Kerry Underwood

Archive for July 2019


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

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


Change on Causation Justified Claimant Amending Costs Budget


Zeromska-Smith v United Lincolnshire Hospitals NHS Trust [2019] EWHC 630 (QB) (22 February 2019)

the Queen’s Bench Division of the High Court overturned a Master’s refusal to permit a claimant to amend her costs budget to allow for the instruction of leading counsel.

This decision illustrates a “significant development” under Practice Direction 3E.7.6.

Here, the defendant’s change of position on whether the claimant had suffered psychiatric injury as a result of the defendant’s admitted negligence constituted a significant development, as it had potentially significant consequences for the quantification of the claimant’s claim.

The claimant had brought a clinical negligence claim against the defendant after the claimant’s daughter was stillborn.

The claimant alleged that she had suffered psychiatric injury due to the defendant’s negligence and served a supportive expert’s report.

The parties discussed the extent to which the defendant admitted the claim and the basis on which judgment could be entered.

The claimant’s solicitor informed the defendant’s solicitor that the claimant could only agree to quantum-only directions if the defendant admitted liability, including both breach of duty and causation.

The defendant’s solicitor confirmed that judgment could be entered for the claimant “with extent of injury and loss to be assessed.”

The claimant understood the defendant to be admitting that the claimant had suffered a psychiatric injury due to the defendant’s admitted negligence.

The defendant had obtained its own expert evidence by the time of the case and costs management hearing, but did not serve it until eight months later.

It then emerged that the defendant was denying that the claimant had suffered any psychiatric injury at all.

The claimant considered that the defendant had resiled from the basis on which judgment had been entered and applied, unsuccessfully, to amend her costs budget to allow for the instruction of leading counsel.

On appeal, the High Court Judge held that, in deciding that there was no significant change justifying an amendment to the claimant’s costs budget, the Master had erred in law: he had failed to appreciate that the defendant was not simply disputing the extent of the psychiatric injury, but asserting that there was none.

The defendant’s change of position was significant because there was a qualitative difference between the defendant conceding damages only for the failure to successfully conclude the pregnancy.


Costs Offer Not A Benchmark Below Which Costs Cannot Be Budgeted


Gray v Commissioner of Police for the Metropolis [2019] EWHC 1780 (QB) (24 May 2019)

the Queen’s Bench Division of the High Court, on appeal, refused to revise the claimant’s costs budget upwards.

In reaching this decision, the key questions were whether the lower court judge had:

  • placed too much emphasis on the low value of the claim;
  • failed to take into account or place sufficient weight on other aspects of the case including the complexity of civil actions against the police; and
  • the difficulties which the claimant’s solicitors would have in taking the claimant’s instructions given his mental health issues.

The High Court held that the lower court  was not only entitled, but obliged, to take into account the relatively low value of the claim under CPR 44.3(5)and was entitled to conclude that the matter was relatively straightforward: the case centred around a series of factual disputes, which did not raise novel or particularly difficult legal issues.

As  to the specific items of the costs budget, the High Court Judge held that the court was not required to give reasons for allowing a sum for witness statement preparation which was lower than that which the defendant had offered; the figure offered by the defendant was not proportionate.

An offer for costs was not a benchmark below which costs could not be budgeted (paragraph 27).

A substantial amount of preparatory work had already been carried out in analysing the defendant’s disclosure, and large numbers of the documents disclosed were common to both parties, so they would have already been considered by the claimant’s solicitors.

Although the claimant’s mental health problems had to be borne in mind, they did not justify a significant increase in costs for witness statement preparation.

Although the lower court judge mistakenly thought the trial was three days instead of five days, this was not a factor which would have decreased the budgeted costs for trial preparation.

While the case was not “run of the mill”, the amounts allowed were not manifestly too low.

The budget as decided did not mean that the litigation was no longer economic.


No Significant Developments Justifying Revision Of Costs Budget


Seekings and another v Moores and others [2019] EWHC 1476 (Comm) (7 June 2019)

a High Court Judge refused a defendant’s application to increase its costs budget by £130,000.

There were two issues:

(i) whether there was any jurisdiction to make such an order when the vast majority of the costs had already been incurred, something considered in Sharp v Blank [2017] EWHC 3390 (Ch); and

(ii) whether there had been “significant developments” justifying revision of the budget, as per Practice Direction 3E, Paragraph 7.6.

The judge held that there had not been “significant developments” justifying revision and so did not need to consider the “difficult question of jurisdiction”.

In Sharp v Blank the court had interpreted “future costs” in Paragraph 7.6 of Practice Direction 3E as meaning costs after the last approved or agreed budget, rather than – well – future costs.

Virtually every commentator thinks that the decision in Sharp is wrong.

Here the court just considers the issue of significant developments and the judgment contains a useful summary of the existing case law, although generally the matter will be fact sensitive to each matter.

It is not consistent with the overriding objective to allow parties to amend budgets because they have overlooked something or made a careless mistake, or when the case develops in a way that should have been foreseen – see

Al-Najar and others v The Cumberland Hotel [2018] EWHC 3532 (QB)

which gives useful guidance.

Here, the judge concluded that continuing electronic platform costs should have been anticipated and were relatively minor and so did not warrant revision.

Requests for information pre-dated the budget and so the defendant should reasonably have anticipated the work required.

An increase in the documents for review did not warrant an increase either: they were the defendant’s documents and the defendant should reasonably have anticipated the extent of the review.

In relation to expert evidence reasons for the increases appeared to be “an amalgam of matters which should have reasonably been anticipated, and matters which did not warrant an increase”.

As to pleadings and lists of issues, these are common in this sort of litigation.

The work relied upon should reasonably have been anticipated and did not warrant revising the budget.

£85,000 had been agreed for this phase.

It was not proportionate to spend more.

As to Requests for further information the costs of hearings resulted from the defendant’s decision to resist the claimant’s applications, which were successful, and resulted in adverse costs orders against the defendant.

Even if they were a significant development, their outcome was such that no revision to the defendant’s budget was warranted.

The judge noted that the defendant should have followed the proper procedure for revision including identifying the changes and giving reasons for them.

7. The relevant parts of Practice Direction 3E are:

7.3 If the budgeted costs or incurred costs are agreed between all parties, the court will record the extent of such agreement. In so far as the budgeted costs are not agreed, the court will review them and, after making any appropriate revisions, record its approval of those budgeted costs. The court’s approval will relate only to the total figures for budgeted costs of each phase of the proceedings, although in the course of its review the court may have regard to the constituent elements of each total figure. When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.

7.4 As part of the costs management process the court may not approve costs incurred before the date of any costs management hearing. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all budgeted costs.

7.5 The court may set a timetable or give other directions for future reviews of budgets.

7.6 Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions. Such amended budgets shall be submitted to the other parties for agreement. In default of agreement, the amended budgets shall be submitted to the court, together with a note of (a) the changes made and the reasons for those changes and (b) the objections of any other party. The court may approve, vary or disapprove the revisions, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed.


Effect Of Settlement Of Claim On Good Reason To Depart From Budget Under CPR 3.18(B) When Costs Are Assessed


Barts Health NHS Trust v Salmon (unreported) (17 January 2019)

a County Court Judge allowed an appeal against a  decision taken by a master when assessing costs of a claim which had settled.

The receiving party claimed less than the budget sum for certain phases and the master assessed the bill as claimed.

The judge held that the master had been wrong in not explaining his reasons for assessing the bill as claimed and in not allowing the paying party to make submissions as to the appropriate sums in respect of those phases before assessing.

The County Court Judge said that where a party claimed less than the budget sum, because they spent less and because of the indemnity principle, that was a good reason for departing from the budget under CPR 3.18(b) –

see Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792

and there was no need to establish a “further” good reason in order to reduce the costs to a greater extent.

In any event, here, there were good reasons to justify a further downward departure from the budget figures; the phases were substantially incomplete and there was no alternative dispute resolution other than the making and acceptance of a Part 36 offer.

Once the court has found a good reason to depart downwards from the budgeted figure, the court should hear submissions from both parties on what the final figure should be.

The judge did not criticise the master for his approach to proportionality.

He considered that he went through the relevant factors, in a structured and analytical way, and carried out the balancing exercise.

However, the consequences of the conclusions reached on good reason in the appeal meant that the starting-point for the exercise of applying the proportionality test might have shifted.

In the absence of agreement, there would have to be a re-assessment of the reasonable costs and the court would have to re-assess proportionality if the starting figure was different to the figure that the master had as his starting point.

It suggests that whenever budgeted cases have settled before trial, costs are going to be open to challenge on assessment.

Written by kerryunderwood

July 31, 2019 at 8:14 am

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A bizarre, almost unbelievable, situation was dealt with by the Court of Appeal in

J v K & Anor [2019] EWCA Civ 5 (22 January 2019) .

The claimant brought Employment Tribunal proceedings which were struck out and he wished to appeal but the Employment Appeal Tribunal’s server was unable to accept emails and attachments of more than 10mb.

In a guide published on the website, there was a warning about this and parties to an Employment Tribunal decision are sent a covering letter referring them to a booklet, which has a link to the online warning, but it was accepted that the mentally ill appellant litigant in person here never received it.

Five minutes before the 4.00pm deadline, the claimant emailed the EAT with an attachment containing his notice of appeal and all necessary documents, but the communication failed as the attachment exceeded 10mb.

The claimant immediately re-sent the attachments as a number of smaller files, but they were received after the deadline and his application for an extension was, bizarrely, refused on the papers, and he appealed, but the EAT, in an astonishing decision, rejected his appeal.

The Court of Appeal held that the EAT was wrong to refuse an extension of time to appeal in these circumstances.

An ordinary layman would reasonably have expected that the EAT’s server would have been able to accept the documents which the EAT itself required on an appeal.

An extension would be granted to render the claimant’s appeal to the EAT in time.

As the Court of Appeal here pointed out, the EAT has encouraged the lodging by email of the documents necessary to institute an appeal but has, in my words and not those of the Court of Appeal, an inbox capacity that would shame a five-year-old.

To put this in context, a basic Iphone photo uses up 2.5mb.

The warning can only be seen by going to a link online, yet an appellant is specifically prohibited –

Desmond v Cheshire West and Chester Council HQ [2012] UKEAT 0007/12/2006 .

from getting around the Toytown IT system that the EAT has by having a link online to the appeal documents.

A hard copy of the warning, contained in document T440, is not sent to a proposed appellant.

As you will pick up, that specific prohibition was made by the Employment Appeal Tribunal which ruled that it was allowed to deprive people of the right to appeal by an online link, but they could not appeal by way of an online link.

The Court of Appeal said that it regarded it as surprising that the EAT server was unable to accept the documents that the EAT itself required and encouraged to be lodged by email.

“ … I should be reluctant to hold that would-be appellants are to be criticised for ignorance of information (a fortiori rather surprising information) which is only available in a guidance document which they are not advised to consult, even if many or most might in fact find it by their own efforts. (There is also a difference…between giving information in government guidance and making provision in the Rules and/or the EAT’s own Practice Direction, neither of which mention the limited capacity of the EAT server.)”

In a graphic passage the Court of Appeal, in dealing with the issue of appellants who leave matters to the last minute pointed out that this was not due to extraneous circumstances but:


“Rather, the problem was the limited capacity of the EAT’s own system (insufficiently notified to the Appellant). That seems to me to put the case into a rather different category. It is as if the Appellant had arrived at the EAT at 3.55 p.m. on the last day with the documents fully ready to serve but had been unable to deliver them because the doors or letterbox were jammed or everyone was on the street because of a fire alarm. It is inconceivable that in such a case an extension could fairly be refused…”.


The Court of Appeal observed that the best thing would obviously be for the EAT server’s capacity to be increased.



This is a real case and these are real facts. It is not one of my ironic Alice in Wonderland pieces.

These are real decisions by real Registrars and real judges.

This is a real server set up by a real IT department in a real government department.

There is a real Bill before Parliament to introduce video courts next year, and electronic filing is already compulsory in many courts.

Videos are really demanding in terms of the capacity they require on servers and bandwidth and so on.

Written by kerryunderwood

July 30, 2019 at 9:00 am

Posted in Uncategorized


with 2 comments

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

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


West v Stockport NHS Foundation Trust and Demouilpied v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 (17 July 2019)

the Court of Appeal considered the correct approach to assessing After-the-Event insurance premiums in cases where the premium remains recoverable from the paying party.

Although this case concerned premiums in clinical negligence cases, the principles will apply in defamation and privacy cases, where recoverability of success fees has been abolished, but recoverability of After-the-Event insurance premiums remains.

This may well be the model used in other areas of civil litigation going forward as it provides access to justice, a point emphasized in this case by the Court of Appeal:


“Access to justice must therefore be the starting point for any debate about the recoverability of ATE insurance premiums in any dispute about costs.” (Paragraph 12)


“If a claimant’s right to recover the ATE insurance premium in clinical negligence cases is the subject of a capricious system of cost assessment, then a claimant may be denied the very access to justice which the exception at s.58C and the Regulations were designed to protect.” (Paragraph 29)

Here, judges at first instance and on appeal had refused to allow recovery of premiums in block-rated cases, that is where the premium is not linked to a particular case, but rather where there is a fixed premium set by reference to a wide basket of cases.

To avoid solicitors cherry-picking, that is using a standard premium policy then only insuring the riskier cases, normally a solicitor will be contractually obliged to offer the policy in every appropriate case.

The Court of Appeal was critical of the National Health Service Litigation Authority, asking why, if the risk of the claimant losing the case was very low, the NHSLA had not admitted the claim from the outset. (Paragraph 17).

The NHSLA also used, as a comparator, an insurance product called LAMP.

The Court of Appeal observed:

“It appears that LAMP was a company registered in Gibraltar. It is now insolvent, although it was apparently still trading at the time of the cost assessments in these cases.” (Paragraph 18).

“30. Thirdly, there are concerns about the respondent’s repeated reliance on the burden of proof. This can be seen in their Points of Dispute documents and other written submissions, and it was noted unfavourably in the Assessors’ Report (see paragraphs 42 and 45 below). The respondent’s strategy appears to be to offer something minimal to put the reasonableness or proportionality of the ATE premium in issue, and then assert that the burden of proof falls upon the individual claimant, who will usually be unable to deal with the wider questions that might be raised concerning the insurance market. On this aspect of the case at least, the respondent has access to much more information than an individual claimant, so that the respondent’s reliance on the burden of proof has potentially a distorting effect on the costs assessment.

31. Fourthly, and related to the previous point, we note the respondent’s use of so-called comparables. We consider that, when dealing with reasonableness, detailed evidence about unarguably comparable insurance policies and premiums would be admissible. What is not permissible is reliance on the production of a few photocopied pages of another policy which, taken as a whole, is not in fact comparable.

The very lengthy judgment has a flash of comedy, with the Chief Executive of LAMP disavowing the NHSLA’s use of its own policy as a comparable:

“He [Mr Cousins, then the CEO of LAMP] described the policies with a £9,000 indemnity limit, memorably, as a ‘pregnant albatross’, referring to the fact that schedules from those policies are regularly produced, out of context and without reference to availability or scheme specifics, to challenge on detailed assessment insurer’s clinical negligence ATE premiums. That includes, ironically, LAMP’s own premiums under other schemes, which can be significantly higher …” (Paragraph 41)


Reasonableness of the ATE Premium

The Court of Appeal set out the four principles to be distilled from the case law:


i) Disputes about the reasonableness and recoverability of the ATE insurance premium are not to be decided on the usual case-by-case basis. Questions of reasonableness are settled at a macro level by reference to the general run of cases and the macro-economics of the ATE insurance market, and not by reference to the facts in any specific case [McMenemy].

ii) Issues of reasonableness go beyond the dictates of a particular case and include the unavoidable characteristics of the ATE insurance market [Rogers].

iii) District judges and cost judges do not have the expertise to judge the reasonableness of a premium except in very broad-brush terms, and the viability of the ATE market will be imperilled if they regard themselves (without the assistance of expert evidence) as better qualified than the underwriter to rate the financial risk the insurer faces [Rogers].

iv) It is for the paying party to raise a substantive issue as to the reasonableness of the premium which will generally only be capable of being resolved by way of expert evidence [Kris]”

The Court of Appeal said that these principles must be applied in every case because the After-the-Event insurance market is “integral to the means of providing access to justice in civil disputes [now limited to clinical negligence cases] in what may be called the post-legal aid world”, that being a direct quote from the case of

Rogers v Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134.

In fact such premiums remain recoverable in mesothelioma cases and defamation and privacy cases, not just clinical negligence cases.

The suggestion in

Surrey and others v Barnet and Chase Farm Hospitals NHS Trust [2016] EWHC 1598 (QB)

that Rogers is out of date and that Costs Judges can consider ATE insurance premiums by engaging in a robust analysis and “entering the arena” is an incorrect statement of law and an unacceptable and wrong approach.



If the ATE policy is a bespoke one, then the “grounds of challenge of the amount of the premium are relatively wide”. (Paragraph 64)

“65. As regards a block-rated policy, such as the policies in the present appeals, the ability of the paying party to mount a sustainable challenge will be much more restricted. The majority of challenges to block-rated premiums must relate back to the market in one way or another, and would therefore require expert evidence to resolve. In particular, it will not usually be enough for the paying party simply to give evidence that another policy was cheaper. It is not for district judges or costs judges to have to plough through the detail of allegedly comparable policies, still less to be required to assess the effect of any differences in content. An expert’s report would be required to the effect that the other policy was directly comparable to the policy under review.

66. Moreover, by reason of the contract terms commonly agreed between insurers and solicitors, an alternative block-rated policy may not in fact have been available to the receiving party in any event. That may not of itself rule out consideration of that policy as a comparable, but the challenge would involve difficult issues as to reasonableness to be resolved on the facts of the particular case.

67. Finally, a simple comparison between the value of the claim (either the claim made or the settlement sum) and the amount of the premium paid is not a reliable measure of the reasonableness of the ATE insurance premium. That would ignore the way in which the premium payable for a block-rated policy is fixed taking into account a basket of a wide range of cases. It is similar to the “swings and roundabouts” comments associated with fixed costs. In Sharp v Leeds City Council[2017] EWCA Civ 33[2017] 4 WLR 98, for example, Briggs LJ (as he then was) said:

“41. … The fixed costs regime inevitably contains swings and roundabouts, and lawyers who assist claimants by participating in it are accustomed to taking the rough with the smooth, in pursuing legal business which is profitable overall.””



The Court of Appeal ruled that a proportionality challenge is to be assessed by reference to all of the circumstances, and this encompasses matters which were not necessarily related to the case in question.

This is the so called “wider interpretation”.

A block-rated ATE premium can never be challenged on proportionality grounds.

It joins the categories of costs, such as court fees and VAT, which must always be left out of account. (see paragraphs 79 to 83).

Nevertheless, the court may still take into account the total bill, including these sacred items, and cut it on proportionality grounds, and reductions “will simply be by reference to other elements of cost, not the ATE insurance premium”.

“85. We recognise that this means that, when undertaking the proportionality exercise, it is those elements of cost which are not inevitable or which are not subject to an irreducible minimum which will be vulnerable to reduction on proportionality grounds in order that the final figure is proportionate. Such costs are, however, likely to be costs which have been incurred as a result of the exercise of judgement by the solicitor or counsel. Those are precisely the sorts of costs which the new rules as to proportionality were designed to control.

86. As should be apparent, leaving particular items out of account when considering proportionality because they are both reasonable and an unavoidable expenditure does not re-introduce theLowndstest, by which necessity always trumped proportionality. Most costs will still be subject to the proportionality requirement.”

The position will be different in relation to bespoke policies.


Costs Assessments Generally

The Court of Appeal gave guidance as to the correct approach to the assessment of costs generally.

“87. We are anxious not to restrict judges or force them, when assessing a bill of costs, to follow inflexible or overly-complex rules. One of the matters, however, which is apparent from the many cases cited to us, and from the submissions of counsel on the hearing of these appeals, is that there is an absence of consistency in the way in which costs bills are assessed. Taking the various points made above and drawing them together, we give the following guidance on an appropriate approach.

88. First, the judge should go through the bill line-by-line, assessing the reasonableness of each item of cost. If the judge considers it possible, appropriate and convenient when undertaking that exercise, he or she may also address the proportionality of any particular item at the same time. That is because, although reasonableness and proportionality are conceptually distinct, there can be an overlap between them, not least because reasonableness may be a necessary condition of proportionality: see Rogers at paragraph 104. This will be a matter for the judge. It will apply, for example, when the judge considers an item to be clearly disproportionate, irrespective of the final figures.

89. At the conclusion of the line-by-line exercise, there will be a total figure which the judge considers to be reasonable (and which may, as indicated, also take into account at least some aspects of proportionality). That total figure will have involved an assessment of every item of cost, including court fees, the ATE premium and the like.

90. The proportionality of that total figure must be assessed by reference to both r.44.3(5) and r.44.4(1). If that total figure is found to be proportionate, then no further assessment is required. If the judge regards the overall figure as disproportionate, then a further assessment is required. That should not be line-by-line, but should instead consider various categories of cost, such as disclosure or expert’s reports, or specific periods where particular costs were incurred, or particular parts of the profit costs.

91. At that stage, however, any reductions for proportionality should exclude those elements of costs which are properly regarded as unavoidable, such as court fees, the reasonable element of the ATE premium in clinical negligence cases, and the like. Specifically, therefore, if the ATE premium is assessed as reasonable, it will not fall to be reduced by any further assessment of proportionality.

92. The judge will undertake the proportionality assessment by looking at the different categories of costs (excluding the unavoidable items noted above) and considering, in respect of each such category, whether the costs incurred were disproportionate. If yes, then the judge will make such reduction as is appropriate. In that way, reductions for proportionality will be clear and transparent for both sides.

93. Once any further reductions have been made, the resulting figure will be the final amount of the costs assessment. There would be no further stage of standing back and, if necessary, undertaking a yet further review by reference to proportionality. That would introduce the risk of double-counting.


There can be no further look at proportionality.

The judgment contains a very lengthy report from the assessors, which is an extremely helpful explanation of how ATE insurance works, and how the premiums are calculated.

Written by kerryunderwood

July 30, 2019 at 7:49 am

Posted in Uncategorized


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

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


Transfer Out of Shorter Trials Scheme Refused


Sprint Electric Ltd v Buyer’s Dream Ltd and another [2019] EWHC 1853 (Ch)

the Chancery Division of the High Court refused the claimant permission to transfer an intellectual property claim out of the Shorter Trials Scheme.

The court was satisfied that it had power to transfer the case under CPR 3.1(2) – see

Family Mosaic Home Ownership Ltd v Peer Real Estate Ltd [2016] EWHC 257 (Ch) ­

even though there was no express provision in Practice Direction 57AB.

Otherwise there was a “very real and regrettable danger” that claims inappropriately started in the Shorter Trials Scheme without the defendant objecting, would have to remain there, even if that was unsuitable.

On the facts here, the court found that there were case management benefits for the court and both parties if the case remained within the scheme, although the court observed that split trials do not readily fit in to Practice Direction 57AB.

The stringency of controls and economy of procedures in the Shorter Trials Scheme would benefit the parties.

The court adopted a pragmatic approach to make the split trial work, but stressed that this ruling could not resolved that issue generally.

Here, liability had been determined and the remedies and quantum stage had been reached.

The claimant submitted that the complexity of the case, the likely volume of disclosure, the estimated hearing length and the limits on the length of witness statements made the Shorter Trials Scheme inappropriate, although it was the claimant who had voluntarily started the case there.

The court removed the 25-page limit on witness statements and adjusted the time estimate.


Disclosure Guidance Hearings – The Disclosure Pilot Scheme


Vannin Capital PCC v RBOS Shareholders Action Group Ltd and others [2019] EWHC 1617 (Ch)

the Chancery Division of the High Court granted the claimant’s application under Practice Direction 51U.17 for an order requiring the second defendant to carry out further searches in order to comply with the Extended Disclosure Order made, and refused the second defendant’s application under Practice Direction 51U.18.1 to vary the order to exclude one specified entity on the ground of proportionality.

This is one of the first cases under the Disclosure Pilot Scheme in Practice Direction 51U and the court gave useful guidance.

The court strongly encouraged the parties to seek guidance in Disclosure Guidance Hearings, under Practice Direction 51U.11 before making formal applications, as this was likely to save time and costs.

The court’s discretion to vary its own order for Extended Disclosure is not subject to the applicant satisfying the conditions in

Tibbles v SIG plc [2012] EWCA Civ 518 ,

that is that there has been a material change of circumstances since the order was made, or a misstatement of facts on which the original decision was based.

In an appropriate case, the court would exercise its discretion to reduce the scope of Extended Disclosure Order, and, as with requiring additional disclosure, the question in an application to reduce would centre upon proportionality.


Claimant Cannot Be Forced to Either Plead or Abandon a Claim


Pixdene Ltd v Paddington and Company Ltd and another [2019] EWHC 1842 (IPEC)

the Intellectual Property and Enterprise Court held that it had no power to order the claimant either to amend its particulars of claim to include matters mentioned in the draft particulars, or formally to abandon those claims.

The real issue was whether the conduct was an abuse of process, and the court noted that:

  • the rule in Henderson v Henderson did not require a party to pursue a claim or abandon it;
  • it would not make a ruling on a hypothetical basis that the claimant would bring further proceedings;
  • it was not inevitable that any further claim would fall foul of the rule in Henderson v Henderson, which states that a party should pursue its entire case in one action.


The court considered and set out the relevant case law, including:


No Default Judgment Where Defence Filed Late


Clements Smith v Berrymans Lace Mawer Service Company and another [2019] EWHC 1904 (QB) (18 July 2019

the Queen’s Bench Division of the High Court held that a judgment in default of defence must be set aside as of right, because the court did not have jurisdiction under CPR 12.3 to enter a default judgment where a defence had been filed, albeit after the expiry of the relevant time limit.

Thus, to succeed in obtaining a default judgment, the claimant must obtain in before a defence is filed, even if that defence is late. The expiry date for the defence is therefore irrelevant. The Denton Principles did not apply and there was no need for relief from sanctions.

The court granted permission to appeal to the Court of Appeal, given the absence of higher authority and inconsistent first instance decisions, and recognising the importance of the issue.


High Court Enforcement


Court Enforcement Services Ltd v Burlington Credit Ltd [2019] EWHC 1920 (QB) (19 July 2019)

the Queen’s Bench Division of the High Court held that where two creditors issue separate writs of control, priority will be given to the creditor whose writs are received first by a High Court Enforcement Officer, rather than to the creditor whose Enforcement Officer first gets money from the debtor.

Thus, where there are two High Court Enforcement Officers, priority is determined by who first got the writ, and not who first gets the money.

On 22 July 2019 the Ministry of Justice published an update, in a written statement, on its review of the implementation of the Enforcement Agent Reforms contained in the Tribunals, Courts and Enforcement Act 2007.

Consultation is continuing, but it will be compulsory for High Court Enforcement Officers and certified Enforcement Agents to have body-worn cameras when enforcing.

This change will not apply to County Court Bailiffs, as they are employed by Her Majesty’s Courts and Tribunal Service, and are outside the scope of the review.


Disclosure and Internet Service Providers


Mircom International Content Management & Consulting Ltd & Others v Virgin Media Ltd & Another [2019] EWHC 1827 (Ch) (16 July 2019)

the Chancery Division of the High Court considered the correct legal approach to granting Norwich Pharmacal relief requiring an internet service provider to disclose the names and addresses of tens of thousands of residential broadband subscribers  who had allegedly downloaded films in breach of copyright.

The court held that the general Data Protection Regulations had made no difference and that the approach set out in

Golden Eye (International) Ltd v Telefónica UK Ltd [2012] EWHC 723 (Ch) and

Golden Eye (International) Ltd v Telefónica UK Ltd (Open Rights Group intervening) [2012] EWCA Civ 1740

remained applicable.


Wrong Name Did Not Invalidate Notice of Adjudication


MG Scaffolding (Oxford) Ltd v Palmloch Ltd [2019] EWHC 1787 (TCC)

the Technology and Construction Court held that using the respondent party’s trading name instead of its correct name did not invalidate the Notice of Adjudication, the test being how it would appear to a reasonable recipient and looking at the substance rather than the form.

Here, the position was certain as the Notice referred to a specific property and project and was emailed to the person dealing with it.

The court considered and set out the case law in this area.




Gulf International Bank BSC v Aldwood [2019] EWHC 1666 (QB)

the High Court, in differing from several other first instance decisions, refused to stay proceedings in England and Wales against a defendant domiciled here, even though the bank’s claim was brought under a guarantee subject to Saudi Arabian jurisdiction.

The decision confirms that in Owusu, where the European Court of Justice held that the Brussels Convention prevented a court from declining jurisdiction on the ground that a court of a non-contracting state would be a more appropriate forum.


Sabbagh v Khoury [2019] EWCA Civ 1219

the Court of Appeal held that an English/Welsh court had jurisdiction to grant an anti-arbitration injunction to prevent vexatious and oppressive conduct, even if the courts of England and Wales are not the natural forum for the dispute.

The power is contained in section 37 of the Senior Courts Act 1981.

The judgment analyses in detail the exceptional circumstances in which such a decision may be made.

The relevant foreign jurisdiction here was that of the Lebanon.


Tomlin Order Not a Regulated Credit Agreement


CFL Finance Ltd v Bass & Ors [2019] EWHC 1839 (Ch)

the Chancery Division of the High Court held that a structured settlement clause providing for a debt to be paid over time, in the form of a Tomlin Order, does not extend “credit” or “financial accommodation” under section 9(1) of the Consumer Credit Act 1974 and thus the arrangements were not within the scope of consumer credit regulations.


Assessing Recoverable After the Event Insurance Premiums


West v Stockport NHS Foundation Trust and Demouilpied v Stockport NHS Foundation Trust [2019] EWCA Civ 1220

the Court of Appeal held that a block- rated After the Event Insurance policy, that is one where the premium is not fixed by reference to the individual case, is not subject to proportionality on assessment.

Although this case concerned premiums in clinical negligence cases, the principles will apply in defamation and privacy cases, where recoverability of success fees has been abolished, but recoverability of After the Event Insurance premiums remains.

This may well be the model used in other areas of civil litigation going forward, as it provides access to justice, a point emphasised here by the Court of Appeal.

Written by kerryunderwood

July 29, 2019 at 8:06 am

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

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

Probably not, which is also the view of the Senior Costs Judge.

Part 36 is a self-contained code and CPR 47 specifically applies Part 36 to between the parties’ costs assessments and CPR 47.20 clearly relates to between the parties’ cases.

Solicitor and own client assessments are governed by primary legislation – the Solicitors Act 1974 – and the relevant CPR is Rule 46.

Section 70(9) of the Solicitors Act 1974 provides that for a challenging, that is paying, party to win and get costs, that party must achieve at least a 20% reduction in the bill.

Practice Direction 46 specifically refers to the court determining the costs of a solicitor and own client assessment by reference to this Rule.

Consequently, it is unlikely that the strict consequences of CPR 36.13 apply, so there would be no deemed order for costs made upon acceptance.

A Calderbank offer can still be made on terms as to costs, and if accepted that is that.

If it is not accepted and the paying party fails at trial to reduce the sum below that offered by the solicitors, then the court will take the offer into account.

It will almost certainly displace the One-fifth rule if the offer is not beaten – see

Angel Airlines SA v Dean & Dean (QBD) [2009] 2 Costs LR 159

So, the bill is £20,000.

The solicitors make a Calderbank offer of £15,000 and the court awards £15,500.

Over 20% has been knocked off, so the challenger has met the one-fifth rule and so, on the face of it, is entitled to costs.

However, the client has been ordered to pay more than the solicitor was prepared to accept.

The claimant should be ordered to pay costs from a reasonable period – say 21 days – after the date of the offer.

Written by kerryunderwood

July 26, 2019 at 8:39 am

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Rattan v Carter-Ruck Solicitors [2019] 5 WLUK 633 (20 May 2019)

a Master refused a client’s out-of-time application for an extension of time to request a hearing of a detailed assessment of a solicitor’s bill under CPR 46.10 and ordered the costs to be assessed as billed, in the sum of £340,000.

The Master’s decision indicates that CPR 3.9 applies to such an application and rejected the client’s argument that

Haji-Ioannou v Frangos and others [2006] EWCA Civ 1663 and

Less and others v Benedict [2005] EWHC 1643


Those cases suggested that the court should grant indulgence for breach of a court rule absent misconduct, but they pre-dated the 2013 reforms emphasising compliance, and also concerned a receiving party failing to serve a timely notice of commencement of detailed proceedings in between the parties’ costs proceedings, or to request a hearing under CPR 47.

These principles did not apply to a solicitor and own client assessment under the Solicitors Act 1974, which was governed by CPR 46, and which involved different considerations, as in between the parties’ proceedings the receiving party already had a costs order and so delay was more akin to a delay in enforcement of the judgment, rather than a delay in pursuing the substantive claim.

It was appropriate to treat the application like one for relief from sanction under CPR 3.9.

Mark v Universal Coatings & Services Ltd [2018] EWHC 3206 (QB)

found that the “implied sanction” doctrine does not apply the CPR 3.9 principles to every instance where the rules provide that something “must” be done but there is no express sanction.

It depends upon the significance of the consequences of non-compliance; it was right to apply the doctrine here.

Applying the Denton criteria, the Master found that the client’s delay of three years was clearly serious and significant, and there was no good reason, and it was irrelevant that the client was a litigant in person, which did not justify ignoring court orders.

Requesting a hearing was not onerous.


An extension would likely mean extending for months, possibly years, to accommodate other proceedings against the solicitor and directions, and ultimately, it was highly unlikely that the client would derive any material benefit.

Even if Denton did not apply, the Master considered it was not consistent with the overriding objective to allow the extension.

The client was seeking to reduce the solicitor’s costs below a sum authorised by him in a settlement arrangement, to which he freely agreed, from which he benefited, and which represented a substantial reduction of the costs to which the solicitor was contractually entitled.

Indeed, the contractual entitlement of the solicitors was over two and a half times the amount that they actually billed – see paragraph 23 of the judgment.

Their costs would likely be assessed as this sum, and even if not, the client was unlikely to achieve any significant reduction.



A correct decision.

The solicitors did an outstanding job and under-charged by a very considerable margin.

Surely the time has come to end the right of a client to challenge a solicitor’s bill, other than in a usual way by defending any action on the bill as a debt in the County Court/High Court.


Written by kerryunderwood

July 15, 2019 at 11:15 am

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

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


Lee Edmunds v Motor Insurers’ Bureau, Arbitrator’s Decision, 10 May 2019

Arbitrator Colin McCaul QC was considering an appeal by the claimant against the decision of the Motor Insurers’ Bureau (MIB) in relation to a claim under the Untraced Drivers’ Agreement of 28 February 2017, where the MIB had held the claimant to be 50% liable for the accident due to the amount of alcohol that he had consumed and the clothes that he was wearing.

The claimant was a pedestrian at night, when he was struck by a car and his evidence was that he had drunk six pints of lager.


CC v TD [2018] EWHC 1240 (QB)

the Queen’s Bench Division of the High Court held that mere intoxication did not expose the claimant, in that case a pedestrian who died of his injuries, to criticism and that a claimant’s actions are to be judged by reference to a sober person.

There, the judge said that even if the claimant had been guilty of a degree of inadvertence, it did not amount to negligence.


Liddell v Middleton [1996] PIQR P36,

the Court of Appeal said:

“It is not the fact that a plaintiff [the old name for a claimant] has consumed too much alcohol that matters, it is what he does. If he steps in front of a car travelling at 30 mph at a time when the driver has no opportunity to avoid an accident, that is a very dangerous and unwise thing to do. The explanation of his conduct may be that he was drunk: but the fact of drunkenness does not, in my judgment, make the conduct any more or less dangerous and it does not in these circumstances increase the blameworthiness of it.”


Lunt v Khelifa [2002] EWCA Civ 801

the Court of Appeal said:

“It seems to me, as I have already indicated, that the fact that the appellant had taken drink was of undoubted significance if one was looking for some reason why he might have behaved in the way he did. But for the purposes of determining apportionment, the important question is what he did.”

The Arbitrator described the MIB’s criticism of the claimant for wearing flip flops, which are more likely to cause a person running to avoid a vehicle to trip over, as “faintly absurd”. It was the negligence of the driver that caused the flip flop to break and the claimant to stumble and fall.

The Arbitrator also had this to say about the MIB’s criticism of the claimant for wearing dark clothing at night:

The General Guidance to Pedestrians within the Highway Code at Rule 3 states that pedestrians should wear something light, coloured, bright or florescent in poor daylight conditions and use reflective materials when it is dark. Whilst that advice is not restricted in the countryside, there must be few, if any, pedestrians in citizen towns who adopt it. In consequence, I do not consider it negligent for the claimant to have worn the attire that he did.”

The Arbitrator held that the MIB, upon whom the onus of proof lies, failed to prove that the claimant was contributorily negligent.



A correct, sensible and practical decision.

Thank you to Lisa Quick, a Paralegal with Mooneerams Solicitors for information about this case.

Written by kerryunderwood

July 11, 2019 at 12:57 pm

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