Kerry Underwood


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In Hampshire Hospitals, NHS Foundation Trust v Tucker [2017] EWHC 3650 (QB)

the Queen’s Bench Division of the High Court allowed an appeal against a judge’s assessment of a recoverable success fee on the ground that the judge’s failure to take into account relevant documents was a procedural irregularity.

The issue here was whether the success fee should have been 100% as allowed by the judge, or 70% as contended by the paying party.

Even given this fairly narrow area of disagreement, the High Court declined to substitute its own decision, in spite of being invited to do so.

“The assessment of a reasonable success fee is one for an experienced costs judge, with years of experience of assessing the risks of litigation and of conditional fee agreements, to make. It is not one for a very new visitor to this highly specialised arena.”



Ridiculous. So we now have full High Court judges unprepared to assess the risks of litigation. What happens if this comes back on appeal? Parliament has decided that High Court judges should have an appellate function. End of.


Written by kerryunderwood

May 9, 2018 at 8:29 am

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In Stephen Hawking and Others v Secretary of State for Health and Social Care and National Health Service Commissioning Board

the High Court granted a costs capping order in judicial review proceedings financed by crowdfunding.

The court held that costs certainty in respect of claimants bringing a claim in the public interest was a key factor, even though the individuals were of relatively significant means and had crowdfunded to meet their own lawyers’ costs as well as any Adverse Costs Order.

The court recognised that where a judicial review application is crowdfunded, the public is funding both sides: the government by tax payers and the claimants by crowdfunding.

The court also noted that crowdfunding is inherently uncertain and the certainty provided by a costs capping order was necessary to enable individuals to take a public interest case forward.

The order was not for the full amount of the money raised, thereby enabling the claimants’ lawyers own costs to be met.

At an oral hearing on 22 February 2018 the High Court overturned a paper ruling rejecting the application and held that this judicial review, funded by thousands of backers on CrowdJustice, met the statutory test set out in Section 88(6) of the Criminal Justice and Courts Act 2015 which provides that the court may make a costs capping order only if it is satisfied that –

“(a) the proceedings are public interest proceedings,

(b)  in the absence of the order, the applicant for judicial review would withdraw the application for judicial review or cease to participate in the proceedings, and

(c) it would be reasonable for the applicant for judicial review to do so.”


The court took into account the fact that the defendants’ costs were very high and without a costs cap there could be no certainty for the claimants as to their potential exposure and they could not be criticised as being unreasonable in not proceeding with open ended potential liabilities.

The claimants needed certainty to inform them of fundraising targets and to allow them to make an informed decision on whether to proceed.

The claimants were willing to meet a substantial degree of the defendants’ costs by raising money through crowdfunding.

The case of


Corner House (R on the application of Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA. Civ 192


anticipated a variety of circumstances in which costs capping orders could be made, and not just where there was a single claimant of very modest means.

The court made a costs capping order of £80,000.00 in respect of each of the defendants’ costs, £160,000.00 in total, and a reciprocal cap of £115,000.00 in respect of the claimants’ costs.

The claimants had raised nearly £265,000.00 after three rounds of crowdfunding and private donations and so the decision allowed for funds to meet the costs of the claimants’ own lawyers.



Written by kerryunderwood

May 8, 2018 at 10:30 am

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In Nicolaou v Cass Liverpool County Court, 1 November 2017, Case number BO4L V651

the District Judge disallowed recovery of a large part of an After the Event insurance premium as there was insufficient evidence to support the claim.

This was a clinical negligence matter that settled for £250,000.00.

The defendant paying party challenged the reasonableness of the After the Event insurance premium of £53,145.00, including a stage two premium of £48,195.00, and sought to rely on less expensive comparator policies while the claimant sought to justify the choice of policy, whilst seeking to resist giving details of how the premium was calculated.

The claimant’s solicitors erroneously stated that it was a block-rated policy with a fixed second stage premium and erroneously stated that the second stage premium was £48,195.00, when in fact it was £27,170.00.

The policy was an ARAG one and the defendant stated that in a number of similar cases ARAG had sought to put before the court different and inconsistent statements as to how the second stage premium was calculated.

The paying party also submitted that there was a breach of the indemnity principle in that the failure to provide proper documentation to the claimant meant that she was not liable to pay at the stage 2 premium and therefore the paying party did not have to indemnify her for a non-existent contractual liability.

The court held that even in the absence of the correct documentation being supplied to the claimant, she was liable to pay the premium and therefore the indemnity principle argument failed.

The court also held that the mere provision of comparator policies without more detail of an expert underwriting nature on the unreasonableness of the index policy, either as to terms or cost, was insufficient to justify a finding of unreasonableness in taking out that particular policy.

However, for reasons set out in paragraph 41 of the judgment, the court disallowed the whole of the stage 2 premium and allowed recoverability of just £4,950.00, holding that without needing to consider reasonableness or proportionality, the stage 2 claim failed for lack of quantifiability.


“41.     However, after careful consideration of the evidence before me and the submissions made at the hearing, I have concluded that the Claimant has not proved to my satisfaction and on the balance of probabilities any quantifiable level of that premium, for these reasons:-


(i)           the initial stage 2 premium claimed had every appearance of being genuinely and correctly calculated by ARAG and, but for my agreement to adjourn for further evidence, might well have been held as part of the assessed costs payable to the Claimant in these proceedings;

(ii)          it is only as a result of happy chance that, consequent upon my decision on the last occasion, Mr Dyer came to reconsider the figure and reached his conclusion as to the “typographical error”, with the consequential considerable reduction in the figure claimed;

(iii)         in those circumstances, in my view the court is entitled, in this matter at least, to entertain doubts as to the reliability of prima facie assertions of evidence and to expect a comprehensive approach to proving what might otherwise have been relatively straightforward matters of fact;

(iv)         as such, in that the evidence of Mr Dyer does little more than point out the error and apparently correct it, without supplying the court with any cogent, persuasive and thus apparently reliable basis upon which to accept not only the existence of the initial error but also the accuracy of the consequential correction, such that the Claimant is forced to resort to matters of theory alone as exemplified upon Issue 1 [12], I remain unpersuaded in support of a claim for a significant individual lump sum in excess of £27,000, set against this particular background of error and confusion, that the figure sought in substitution for that documented at [26] can be safely accepted as accurate on balance.”



Written by kerryunderwood

May 4, 2018 at 8:29 am

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In Chapman v Tameside Hospitals NHS Foundation Trust, Bolton County Court 15 June 2016

the court was considering the issue of costs in; a fixed costs, ex portal employers liability claim discontinued shortly before trial but where the court found the successful defendant’s conduct of the litigation to be “entirely unacceptable and egregious.”

The court found that this was “exactly the type of conduct which Part 44.2 is designed to address.”

CPR 44.2.1 gives the court a very wide discretion as to costs and 44.2.4(a) specifically states that in deciding what order, if any, to make about costs, the court will have regard to all of the circumstances including the conduct of the parties.

Here, the court held that it could apply CPR 44.2 in a fixed costs case and that the indemnity principle did not apply to such cases.


see Nizami v Butt [2006] EWHC 159 (QB)


“18. Mr Bacon, for the Claimant submitted:

  1. i) Master O’Hare’s analysis was correct. CPR 45 Section II provides for a self-contained scheme for the recovery of costs in litigation involving road traffic accidents giving rise to relatively small claims. The costs are recoverable whether or not they have actually been incurred. The Indemnity Principle has no place in a scheme where the costs are fixed. The Defendant’s arguments subvert this principle.
  2. ii) CPR 45 Section II applies to a closely confined category of cases. As CPR 45.7 makes clear, it is limited to costs-only proceedings under the procedure set out in CPR 44.12A.

Costs-only Proceedings


(1) This rule sets out a procedure which may be followed where –

(a) the parties to a dispute have reached an agreement on all issues (including which party is to bear the costs) which is made or confirmed in writing; but

(b) they have failed to agree the amount of such costs; and

(c) no proceedings have been started.

If the Defendant’s argument that the indemnity principle applies to this category of cases is correct, there is no reason why it could not challenge the amount of costs.

iii) As to Mr Mallalieu’s point iii), the success fee which is recoverable under Part 43.11 is in relation to a funding agreement as defined in CPR 43.2 (1)(k)(i), and not as defined in CPR 43.2 (3) and (4), which require ‘an agreement which satisfies all the conditions applicable to it by virtue of s.58 of the Courts and Legal Services Act 1990.’ CPR 43.11 is not concerned with compliance with conditions, simply with a funding arrangement, which is defined as a conditional fee agreement which provides for a success fee within the meaning of s.58(2) of the Courts and Legal Services Act 1990. Section.58(2) provides:

For the purposes of this section and section 58A –

(a) a conditional fee agreement is an agreement with a person providing advocacy or litigation services which provides for his fees and expenses, or any part of them, to be payable only in specified circumstances; and

(b) a conditional fee agreement provides for a success fee if it provides for the amount of any fees to which it applies to be increased, in specified circumstances, above the amount which would be payable if it were not payable only in specified circumstances.

  1. iv) In any event this appeal is premature since the Claimants have not yet prepared a bill of costs, let alone been in a position to provide a certificate. As Master O’Hare recorded:

The Claimants’ solicitor volunteers to give a certificate as to compliance with the Conditional Fee Agreement regulations in this case.




  1. I am advised by the Assessors that until the Court of Appeal decision in Hollins v. Russell [2003] EWCA Civ 718 numerous technical challenges were made to the validity of conditional fee agreements. As Mr Mallalieu put it in the course of argument, ‘the history of litigation in this field indicates that disproportionate points were taken.’ The challenges sought to show that conditional fee agreements did not comply with primary and secondary litigation; and were therefore unenforceable between solicitor and client. On this basis the paying party was able to rely on the Indemnity Principle so as to argue that it could avoid liability for the receiving party’s costs. It is clear that such challenges had a significantly detrimental effect on the efficient conduct of personal injury litigation and were inconsistent with the overriding objective of enabling the court to deal with cases justly. As Judge LJ noted in Bailey v. IBC Vehicles Ltd [1998] 3 All ER 570 at 575a:


The defendants’ request that the plaintiff be required to provide information proving that the indemnity principle has been observed represents pointless satellite litigation.”


Written by kerryunderwood

May 3, 2018 at 8:35 am

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In Loson v Stack and another [2018] EWCA Civ 803 (17 April 2018)

the Court of Appeal considered the interplay between an order that a debtor pay a judgment creditor’s costs by instalment and bankruptcy proceedings against that debtor, and also the circumstances in which an instalment order should be made.

Here the Court of Appeal upheld a High Court decision to set aside an instalment order as the debtor had not provided evidence of a realistic payment schedule and so the creditor could enforce the debt in any way it wanted.

The creditor had enforced the costs order by way of a statutory demand and a bankruptcy petition, and the debtor subsequently obtained an instalment order as the County Court took the view that that would not stop the creditor from continuing with the bankruptcy proceedings.

The creditor applied to set aside the instalment order on the ground that it rendered the bankruptcy petition debt no longer due and immediately payable, and the High Court set aside the instalment order and the debtor appealed.

The Court of Appeal held that the debtor did not have the ability to pay the costs order and failed to provide any evidence of his ability to repay the debt and therefore the High Court had been right to set aside the instalment order.

The Court of Appeal commented that although the court has jurisdiction to make a bankruptcy order based on the position at the date that the bankruptcy petition was presented, it must, in the exercise of its discretion, consider the change of circumstances created by an instalment order.

The Court of Appeal considered, by analogy with Rule 10.24 of the Insolvency (England and Wales) Rules 2016, that there was significant doubt that a bankruptcy order could be made where the petition debt was no longer due and payable, and where any arrears were below the bankruptcy level of £5,000.

The decision is Court of Appeal authority for the proposition that a bankruptcy petition, based on a debt which is due and payable at the time that the petition was presented, may continue to be prosecuted by a creditor even where an instalment order is subsequently made, but it is unlikely that a bankruptcy order will be made if the petition debt is less than the bankruptcy level at the time of the hearing, even if the debt was originally above the bankruptcy level of £5,000.

It also demonstrates that, when applying for an instalment order under CPR 40.11 or CPR 40.9A, a debtor must provide evidence that he can pay the principal and interest within a reasonable time.

If that is not the case, then the court should not interfere with the creditor’s right to enforce the judgment by whatever means available.


Written by kerryunderwood

May 2, 2018 at 8:29 am

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The new Practice Direction on Insolvency Proceedings was published on 25 April 2018 and came into force immediately.

It replaces all previous Practice Directions, Practice Statements and Practice Notes relating to Insolvency Proceedings, but it does not affect other Practice Directions in the Civil Procedure Rules, the Practice Direction for Insolvency Express Trials, and neither does it affect the Practice Direction for Directors Disqualification Proceedings.

As with previous Insolvency Proceedings Practice Directions, the new one contains procedural requirements for various aspects of proceedings under the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016 and the various European Union Regulation.


Insolvency Proceedings are defined as any proceedings under


  • Parts 1 to 11 of the Act;


  • The Insolvency Rules;


  • The Administration of Insolvent Estates of Deceased Persons Order 1986;


  • The Insolvent Partnerships Order 1994;


  • The Limited Liability Partnerships Regulations 2001;


  • Any proceedings under the EU Regulations on Insolvency Proceedings or the Cross-Border Insolvency Regulations 2006; and


  • in an insolvency context an application made pursuant to Section 423 of the Act.



The relevant European Union Regulations on Insolvency Proceedings are:


  • Council Regulation (EC) 1346/2000 on 29 May 2000 on Insolvency Proceedings;


  • Regulation (EU) 2015/848 of The European Parliament and of the Council of 20 May 2015 on Insolvency Proceedings (known as the “Recast” EU Insolvency Regulation);


  • Service Regulation meansCouncil Regulation (EC) 1393/2007 – or any successor – concerning the service in the Member States of judicial and extrajudicial documents in civil and commercial matters.


Provisions are made as to who should hear matters and the jurisdiction of various level of the judiciary, including an “ICC Judge” which stands for an Insolvency and Companies Court Judge, (previously a Registrar in Bankruptcy) under Section 89(1) of the Senior Courts Act 1981.

There are new provisions in relation to the Service of Bankruptcy Petitions and new provisions on unfair prejudice petitions under the Companies Act 2006.

There are also new references to the Electronic Working Pilot Scheme.

Written by kerryunderwood

May 1, 2018 at 8:29 am

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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.



Written by kerryunderwood

April 30, 2018 at 8:34 am

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