist on out of date procedures such as Powers of Attorney and the Court of Protection and such old rubbish. We have a case management system which simply gives us the instructions that the person might have given us if they had capacity. Normally this involves a big fee to us”.
Deceased people will be catered for by DeadRight LLP. Partner Christine Corpse, 3½ , said that dead people saw their legacies being squandered and could do nothing about it. Being just 3½ she did not quite put it like that.
Miss Corpse appeared to be unfamiliar with Chapter 2 of the Solicitors Code of Conduct dealing with Equality and Diversity.
Chairman of rival ABS holding company, Drop, Peter Chrysanthemum, who may or may not have been under the influence of a Class A drug, was too busy paying close attention to his laptop to comment, but was later heard singing, to the tune of Lucy in the Sky with Diamonds:
“Picture yourself with a massive great debt
Thirty four pence in the pound
Assets of £3 billion or just forty-seven
Practising law is just hea-ven”
A spokesman for the Solicitors Regulation Authority declined to comment.
A spokesman for the Legal Services Board declined to comment.
A spokesman for the Legal Services Ombudsman declined to comment.
The Coalition Government and Her Majesty’s Opposition remain committed to the Legal Services Act.
On 20 November 2013 a consultation opened on a proposal that would allow the Solicitors Regulation Authority to fine “traditional”, that is properly regulated and disciplined, law firms up to £100,000.00, as compared with the current maximum of £2,000.00, that is an increase of five thousand per cent.
Other, Other News
Co-op Legal Services is laying off 60 of its 120 legal staff dealing with personal injury matters.
Droning On dropped in at The Bus Pass Arms and caught up with Reg Geranium, 49, early retired assistant manager of the Electricity Pylons Aesthetics Council.
Reg described a typical day:
“I get up early to use the night time cheap electricity. Sometimes I will catch the 5.53am bus to nowhere, as it is free. I retired early and so I have not got my bus pass yet – that is something that I am counting the days to – 3,846 to be precise.
Normally I put the clocks back a couple of hours; it makes the afternoon pass more quickly when I put them forward again”.
Reg drives a Fiat Nono and at a steady 18 mph gets 92 miles to the gallon. “People are very friendly – always honking and waving their arms when I tootle along the middle lane of the motorway. Sometimes I just sit in it without going anywhere. That is very economical and you get free radio – no electricity is consumed”.
Reg helps out at the local cricket club where he finishes off any tea left by the players. He does this at several clubs.
He also takes advantage of his local barber’s two haircuts for the price of one”. (Terms and conditions apply: both haircuts must be had by the same person at the same time).
Lottery winner Reg also has good relations with his local branch of Waitrose.
“It all started when the manager was called to meet me over the interpretation of their “Free newspaper if you spend £5” promotion. The cashier said that I had to spend £5 to get the free paper, but I said that the £5 should include the cost of the paper!
The manager agreed with me, so on Saturday I spend £2.30 and get the Guardian, at £2.70, free. I don’t really like the Guardian but as it is the dearest paper, that is the best value for money. On other days I get the Mail, and with their “Collect five swastikas and get Saturday’s paper free” promotion I get that on Saturday as well”.
I left Reg eating his two for the price of one mashed potato lunch at The Bus Pass Arms while studying the Droning On’s monochrome supplement “101 things to do with your Winter Fuel Allowance”.
Next week we drop in on Deirdre Daffodil, retired Wallpaper Ethics and Integration Adviser, who tells us how to make making a cup of instant coffee last all day, and gives us tips on knitting your own teabags; plus a guide to where you can have a half-price pub lunch with similarly interesting people, and our list of the 50 warmest libraries.
The courts are experiencing a very significant increase in the number of Litigants in Person following the sharp increase in legal fees to be paid by individuals as a result of the Jackson reforms, and the virtual abolition of civil legal aid. This is already causing problems in the courts as cases involving Litigants in Person take much longer than those involving represented parties.
Indeed The Spectator, 20 February 2014, hardly a journal of the left, says “the number of them has exploded” since “the government slashed legal aid in April of last year.” (2013), and that the majority of trials now have at least one unrepresented party. One barrister commented that “the man in the street has as much chance of dealing with these issues as building their own rocket to the moon.” It is a fascinating article and needs to be read.
The increase has prompted The Supreme Court of the United Kingdom to publish “A guide to proceedings in the Supreme Court for those without a legal representative.” (February 2014). This is a short and helpful guide which lawyers will also find useful.
On 1 October 2015 a new rule was introduced in relation to case management of matters involving litigants in person and this was achieved by the 81st update to the Civil Procedure Rules.
” Case Management- unrepresented parties
3.1A – (1) This rule applies in any proceedings where at least one party is unrepresented.
(2) When the court is exercising any powers of case management, it must have regard to the fact that at least one party is unrepresented.
(3) Both the parties and the court must, when drafting case management directions in the multi-track and fast track, take as their starting point any relevant standard directions which can be found online atwww.justice.gov.uk/courts/procedure-rules/civil and adopt them as appropriate to the circumstances of the case.
(4) The court must adopt such procedures at any hearing as it considers appropriate to further the overriding objective.
(5) At any hearing where the court is taking evidence this may include-
(a) ascertaining from an unrepresented party the matters about which the witness may be able to give evidence or on which the witness ought to be cross-examined; and
(b) putting, or causing to be put, to the witness such questions as may appear to the court to be proper.”
Meanwhile in Akcine Bendore Bankas Snoras (in bankruptcy) v Yampolskaya  EWHC 2136 (QB)
the Queen’s Bench Division of the High Court refused relief from sanctions to a litigant in person who had failed to file an appeal bundle in breach of an unless order.Her appeal was struck out.
The High Court gave guidance as to assessing defaults by litigants in person. They should not all be treated the same.The court may take into account the needs of a litigant in person who is impecunious or unable to speak English.
The High Court has also produced a formal guide for Litigants in Person in interim applications and no doubt more will follow.
The Civil Procedure (Amendment) Rules 2013, published on 13 February 2013, do not alter substantially the position in relation to Litigants in Person, but the relevant rule is now CPR 46.5, which I set out at the end of this piece. Here I do not deal with the problems in the criminal courts caused by the unavailability of counsel in Very High Costs Cases due to the reduction in legal aid fees, and other changes, in criminal cases.
Nor do I deal here with the problems caused for everyone, but especially Litigants in Person, by the Court of Appeal’s decision in Mitchell  EWCA Civ 1526, 27 November 2013 I deal with the whole issue of relief from sanctions in my piece: Relief From Sanctions.
Here I am largely dealing with the consequences for lawyers representing clients who are opposed by Litigants in Person, who were to be known by the Orwellian name of “self-represented litigants “. No doubt “self-operating patients” were soon to be with us. Fortunately the High Court has put a stop to that nonsense and Litigants in Person they remain.
In Tinkler and another v Elliott  EWCA Civ 1289 the self-representing Mr Elliott failed to attend trial but instead submitted a medical certificate of unfitness to attend court. The trial judge rejected this and granted the other party a permanent injunction and general restraining order against Mr Elliott.
On appeal the High Court set the judgment aside under CPR 39.3 holding that Mr Elliott had a good reason for not attending the original hearing.
The Court of Appeal restored the original court’s decision, holding that CPR 39.3 must be rigorously applied. Under that Part the court had no discretion to set aside a decision taken in a party’s absence until the applicant satisfied the three positive requirements of the rule.
The first requires that the applicant “has acted with all reasonable celerity* in the circumstances”.
(*Celerity – noun archaic – “swiftness, speed”. Appears below celeriac and above celery in the Oxford English Dictionary).
Mr Elliott had relied on his poor mental health and “his ignorance as a litigant in person of the availability of an application to set aside”.
The Court of Appeal held that Mr Elliott had been capable of acting as a litigant in person. However the significance of the case is the Court of Appeal’s findings in relation to his ignorance as a person representing himself.
The Court of Appeal said that “there may be facts and circumstances in relation to a litigant in person that may go to an assessment of promptness……they will only operate close to the margins,” and that “an opponent of a litigant in person is entitled to assume finality without expecting excessive indulgence to be extended to the litigant in person,” and that lack of understanding of procedures “does not entitle him to extra indulgence”.
This was in the context of a 21 month delay in Mr Elliott making his CPR 39.3 application, but the findings are of relevance generally and were not specific to this case.
In Fernandes v Kenny and Others, Court of Appeal, 23 October 2012
an unrepresented landlord applied to set aside a judgment for damages in respect of a deposit, the judgment having been entered at a small claims hearing which he had failed to attend.
The application to the District Judge failed, as did the first tier appeal to the Circuit Judge, who held that there was no discretion to hear an application made out of time.
The Court of Appeal held that the Circuit Judge had overlooked the fact that CPR3.1 allowed the court to extend the time limit set out in CPR27.11(2) but nevertheless found that the lower courts had been correct in finding that the landlord had had no good reason for failing to attend the original hearing.
However the Employment Appeal Tribunal has taken a different view in relation to litigants in person in Employment Tribunals, possibly influenced by the fact that such tribunals have historically been no-costs zones where individuals were expected to be able to represent themselves.
In AQ Ltd v Holden  IRLR 648
the Employment Appeal Tribunal held that a court was entitled to take in to account the fact that a party was a litigant in person in deciding whether to order costs against that party.
Although the law is the same whether a litigant is or is not professionally represented, the application of that law, and the court’s exercise of its discretion, must take in to account whether a litigant is professionally represented.
A tribunal cannot and should not judge a litigant in person by the standards of a professional representative.
Lay people are entitled to represent themselves in tribunals and, as legal aid is not available and they will not usually recover costs if they are successful, it is inevitable that many lay people will represent themselves.
Justice requires that tribunals do not apply professional standards to such people, who may be involved in legal proceedings for the only time in their life. They are likely to lack the objectivity and knowledge of law and practice brought by a professional legal adviser.
Even if the threshold tests for an order for costs are met, the tribunal has discretion whether to make an order, and that discretion must be exercised having regard to all of the circumstances.
However lay people should not regard themselves as immune from costs orders.
The EAT was here dealing with Rule 40(3) of Schedule 1 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, which provides that an order for costs may be made where the paying party in bringing or conducting proceedings has acted vexatiously, abusively, disruptively or otherwise unreasonably.
In January 2013 the High Court published a self-help guide for litigants in persons presenting cases to the interim applications court. The Guide has been written by Mr Justice Foskett and takes litigants through each stage of the process, from giving notice and presenting documents to how to behave in court, apply for costs and seek permission to appeal.
The interim applications court deals with short applications of an interim nature within existing or, sometimes, proposed proceedings in the Queen’s Bench Division of the High Court. It does not deal with family or matrimonial cases. The most commonly heard applications include applying for an injunction to prevent a former employee from abusing confidential information, setting up in competition or working for a rival employer; preventing travellers occupying a site in contravention of the planning laws; freezing orders to prevent the sale of property; and applying for the disclosure of specific documents.
The Guide will be kept under review and updated.
The right of a Litigant in Person to claim costs derives from The Litigants In Person (Costs and Expenses) Act 1975; there was no such right at common law.
The Act gives a Litigant in Person the right to recover “sums in respect of any work done, and any expenses and losses incurred, by the litigant in or in connection with the proceedings to which the order relates”.
It applies to all civil and family courts, the Lands Tribunal and both the first tier and upper tribunals and most cost-bearing tribunals; by section 1(1) of the Act, only out of pocket disbursements are recoverable if costs are not recoverable.
CPR 46.5(6) below lists the categories of Litigants in Person. The fact that a party is represented for part of the proceedings does not prevent recovery for work done when not represented – see
Agassi v Robinson (HM Inspector of Taxes)  EWCA Civ 1507  1 All ER 900
A Litigant in Person should file and serve written evidence to show actual loss 24 hours before any hearing and if the costs are to be subject to detailed assessment then written evidence is to be filed with the notice of commencement. This will now virtually always be a provisional assessment.
Paragraph 52.4 of the Costs Practice Direction was amended with effect from 1 October 2011 to increase costs payable from £9.25 per hour to £18.00 per hour.
New CPR 46.5(5), replacing its identically worded predecessor, pre-empts double recovery by providing:
‘A litigant who is allowed costs for attending at court to conduct his case is not entitled to a witness allowance in respect of such attendance in addition to those costs.’
Litigants in person (LIPs) fall into two categories: those who can prove financial loss and those who cannot. The new rate of £18 an hour is compensation for time reasonably spent by those who cannot prove financial loss.
And what of those who can prove loss? There are two caps: first, they cannot recover more than they have lost. The second cap is that the litigant cannot recover more than two-thirds of the amount to which a solicitor would have been entitled. This limit does not apply to disbursements.
It is for the Litigant in Person to shown on the balance of probabilities that a financial loss has been suffered, and what that loss is.
In Mainwaring v Goldtech Investments Ltd  1 All ER 467 the court referred to the difference between:
“a self-employed tradesman in a small but profitable way of business who has more custom than he can cope with and can fill every working hour to advantage; at the other extreme, a retired civil servant with an index-linked pension who finds the conduct of litigation a more interesting pastime than bowls or crossword puzzles”.
In Joseph v Boyd and Hutchinson  EWHC 413 the court considered that it should adopt a broad brush approach in circumstances where work was done during hours when the Litigant in Person was available for work. It was not necessary to enquire to any great extent as to whether they would have been engaged on other business, but the Litigant in Person must show that s/he would have been gainfully employed and also how much would have been earnt.
If the loss is less than £18 per hour the Litigant in Person is better off claiming the flat rate of £18 per hour.
In any event the maximum two-thirds of what would have been allowed to a legal representative applies.
CPR 46.5(3) below sets out the categories of claim that Litigant in Person may make.
“Expert assistance” is defined in Practice Direction 46, Paragraph 3.1, as assistance from a barrister, solicitor, Fellow of the Chartered Institute of Legal Executives, Fellow of the Association of Costs Lawyers or a law costs draftsman who is a member of the Academy of Experts or the Expert Witness Institute.
Work done must be work that a legal representative would have undertaken and a disbursement must be one that would have been incurred by a legal representative. The Litigant in Person must choose whether the claim as a witness or a notional legal representative; s/he cannot claim both (CPR 46.5(5)).
In Grand v Gill  EWCA Civ 902 the court followed the decision in R v Legal Services Commission Ex Parte Wulfsohn  EWCA Civ 250 that a reasonable sum for time spent on research is recoverable.
Proportionality applies in full to Litigants in Person. In Grand the court reduced the costs from £15,000 claimed to £707.77.
A Litigant in Person cannot recover notional disbursements such as counsel’s fees where counsel was not instructed – see
Hart v Aga Khan Foundation (UK)  2 All ER 439.
It appears that in a fast-track trial where a Litigant in Person establishes a financial loss they are entitled to two-thirds of the sum allowable to the trial advocate, whatever the actual oss, together with any additional CPR 45.39 costs.
Postage, telephones, copying etc are treated as unrecoverable office overheads for legal representatives.
In Mealing-McLeod v The Common Professional Examination Board  EWHC 185 (QB) the court said
“A solicitor’s charging rate includes or takes account of the fact that he has support staff, secretaries, messengers and so forth. A Litigant in Person, for example, must himself post letters, takes files to court and photocopy documents. “The time spent reasonably doing the work…..” mentioned in CPR 48.6(4) permits a reasonable assessment of time spent by the Litigant in Person and should reflect those matters”.
However the phrase “time reasonably spent” no longer appears in the rule or practice direction and so it is questionable whether such costs can be recovered. It could be argued that these expenses are reflected in a legal representative’s hourly rate, but not in the much lower hourly rate of a Litigant in Person, who should therefore be able to recover such actual costs.
The consequences of a LIP not using a solicitor were demonstrated in Agassi v Robinson (Inspector of Taxes) (Bar Council intervening)  EWCA Civ 1507,  1 All ER 900,  1 WLR 2126. Mr Agassi retained a tax expert who was a member of the Chartered Institute of Taxation licensed to instruct counsel directly. No solicitors were involved. Mr Agassi was awarded his costs as a LIP. Were the tax expert’s fees recoverable as costs under the general costs provisions of CPR 48.6? The answer is no. Although Mr Agassi could recover counsel’s fee as a disbursement, he was not entitled to recover as a LIP costs as a disbursement in respect of work done by the tax expert which would normally have been done by a solicitor. That meant he was not entitled to recover the costs of the tax expert providing general assistance to counsel.
Below is the text of CPR 46.5 with effect from 1 April 2013, as created by The Civil Procedure (Amendment) Rules 2013.
Litigants in person
46.5.—(1) This rule applies where the court orders (whether by summary assessment or detailed assessment) that the costs of a litigant in person are to be paid by any other person.
(2) The costs allowed under this rule will not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.
(3) The litigant in person shall be allowed—
(a) costs for the same categories of—
(i) work; and
which would have been allowed if the work had been done or the disbursements had been made by a legal representative on the litigant in person’s behalf;
(b) the payments reasonably made by the litigant in person for legal services relating to the conduct of the proceedings; and
(c) the costs of obtaining expert assistance in assessing the costs claim.
(4) The amount of costs to be allowed to the litigant in person for any item of work claimed will be—
(a) where the litigant can prove financial loss, the amount that the litigant can prove to have been lost for time reasonably spent on doing the work; or
(b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at the rate set out in Practice Direction 46.
(5) A litigant who is allowed costs for attending at court to conduct the case is not entitled to a witness allowance in respect of such attendance in addition to those costs.
(6) For the purposes of this rule, a litigant in person includes—
(a) a company or other corporation which is acting without a legal representative; and
(b) any of the following who acts in person (except where any such person is represented by a firm in which that person is a partner)—
(i) a barrister;
(ii) a solicitor;
(iii) a solicitor’s employee;
(iv) a manager of a body recognised under section 9 of the Administration of Justice Act 1985 (a) ; or
(v) a person who, for the purposes of the 2007 Act(b), is an authorised person in relation to an activity which constitutes the conduct of litigation (within the meaning of that Act).
Litigants in person: rule 46.5
3.1 In order to qualify as an expert for the purpose of rule 46.5(3)(c) (expert assistance in connection with assessing the claim for costs), the person in question must be a –
(c) Fellow of the Institute of Legal Executives;
(d) Fellow of the Association of Costs Lawyers;
(e) law costs draftsman who is a member of the Academy of Experts;
(f) law costs draftsman who is a member of the Expert Witness Institute.
3.2 Where a self represented litigant wishes to prove that the litigant has suffered financial loss, the litigant should produce to the court any written evidence relied on to support that claim, and serve a copy of that evidence on any party against whom the litigant seeks costs at least 24 hours before the hearing at which the question may be decided.
3.3 A self represented litigant who commences detailed assessment proceedings under rule 47.5 should serve copies of that written evidence with the notice of commencement.
3.4 The amount, which may be allowed to a self represented litigant under rule 45.39(5)(b) and rule 46.5(4)(b), is £18 per hour.
(a) 1985 c. 61. Section 9 was amended by the Courts and Legal Services Act 1990, section 125(3), (7), Schedules 18 and 20; the Access to Justice Act 1999 section 106, Schedule 15 Part II; S.I. 2000/1119 regulation 37(3), Schedule 4 paragraph 15; the Legal Services Act 2007, section 177, 210, Schedule 16, Part 2, paragraphs 80 and 81 and Schedule 23; S.I. 2001/1090, regulation 1, 9, Schedule 5 paragraph 12; S.I. 2011/1716 article 4.
(b) 2007 c.29.
I am grateful to Regional Costs Judge Ian Besford for much of the information in this piece.
Here I consider which, if any, of the following types of agreement require signature, and if so, whether an electronic signature is valid:
- Conditional Fee Agreements
- Damages-Based Agreements.
- Contingency Fee Agreements.
- Conditional Fee Agreements – no signature required.
- Damages-Based Agreements – no signature generally required.
- Contingency Fee Agreements – physical signature required in all cases; electronic signature not valid.
Conditional Fee Agreements
There is no statutory or secondary legislation that requires conditional fee agreements to be signed and consequently the law relating to electronic signatures is of no relevance as there is no requirement for any signature in the first place.
Section 58 of the Courts and Legal Services Act 1990, as amended, which governs conditional fee agreements, provides at Section 58(3), as follows:
“(3) The following conditions are applicable to every conditional fee agreement –
(a) it must be in writing;
(b) it must not relate to proceedings which cannot be the subject of an enforceable conditional fee agreement; and
(c) it must comply with such requirements (if any) as may be prescribed by the Lord Chancellor.”
This is part of a lengthy and detailed part of the Act where Parliament has gone to great lengths to set out what is required, permitted and prohibited in respect of conditional fee agreements and has done so by primary legislation. It pointedly does not state a requirement for the agreement to be signed.
My view is reinforced by the fact that, as we will see later, in relation to non-contentious business agreements, the term used to refer to contingency fee agreements in section 57 of the Solicitors Act 1974, Parliament has set out a clear requirement that contingency fee agreements must be signed. In my view it is clear that Parliament has differentiated between conditional and contingency fee agreements and I am satisfied beyond doubt that a conditional fee agreement does not need to be signed for it to be valid and enforceable.
The Conditional Fee Agreements Order 2013 does not require a conditional fee agreement to be signed.
As there is no requirement for a conditional fee agreement to be signed at all, the issue of the validity of an electronic signature does not apply.
Nevertheless from an evidential point of view, that is to prove that the client did indeed enter in to, and agree to, the conditional fee agreement, my clear advice is that it should always be physically signed by both parties.
Damages-based agreements are creatures of statute, specifically Section 45 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which amends Section 58AA of the Courts and Legal Services Act 1990.
Section 58AA(4)(a) states that the agreement “must be in writing”. There is no requirement for a signature in what is a lengthy section running to 10 subsections.
Again this is in marked contrast to Section 57(3) of the Solicitors Act 1974 which requires that a non-contentious business agreement, which includes contingency fee agreements, “shall be in writing and signed…..”
Thus I am satisfied that there is no statutory requirement for a damages-based agreement to be signed.
The secondary legislation governing damages-based agreement is The Damages-Based Agreements Regulations 2013.
Regulation 3 deals with “Requirements of an agreement in respect of all damages-based agreements” and there is no requirement that a damages-based agreement be signed.
Regulation 5 imposes significant extra regulatory requirements in relation to employment damages-based agreements, but again there is no requirement for signature.
Regulation 6 does require signature in one, limited, circumstance:
“6. In an employment matter, any amendment to a damages-based agreement to cover additional causes of action must be in writing and signed by the client and the representative”.
Thus Parliament has specifically required signature, by both parties, in this one instance.
It follows that signature is NOT required in any other circumstance in a damages-based agreement. The Explanatory Notes, not part of the Regulations, reinforces this view as they state:
“These Regulations apply to all DBAs, including those which relate to employment matters, entered into or signed (my italics) on or after the date on which they come into force”.
Thus the Explanatory Notes, by the use of the word “or” envisage an unsigned DBA. The Notes also say “Regulation 6 specifies that additional causes of action can be added to the agreement by written and signed amendment”, again making the point that these requirements apply only in that circumstance.
As there is no requirement for a damages-based agreement to be signed at all, the issue of the validity of an electronic signature does not apply.
Nevertheless from an evidential point of view, that is to prove that the client did indeed enter into, and agree to, the damages-based agreement, my clear advice is that it should always be physically signed by both parties.
Contingency Fee Agreements
Contingency fee agreements covering non-contentious work are specifically excluded from the provisions of The Damages-Based Agreements Regulations 2013 by Regulation 1(4) of those 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”.
Section 57(3) of the Solicitors Act 1974 provides:
(3) The agreement shall be in writing and signed by the person to be bound by it or his agent in that behalf”.
That is a clumsily worded provision as clearly in any contract both parties are to be bound, otherwise it is not a contract.
In the context of the Solicitors Act 1974 generally it is clear that this is a requirement that the client signs the non-contentious business agreement but my clear advice is that both parties, that is client and solicitor, should sign the contract.
Thus we have established that a contingency fee agreement does need to be signed.
The question then arises as to whether an electronic signature suffices. Electronic signatures are governed by the Electronic Communications Act 2000.
Section 7 of the 2000 Act states:
7 Electronic signatures and related certificates
(1) In any legal proceedings—
(a) an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and
(b) the certification by any person of such a signature,
shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.
(2) For the purposes of this section an electronic signature is so much of anything in electronic form as—
(a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and
(b) purports to be so incorporated or associated for the purpose of being used in establishing the authenticity of the communication or data, the integrity of the communication or data, or both.
(3) For the purposes of this section an electronic signature incorporated into or associated with a particular electronic communication or particular electronic data is certified by any person if that person (whether before or after the making of the communication) has made a statement confirming that—
(a) the signature,
(b) a means of producing, communicating or verifying the signature, or
(c) a procedure applied to the signature.”
This has the effect of making all electronic signatures admissible in legal proceedings, but that does not of itself overturn any statutory requirement for a traditional signature; that is dealt with by Section 8.
Section 8 allows for modification of any enactment or subordinate legislation by way of statutory instrument to allow for an electronic signature where the original legislation requires a conventional signature (Section 8(2)(c)).
No such statutory instrument has been laid in relation to Section 57(3) Solicitors Act 1974 and thus an electronic signature is not valid on a contingency fee agreement and any such agreement lacking the client’s physical signature is void.
However my view is that if a client prints off an electronically communicated contingency fee agreement and signs the printed copy and scans in that printed copy and emails it to the solicitor, then there is compliance with Section 57(3) and the contingency fee agreement is valid.
Last night Toynbee Hall celebrated 115 years of giving free legal advice. Here is a piece that I wrote for Solicitors Journal in 2006. It is as relevant today as it was then:
In these days when legal advice is reduced to a commodity, Kerry Underwood says we must keep the Toynbee Hall spirit alive.
Last week I went to Toynbee Hall for an event celebrating the life of John Profumo – a very special man being remembered in a very special place.
Toynbee Hall says of itself: “Based in Tower Hamlets in the East End of London, Toynbee Hall produces practical, innovative programmes to meet the needs of local people, improve conditions and enable communities to fulfil their potential”.
That is something of an understatement.
This remarkable place, now 122 years old, gave birth to the Citizens’ Advice Bureau, the Youth Hostels Association, the Workers’ Educational Association, the Children’s Country Holiday Fund, the Child Poverty Action Group and Legal Aid. Its free legal advice centre – the first in the world – is still going strong and lawyers still play a key part in the work of Toynbee Hall.
It nurtured Lenin, Attlee and Beveridge – author of the report that led to the creation of the Welfare State. Indeed Toynbee Hall, modest, as the above quote shows, rightly regards itself as the birthplace of the Welfare State. Less well-known is the fact that Marconi was a Toynbee Hall protégé. The first public demonstration of radio broadcasting was from Toynbee Hall, accompanied by the immortal words: “My name is Guillermo Marconi and I’ve just invested the wireless”.
Perhaps even less well-known is that Pierre de Coubertin, founder of the modern Olympic Games, was involved with Toynbee Hall. So it can lay claim to inventing the modern Olympic Games, the Welfare State and the wireless!
Regarded as on the left of the political spectrum, it has a beguiling effect on all who cross its threshold. John Profumo was of course a Conservative Cabinet Minister, and one of the speakers last week was Iain Duncan Smith, the former leader of the Conservative Party.
Toynbee Hall is classless and all-embracing. The lawyers who given their time come from different types of firms. A Linklaters partner is the chairman. In an increasingly polarised legal world, it is one of the few opportunities that lawyers from High Street firms and City firms get to meet each other. Its legal advice service has operated without a break since 1898.
Toynbee Hall can even claim to have been involved in the introduction of conditional fees. In the beginning there was a delay while the issue of payment of the other side’s costs in a lost case was resolved. The answer was the Law Society’s cheap and available Accident Line ‘after-the-event’ insurance – a completely novel concept at the time. That was run by Abbey legal Protection Ltd, a company chaired by Lord Westbury, who was heavily involved at Toynbee Hall – his main motivation was to provide access to justice to people who could not afford to risk an adverse costs order. Abbey Legal certainly did not get rich on Accident Line Protect. Indeed my first substantial involvement with Toynbee Hall arose through my contacts with Lord Westbury when we were working to introduce conditional fees.
As the legal profession faces annihilation by the Legal Service Bill, legislation more suited to totalitarian regimes than the UK Parliament, involvement with Toynbee Hall is both sobering and comforting. It is a reminder that lawyers, especially when working with others, can make a real difference to real people. It is an escape from time-recording, billable hours, Practice Rule 15 and all of the other things that get in the way of being a lawyer.
Specialist advice sessions deal with housing, debt, employment and general advice sessions deal with anything and everything, including medical negligence, wills, probate, criminal injury compensation, consumer affairs, immigration and family law.
Recently there was a competition for a name to replace ‘pro bono work’. ‘Toynbee work’ would be a good replacement. If ever an institution worked for the public good, it is Toynbee Hall. It is the complete antidote to the current brigade of politicians and administrators who know the price of everything but the value of nothing.
It is said that you go there to give but always receive more than you give. That is entirely true.
I have a strong feeling that when the current madness ends, and it will, the solution, like so many others, will have its roots in the philosophy, thinking and members of Toynbee Hall.
It is not the most beautiful of buildings, but it is the most beautiful of places”.