Archive for April 2016
the Court of Appeal overturned the first instance decision and held that where a claimant matched or beat its own Part 36 offer the claimant should get costs on a 100% basis, subject to detailed assessment as to the detail, and the court should not make an issue based order.
This decision of the Court of Appeal is so clearly written and well set out that I can quote many of the relevant paragraphs without further comment.
It is a most welcome decision which has gone a long way to redress the balance between the treatment of defendants’ Part 36 offers and claimants’ Part 36 offers.
Here the claimant had made a Part 36 offer to settle liability on the basis that she received 65% of the damages that would accrue on a 100% basis and that offer was rejected and the matter went to trial where the claimant obtained a judgment that was clearly more advantageous to her than the proposal contained in her Part 36 offer.
Paragraph 3, 4, 6 and 7 of the judgment read:-
“3. The claim resulted from the Claimant’s birth, in the course of which she suffered a Brachial Plexus Injury as a result of shoulder dystocia. She claimed that her injury was the result of the Defendant’s negligence. The Claimant’s allegations of negligence fell into two main parts:
(a) That, during the labour of the Claimant’s mother the need for a Caesarean section was indicated on 4 occasions, but, negligently, no Caesarean section was performed and instead the Defendant negligently decided that the birth should be allowed to proceed to a vaginal delivery (the first allegation).
(b) That the vaginal delivery itself was negligently managed because the midwives undertaking it failed to adopt recognised procedures to deal with the shoulder dystocia that the claimant suffered in the course of the vaginal delivery (the second allegation).
- The Judge upheld the first allegation, but rejected the second allegation. Having succeeded in establishing that her injury was caused by the Defendant’s negligence, the Claimant was entitled to full recovery of damages for her injury and loss…
- The judgment was clearly more advantageous to the Claimant than the proposal contained in her Part 36 offer. When judgment was handed down, her counsel contended that the consequences of what was then Part 36.14(3) applied and that she should have all her costs on an indemnity basis from the expiry of the relevant period plus interest thereon at the enhanced “Part 36 rate” plus the enhancements specified in Part 36.14(3)(a) and (d).
- The Defendant contended that the normal consequences of Part 36.14(3) should be disapplied because, by reference to Part 36.14(4), in the circumstances it would be unjust to apply them. It argued that Part 36 did not prevent the court from making an issues-based or proportionate costs order to reflect the fact that the Claimant failed in respect of the second allegation, which was a discrete and independent allegation. The Claimant should have her costs with the Part 36 enhancements in respect of her costs referable to the first allegation but she should not be awarded costs for the unsuccessful prosecution of the second allegation, much less with any Part 36 enhancements.”
The original judge had held that:-
“a) Part 36 does not prevent the Court from making an issues-based or proportionate costs order. In other words, the Court has a discretion to make such an order, notwithstanding that the Claimant was a successful claimant.
- b) In the circumstances of this case, it was just to make an issues-based proportionate costs order, under which the Claimant would not recover her costs of the second allegation.
- The order made by the Judge was that the Claimant should recover her damages to be assessed with the 10 per cent addition required by CPR 36.14(3)(d), plus her costs excluding those referable to the second allegation. The Judge therefore excluded from her recovery the fees of her midwifery expert (whose evidence was confined to the second allegation) and 25 per cent of her solicitors’ time costs, being his assessment of the solicitors’ costs referable to the second allegation. The Claimant’s costs, other than the excluded 25 per cent of her solicitors’ time costs, incurred after 22 October 2014 were to be assessed on an indemnity basis pursuant to CPR 36.14(3)(d), and the Defendant was ordered to pay interest on those costs incurred after 22 October 2014.
The issues on this appeal
- Before us, both parties recognised that there might be different principles applicable to costs incurred before the effective date. Both parties accepted that the Claimant’s entitlement to costs before the effective date was to be determined in accordance with the CPR Part 44. In relation to those costs, the Claimant contended that this was not a case in which there was any justification for depriving the successful Claimant of any of her costs. The second allegation had not been made or pursued unreasonably or irresponsibly. Both allegations concerned a single event, namely her birth and its management. It was common, particularly in a relatively complex personal injuries case, for a claimant to succeed on some allegations of negligence and to fail on others, and the mere fact of her failing on a sensibly pursued allegation of negligence did not justify her being deprived of part of her costs…
- The issues in relation to the Claimant’s costs incurred after the effective date are more complex. The Claimant submitted:
- a) On the true construction of Part 36, the discretion of the Court under Part 36.14(3) (now 36.17(4)) is restricted to the enhancements to which a successful claimant is normally entitled in respect of damages, costs and interest. For example, the Court may decide that the successful claimant should not recover costs on an indemnity basis, and could restrict her to the standard basis. It would follow that the Court does not have power under Part 36 to deprive a party of part of its costs on the basis that it failed to establish part of its claim. In other words, on its true construction, Part 36 excludes the normal discretion of the Court to make an issues-based or proportionate costs order.
- b) Alternatively, a successful Claimant can only be deprived of her costs if it is shown that it would be unjust for her to recover all her costs.
- c) The Judge erred in law in deciding that he could and should deprive the Claimant of her costs attributable to the second allegation.
- The Defendant contends:
- a) The judge was entitled, in the exercise of his discretion under Part 44, to deprive the Claimant of her costs incurred prior to the effective date that relate to the second allegation.
- b) In relation to the Claimant’s costs incurred after the effective date, on the true construction of Part 36, the costs referred to in 36.14(3)(b) are the costs that are determined on the application of the discretion under Part 44.2. It is only to those costs that the right to their assessment on the indemnity basis applies. It follows that the judge was entitled to restrict the Claimant’s recovery to her costs relating to the first allegation, and to have only those costs assessed on the indemnity basis.
- c) In any event, the Judge found that it would be unjust for the Claimant to recover her costs of the second allegation; he was entitled so to find; and accordingly, in the circumstances of this case, he was entitled to make the issues-based or proportionate costs order that he made.”
The trial judge worked on the basis that in the absence of a Part 36 offer he would have made a proportionate costs order and that he did not accept that such an order should not be made simply because there had been a Part 36 offer.
The Court of Appeal disagreed.
In relation to the pre-Part 36 offer costs the Court of Appeal found that the judge should not properly have deprived the claimant of any part of her costs and this was due to the facts of the matter and involved the court’s discretion under CPR 44, rather than any Part 36 issues.
CPR 44.2 provides:-
“(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
(c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;”
Paragraph 27 & 28 of the judgment reads:-
“27. It is not unusual for a claimant to succeed on some, but not all, allegations, particularly in a personal injury case such as the present. In HLB Kidsons v Lloyds Underwriters 2007 EWHC 2699 (Comm), Gloster J, as she then was, said:
“11. There is no automatic rule requiring reduction of a successful party’s costs if he loses on one or more issues. In any litigation, especially complex litigation such as the present case, any winning party is likely to fail on one or more issues in the case. As Simon Brown LJ said in Budgen v Andrew Gardner Partnership  EWCA Civ 1125 at paragraph 35: ‘the court can properly have regard to the fact that in almost every case even the winner is likely to fail on some issues.’ Likewise in Travellers’ Casualty  EWHC 2885 (Comm), Clarke J said at paragraph 12:
‘If the successful Claimant has lost out on a number of issues it may be inappropriate to make separate orders for costs in respect of issues upon which he has failed, unless the points were unreasonably taken. It is a fortunate litigant who wins on every point.'”
- In Fox v Foundation Piling  EWCA Civ 790  6 Costs LR 961, Jackson LJ said, in a judgment with which the other members of the Court agreed:
“48. In a personal injury action the fact that the claimant has won on some issues and lost on other issues along the way is not normally a reason for depriving the claimant of part of his costs: see Goodwin v Bennett UK Limited  EWCA Civ 1658. For example, the claimant may succeed on some of the pleaded particulars of negligence, but not on others. Indeed the fact that the claimant has deliberately exaggerated his claim may in certain instances not be a good reason for depriving him of part of his costs: see Morgan v UPS  EWCA Civ 1476. …””
Consequently the Court of Appeal decided that there was nothing in this case to take it out of the ordinary and thus justify the claimant of being deprived of part of her costs in relation to the pre Part 36 work.
The Court of Appeal then considered the separate issue of the consequences of a claimant matching or beating its own Part 36 offer but failing on one or more of the issues.
The Court of Appeal found that a successful claimant is entitled to all of her costs on an indemnity basis in such circumstances, unless it will be unjust for her to be awarded those costs.
The Court of Appeal distinguished the case of Kastor Navigation Co Ltd v Axa Global Risks (UK) Ltd  EWCA Civ 277 on the basis that the provisions of CPR 36 and CPR 44 were materially different when that case was decided than they are now.
Then the court specifically had to take into account under CPR 44 the costs consequences of a Part 36 offer – the old CPR 44(4)(c).
The new Part 44, set out above, specifically excludes the court from considering any offer to which the costs consequences of Part 36 apply when it is exercising its CPR 44 jurisdiction.
Part 36 was also different at the time of Kastor as there was no reference to “all the circumstances of the case”, which there is now.
Thus cases under the old law are no longer applicable and here the Court of Appeal referred to the decision of the Court of Appeal in Shovelar v Lane  EWCA Civ 802  1 WLR 637where the court said:-
“These differences in my judgment require this Court to consider the meaning and effect of Part 36.14 untrammelled by the decision in Kastor. My view as to the meaning of Part 36.14 is supported by the substantial line of authority to the effect that Part 36 is now a self-contained code, see, e.g., Ward LJ in Shovelar v Lane  EWCA Civ 802  1 WLR 637 at paragraph 52:
“52. … Part 36 is a separate, self-contained code. It must be applied as such. If the offer is one to which the costs consequences under Part 36 apply, then it cannot be taken into account under Part 44 because, although CPR 44.3(4)(c) requires the court to have regard to “any payment into court or admissible offer to settle”, those words are qualified by the words which follow namely ‘which is not an offer to which costs consequences under Part 36 apply’. Part 36 trumps Part 44.””
Paragraph 37, 38 and 39 of the judgment reads as follows:-
“37. In deciding what costs order to make under 36.14, the Court does not first exercise its discretion under Part 44. Its only discretion is that conferred by Part 36 itself. The alternative construction requires the Court first to exercise its discretion under Part 44, on the basis of all the circumstances of the case, and then to exercise its discretion under Part 36, again having regard to all the circumstances of the case. This makes no sense.
- It follows from the above, and in particular that Part 36 is a self-contained code, that the discretion under 36.14 relates not only to the basis of assessment of costs, but also to the determination of what costs are to be assessed. I agree with the Judge that Part 36 does not preclude the making of an issue-based or proportionate costs order. However, a successful claimant is to be deprived of all or part of her costs only if the court considers that would be unjust for her to be awarded all or that part of her costs. That decision falls to be made having regard to “all the circumstances of the case”. In exercising its discretion, the Court must take into account that the unsuccessful defendant could have avoided the costs of the trial if it had accepted the claimant’s Part 36 offer, as it could and should have done. The principles were aptly summarised by Briggs J (as he then was) in Smith v Trafford Housing Trust  EWHC 3320 (Ch):
“13. … For present purposes, the principles which I derive from the authorities are as follows:
- a) The question is not whether it was reasonable for the claimant to refuse the offer. Rather, the question is whether, having regard to all the circumstances and looking at the matter as it affects both parties, an order that the claimant should pay the costs would be unjust: see Matthews v Metal Improvements Co. Inc  EWCA Civ 215, per Stanley Burnton J (sitting as an additional judge of the Court of Appeal) at paragraph 32.
- b) Each case will turn on its own circumstances, but the court should be trying to assess “who in reality is the unsuccessful party and who has been responsible for the fact that costs have been incurred which should not have been.” : see Factortame v Secretary of State  EWCA Civ 22, per Walker LJ at paragraph 27.
- c) The court is not constrained by the list of potentially relevant factors in Part 36.14(4) to have regard only to the circumstances of the making of the offer or the provision or otherwise of relevant information in relation to it. There is no limit to the types of circumstances which may, in a particular case, make it unjust that the ordinary consequences set out in Part 36.14 should follow: see Lilleyman v Lilleyman (judgment on costs)  EWHC 1056 (Ch) at paragraph 16.
- d) Nonetheless, the court does not have an unfettered discretion to depart from the ordinary cost consequences set out in Part 36.14. The burden on a claimant who has failed to beat the defendant’s Part 36 offer to show injustice is a formidable obstacle to the obtaining of a different costs order. If that were not so, then the salutary purpose of Part 36, in promoting compromise and the avoidance of unnecessary expenditure of costs and court time, would be undermined.”
- I am clear that, for the reasons I have given in relation to the Claimant’s costs before the effective date, it cannot be said that it would be unjust for her to be awarded all her costs. Furthermore, in making his determination, the Judge did not take into account, as he should have, the fact that the Defendant could have avoided all the costs of the trial by accepting the Claimant’s favourable Part 36 offer. The considerations to which I referred apply even more strongly in relation to her costs after the effective date, when the question is not whether it is just for her to be awarded all her costs, but whether it would be unjust for that award to be made.”
The Court of Appeal also had this to say about Part 36:-
“It is a sad fact that the provisions of Part 36, intended to promote the settlement of litigation, and thus to minimise costs, have themselves been productive of numerous appeals to this Court, and in consequence substantial costs in what is effectively satellite litigation. This is presumably because Part 36 is highly prescriptive (so that even experienced lawyers may fail to make a compliant offer) and the financial consequences of the application of the provisions of Part 36, or the failure to comply with the requirements of Part 36, may be substantial.”
the Queen’s Bench Division of the High Court upheld a Section 57 Solicitors Act 1974 Contingency Fee Agreement whereby the solicitors billed £498,083.52, whereas on a time basis the total would have been around £50,000.00.
The High Court rejected all of the defendants’ challenges which included that the solicitors had misrepresented the chances of success and that the agreement was unfair and unreasonable meaning that the court should exercise its discretion under Section 57(5) of the Solicitors Act 1974 to set aside the agreement or to reduce the fees payable.
This was not a personal injury case and the agreement was a Contingency Fee Agreement and not a Damages-Based Agreement under the Damages-Based Agreements Regulations 2013. However it should be noted that the maximum under a Damages-Based Agreement in such types of case is 50% and therefore it is unsurprising that the judge rejected the client’s challenge to this percentage.
Interestingly the judge suggested that Contingency Fee Agreements are more advantageous to clients than Conditional Fee Agreements:-
“It is particularly important, in my judgment, to distinguish the potential consequences of this Contingency Fee Agreement from those of a conditional fee agreement… The client may well find himself worse off overall with a conditional fee agreement unless sufficient recovery of compensation is achieved.”
This is an important and key judgment for several reasons.
Firstly it is rare that Section 57 Contingency Fee Agreements come before the court and indeed many lawyers seem unaware of the existence of such a creature:
Thus this very lengthy judgment – 37 pages – is a useful guide to the law in this area.
Secondly the court recognises that any Contingency Fee Agreement may result in the lawyers getting far more in costs than under an Hourly Rate Regime, but obviously the opposite is also true.
Thirdly the court was comfortable with a 50% contingency fee.
Given that Parliament has specifically sanctioned 35% for employment matters and a maximum of 50% in Damages-Based Agreements, other than in personal injury and employment matters, it seems very unlikely that the court will have a problem with my proposed figure of 40% in contingency fee agreements for personal injury work.
The court also rejected any suggestion that the solicitors should have told the clients to take independent legal advice:-
“It could be said of any contingency fee agreement, where the solicitors’ remuneration is proportionate to the amount of recovery, that there is a conflict between the solicitors wanting to obtain as their fee the largest possible percentage of the compensation recovered and the client’s interest in achieving exactly the reverse.
There was no obligation on Bolt Burdon to suggest that Mr Tariq should obtain independent legal advice in relation to the terms of the Agreement. He did not need to be told this. There was no reason why he could not have sought advice from the solicitor who had acted for him for 30 years in his business affairs. He was put under no pressure of time to sign the Agreement. Quite the reverse, he took two months to sign it and did so only when he was satisfied that his precise requirements in relation to disbursements had been met.”
The court also said that on the face of it there was “an obvious disquiet in permitting solicitors to recover fees of some £400,000 for work which might otherwise have been billed, on the basis of hourly rates, at only some £50,000… However, on proper analysis this ignores the commercial realties which faced the parties when the Agreement was made. In truth the Agreement represented a speculative joint business venture in which the solicitors were taking all the risk and the client was exposed to no risk at all.”
Section 57 provides as follows:-
“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 [F5costs 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.”
The predecessor of this provision was Section 8 and 9 of the Attorneys and Solicitors Act 1870.
The court, at paragraph 144 stated:-
“144. It follows that:
(i) a contingency fee agreement of the kind in this case, where the fee is based on a “percentage”, is perfectly lawful;
(ii) on an assessment of costs the client is entitled to object to the agreement as unfair or unreasonable;
(iii) in that event the costs officer may enquire into the facts and certify them to the court;
(iv) the court may set aside the agreement or order that the amount payable under the agreement is reduced, if it appears “just” to do so.”
In relation to questions of fairness and reasonableness under Section 57(5) the High Court pointed out that there is very little authority on this subject and it considered a case determined under one of the 1974 Act’s predecessors – Sections 8 & 9 of the Attorneys and Solicitors Act 1870.
In Re Stuart, Ex Parte Cathcart  2 QB 201
the court said this:-
“By s.9 the Court may enforce an agreement if it appears that it is in all respects fair and reasonable. With regard to the fairness of such an agreement, it appears to me that this refers to the mode of obtaining the agreement, and that if a solicitor makes an agreement with a client who fully understands and appreciates that agreement that satisfies the requirement as to fairness. But the agreement must also be reasonable, and in determining whether it is so the matters covered by the expression “fair” cannot be re-introduced. As to this part of the requirements of the statute, I am of opinion that the meaning is that when an agreement is challenged the solicitor must not only satisfy the Court that the agreement was absolutely fair with regard to the way in which it was obtained, but must also satisfy the Court that the terms of that agreement are reasonable. If in the opinion of the Court they are not reasonable having regard to the kind of work the solicitor has to do under the agreement, the Court are bound to say that the solicitor, and an officer of the Court, has no right to an unreasonable payment for the work he has done and ought not to have made an agreement for remuneration in such a manner. On this question it is quite clear to me that we cannot arrive at any other conclusion than that arrived at by the Divisional Court. It is impossible to say that work which according to information given by the taxing master to the Divisional Court would be properly remunerated by a sum of £20 can be reasonably charged at £100. The decision of the Court below must be affirmed, and the appeal dismissed.”
Here the High Court held that the outcome provided no particular assistance but that the case is helpful in identifying the issues of fairness and reasonableness and holding that those must be considered separately.
Fairness relates principally to the matter in which the agreement came to be made.
Reasonableness relates principally to the terms of the agreement.
The court also had this to say, at paragraph 150 of its judgment:-
“150. One other statutory provision, very recent, was also referred to in the course of argument and should be mentioned for completeness. The Damages-Based Agreements Regulations 2013 permit what are, in effect, contingency fee agreements in relation to certain contentious proceedings. Regulation 4(3) limits payment under such an agreement to an amount which, including VAT, is equal to 50% of the sums ultimately recovered by the client. I stress that these Regulations have no direct application in the present case because here we are concerned with a non-contentious business agreement. Mr Mallalieu drew attention to the provisions in order to demonstrate that the level of 50% provided for in the Agreement in the present case is within the limit of what Parliament has permitted in Damages-Based Agreements. It was also asserted in the pleadings (at paragraph 27(e) of the amended reply) that in enacting these provisions Parliament expressly rejected any recommendation that specific advice of a prescribed nature had to be provided before such an agreement could be enforced.
The parties submissions on “unfair or unreasonable””
Paragraph 156 contains an interesting, accurate and telling illustration of how contingency fees protect clients more than Conditional Fee Agreements where costs can exceed damages:
“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.”
Of course the Underwoods method, recognised by the Court of Appeal at paragraph 32 of Broadhurst v Tan and Taylor v Smith  EWCA Civ 94 (23 February 2016) effectively gives the client the protection of contingency fees even in a Conditional Fee Agreement context.
It should be noted that the decision of the Court of Appeal in Broadhurst v Tan and Taylor v Smith  EWCA Civ 94 (23 February 2016) and the decision of the High Court here represent a wholesale rejection of the obiter views of DJ Lumb in A & M (by their litigation friend) v Royal Mail Group (2)  MISC B30 (CC).
The only paragraph in the judgment that lawyers should be wary of is paragraph 166 where the judge compares the charges here with a Conditional Fee Agreement with an uplift of 300%, which would be consistent with the risk assessment of this claim.
The judge appears to be unaware that the maximum success fee in a Conditional Fee Agreement of any kind is 100%.
Subject to that caveat this is a most helpful and useful judgment.
I wonder if any of you can help me. I run a small law firm in Hertfordshire and I am not too good at keeping up with the news.
I know that the Chancellorships of the Exchequer and Lord have been combined which is why Mr Osborne now deals with the legal system.
The small claims limit in personal injury cases is going up to £5,000.00 so that lawyers can only get costs from the other side if the claim is over that amount. That is what Mr Osborne, Member of Parliament for Tatton said in November but Lord Justice Briggs says we should scrap courts and lawyers for claims under £25,000.00. I can’t see which seat he represents in Parliament.
Maybe he took over Lord Justice Jackson’s constituency; he does not seem to have been elected to Parliament either.
I would just like to know whether the limit is going to be £5,000.00, or £25,000.00 and whether I can represent clients and get costs from the other side, or represent clients and not get costs from the other side, or whether I am going to be thrown out of the courts altogether.
Will I be able to get rid of all my professional indemnity insurance and my qualifications and get paid for being a McKenzie Smart App Friend?
In fact will lawyers be the ONLY group not allowed to appear in the Briggs/Susskind Star Chamber or should that be Hashtag Chamber?
Also I am not sure how lawyers being replaced by artificial insemination helps. I am not great with technology and don’t want to get into the physical details but how does online artificial insemination for cases up to £25,000.00 work? Sounds as though McKenzie needs to become a bit more than a friend.
I have also heard that the Health Minister is bringing in fixed costs for clinical negligence cases but I can’t see whether that is for claims up to £25,000.00 or £250,000.00 or when that is coming in.
Rupert Jackson MP wants fixed costs for everything up to £250,000.00. I hope these politicians can sort it all out.
Apparently clients suffering certain injuries won’t be able to claim for them but I don’t know what injuries those are or when that is coming in or how serious the injuries have to be before they can claim.
Did I miss some statement by the Minister for Art, Fisheries and Canal Redevelopment dealing with this?
I am glad the Lord Chief Justice wants a 24 hour helpline, Occupational Health and counselling support for us lawyers, although I heard some idiot say that he wanted it for judges and not lawyers. That can’t be right! Lord Thomas will never get re-elected to Parliament with views like that! Not sure what constituency he represents.
I think that we should have a separate Government department dealing with all of this – maybe – just throwing a few ideas out – a Lord Chancellor’s Department, or a Ministry of Justice, or something like that so that it can all be thought through.
Apparently there is some book about all of this by Monty Skew – an Essex boy I believe – but I can’t find it on Amazon. I think it is called the Law of Spirits.
Finally is it not time that the insurance companies had a say in all of this? I feel very sorry for them. They have to pay out on all of these claims and no one listens to them.
Confused of Hemel Hempstead
I have on many occasions criticised the conduct of insurance companies and their lawyers in personal injury matters. This is not a one way street and claimant solicitors do not always cover themselves in glory as the case below shows.
In Brown v Haven Insurance Company Ltd, Unreported, 7 January 2016, Leeds County Court
the court ordered solicitors who had signed a Statement of Truth on a Schedule of Damages which included an incorrect claim for physiotherapy charges to pay costs under the court’s wasted costs jurisdiction and to pay those wasted costs on the indemnity basis.
The solicitors had persisted in the claim for physiotherapy charges even after this item was challenged by the defendant in its counter schedule and it only became clear at trial that in fact no physiotherapy had taken place.
The court referred to the requirements of Practice Direction 22.3.8 in relation to legal representatives signing the Statements of Truth and found that the solicitor did not have specific instructions to sign the Statement of Truth and did not have the client’s authority so to do and had not provided the client with the necessary explanation required by that Practice Direction.
Rather the firm’s procedure was to get a general Form of Authority from the client and to then sign any documents that they considered to be appropriate and then notifying the client after this had been done.
The judge said:-
“This is a case where whatever costs were wasted must be paid. It is also a case where I express grave reservations of the practice of a practice of solicitors in possibly putting too much pressure on employees or alternatively not supervising employees properly and in this case a solicitor ignoring the grave importance of the consequences of a statement of truth signed by a solicitor when clearly there was no authority to do it and in any event what was being signed was manifestly incorrect.”
This was a personal injury claim which included a claim for prospective physiotherapy charges of £880.00 but the claimant stated in evidence that he was suffering from no symptoms and had no wish to pursue a claim.
Here the solicitors had been running a medical agency and the judge had this to say:-
“If solicitors dabble in running medical agencies as well, they should be completely transparent, not use it as a way of increasing costs, a bit like, as I said earlier, miscellaneous expenses often claimed, seldom proved or, if they are proved, in my experience – and although I am a deputy district judge now, I have 20 years’ experience as a district judge – in my experience never often proved more than £15 or £20, and it is a very sad reflection of the state of affairs of litigation.”
The medical report had been commissioned by Bollin Legal Associates through LMS Legal Services and Bollin Legal Associates was purchased by Amanda Cunliffe Solicitors in 2015. All three businesses operated from the same premises.
On the same day as the Medical Report was prepared a pro-forma invoice for physiotherapy sessions was produced and the number of sessions exceeded the number recommended by the Medical Report. The report recommended five or six but the invoice was generated for eight sessions.
At paragraphs 13 and 14 the judge said this:-
“13. A witness statement was filed by Miss Nkochi-Nwankwo, a solicitor employed by Amanda Cunliffe. That was dated the 24th July. She set out the change of ownership and the fact that Bollin was purchased. She also told me in her witness statement that there was “no relationship between Bollin and Lawyers Medical Services other than their business working relationship and the fact they traded from the same building but in separate office space. Amanda Cunliffe also trades from the same building as Lawyers Medical Services but again from different office space. One of the directors of Amanda Cunliffe, namely Christopher Jones, is also a director of Lawyers Medical Agency and two of the shareholders” – we know not how many there are – “of Amanda Cunliffe, namely Jones and Ainsworth, are also shareholders of the company that owns Lawyers Medical Services. That company is called Westongate Associates”.
- There is certainly clearly a financial relationship between Lawyers Medical Services, Lawyers Medical Agency and Amanda Cunliffe Solicitors. The connection between Amanda Cunliffe Solicitors and Bollin Associates is that the former purchased the latter and employees, including Miss Nkochi-Nwankwo who appears before me today, transferred with them.”
During questions about costs the judge said that he noticed that Miss Nkochi-Nwankwo was described as a solicitor for Bollin Legal and asked “Why was I not told that the Chief Executive of Bollin Legal was none other than Amanda Cunliffe?”
The judge also said:-
“It really is outrageous that I should be treated… the court should be treated in this way.”
The judge ordered the claimant’s solicitors to pay the defendant’s wasted costs and the cost of the hearing assessed in the total sum of £2,131.92 and on the indemnity basis.
The judge said to counsel representing Amanda Cunliffe Solicitors that he should “have been fully briefed on the intricacies of the inter-weavings of these companies based in Macclesfield.”
The judge also said:
“22. It is quite clear that there was no such authority [to sign a Statement of Truth] and no such explanation and I am driven to the conclusion that the practice of this company, Amanda Cunliffe Solicitors, is not routinely to check before solicitors sign statements of truth. It is not difficult to write to the client, saying, “Dear Mr, Lord”, (or whatever you like to call yourself), “Brown”, “Here is a statement which we are required to file at court. Please confirm that it is true”. If the client then signs it as true, then some of the responsibility is taken off the solicitor although if the solicitor knows that what he or she is asking the client to sign is not true, then there would be a complicity in what is clearly – and I have to use the word – “perjury”, either “perjury” or “forgery”. It is a very, very serious matter.”
At paragraph 27 the judge said:-
“27… This is a case where a claim for physiotherapy charges which is inflated from the beginning is made without proper concern for arranging the physiotherapy at all. It is done on the basis of an invoice. Nothing is done to sort out the physiotherapy. Comments are made about it in the witness statement which is actually signed after the six months prognosis is complete and the witness statement says, “I am happy to settle my claim on the basis of the six months prognosis”, which means by that stage the physiotherapy was totally unnecessary.
- The 6 April, what I can only describe as a false statement of truth is signed. The claimants are put on notice in May by a counter schedule and still do nothing about it and still include details of it in the trial bundle and until queried at trial it appears still to be a live claim.”
At paragraph 25 the judge said:-
“25. Miss Nkochi-Nwankwo went on to say, “There are occasions where sometimes there might be a case where physiotherapy payments are received when the physiotherapy has not, in fact, been received. As a general rule we would ensure we administered the payment of that but we may pay money to the client if so instructed, otherwise we would make the payment but we would only” – she qualified that later – “make the payment to the client if the physio had, in fact, been done”.”
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