Kerry Underwood

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£2.6 MILLION CLAIM SHOULD NOT GO ON THE PORTAL: CLAIM STRUCK OUT

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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.

In

Cable v Liverpool Victoria Insurance Company Limited, Liverpool County Court – Case number D34BI037

the Circuit Judge, hearing an appeal from a District Judge, upheld the District Judge’s decision to refuse to lift a stay on Part 8 proceedings, and the consequent striking out of the claim, in a case placed on the portal and “parked” there.

Here, the claimant issued Part 8 proceedings in a case which the claimant himself maintained at a value of £2.6 million as compared with the portal limit at £25,000.

The judge said that this was a case that “never, ever at the time they issued the claim form could it be said would have a value of £25,000 or less. That to me is an abuse of process and the abuse comes from using the procedure that is available to portal claims in a case that could not be said, on any stretch of the imagination, to be a portal claim….”.

Here, the claimant was injured in a road traffic accident in September 2014 and the solicitors placed the matter on the portal, and initially the claim was said to be low value but a medical report indicated that the claimant was still absent from work.

The defendant sought further information but got little response and the claimant engaged in what the District Judge called “radio silence”.

In July 2017 the claimant’s solicitors issued a Part 8 Claim Form and a stay was granted until August 2018, with the court ordering that a copy of the order be sent to the defendant by August 2017, although it was not in fact sent until February 2018.

In August 2018 the claimant’s solicitors told the defendant that the case was substantial with the claimant losing £130,000 a year through being unable to work.

The claimant applied to lift the stay and for the matter to proceed on a Part 7 basis and that application was granted without notice to the defendant, who then applied, and succeeded, in having that order set aside.

The District Judge refused to allow the matter to proceed by way of Part 7, and struck the claim out, and that decision was upheld by the Circuit Judge.

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Written by kerryunderwood

August 14, 2019 at 8:07 am

Posted in Uncategorized

NO WASTED COSTS AGAINST LAWYERS ACTING ON CONDITIONAL FEE AGREEMENT

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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.

In

Willers v Joyce & Ors [2019] EWHC 2183 (Ch) (08 August 2019)

the Chancery Division of the High Court dismissed an application under section 51 of the Senior Courts Act 1981 for a costs order against solicitors and counsel who had represented an unsuccessful claimant on a conditional fee basis.

The claimant brought, and lost, an action for malicious prosecution and abuse of process and, after the case had ended, the defendant joined in as costs defendants under CPR 46.2(1)(a)  the solicitors, leading counsel and junior counsel who had acted for the claimant, alleging that the main reason for the claim was the claimant’s lawyers’ wish to recover unpaid fees from previous cases.

The amount disallowed on detailed assessment in the previous case was a specific head of damages in the current action.

Although the claim was lost on the facts here, it is possible to claim costs as a head of damages

 – see my post – COSTS PERMITTED TO BE CLAIMED AS DAMAGES

reporting the case of

Playboy Club London Ltd v Banca Nazionale Del Lavora SPA [2019] EWHC 303 (Comm) (21 February 2019).

The decision contains no new law, but reviews the case law at length, including the key decision in

Sibthorpe v Southwark London Borough Council (Law Society intervening) [2011] EWCA Civ 25 .

The court reiterated the point that there is a strong public interest in ensuring that impecunious claimants can have access to justice, even if that means successful defendants are left out of pocket.

“54.In my judgment the principle that emerges clearly from the decisions of this Court in Tolstoy, Floods and Hamilton v Al Fayed is that there is a strong public interest in ensuring that impecunious claimants can have access to justice even if that means that successful defendants are left substantially out of pocket. Because of this, legal representatives should not be at risk of a third party costs order unless they are acting in some way outside the role of legal representative. The nature of the role of the legal representative means that the indicators useful in considering the liability of, for example, a pure funder, such as whether he has been closely involved in making decisions about the conduct of litigation or whether he has a substantial financial interest in the success of the litigation do not work. The legal representative will always be closely involved in taking decisions about the conduct of the litigation and will always have a financial interest in the outcome, particularly where he is working under a conditional fee agreement or because although he is invoicing the client regularly for work done, he knows that in practice he will never be paid unless the client wins the case.”

 

See my post – CONDITIONAL FEE AGREEMENTS, DAMAGES-BASED AGREEMENTS AND CONTINGENCY FEES

Written by kerryunderwood

August 13, 2019 at 7:33 am

Posted in Uncategorized

FIXED COSTS APPLY TO DEFENDANTS AS WELL AS CLAIMANTS

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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.

In

Woodward v Hyder A2/2017/1929

the Court of Appeal, by consent, allowed the claimant’s appeal against the order of Nottingham County Court that he pay the costs of an interlocutory application on an open basis, rather than paying fixed costs in accordance with CPR 45.29H.

This is a reminder that fixed costs apply to defendants as well as to claimants.

The rule is crystal clear.

Not all judges get it.

The claimant here not only lost originally, but also lost at the first appeal stage.

See –  FIXED COSTS, ALL THE PORTALS AND FIXED RECOVERABLE COSTS

Written by kerryunderwood

August 12, 2019 at 3:35 pm

Posted in Uncategorized

PROVISIONAL ASSESSMENTS: JURISDICTION OF COSTS OFFICERS AND APPEALS

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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.

In

PME v The Scout Association (30 July 2019), SCCO

the Senior Courts Costs Office has given guidance as to the jurisdiction of costs officers to undertake provisional assessments, and the scope of appeals from provisional assessments.

The Master referred to “costs officer” in his judgment as an “authorised court officer”, and held that costs officers had jurisdiction to conduct provisional assessments.

Under CPR 44.1 an “authorised court officer” means any officer of the County Court, a district registry of the High Court, the Principal Registry of the Family Division, the High Court or of the Senior Courts Costs Office, who is authorised by the Lord Chancellor to assess costs.

He interpreted CPR 47.3 (jurisdiction of authorised costs officer), supplemented by Practice Direction 47.3, and CPR 47.15 (provisional assessment), supplemented by Practice Direction 47.14, to mean that they should and CPR 47.15 did not alter that jurisdiction.

CPR 47.3 was not specifically mentioned in Practice Direction 47.14, where that set out the provisions of CPR and Practice Direction 47 applying to cases falling within CPR 47.15 (provisional assessment), because it did not need to be.

CPR 47.3 had to do with the jurisdiction of a costs officer, not with procedure.

Most bills under £75,000 were provisionally assessed and, in the Senior Courts Costs Office, mostly by costs officers.

The rules committee could not have intended that CPR 47.3 and Practice Direction 47.3 should confer upon costs officers jurisdiction to assess bills, and at the same time exclude them from assessing the vast majority of bills, that is those dealt with by way of provisional assessment.

There is no appeal from a provisional assessment, only from an oral hearing requested after such assessment under CPR 47.15(7).

While appeals from decisions of costs officers involve re-hearings rather than review – see CPR 47.24, the appeal of an oral hearing after provisional assessment is confined to a re-hearing of the matters decided at the oral hearing.

There should not be a fresh assessment.

This was consistent with the aim of the provisional assessment process, which was to save time and costs, and it could not be right that a party should have two rights to challenge the provisional assessment.

 

Please see –

COSTS ROUND-UP

LEGAL OMBUDSMAN: AN OMBUDSMAN’S VIEW OF GOOD COSTS SERVICE SECOND EDITION

COURTS MUST NOT CONSIDER JACKSON REFORMS ETC. SAYS COURT OF APPEAL

Written by kerryunderwood

August 9, 2019 at 8:20 am

Posted in Uncategorized

SUCCESS FEE AND INSURANCE PREMIUM RECOVERABLE ON SWITCH FROM LEGAL AID TO CONDITIONAL FEE AGREEMENT

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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.

In

AB v Mid Cheshire Hospitals NHS Foundation Trust [2019] EWHC 1889 (QB) (16 July 2019)

the High Court dismissed an appeal against a Regional Costs Judge’s order that additional liabilities of a success fee and an ATE insurance premium were recoverable by the claimant, a protected party acting by his mother and litigation friend, from the defendant.

The claimant claimed damages for medical negligence relating to catastrophic brain injuries and the litigation friend instructed solicitors in 2010 and legal aid was granted but the litigation friend discharged the legal aid certificate and entered into a Conditional Fee Agreement in February 2013.

The claim was settled for a £3.8 million lump sum and annual periodic payments, by which time, the claimant had instructed 12 experts in various fields.

The litigation friend’s bill of costs amounted to just over £1 million, including a success fee of £388,173.40 and an ATE insurance premium of £29,256.

The court held that the Regional Costs Judge had been entitled to find that the additional liabilities were reasonably incurred.

The litigation friend’s decision to change to Conditional Fee Agreement funding was reasonable because a serious dispute had arisen between three experts about causation, which was critical to the claim’s success.

Experts had already been instructed and hourly rates had already been an issue for one of them although he had reduced his rate.

The Legal Services Commission’s approach to hourly rates also caused problems with other experts.

The Regional Costs Judge had been entitled to find that the failure of the litigation friend’s solicitors to provide Simmons v Castle advice that the claimant would lose the 10% uplift on damages did not make the decision to change funding unreasonable because advice on that point would not have affected her decision.

The court held that failure to advise on the potential liabilities for a higher hourly rate and success fee did not undermine the reasonableness of the change.

There was a very real risk of no recovery because of the causation issue, meaning that the requirement to have the freedom of a Conditional Fee Agreement to attempt to secure some recovery became the decisive feature.

 

Please see –

COSTS ROUND-UP

LEGAL OMBUDSMAN: AN OMBUDSMAN’S VIEW OF GOOD COSTS SERVICE SECOND EDITION

COURTS MUST NOT CONSIDER JACKSON REFORMS ETC. SAYS COURT OF APPEAL

Written by kerryunderwood

August 9, 2019 at 8:00 am

Posted in Uncategorized

NON-PARTY COSTS ORDERS AND DISCLOSURE

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

In

Rudd v Bridle & Anor [2019] EWHC 1986 (QB) (24 July 2019)

the Queen’s Bench Division of the High Court refused a claimant’s application for disclosure of the defendants’ funding arrangements, and in doing so set out the relevant legal principles.

The purpose of the application was to obtain information to support an application for a costs order against a non-party under section 51(3) of the Senior Courts Act 1981.

Here, the claimant succeeded in part against the first individual defendant, but failed against the second company defendant.

The losing individual was ordered to pay half of the claimant’s costs, but to pay, on the indemnity basis, the claimant’s costs in relation to the failed action against the company.

The claimant sought an order relating to “the identity of the individuals, companies or entities who have financed or provided financial support to the defendants or either of them during and in relation to the present litigation and related documents.”

 

The court set out the general principles:

 

Funding Disclosure

Legal framework

8. The basic legal framework is not in dispute. The court has power to make orders for costs against non-parties. This is part of the general power to make orders as to the costs of proceedings which is conferred by s 51(3) of the Senior Courts Act 1981: see Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965. There are many circumstances that could in principle justify a third-party costs order, but commonly, third parties are targeted on the basis that they have funded an unmeritorious claim or defence.

9. The factors to be considered, and the relevant principles, have been the subject of consideration in a substantial number of reported and unreported cases, including Symphony Group Plc v Hodgson[1994] QB 179 (CA), Hamilton v Al Fayed (No 2)[2002] EWCA Civ 665[2003] QB 1175Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Others [2004] UK PC 39 [2004] 1 WLR 2807,Petroleo Brasileiro SA v Petromec Inc [2005] EWHC 2430 (Comm) [2005] All ER (D) 48, and Deutsche Bank AG v Sebastian Holdings Inc [2016] EWCA Civ 23. The general principles that can be extracted from these authorities include the following:

(1) The power to make a costs order against a non-party is exceptional in the sense that such orders are not usually made. Such an order may only be made where there has been conduct by the non-party such as to render the order just and reasonable: see Symphony Group at 192H (Balcombe LJ);

(2) The power will not generally be used against “pure funders”, that is to say persons who provide financial support to a litigant but who have no personal interest in the litigation, who do not stand to benefit from it, who do not fund the litigation as a matter of business, and who do not seek to control its course: Dymocks [25(1) – (3)] (Lord Brown).

10. The modern jurisprudence is well summarised in Turvill v Bird [2016] EWCA Civ 703[2016] BLR 522, where Hamblen LJ (with whom Gross LJ agreed) said this:

“24. A number of recent authorities have stressed that this is a jurisdiction which must be exercised in the interests of justice and that its exercise should not be overcomplicated by authority.”

He was referring, among others, to these observations of Moore-Bick LJ in the Deutsche Bank case at [62]:

“We think it important to emphasise that the only immutable principle is that the discretion must be exercised justly. It should also be recognised that, since the decision involves an exercise of discretion, limited assistance is likely to be gained from the citation of other decisions at first instance in which judges have or have not granted an order of this kind.”

11. Hamblen LJ went on to say this:

“27. The authorities illustrate “the variety of circumstances in which the court is likely to be called upon to exercise the discretion” and “the kind of considerations upon which the court will focus”, but are not to be treated as providing “a rulebook”. The kind of considerations illustrated by the authorities include the following:

(1) Whether the non-party funds the proceedings and substantially also controls or is to benefit from them and is the “real party” to them;

(2) Whether the non-party promotes and funds proceedings by an insolvent company solely or substantially for his own financial benefit;

(3) Whether there is impropriety by the non-party in the pursuit of the litigation.

(4) Whether the non-party causes costs to be incurred….

28.(1) (2) and (3) are all examples of circumstances in which non-party costs orders have been made. Generally (4), causation, is also required “to some extent” (per Morritt LJ in Global Equities Ltd v Globe Legal Services Ltd [1999] BLR 232) although it is not a necessary pre-condition, as held in Total Spares & Supplies Ltd v Antares SRL [2006] EWHC 1537 (Ch). In that case, however, there was still a causal link between the non-party’s actions and the claimant’s costs recovery in that he had deprived the claimant of any realistic opportunity of recovering its costs. The link was with the recovery of costs rather than the incurring of costs, but in both cases the claimant has to bear costs in circumstances where he otherwise would not have done.”

12. Procedurally, a court considering whether to exercise the power to make a third-party costs order must add the third party to the proceedings for the purposes of costs only, and give the person a reasonable opportunity to attend a hearing at which the court will consider the matter further: CPR 46.2(1). There may of course be a need to identify third parties, as a preliminary step towards engaging them in this process. Funders may be covert, or anonymous. It is clear that the court has a discretionary power, ancillary to its costs jurisdiction, to require a party to disclose to the other party the names of those who have financed the litigation: Abraham v Thompson[1997] 4 All ER 362, 368 (CA), Raiffeisen Zentralbank Osterreich AG v Crossseas Shipping Ltd[2003] EWHC 1381 (Comm)[7] (Morison J). This is the power relied on by the claimant on this application.

13. There is authority that this power extends to directing the disclosure of information going beyond the mere identity of the third-party funder. The court can make whatever ancillary orders will make the section 51 remedy effective, so that in an appropriate case the court may exercise a discretion to order more against the party who has been funded than simply the disclosure of the names of those individuals who have funded the litigation: see Automotive Latch Systems Ltd v Honeywell International Inc [2008] EWHC 3442 (Comm) [13], [16] (Flaux J).

14. The disclosure sought and ordered in the Automotive Latch case extended to the identities of any funders; the amount of such funding; the terms on which it was provided; the extent of each such party’s involvement in the conduct of the action; and the nature and extent of the third party’s interest (financial or otherwise) in the outcome of the action: see ibid [3] and [17]. The order sought on this application tracks the form of order granted in that case.”

 

On the facts, the court refused the application.

 

Please see –

COSTS ROUND-UP

LEGAL OMBUDSMAN: AN OMBUDSMAN’S VIEW OF GOOD COSTS SERVICE SECOND EDITION

COURTS MUST NOT CONSIDER JACKSON REFORMS ETC. SAYS COURT OF APPEAL

Written by kerryunderwood

August 8, 2019 at 8:54 am

Posted in Uncategorized

COSTS IN STATUTORY REVIEW AND JUDICIAL REVIEW CLAIMS

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

In

Campaign to Protect Rural England – Kent Branch v Secretary of State for Communities and Local Government and another [2019] EWCA Civ 1230 (15 July 2019)

the Court of Appeal held that an unsuccessful claimant in a planning statutory review was required to pay the costs of two defendants and an interested party, and that the collective application of an Aarhus cap for protection of environmental costs to these was permissible.

Thus the court awarded costs against the claimant in relation to three sets of defence costs, but in relation to the costs of the interested party, reduced them to £1,875.50, so that the overall total did not exceed the Aarhus cap of £10,000.

It was accepted that this was an Aarhus claim.

This is a reference to the Aarhus Convention of 1998 which provided that environmental litigation should not be “prohibitively expensive”.

The United Kingdom implemented this by providing in the Civil Procedure Rules, in 2017, that there should be a cap on the total costs liabilities of claimants to other parties.

At present that cap is £10,000.

The interested party did not appeal against the decision to cap only its costs so as to keep the total within the Aarhus cap, as compared with applying a pro rata reduction in respect of all three of the successful parties.

The claimant appealed, submitting that is was wrong to award more than one set of costs.

The claimant also submitted that it was wrong to absorb all of the Aarhus cap of £10,000 at the permission stage, as the cap applied to the whole costs of full proceedings.

The Court of Appeal held that there was no rule limiting the number of parties that could recover their reasonable and proportionate costs of preparing an Acknowledgement of Service if permission was refused to a claimant, and so the appeal on that point was dismissed.

The High Court held that the principles established in

R (Mount Cook Land Ltd) v Westminster City Council [2004] C.P Rep. 12

applied to statutory review cases as well as judicial review claims:

“It is plain that the guidance given… about the recoverability of the costs of an Acknowledgement of Service and summary grounds when permission is refused, was and is equally applicable to both judicial review and statutory review claims.”

The Court of Appeal then reviewed the judgments in

R (on the application of Mount Cook Land Limited) v Westminster City Council [2003] EWCA Civ 1346

and

Bolton Metropolitan District Council and others v Secretary of State for the Environment [1995] 1 WLR 1176,

and gave guidance on the extent to which the costs of multiple parties will be proportionate and therefore recoverable.

The Court of Appeal also rejected the argument that it was wrong to absorb all of the Aarhus cap at the permission stage.

The Court of Appeal also held that the position of interested parties was the same as that of actual defendants but observed that an interested party had greater freedom than a defendant to choose the extent to which they were involved in the proceedings.

The Court of Appeal also observed that it was wrong to introduce material surrounding the introduction of a new part of the Civil Procedure Rules:

 

“That is not good practice. The Rules say what they say and will be interpreted accordingly.”

 

That is an interesting, and potentially important, observation, as courts frequently quote various sections of reports, in particular the reports of Lord Justice Jackson, as background to the contents of Civil Procedure Rules.

That is now forbidden.

 

Please see –

COSTS ROUND-UP

LEGAL OMBUDSMAN: AN OMBUDSMAN’S VIEW OF GOOD COSTS SERVICE SECOND EDITION

COURTS MUST NOT CONSIDER JACKSON REFORMS ETC. SAYS COURT OF APPEAL

Written by kerryunderwood

August 8, 2019 at 8:15 am

Posted in Uncategorized

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