Kerry Underwood

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FIXED COSTS REPORT OVERVIEW : POST 1

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This blog first appeared in Practical Law on 31 July.

On 31 July 2017 Lord Justice Jackson’s Supplemental Report on Recoverable Fixed Costs was published and is available here.

You can book for my 10 city Autumn Fixed Costs Tour here.

This will now be subject to consultation by the government, and so these are proposals at this stage.

Whatever comes in is likely to be on 1 October 2018.

Fast Track

The Fast Track limit remains £25,000.00 and all Fast Track claims will be covered by Fixed Recoverable Costs.

The new grid has the same stages as the current Fast Track personal injury grid set out in CPR 45.29, but has four bands of complexity, a new concept.

In Band 4 alone, covering the most complex cases, there will be ring-fenced fees for counsel/specialist lawyers as follows:

Post-issue advice or conference –                             £1,000.00

Settling Defence/Defence and counterclaim –           £500.00

Throughout the Fast Track, both pre and post-issue, all figures are fixed, not capped.

There is a special table for noise induced hearing loss (NIHL) claims as follows:

Stage NIHL claims with value less than £25,000
Pre-Issue £4,000 + £500 per extra defendant (reduced by £1,000 if there is an early admission of liability or by £500 if settled before proceedings drafted)
Post-issue, pre-allocation £5,650

+ £830 uplift per extra defendant

Post-allocation, pre-listing £7,306

+ £1,161 uplift per extra defendant

Post-listing, pre-trial £9,187

+ £1,537 uplift per extra defendant

Trial advocacy fee Not agreed

The costs figures are to be reviewed every three years.

Non-monetary awards

Non-monetary awards, such as declarations or injunctions are to be valued at £10,000.00, with courts having a discretion to vary that valuation.

The fixed recoverable fee for an interim injunction application will be £750.00.

Interim applications in NIHL and Band 4 fast track claims will be paid at two-thirds of type A and type B costs, rather than one-half.

Portals

There will be no extension to the portal system.

Complexity

The Pre-action Protocols are to be amended to require parties, pre-issue, to agree the band of complexity, and that will depend upon the individual case, rather than the type of case.

Ultimately the Judge on Allocation will decide both the track and the band.

The party will be able to challenge the band and track allocation, but if unsuccessful, will incur fixed costs of £150.00.

Clinical negligence

The only clinical negligence cases to be covered by fixed costs will be where breach and causation are admitted in the Pre-action Protocol Letter of Response and the claim is valued at less than £25,000.00.

Given the absence of any other fixed costs regime for clinical negligence cases, this is a very powerful incentive on Resolution (formerly the NHSLA) to admit liability and causation, where appropriate, immediately.

IPEC

Intellectual Property and Enterprise Court claims will remain subject to their own existing capped costs scheme and are not affected by this report.

Intermediate Track

This new streamlined track will apply to most civil claims, including personal injury, but not clinical negligence, matters valued at between £25,000.00 and £100,000.00.

This is subject to those claims being ones where the trial will take three days or less, with no more than two expert witnesses giving oral evidence on each side.

The Intermediate Track has nine pre-trial stages and four complexity bands.

As with the existing fast track grid, the fixed costs are a combination of a core fee and a percentage of damages.

The figures are cumulative, that is you get the figure in the box at the stage you have reached; you do not add all of the stages up.

In relation to non-personal injury cases, the Stage 1 costs, that is for settlement pre-issue, or pre-defence investigations, is capped and not fixed.

The reason for this is that in personal injury cases, there is a minimum amount of work which must be done to achieve a settlement pre-issue and therefore the Stage 1 figures are calculated on a “swings and roundabouts” basis.

In non-personal injury cases, the amount of work to be done to achieve a pre-issue settlement may vary substantially. In some cases, a simple Letter of Claim may bring about a settlement, whereas in other cases a large amount of investigation may be required.

The figures

In the Intermediate Track, these are the figures:

Stage (S) Band 1 Band 2 Band 3 Band 4
S1 Pre-issue or pre-defence investigations £1,400 + 3% of damages £4,350 + 6% of damages £5,550 + 6% of damages £8,000 + 8% of damages
S2 Counsel/ specialist lawyer drafting statements of case and/or advising (if instructed) £1,750.00 £1,750.00 £2,00012 £2,00013
S3 Up to and including CMC £3,500 + 10% of damages £6,650 + 12% of damages £7,850 + 12% of damages £11,000 + 14% of damages
S4 Up to the end of disclosure and inspection £4,000 + 12% of damages £8,100 + 14% of damages £9,300 + 14% of damages £14,200 + 16% of damages
S5 Up to service of witness statements and expert reports £4,500 + 12% of damages £9,500 + 16% of damages £10,700 + 16% of damages £17,400 + 18% of damages
S6 Up to PTR, alternatively 14 days before trial £5,100 + 15% of damages £12,750 + 16% of damages £13,950 + 16% of damages £21,050 + 18% of damages
S7 Counsel/ specialist lawyer advising in writing or in conference (if instructed) £1,250 £1,500 £2,000 £2,500
S8 Up to trial14 £5,700 + 15% of damages £15,000 + 20% of damages £16,200 + 20% of damages £24,700 + 22% of damages
S9 Attendance of solicitor15 at trial per day16 £500 £750 £1,000 £1,250

______________________________________

12 £3,000 if there is a counterclaim and defence to counterclaim.  The rules may need to specify how costs are split between claim and counterclaim.

13 £3,000 if there is a counterclaim and defence to counterclaim.  The rules may need to specify how costs are split between claim and counterclaim.

14 If the receiving party did not prepare the bundle, subtract: (a) £500 for a Band 1 case, (b) £750 for a Band 2 case, (c) £1,000 for a Band 3 case, and (d) £1,250 for a Band 4 case.

15 In this table “solicitor” includes a representative of the solicitor’s firm.

16 To be halved if attendance is for half a day or less.

Stage (S) Band 1 Band 2 Band 3 Band 4
S10 Advocacy fee: day 1 £2,750 £3,000 £3,500 £5,000
s11 Advocacy fee: subsequent days17 £1,250 £1,500 £1,750 £2,500
S12 Hand down of judgment and consequential matters £500 £500 £500 £500
S13 ADR: counsel/specialist lawyer at mediation or JSM (if instructed) £1,200 £1,500 £1,750 £2,000
S14 ADR: solicitor at JSM or mediation £1,000 £1,000 £1,000 £1,000
S15 Approval of settlement for child or protected party £1,000 £1,250 £1,500 £1,750
Total: (a) £30,000 (b) £50,000, (c) £100,000 damages18

 

(a)   £19,150

(b)   £22,150

(c)   £29,650

(a)    £33,250

(b)    £37,250

(c)    £47,250

 

(a)    £39,450

(b)    £43,450

(c)    £53,450

(a)    £53,050

(b)    £57,450

(c)    £68,450

 

____________________________________________

17 To be halved if attendance is for half a day or less.

 18 Assuming a one day trial in Band 1, a two day trial in Band 2, and a three day trial in Bands 3 and 4. For all bands, it is assumed that there was no counterclaim, that the receiving party prepared the trial bundles, that there was unsuccessful ADR and that there was no approval of settlement for a child or protected party.

19 Solicitors and costs lawyers.

Advocacy Fees

There are six variations of Advocacy Fees and the same four bands of complexity and these are set out at stages 10 to 15 of the table above.

The total maximum fixed costs ranges from £19,150.00 for a Band 1 matter of £30,000.00 or less to £68,450.00 for a Band 4 claim of between £50,000.00 and £100,000.00.

Judicial Review

Judicial Review applications are to be subject to capped costs along the lines of environmental cases as in the Aarhus Convention.

“Citizens must be able to challenge the executive without facing crushing costs liabilities if they lose.” (Paragraph 11 of Executive Summary)

Part 36

If the Defendant fails to beat a Claimant’s Part 36 offer, then there should be a 30%, or 40% uplift on Fixed Costs, rather than an award of indemnity costs.

This introduces certainty for the litigants and avoids the need for a detailed assessment of costs in such cases.

This will apply in both the Fast Track and the new Intermediate Track, although on my initial reading of the report I can see no proposal as to whether a late accepting Defendant, as compared with a Defendant who has had judgment against it, should be so penalised in costs.

Modifications to the existing Fast Track Regime

Lord Justice Jackson states:

“I have come to the conclusion that it is not appropriate for me in this review to start “tinkering” with the existing Fast Track FRC [Fixed Recoverable Costs] Regime, which overall works well. The focus of this report is upon whether and how to introduce FRC for cases where costs are currently at large. I therefore leave it to the Civil Procedure Rule Committee (“The Rule Committee”) to consider the points of detail which have been raised concerning the current regime.”

Commercial pilot for claims between £100,000.00 and £250,000.00

This is part of Lord Justice Jackson’s recommendations, and I dealt with this in my last blog, and do not deal with it again in detail here.

Part 8 Claims

Part 8 claims, generally dealing costs, will not be subject to the Fixed Recoverable Cost Scheme.

Summary

This is very much an initial overview of a 135 page report, excluding appendices.

I will look at specific proposals in much more detail in future posts, as well as dealing with them in my series of lectures in the Autumn, and more information about those courses can be found here. 

 

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Written by kerryunderwood

July 31, 2017 at 4:57 pm

Posted in Uncategorized

FIXED COSTS PILOT

with one comment


This blog first appeared in Practical Law on 27 July.

I deal with this matter in detail in my Fixed Costs Autumn Tour – you can book here.

All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

A voluntary two year capped costs pilot scheme for High Court cases valued between £100,000.00 and £250,000.00 is now running in the London Mercantile Court and the Mercantile, Technology and Construction and Chancery Courts in Manchester and Leeds District Registries.

Although voluntary, once a party has agreed to enter the scheme it will not have an automatic right to leave it. This principle has already been established in relation to IPEC – see 77M Ltd v Ordnance Survey Ltd and Others [2017] EWHC 1501 (IPEC).

The Claimant can always issue in the scheme but the case will only continue within it if the Defendant consents.

There is a streamlined procedure based on the Shorter Trials Scheme. The trial will be fixed within eight months of the Case Management Conference (CMC) and is limited to two days.

Each phase of work is capped and the overall total is capped and costs will be subject to summary assessment and the indemnity principle will apply, in contrast to the existing fixed costs scheme (see Nizami v Butt [2006] EWHC 159 (QB)).

There will be no Costs Budgeting.

When the minimum jurisdiction of the High Court is raised from £100,000.00 to £250,000.00, it is proposed that claims subject to the pilot remain in the High Court.

Cases which involve an allegation of fraud or dishonesty, or involve multiple issues and parties, or are likely to require expert evidence or extensive disclosure or extensive evidence are excluded.

Pre-Issue    

The Claimant sends a “succinct” Letter of Claim notifying the Defendant of intention to issue in the Capped Costs List.

The Defendant responds within 14 days stating whether it agrees to the matter being in the pilot.

Statements of Case

Particulars of Claim and Defences with counterclaim are limited to 20 pages.

All other Statements of Case are limited to 15 pages.

A bundle of core documents must be appended to the Particulars of Claim and additional core documents must be appended to subsequent Statements of Case.

The Particulars of Claim and any counterclaim must contain a brief summary of the dispute, a list of anticipated issues and a concise statement of the facts and arguments relied upon, as well as a full statement of all relief and remedies claimed and detailed calculations of any money claimed.

Detailed provision is made concerning the Acknowledgement of Service, and Defence and arranging the CMC.

The trial advocate, or a senior legal representative – undefined – must attend the CMC.

Disclosure

The general rule is no disclosure and the parties will be able to rely only on the core bundle.

Experts

The general rule is that expert evidence will not be allowed.

Witnesses

 Limited to two witnesses per party with each Witness Statement limited to 15 pages.

Applications

Except for the CMC, the court will generally deal with applications without a hearing.

Trial

The CMC Judge will hear the trial.

Cross-examination will be strictly controlled and timetabled.

Judgment will be given within six weeks.

Appeals

The Court of Appeal will expedite appeals in Capped Costs Cases.

Part 36

Indemnity costs will be awarded, but capped at a sum equal to 125% of normal capped costs.

The Figures

 

Work done in respect of Maximum amount of costs
Pre-action £10,000.00
Particulars of Claim £7,000.00
Defence and counterclaim £7,000.00
Reply and defence to counterclaim £6,000.00
Case Management Conference £6,000.00
Disclosure £6,000.00
Witness Statements £8,000.00
Experts’ reports £10,000.00
Trial and judgment £3,000.00
Settlement/negotiations/mediation £10,000.00
Making or responding to an application £3,000.00
Work done post-issue which is not otherwise covered by any of the stages above £5,000.00

The total costs are capped at £80,000.00 plus VAT and court fees and costs relating to the enforcement of any Court Order.

The total costs on an indemnity basis are capped at £100,000 plus VAT etc.

Wasted costs can be ordered in addition.

See here for full Civil Procedure Rule Committee minutes, including draft rules.

Written by kerryunderwood

July 28, 2017 at 10:22 am

Posted in Uncategorized

SUPREME COURT: FRIENDS OF THE PEOPLE: UNISON CONSIDERED

with 4 comments


In the case of R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51

a seven member Supreme Court unanimously allowed UNISON’s appeal and quashed the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013.

Thus Employment Tribunal and Employment Appeal Tribunal fees are scrapped and, in accordance with its previous undertaking, the government must return all fees paid, estimated to be around £30 million.

That will be a windfall for losing employers, who generally will have been ordered to pay the winning Claimant’s fee, as well as a refund for unsuccessful Claimants.

An unresolved issue is whether Employment Tribunals will now allow original Employment Tribunal applications years out of time on the basis that the unlawful fee prevented the employee from making a claim.

Here the Supreme Court had three main options:

  1. to do nothing and allow the fees to stand;

 

  1. to quash the order on fairly narrow grounds, such as discrimination or failure of equivalency under European Union law; or

 

  1. to re-state and re-affirm that access to the courst to enforce the laws passed by Parliament is an inherent constitutional right not capable of being prevented, even by Parliament itself.

The Supreme Court clearly and bravely went for option 3.

This decision relies on domestic law primarily, as well as European law, and thus its effect and importance will continue after the exit of the United Kingdom from the European Union.

The Senior Judiciary have been less than impressed by the idea that the European Union is the fount of rights in this country and that outside the European Union the courts would be unable to enforce individual rights.

The rights of access to the courts existed before entry into the Common Market and will exist afterwards, just as human rights existed before the Human Rights Act.

“Before this court, it has been recognised that the right of access to justice is not an idea recently imported from the continent of Europe, but has long been deeply embedded in our constitutional law. The case has therefore been argued primarily on the basis of the common law right of access to justice…”

This decision is also of potential relevance to fees in the ordinary courts.

If those fees are so high, or so structured, that they severely limit access to justice, then they will be quashed.

However the most significant aspect of this historic judgment of great constitutional importance is its tone and its restatement of some of the basic rights of citizens of the United Kingdom, put more eloquently and powerfully than in all of the Acts and treaties etc.

At paragraph 29 the Supreme Court makes the point that going to court is not just for winners, and that losing claims are not necessarily unmeritorious:

“29. More fundamentally, the right of access to justice, both under domestic law and under EU law, is not restricted to the ability to bring claims which are successful. Many people, even if their claims ultimately fail, nevertheless have arguable claims which they have a right to present for adjudication.”

We used to call that  “Having your day in court.”

Enforcement

The Supreme Court also pointed out that successful Claimants often lose out as only 53% of successful Claimants received any part of the award before taking enforcement action, which action itself is subject to a further court fee of £44.00.

Even after enforcement 35% received no money at all, 16% received payment in part and only 49% received payment in full.

Although the Supreme Court made no further comment, that demonstrates the woeful inadequacy of the County Court Enforcement Procedure, something known to every litigation lawyer in the land.

Impact assessment

The impact assessment had estimated that 77% of applicants would receive full or partial fee remission.

In fact the figure is 29% and as the Supreme Court pointed out, the true figure is “even lower, compared with what had been anticipated, given the difference between the number of Claimants before and after the introduction of fees.” (Paragraph 43)

The point here is that obviously people who do not qualify for fee remission are more likely to be deterred from bringing claims, so those who do bring claims have a much higher percentage of fee remission qualifiers, making the statistics largely meaningless.

Thus, for example, if the fee was £1 million and only one person qualified for fee remission and only one person brought a claim, then 100% of all applicants qualified for fee remission and therefore the fee of £1 million has not deterred anyone from bringing a claim.

Virtually every assumption made in the impact assessment, including those about the drop in the number of claims, the percentage settlement through ACAS, and the weeding out of meritorious claims was hopelessly wrong.

Impact assessments are a pointless and misleading waste of money and should be scrapped (My comment, not the Supreme Court’s comment).

Children without clothes

The Lord Chancellor of the United Kingdom, in 2017, submitted to the Supreme Court that people could afford Employment Tribunal fees by, for example, not buying clothes for their children.

The Supreme Court said:

“One problem with the Lord Chancellor’s approach to these calculations is that some of the expenditure which he excludes, such as spending on clothing, may not in fact be saved, but is simply postponed. For example, if the children need new clothes because they have outgrown their old ones, replacements have to be purchased sooner or later. The impact of the fees on the family’s ability to enjoy acceptable living standards is not avoided merely by postponing necessary expenditure.”

The constitutional right of access to the courts

This is the most important part of the judgment and defines it as a major constitutional document.

At the end of this blog I set out in full paragraphs 66 to 75 of this judgment.

This passage has already been described as poetic and beautifully written and I endorse those sentiments.

Key phrases and quotes

The constitutional right of access to the courts is inherent in the rule of law.

The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other.

… the idea that bringing a claim before a court or a tribunal is a purely private activity, and the related idea that such claims provide no broader social benefit, are demonstrably untenable.

At the heart of the concept of the rule of law is the idea that society is governed by law.

Parliament exists primarily in order to make laws for society in this country.

Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced.

In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.

… it is not always desirable that claims should be settled: [Because authoritative rulings are sometimes required on matters of general importance].

… although it is often desirable that claims… should be resolved by negotiation or mediation, those procedures can only work fairly and properly if they are backed up by the knowledge on both sides that a fair and just system of adjudication will be available if they fail. Otherwise, the party in the stronger bargaining position will always prevail.

In English law, the right of access to the courts has long been recognised. The central idea is expressed in chapter 40 of the Magna Carta of 1215 (“Nulli vendemus, nulli negabimus aut differemus rectum aut justiciam”), which remains on the statute book in the closing words of chapter 29 of the version issued by Edward I in 1297:

“We will sell to no man, we will not deny or defer to any man either Justice or Right.”

Those words are not a prohibition on the charging of court fees, but they are a guarantee of access to courts which administer justice promptly and fairly.

Significantly the Supreme Court held here that even an act of Parliament, as compared with the secondary legislation bringing in Employment Tribunal fees, can effectively be struck down by the court    “… even where primary legislation authorises the imposition of an intrusion on the right of access to justice, it is presumed to be subject to an implied limitation. As it was put by Lord Bingham in Daly, the decree of intrusion must not be greater than is justified by the objectives for which the measure is intended to serve” (Paragraph 88).

The Supreme Court rejected the Divisional Courts view that specific evidence from specific people was required:

“In order for the fees to be lawful, they have to be set at a level that everyone can afford, taking into account the availability of full or partial remission. The evidence now before the court, considered realistically and as a whole, leads to the conclusion that that requirement is not met. In the first place, as the Review Report concludes, “it is clear that there has been a sharp, substantial and sustained fall in the volume of case receipts as a result of the introduction of fees”. While the Review Report fairly states that there is no conclusive evidence that the fees have prevented people from bringing claims, the court does not require conclusive evidence: as the Hillingdon case indicates, it is sufficient in this context if a real risk is demonstrated. The fall in the number of claims has in any event been so sharp, so substantial, and so sustained as to warrant the conclusion that a significant number of people who would otherwise have brought claims have found the fees to be unaffordable.”

In a damning indictment of the reasoning of the Divisional Court the Supreme Court had this to say:

“The question whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable.”

The Supreme Court rejected the idea that individuals could, and should, sacrifice acceptable living standards in order to pay court fees and had this to say:

“The Lord Chancellor argues that, if the households sacrifice all spending on clothing, personal goods and services, social and cultural participation, and alcohol, the necessary savings can be made to enable the fees to be paid. As was explained earlier, the time required to make the necessary savings varies, in the examples, between about one month and three and a half months. Leaving aside the other difficulties with the Lord Chancellor’s argument discussed earlier, the fundamental problem is the assumption that the right of access to courts and tribunals can lawfully be made subject to impositions which low to middle income households can only meet by sacrificing ordinary and reasonable expenditure for substantial periods of time.”

The Supreme Court also held that the effect of the fees imposed limitations on the exercise of EU rights which are disproportionate, and therefore the Fees Order is also unlawful under European Union law.

The Supreme Court also made it clear that this case was not about an administrative decision challenged on the basis that relevant considerations were not taken into account, or on the basis that the decision to introduce fees was unreasonable. Rather it said:

“The Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice.” (Paragraph 119).

The Supreme Court also held that the Fees Order is indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage, because a higher proportion of women bring type B than bring type A claims.

Summary

A momentous, dramatic, powerful and brave decision by the Supreme Court.

In contrast to virtually all other commentators, I expected nothing less – see my previous writings on this subject.

The Supreme Court is one of our greatest institutions and its first two presidents, Lord Phillips and Lord Neuberger amongst our greatest citizens.

The Judges of the Supreme Court are indeed the Friends of the People.

 

 

Here are the key paragraphs relating to the constitutional rights of citizens of the United Kingdom.

“66. The constitutional right of access to the courts is inherent in the rule of law. The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other, that courts and tribunals are providers of services to the “users” who appear before them, and that the provision of those services is of value only to the users themselves and to those who are remunerated for their participation in the proceedings. The extent to which that viewpoint has gained currency in recent times is apparent from the consultation papers and reports discussed earlier. It is epitomised in the assumption that the consumption of ET and EAT services without full cost recovery results in a loss to society, since “ET and EAT use does not lead to gains to society that exceed the sum of the gains to consumers and producers of these services”.

  1. It may be helpful to begin by explaining briefly the importance of the rule of law, and the role of access to the courts in maintaining the rule of law. It may also be helpful to explain why the idea that bringing a claim before a court or a tribunal is a purely private activity, and the related idea that such claims provide no broader social benefit, are demonstrably untenable.

 

  1. At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.

 

  1. Access to the courts is not, therefore, of value only to the particular individuals involved. That is most obviously true of cases which establish principles of general importance. When, for example, Mrs Donoghue won her appeal to the House of Lords (Donoghue v Stevenson [1932] AC 562), the decision established that producers of consumer goods are under a duty to take care for the health and safety of the consumers of those goods: one of the most important developments in the law of this country in the 20th century. To say that it was of no value to anyone other than Mrs Donoghue and the lawyers and judges involved in the case would be absurd. The same is true of cases before ETs. For example, the case of Dumfries and Galloway Council v North [2013] UKSC 45[2013] ICR 993, concerned with the comparability for equal pay purposes of classroom assistants and nursery nurses with male manual workers such as road workers and refuse collectors, had implications well beyond the particular claimants and the respondent local authority. The case also illustrates the fact that it is not always desirable that claims should be settled: it resolved a point of genuine uncertainty as to the interpretation of the legislation governing equal pay, which was of general importance, and on which an authoritative ruling was required.

 

  1. Every day in the courts and tribunals of this country, the names of people who brought cases in the past live on as shorthand for the legal rules and principles which their cases established. Their cases form the basis of the advice given to those whose cases are now before the courts, or who need to be advised as to the basis on which their claim might fairly be settled, or who need to be advised that their case is hopeless. The written case lodged on behalf of the Lord Chancellor in this appeal itself cites over 60 cases, each of which bears the name of the individual involved, and each of which is relied on as establishing a legal proposition. The Lord Chancellor’s own use of these materials refutes the idea that taxpayers derive no benefit from the cases brought by other people.

 

  1. But the value to society of the right of access to the courts is not confined to cases in which the courts decide questions of general importance. People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations. That is so, notwithstanding that judicial enforcement of the law is not usually necessary, and notwithstanding that the resolution of disputes by other methods is often desirable.

 

  1. When Parliament passes laws creating employment rights, for example, it does so not merely in order to confer benefits on individual employees, but because it has decided that it is in the public interest that those rights should be given effect. It does not envisage that every case of a breach of those rights will result in a claim before an ET. But the possibility of claims being brought by employees whose rights are infringed must exist, if employment relationships are to be based on respect for those rights. Equally, although it is often desirable that claims arising out of alleged breaches of employment rights should be resolved by negotiation or mediation, those procedures can only work fairly and properly if they are backed up by the knowledge on both sides that a fair and just system of adjudication will be available if they fail. Otherwise, the party in the stronger bargaining position will always prevail. It is thus the claims which are brought before an ET which enable legislation to have the deterrent and other effects which Parliament intended, provide authoritative guidance as to its meaning and application, and underpin alternative methods of dispute resolution.

 

  1. A Lord Chancellor of a previous generation put the point in a nutshell, in a letter to the Treasury:

“(i)      Justice in this country is something in which all the Queen’s subjects have an interest, whether it be criminal or civil.

 

(ii)       The courts are for the benefit of all, whether the individual resorts to them or not.

 

(iii)     In the case of the civil courts the citizen benefits from the interpretation of the law by the Judges and from the resolution of disputes, whether between the state and the individual or between individuals.”

(Genn, Judging Civil Justice (2010), p 46, quoting a letter written by Lord Gardiner in 1965)

  1. In English law, the right of access to the courts has long been recognised. The central idea is expressed in chapter 40 of the Magna Carta of 1215 (“Nulli vendemus, nulli negabimus aut differemus rectum aut justiciam”), which remains on the statute book in the closing words of chapter 29 of the version issued by Edward I in 1297:

“We will sell to no man, we will not deny or defer to any man either Justice or Right.”

Those words are not a prohibition on the charging of court fees, but they are a guarantee of access to courts which administer justice promptly and fairly.

  1. The significance of that guarantee was emphasised by Sir Edward Coke in Part 2 of his Institutes of the Laws of England(written in the 1620s, but published posthumously in 1642). Citing chapter 29 of the 1297 charter, he commented:

“And therefore, every Subject of this Realme, for injury done to him in bonis, terris, vel persona [in goods, in lands, or in person], by any other Subject … may take his remedy by the course of the Law, and have justice, and right for the injury done to him, freely without sale, fully without any deniall, and speedily without delay. Hereby it appeareth, that Justice must have three qualities, it must be Libera, quia nihil iniquius venali Justitia; Plena, quia Justitia non debet claudicare; & Celeris, quia dilatio est quaedam negatio [Free, because nothing is more iniquitous than saleable justice; full, because justice ought not to limp; and speedy, because delay is in effect a denial]; and then it is both Justice and Right.” (1809 ed, pp 55-56)

More than a century later, Blackstone cited Coke in his Commentaries on the Laws of England (1765-1769), and stated:

“A … right of every [man] is that of applying to the courts of justice for redress of injuries. Since the law is in England the supreme arbiter of every man’s life, liberty, and property, courts of justice must at all times be open to the subject, and the law be duly administered therein.” (Book I, Chapter 1, “Absolute Rights of Individuals”).

 

Also see:

A Christmas Carol by the High Court

Written by kerryunderwood

July 27, 2017 at 9:54 am

Posted in Uncategorized

A CHRISTMAS CAROL BY THE HIGH COURT

with 4 comments


Given the Supreme Court decision this morning unanimously to allow the appeal against the Administrative Court’s refusal to judicially review Employment Tribunal fees, this post I wrote at the time needs another airing.

Scene: 

Any solicitor’s office in the country (except the Strand).

Solicitor:

So, Ms Peasant you have been sacked because you are pregnant and you have come in for a free interview.  Typical of your sort if I may say so.

Client: 

It’s so unfair.  I want to bring a claim.  You do no win no fee don’t you?

Solicitor: 

WE do. The State doesn’t.  Tribunal fees are £1,200.00 win or lose.

Client: 

I haven’t got that sort of money!  I am unemployed.  I’ve been sacked.

Solicitor: 

Come, come now.  I am an employment lawyer.  I know the minimum wage is £6.50 an hour.  Easy to remember; it is one hundredth of what I charge – 200 hours work and you have the fee, unless we need to appeal.  Cut out the foreign holidays. Sack the nanny – she won’t be able to afford the fee to sue you.  My little joke!

Client:  

My Mum looks after the children.  We only just got by when I was working.

Solicitor: 

There I can help you.  You need to prioritise your spending.  The High Court has said so.  Eat your existing children – Swift said that and he was a clever man, but you peasants don’t read you just watch Sky.

Client: 

We don’t have Sky.  Murdoch is nearly as right wing as the High Court.

Solicitor: 

Go down the library and read Swift.

Client: 

They’ve closed the library.

Solicitor:  

Have an abortion.  Save you money and I might be able to get your job back.

Client: 

I don’t want an abortion.  Anyway they’ve closed the clinic.

Solicitor:

Find a rich man.

Client: 

I am married.  My husband was sacked for complaining about my treatment at work.

Solicitor: 

Oh then he has a claim as well then.  Another £1,200.00 mind.

Client:  

I’ve had enough!

Solicitor: 

I advise on the law; I don’t make it.  I want to read to you what the High Court said:

“The question many potential claimants have to ask themselves is how to prioritise their spending; what priority should they give to paying fees in a possible legal claim as against many competing and pressing demands on their finances?”

It goes on a bit but basically do you want to bring a claim or eat and feed and clothe your children?

Client: 

But no-one should have to make that choice in Britain in 2014.

Solicitor:  

That’s where you are wrong.  The court said:

“The question is not whether it is difficult for someone to be able to pay – there must be many claimants in that position – it is whether it is virtually impossible and excessively difficult for them to do so”.

Client:  

That’s wicked.

Solicitor: 

That’s the High Court. Lord Justice Elias is paid £198,674.00 and Mr Justice Foskett £174,481.00 so they know all about having to count the pennies.

Client:

Surely Labour will change all this.

Solicitor: 

Nope.

Client:  

I think I will vote for the Fascists then.

Solicitor:

They tried that in Germany.    Didn’t do them much good. Nice rallies mind.

Client leaves.  Solicitor hums the Horst Wessel.  There is a muffled explosion.  The local court is in ruins.

Written by kerryunderwood

July 26, 2017 at 10:31 am

Posted in Uncategorized

ADVOCACY FEES AND FIXED COSTS: A PUZZLE

with 2 comments


All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

You can now book onto my Fixed Costs Autumn Tour and there is an early bird discount if booked and paid for by 31 July 2017 – here

Here I look at the position where a Defendant is successful at trial on a counter- claim, where the original claim is a personal injury case within the Fixed Recoverable Costs Scheme.

CPR 45.29G governs the position in relation to Defendants bringing a counterclaim.

If the Defendant succeeds as counterclaimant, then the fee is based on that successful claim.

If the counterclaim is for something other than personal injuries, but is in response to a claim for personal injury, then the order for costs on the counterclaim shall be for a sum equivalent to one half of the applicable type A and type B costs in table 6.

What is the advocacy fee where the counterclaim is successful, but does not include a claim for personal injuries?

By CPR 45.29G(c) if the court makes an order for the costs of the counter-claim then rules 45.29B, 45.29C, 45.29I, 45.29J, 45.29K and 45.29L shall apply.

CPR 45.29C fixes costs.

What is not clear is whether CPR 45.29G(2)(a) limits the total costs payable to the successful counter-claimant to half of the applicable type A and type B costs in table 6, meaning that there will be no advocacy fee at all, or whether it restricts those aspects of the costs to half of the type A and type B costs, but allows full advocacy costs.

A third interpretation is that as the counter-claim is not for personal injury then the advocacy fee is determined by CPR 45.37 which has its own fixed Fast Track trial costs for all Fast Track cases not covered by CPR 45.29.

Thus, if the defendant counterclaims for personal injury and succeeds, then that Defendant is treated as a successful claimant for the purposes of fixed costs and the advocacy fee is based on the amount awarded to the counterclaimant.

The area of uncertainty is if the counterclaim does not include a claim for personal injury.

Any case allocated to the Multi-Track ceases to be subject to fixed costs, following the decision in Qader & Others v Esure Services Ltd [2016] EWCA Civ 1109 and now enshrined in rule 8(1) of the Civil Procedure (Amendment) Rules 2017.

Written by kerryunderwood

July 26, 2017 at 10:01 am

Posted in Uncategorized

QOCS AND SET-OFF: CONFLICTING CASES

with 2 comments


These issues are dealt with in my book Qualified One-Way Costs Shifting, Section 57 Set-off available from Amazon here

In Darini and Olsoy v Markerstudy Group, Central London County Court, 24 April 2017, Claim A49YP380

the court considered the difficult issue of set-off and its relationship with Qualified One-Way Costs Shifting (QOCS).

Here the Claimants brought a personal injury claim and discontinued it, thus creating a deemed Costs Order in favour of the Defendant, pursuant to CPR 38.6(1), but one which could not be enforced without leave of the court, due to QOCS.

The defendant unsuccessfully sought to set aside the Notice of Discontinuance and was ordered to pay the costs of that application to the Claimants.

The District Judge allowed those costs to be set off against the notional, unenforceable, sum due from the QOCS protected Claimants on discontinuance, which negated the Costs Order on the failed application.

The Claimants appealed and the Circuit Judge allowed that appeal, holding that there was no right of set-off.

Consequently the judge did not need to consider the proper exercise of judicial discretion on these facts, as there was no discretion, in his judgment.

However, had there been such discretion, the Circuit Judge would have overturned the District Judge’s decision on the basis that it was unjust, as it would put the Claimants in a worse position than they otherwise would have been as a result of the Defendant’s failed application.

The worse position was that the Claimants would effectively have to pay their own costs for successfully defending the Defendant’s application as they would not physically recover those costs from the Defendant due to set-off.

The judge held that set-off applied in only three circumstances in the context of QOCS:

  • against damages and interest only – CPR 44.14(1) – and not costs;
  • where the claim had been struck out on the ground that it is an abuse, in which circumstances enforcement, including by way of set-off is allowed in full, without the permission of the court – CPR 44.15;
  • where there has been fundamental dishonesty, in which case the extent of set-off is in the court’s discretion – CPR 44.16.

Thus the court here held that the restriction on enforcement in various places in CPR 44.13 to CPR 44.17, dealing with QOCS, prevented “enforcement” by set-off and thus set-off is only allowed where and when enforcement is allowed.

The court accepted that there was no authority directly on the point.

It was accepted that there can always be a set-off of damages and/or costs against damages and that that is not a matter of discretion.

Here the court quoted from

Burkett v London Borough of Hammersmith & Fulham [2004] EWCA Civ 1342:

“It is possible to regard all questions regarding costs as being subject to the statutory discretion conferred on the court by section 51 of the Supreme Court Act 1981 [now Senior Courts Act 1981]. But I would not have thought a set-off of damages against damages could properly be described as a discretionary matter, nor that a set-off of costs against damages could be so described.”

Thus the issue here was whether there could be a set-off of costs against costs or whether that amounted to “enforcement” and thus had to be dealt with in the same way as any other method of enforcement.

The judge took the view that set-off of costs against costs is a form of enforcement and thus subject to CPR 44.13 to 44.17, and can only be exercised in the same circumstances as any other method of enforcement.

Comment

This is a difficult issue.

Why the Civil Procedure Rules Committee refuses to clarify the obviously defective QOCS rules is beyond me, and beyond the constant stream of judges at every level who have commented on them.

On balance, I believe the judge to be wrong and the District Judge who made the first decision to be right.

CPR 44.12 which appears immediately before the QOCS rules at CPR 44.13 to CPR 44.17, says:

“(1) Where a party entitled to costs is also liable to pay costs, the court may assess the costs which that party is liable to pay and either –

(a) set off the amount assessed against the amount the party is entitled to be paid and direct that party to pay any balance; or

(b) delay the issue of a certificate for the costs to which the party is entitled until the party has paid the amount which that party is liable to pay.”

I see nothing anywhere that prevents CPR 44.12(1)(a) apply to QOCS cases.

It would have been helpful if the Civil Procedure Rules said:

“This rule applies to cases under CPR 44.13 to 17”; or

“this rule does not apply to cases under CPR 44.13 to 17.”

You have to be Kremlinologist to understand the working of the Civil Procedure Rules Committee.

Presumably they could not make up their minds, as is evident from so many other rules, and so stuck the set-off rule immediately before the QOCS rule, without bothering to tell anyone whether or not it applied to QOCS cases.

They have adopted the same policy in relation to Part 36 and its relationship with virtually any other rule.

The Practice Direction is silent.

Forthcoming Court of Appeal decision

Although the written judgment is not yet available, the Court of Appeal in dealing with the cost consequences of its decision in Howe v Motor Insurers’ Bureau [2017] EWCA Civ 932, held that the losing Defendant – the Motor Insurers’ Bureau, could set-off against the costs it had to pay Mr Howe the “unenforceable” Costs Orders it had obtained against him in the main personal injury litigation, where Mr Howe’s claim failed due to limitation issues.

This is on all fours with the facts of the Darini case, where the losing Claimant in the substantive action was successful in resisting the Defendant’s application to set Notice of Discontinuance aside and was awarded costs of that application.

Thus Darini must now be considered to be wrongly decided, in the sense that the court said that there was no jurisdiction to allow set-off. Clearly there is, although the court could exercise its discretion so as not to allow set-off in any given case.

I stress that I have not yet seen the Court of Appeal judgment, which was given orally, but I understand that it will hold that a successful defendant in a QOCS case can set-off “unenforceable” Costs Orders against any costs that it has to pay to the Claimant.

As the costs of the substantive action lost by the Claimant will normally be higher than any costs awarded to the Claimant on an application or appeal, the effect is that the Claimant has to pay its own costs in relation to those ancillary proceedings, where it has won.

Policy issues

One of the points in the Darini case was that it was the policy of the rules, following implementation of Lord Justice Jackson’s report, although in relation to QOCS, not in the way that Lord Justice Jackson advised, that QOCS would replace the need for After the Event insurance.

Such insurance would not protect the Claimant in relation to applications successfully resisted.

Take the Darini case. Let us say that the costs against Mr Darini were £20,000.00 and he successfully resisted the application and was awarded £5,000.00.

Prior to QOCS the balance due from Mr Darini to the MIB would be £15,000.00 and that is the only amount that the ATE insurers would pay out, as they do not insure a client’s own costs.

Thus prior to QOCS Mr Darini would indeed have had to fund his own application, which would not have been insured.

I realise that the application here was in relation to QOCS and therefore would not have arisen prior to QOCS, but the principle is the same, that is that a Claimant successfully resisting an application and being awarded costs would simply result in the Claimant owing less costs overall and it is only that lower sum that insurers would cover.

Thus the policy considerations in Darini are based on a false premise.

I am grateful to Ben Williams QC for his assistance in relation to this piece.

These issues are dealt with in my book Qualified One-Way Costs Shifting, Section 57 Set-off available from Amazon here.

 

Also see:

KERRY ON QOCS: BOOK UPDATE AND LINKS: UNIFIED

QOCS, APPEALS, SET-OFF & KAFKA

QOCS, PART 36, TWO DEFENDANTS: SOME PROBLEMS

CREDIT HIRE, QOCS AND NON-PARTY COSTS ORDERS

QOCS, DISCONTINUANCE AND STRIKE-OUT AND OTHER THINGS

Written by kerryunderwood

July 25, 2017 at 9:40 am

Posted in Uncategorized

ACCEPTING PART 36 OFFER DURING TRIAL

with 2 comments


In Houghton v PB Donoghue (Haulage & Plant Hire Ltd) and others [2017] EWHC 1738 (Ch) (13 June 2017)

the High Court refused the Claimant permission to accept a Defendant’s offer two days after the trial began, in circumstances where the Part 36 offer had been made nearly six months earlier.

The judge recognised that allowing acceptance of the offer would settle the matter and save the court’s time but against that was the fact that the attempt to accept had been left very late and that the Defendant now wished to take its chances at trial, meaning that for all intents and purposes the settlement would be court imposed rather than voluntary.

The court said that where a claimant decided to take its chances at trial, and then changed its mind because the trial was going less well than predicted, then the court would often conclude that it was not right to allow acceptance.

The court considered two Technology and Construction Court authorities relating to earlier version of Part 36

Sampla and others v Rushmoor Borough Council and another [2008] EWHC 2616 (TCC); and

Nulty v Milton Keynes BC [2012] EWHC 730 (QB).

Comment

I have no problem with this decision, but the Defendant who wishes to take its chances at trial could withdraw the offer and thus remove any risk of the court allowing acceptance of the Part 36 offer, as there will be nothing to accept.

True it is that the Defendant would not automatically get the benefits of Part 36 if the Claimant failed to beat its offer.

This throws up one of the many problems with Part 36.

Supposing in this case the claimant says   “Okay – we are part way through the trial – we wish to accept the offer of £100,000.00.”

The judge refuses. He will not know the value of the offer. He then goes on to award more than £100,000.00. Arguably, there is no problem as the Defendant will then have to pay all of the costs of trial.

But supposing the judge awards £98,000.00 and there had been a further £75,000.00 of costs occasioned by the judge’s refusal to allow the Claimant to accept the Defendant’s Part 36 offer of £100,000.00, which has never been withdrawn.

Why should the claimant be forced to pay all of those costs?

Why is it not reasonable of a claimant, realising the way the matter is going, to seek to end further costs by accepting the offer?

How is this different, in principle, from the court’s general refusal to punish discontinuing QOCS Claimants on the basis that it is better to discontinue than to go to trial and lose?

The policy of the judiciary needs to be thought through in relation to these matters, which I accept involve conflicting public policy principles.

As in most things in life and law, certainty either way has a great deal to be said for it.

Written by kerryunderwood

July 21, 2017 at 11:14 am

Posted in Uncategorized

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