Kerry Underwood

Archive for April 2018

COSTS ON SETTLEMENT

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In Marcura Equities FZE and another v Nisomar Ventures Ltd and another [2018] EWHC 523 (QB)

the High Court set out the approach to be taken on costs where a matter has settled save as to costs.

Here, the parties had settled the substantive issues in a claim relating to disclosure and use of confidential information.

The judge held that the defendants should pay the whole of the claimants’ costs, subject to assessment, as the claimants were the successful party and the general rule is that the loser pays costs, and there were no features of the settlement offers made, nor of the conduct of the claimants, justifying some other order under CPR 44.2.

The judge noted the authorities on costs after settlement before trial save as to costs, including

BCT Software Solutions Ltd v C Brewer & Sons Ltd [2003] EWCA Civ 939.

There the Court of Appeal had cautioned judges not to make costs orders where they were not in a position to decide who had been the successful party after settlement, but recognised that there may be cases where it was clear which party had been successful.

The judge agreed and said that it was hard to see why a claimant who was accorded all the relief he sought by consent should not recover his costs.

The claim form had sought £200,000 and, relying on

Medway Primary Care Trust v Sebastian Marcus [2011] EWCA Civ 750

the defendants submitted that the settlement sum of £35,000 was so modest that it could not justify awarding the claimants’ costs  of £450,000 as sought.

However, the judge distinguished Medway, observing that a personal injury case, where the only relief sought is damages, is very different from a confidential information case where there are often a series of motivations, and a corresponding range of claims.

In a confidential information case, where monetary claims are only a part, and sometimes the least important relief sought, it will rarely, if ever, be right to focus only on the payment of money when determining a costs order

Further, if the trial in this action had gone ahead and the claimants had been awarded damages to be assessed, it could not have been said that they should not have their costs because the assessed damages might be modest.

The judgment also contains useful guidance on the law in relation to negotiations on a Without Prejudice basis, and negotiations Without Prejudice Save As To Costs.

 

 

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Written by kerryunderwood

April 30, 2018 at 8:34 am

Posted in Uncategorized

NATIONAL LEAGUE PLAY-OFFS: HOW THEY WORK AND HEMEL HEMPSTEAD TOWN’S OPTIONS

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I have been a Lawyer for 43 years and this is the most complicated advice I have prepared!

 

This system applies to the National League, National League North and National League South.

Dates vary according to the league, and appear at the end.

 

Here I use Team 2 for the team coming second, Team 3 for the team coming third etc.

 

The Champions go up automatically – that is the easy bit!

 

Teams 2 and 3 are automatically in the semi-finals, and at home.

 

The Quarter Finals

  • Team 4 v Team 7;

 

  • Team 5 v Team 6;

 

 

The Semi-Finals

  • Team 2  v  winners of the 5 v 6 quarter final;

 

  • Team 3   v  winners of the 4 v 7 quarter final.

 

 

The Final

The final will be played at the home of the team that ended higher in the league of the two finalists.

All matches are just a single leg with extra time and penalties if necessary, but no replays and no second legs.

Thus Team 2 must always be at home and Team 7 must always be away, as by definition they must always be higher/lower than any other team involved in the playoffs.

Team 3 will be at home in the semi-final, and if they win, away if Team 2 wins the other semi-final, but home to anyone else.

Team 4 will be at home in the quarter final and will be away in the semi-final and whether they are home or away in the final depends on who wins the other semi-final.

Likewise Team 5 – the position is the same as for Team 4.

Team 6 is away in the quarter final and away in the semi-final and will only be at home in the final if the other finalist is Team 7.

 

What Hemel Hempstead Town have to do

Hemel Hempstead Town are in the play-offs and tomorrow’s final round of ordinary league games determines what position they finish in and whether they are straight through to the semi-finals, with an automatic home fixture, or at home in the quarter finals, or away in the quarter finals.

 

Away in the Quarter Finals

This can only happen if Hemel Hempstead Town lose and Truro City win, which would put Hemel Hempstead Town down to sixth, the lowest they can finish. So even a defeat leaves us with a home quarter final unless Truro City win their difficult fixture at Hampton & Richmond.

 

A Hemel Hempstead draw

If Hemel Hempstead Town draw than they are guaranteed at least fifth place, and therefore a home quarter final.

If Chelmsford City and Hampton & Richmond both lose, then Hemel Hempstead Town go third and straight into the semi-finals unless Truro City win by five goals at Hampton & Richmond.

This is because Teams 3, 4, 5 and 6 will all be on 71 points.

Hemel Hempstead Town have a goal difference of 21 and Chelmsford City have a goal difference of 20.

By definition if Hemel Hempstead Town draw and Chelmsford City lose, Hemel Hempstead Town’s goal difference stays the same and Chelmsford City’s gets worse, and therefore Hemel Hempstead Town must end above them.

Hampton & Richmond’s goal difference is identical to Hemel Hempstead Town’s, but the same point applies – it must get worse if they lose and Hemel Hempstead Town’s will stay the same.

Truro City’s goal difference is five worse than Hemel Hempstead Town’s but they have scored exactly the same number of goals, that is 70.

Thus if Truro City win by five goals at Hampton & Richmond then their goal difference is the same – plus 21 – but they would have scored 75 goals and thus have more goals scored than Hemel Hempstead Town, unless Hemel Hempstead Town draw 5-5, or have an even higher score and draw, at  Weston Super Mare.

In case you think that is unlikely, that was the exact score when the teams met on 30 January 2016!

A win by six clear goals by Truro City at Hampton & Richmond would see them move above Hemel Hempstead Town on goal difference, if Hemel Hempstead Town draw.

 

Hemel Hempstead Town win and Chelmsford City and Hampton draw or lose then we end third on points

Thus, overall, if Hemel Hempstead Town do better than Chelmsford City and Hampton then we end third, and thus are in the semi-final, unless Truro City win by five or more at Hampton, subject to the point raised above Hemel Hempstead Town being in a 5-5 draw or above at Weston Super Mare.

I hope that is clear!

 

League Table

a

Final round of Fixtures

 b

National League

 

Wednesday 2nd May 2018

Qualifying Round – Match A – 5th place vs 6th place

 

Thursday 3rd May 2018

Qualifying Round – Match B – 4th place vs 7th Place

 

Saturday 5th May 2018

Semi Final – 2nd place vs winner of Match A

 

Sunday 6th May 2018

Semi Final- 3rd place vs winner of Match B

 

Saturday 12th May 2018

Promotion Final – Wembley Stadium

 

 

National League North

 

Wednesday 2nd May 2018

Qualifying Round – Match A – 5th place vs 6th place

Qualifying Round – Match B – 4th place vs 7th Place

 

Sunday 6th May 2018

Semi Final – 2nd place vs winner of Match A

Semi Final – 3rd place vs winner of Match B

 

Sunday 13th May 2018

Promotion Final

 

 

National League South

 

Wednesday 2nd May 2018

Qualifying Round – Match A – 5th place vs 6th place

Qualifying Round – Match B – 4th place vs 7th Place

 

Sunday 6th May 2018

Semi Final – 2nd place vs winner of Match A

Semi Final – 3rd place vs winner of Match B

 

Sunday 13th May 2018

Promotion Final

 

 

 

Written by kerryunderwood

April 27, 2018 at 1:23 pm

Posted in Uncategorized

CONVEYANCING: VAT PAYABLE ON AGENCY SEARCHES

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In Brabners v The Commissioners for Her Majesty’s Revenue & Customs

the First-Tier Tribunal Tax Chamber held that VAT is payable on property searches when an agency is instructed to carry out the search.

Although this decision related to electronic searches, the same principle applies whenever an agent is used, whether the search is electronic or postal or personal, but HMRC has, by concession, treated postal searches as disbursements since 1991.

This was an appeal against a decision made by HMRC, and upheld by a departmental review, that the appellant firm of solicitors was liable to pay VAT on the search fees charged to it by search agencies.

The Tribunal held that the consumer of the search results is the firm of solicitors, as part of the conveyancing services which it provides to its clients, and not the clients themselves.

This decision relates to electronic searches conducted by Searchflow who obtained the required property searches from the local authorities digitised or dematerialised files and registers and passed them onto the firm of solicitors.

Searchflow invoiced the solicitors without the addition of VAT and the solicitors treated that fee as a disbursement which it then invoiced to its client without the addition of VAT.

HMRC successfully argued that the search fee could only be treated as disbursement if it satisfied the eight disbursement conditions in VAT Notice 700, Paragraph 25.1 which reads:

 

  • You acted as the agent of your client when you paid the third party

 

  • Your client actually received and used the goods or services provided by the third party (this condition usually prevents the agent’s own travelling and subsistence expenses, phone bills, postage, and other costs being treated as disbursements for VATpurposes)

 

  • Your client was responsible for paying the third party (examples include estate duty and stamp duty payable by your client on a contract to be made by the client)

 

  • Your client authorised you to make the payment on their behalf

 

  • Your client knew that the goods or services you paid for would be provided by a third party

 

  • Your outlay will be separately itemised when you invoice your client

 

  • You recover only the exact amount which you paid to the third party

 

  • The goods or services, which you paid for, are clearly additional to the supplies which you make to your client on your own account.

 

HMRC contended that the information within the search results is used by solicitors to give advice to their clients, and thus recovery of the outlay represents part of the overall value of the solicitors’ supply of services to its clients.

HMRC’s own internal manual states that if searches are passed on without analysis or comment, and the eight conditions are met, then the fees are not subject to VAT.

In any other circumstance the search fee is part of the cost of providing the solicitor’s service to the client, and thus is subject to VAT.

The solicitors argued that what was happening was that the client had requested or expressly authorised the solicitor to obtain a search on the client’s behalf and that the solicitor was merely acting as the client’s agent, with the report belonging to the client and not being part of a taxable supply.

 

The Tribunal said that the law relating to VAT draws a distinction between two scenarios:

 

  1. When the expense is paid to a third party (Searchflow) having been incurred by the solicitor in the course of making its own supply of services to the client and as part of the whole of the services rendered by the solicitors to the client; and

 

  1. Where specific services have been supplied by Searchflow to the client, and not to the solicitor, and the solicitor has merely acted as the client’s known and authorised representative in paying Searchflow.

 

Only the second case constitutes a disbursement, where VAT is not payable.

The first scenario represents part of the services supplied by the solicitor, and therefore subject to VAT.

The Tribunal referred to the well-known fact that although railway tickets are not subject to VAT, once a solicitor buys them in order to travel for the client, for example to court, then VAT must be charged to the client on the cost of the train tickets.

Here the Tribunal held that the relevant expenses paid to Searchflow were incurred by the solicitors “in the course of making its own supply of services to” the client “and as part of the whole of the services rendered by it to (its client)”.

 

The Tribunal said:

 

“50. The Appellants [the solicitors] are not simply a conduit or post-box for search results. Simple common sense dictates that clients engage the Appellant in transactional work since the Appellant knows what it is doing, knows what a search is, knows what searches to obtain, knows how to get them quickly and conveniently, and knows what to do with them when it gets them.”

The Tribunal said that this would be the case even if no report was prepared as silence from the solicitors would be taken by clients as an ‘all-clear’.

There is a twist in the judgment in that since 1 October 1991 HMRC has treated postal search fees as disbursements, that is not subject to VAT.

The Tribunal declined to state whether the concession in relation to postal search fees was right or wrong, although, reading between the lines, the Tribunal clearly thought it is wrong.

HMRC’s rationale for allowing postal search fees to escape VAT was that “the fee is charged for the supply of access to the official record and it is the solicitor rather than the client who received that service”.

It is hard to see the difference between that and what happens with an electronic search, in that in both instances the search is part of the whole of the services rendered by the solicitors to the client.

 

 

Thus the Tribunal differed from the Tribunal in

Barratt, Goff and Tomlinson (A firm) v HMRC (Law Society Intervening) [2011] UKFTT 71 (TC)

where the Tribunal allowed an appeal by a firm of solicitors and held that fees paid for medical records and reports in connection with personal injury claims were being purchased by the clients and were disbursements, and not therefore subject to VAT.

Here the Tribunal distinguished that case on the basis that the obtaining of medical legal records etc. required that the client’s consent, whereas the information contained in searches did not require a client’s consent.

Personally, I cannot see how that makes the slightest difference.

 

In Practice

What this means is that if, for example, the search company charges £100 for the search, then the solicitor must charge the client £100 plus VAT, and thus at present, with the VAT rate at 20% a charge of £120 would have to be made to the client.

Obviously the solicitor would then have to account to HMRC for VAT in the sum £20.

Written by kerryunderwood

April 27, 2018 at 8:29 am

Posted in Uncategorized

RE-ALLOCATION OF CLAIMS

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In Francois v Barclays Bank plc [2017] EWHC 3531 (QB)

the Queen’s Bench Division of the High Court allowed an appeal against a costs order, made by a circuit judge.

The order required the claimant to pay the defendant’s costs ,in respect of her race discrimination claim, on a fast track basis from a date when “it appeared” that the claim ,originally allocated to the small claims track, had been re-allocated to the fast track.

When making the costs order, the judge had said that he was “going to infer” that, on 21 January 2010, the matter had been re-allocated to the fast track.

The claimant submitted that, in finding that the case had been re-allocated to the fast track, even though there was no court order to that effect, the judge had misdirected himself in law.

On appeal, the High Court made the following points:

  • allocation of a case to a particular track is significant: not only for the procedure, but also for costs.

In the small claims track, claimants’ costs exposure is minimal (unless there is unreasonable conduct under CPR 27.14(2)(g)).

  • CPR 26.9 requires notification of the allocation of a claim to a particular track, a decision that can be appealed under PD 26.11.1.
  • Re-allocation has the same significance and importance as the original allocation.

The High Court Judge held that there is a requirement for re-allocation of a case to a different track to be notified to the parties.

Although a letter from the Central London Civil Justice Centre, dated 25 March 2010, referred to listing the case as fast track,  it could not be inferred from it that the court had made an order re-allocating the claim ,whether on 21 January 2010 or at all.

The date of re-allocation of a claim is “of considerable significance”, as the new costs regime applies from that date.

Consequently, it is “material and significant” for the parties, and the court, to know the date, and not just the rough time, that a decision to re-allocate is made.

The circuit judge erred in law, and also reached a conclusion that was not open to him on the evidence.

Therefore, the appeal succeeded and the costs order was set aside.

Written by kerryunderwood

April 26, 2018 at 8:33 am

Posted in Uncategorized

BUDGETS: REDUCTION IN HOURLY RATE DOES NOT REDUCE OVERALL BUDGET

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In Nash v Ministry of Defence [2018] EWHC B4 (Costs)

the Senior Courts Costs Office held that a reduction in hourly rates in relation to incurred costs did not require a reduction in the budgeted costs overall or for any given phase.

Hourly rates enjoyed no particular status.

The Master said that budgeting controlled the amount of money the parties could spend, not how they spend it.

  1. “By way of example, if a party budgets for 10 hours at £500/hr plus £2,000 on Counsel for future costs in the disclosure phase, the total of £7,000 is exactly the same as if the same party had budgeted for 100 hours at £50/hr plus £2,000 on Counsel. If £7,000 is approved for the budgeted (future) costs total then the court will not interfere with how that money is spent without good reason.
  2. A budget approved in these terms does not, for example, compel that party to spend £2,000 on Counsel for future costs relating to disclosure or use the fee earners anticipated when the budget was drawn. Similarly, it does not limit that party to spend £2,000 on Counsel for future costs relating to disclosure.
  3. The budget is set following the making of a costs management order, and Solicitors must thereafter cut their cloth accordingly.
  4. Taking the example above, where a rate of £500/hr is reduced to £100/hr in the incurred costs, it cannot be logical for a budget claiming 10 hours at £500/hr plus £2,000 for Counsel (total £7,000) to be reduced to £3,000 on assessment but where a budget claiming 100 hours at £50/hour plus £2,000 for Counsel (total £7,000) would suffer no reduction at all (where say £7,000 is claimed in that phase in the bill of costs).”

 

Written by kerryunderwood

April 25, 2018 at 8:24 am

Posted in Uncategorized

CIVIL LIABILITY BILL: THE ROAD TO NUREMBERG

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Today, 24 April 2018, sees the Second Reading in the House of Lords of the Civil Liability Bill which proposes a tariff for whiplash injuries in road traffic accidents.

Tariff is a weasel word. The Bill is an attack on the judiciary, the independence of the judiciary and the rule of law, as well as the poorer sections of the community, as a reduction at the lower end of damages affects the less well-off more.

Lawyers call this disparate impact.

Damages for such injuries will be reduced by between 62% and 87% if the government follows its previous proposals.

For example an injury of up to six months’ duration will now warrant an award of £450 instead of up to £3,630.

Damages for personal injury are already subject to extensive guidelines laid down by the Judicial College, an official body comprised of judges, academics and medics and they are regularly updated to take account of changes in treatment and the attitudes of society.

For example, damages for sexual abuse have been increased significantly.

The Judicial College Guidelines take into account damages for other types of wrong.

Judges determine damages at trial, normally at a hearing that just deals with how much an injured person should receive, as insurance companies nearly always admit that their insured caused the injury.

Insurers are extremely well-resourced and so able to fight any claim that they think is misguided or fraudulent, or where too much is being claimed.

Insurance companies already enjoy special laws as if any part of a claim is fundamentally dishonest, then the whole claim is lost, even if their insured was to blame. This does not happen in any other area of English and Welsh law.

Currently, judges make all of these decisions.

This bill destroys the work of the Judicial College and destroys judicial discretion and destroys judicial independence.

In reaction to a comment that this is an insane policy, the United Kingdom Association of Part Time Judges said:

Quite right. There is no reason to depart from the Judicial College Guidelines setting out fair compensation determined by judicial discretion.” (Underneath the Law Society Gazette 20 April 2018).

If this bill is passed, then the next target will be damages for injury to feelings in discrimination cases, where guideline damages are also set by judges and are known as the Vento Guidelines.

Unfortunately the legal profession has split into different groups doing different things and seemingly looking after their own interests.

Personal injury lawyers gave no support to employment lawyers fighting Employment Tribunal fees in the Unison case, and employment lawyers are giving no support here.

As both the physical courts and the civil and criminal justice systems crumble, “legal advisers”- civil servants – are set to replace judges in exercising 22 powers currently reserved to the judiciary.

Governments and ministers and ministries set a cultural tone.

At present it is a nasty and vindictive tone, as shown by the recent Windrush events.

This is not a party political point. The last Labour governments had a shameful record on all of these matters and did not oppose these measures in the Prisons and Courts Bill, lost due to last year’s General Election.

The endless attack by senior ministers on lawyers and the judiciary, and now the people they represent, who are least able to represent themselves, is extremely damaging to the rule of law and therefore society.

The rise in anti-Semitism and murder in London is a direct consequence.

This Bill should be voted down.

 

Without lawyers, judges and courts, there is no access to justice and therefore no rule of law, and without the rule of law, society collapses.

Lord Neuberger, Supreme Court President, 10 April 2015.

 

Written by kerryunderwood

April 24, 2018 at 12:00 pm

Posted in Uncategorized

STRIKE-OUT AND SUMMARY JUDGMENT

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Strike-Out and Summary Judgment is dealt with at length in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available here for £15 including P&P

In Saeed and Another v Ibrahim and Others [2018] EWHC 3 (Ch)

the Chancery Division of the High Court considered the overlap between the court’s powers to strike-out under CPR 3.4 and its powers to enter summary judgment under CPR 24.

On the facts, the court refused the application to strike out, partly because it was made just seven weeks before the trial window, but the court also looked at the issues to be taken into account in relation to both CPR 3.4 and CPR 24.

The court said that the applicant should indicate, in its application notice, which of the three sub-paragraphs in CPR 3.4(2) it relies on.

The court accepted that there is some overlap between its powers under CPR 3.4 and its powers under CPR 24 and the court may treat an application under CPR 3.4(2)(a) as though it were an application under CPR 24, even though the requirements of CPR 24 had not been complied with.

The procedural safeguards in CPR 24 can be dispensed with when they achieve little or nothing, but the court should be slow to disregard them, as a respondent to such an application is entitled to notice of the case against it so as to be able to prepare for the application for summary judgment.

The applications should state which jurisdiction is relied on, and here the court refused to treat the application under CPR 3.4 as though it was also under CPR 24 as that latter provision was only mentioned in the applicant’s skeleton argument.

There is a real difference between the jurisdictions.

An application under CPR 3.4(2)(a) focuses almost exclusively on the statement of case, whereas an application under CPR 24 allows the court to look at the claim itself, and the defence, and all relevant evidence.

If the strike-out application relates to a flaw in the pleadings, then that should be clearly flagged up in advance of the hearing so as to allow the respondent to remedy that defect.

Generally, in applications under CPR 3.4(2)(a), witness statements should not be relied upon.

The authority for the view that the court may treat an application under CPR 3.4(2)(a) as if it were an application under CPR 24 is contained in the decisions of the Court of Appeal in

 

Moroney v Anglo-European College of Chiropractice [2009] EWCA Civ 1560; and

 

Ministry of Defence v AB [2010] EWCA Civ 1317.

 

In both of those decisions the Court of Appeal accepted that there was an overlap between the two rules and that there are circumstances in which a court is entitled to treat an application as if it were made under CPR 24, even though the requirements of that rule had not been complied with.

However, that did not mean that an applicant was entitled to request the court to deal with an application as if it had been made under CPR 24, without the application having been made in proper form.

Here the court said:

“It will be rare that an applicant under rule 3.4(2)(a) will be entitled to rely upon such evidence [the claimant’s witness statement] to make out that the statement of case does not show reasonable grounds for bringing the claim. An application will usually succeed or fail by reference only to the content of the statement of case. If conclusions have to be drawn for evidence, Part 24 is the appropriate rule to use.”

 

Comment

This is an important case in its own right, but it is also important in the context of Qualified One-way Cost Shifting, which currently only applies in personal injury cases.

Under CPR 44.15, order for costs made against a personal injury claimant may be enforced to the full extent of the order of the court, without the permission of the court, where the proceedings have been struck out on the grounds of –

(a) the claimant has disclosed no reasonable grounds for bringing the proceedings; or

(b) the proceedings are an abuse of the court’s process; or

(c) the conduct of –

(i) the claimant; or

(ii) the person acting on the claimant’s behalf and with the claimant’s knowledge of such conduct,

is likely to obstruct the just disposal of the proceedings.

 

CPR 44.15(a) reflects the test in CPR 3.4(2)(a)

CPR 44.15(b) and (c) reflects CPR 3.4(2)(b).

Thus CPR 44.15 effectively disqualifies a personal injury claimant from the protection of Qualified One-way Cost Shifting.

 

CPR 3.4(2) reads:

“(2) the court may strike out a statement of case if it appears the court –

(a) the statement of case discloses no reasonable grounds for bringing or defending the claim;

(b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or

(c) that there has been a failure to comply with a rule, practice direction or court order.”

 

Thus, although a claim may be struck out under CPR 3.4(2)(c), that does not deprive a personal injury claimant of QOCS protection.

Likewise, summary judgment under CPR 24 never, of itself, deprives a personal injury claimant of QOCS protection.

Thus the ability of the court to treat an application under CPR 3.4(2) as an application under CPR 24 is important.

Outside the field of personal injury it makes little difference; either which way the claim is struck out, or lost, if the applicant is successful.

However, if the court declines to strike out the claim under CPR 3.4(2) but exercises its discretion to enter summary judgment for the defendant under CPR 24, even if no such application has been made, then the losing claimant enjoys full protection under QOCS against the costs order being enforced.

Strike-Out and Summary Judgment is dealt with at length in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available here for £15 including P&P

 

Written by kerryunderwood

April 24, 2018 at 8:26 am

Posted in Uncategorized

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