Kerry Underwood

FIXED RECOVERABLE COSTS FOR EVERYTHING: BRING IT ON!

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I am trekking in the Sahara Desert to raise money for the Lord’s Taverners’ cricket charity for disabled and disadvantaged children. If you find my blogs helpful how about making a donation? All donations go straight to the charity as the trekkers pay all of their own expenses. Please donate here.

 

This is all dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs – which can be ordered here.

 

This post, with a slightly different house style, first appeared on the Practical Law Dispute Resolution Blog on 24 March 2017.

 

The horizontal and vertical extension of Fixed Recoverable Costs is being considered by Lord Justice Jackson, whose report is due by 31 July 2017.

 

The Government will then respond and consult, but is on record as supporting the spread of Fixed Recoverable Costs and thus the key issues will be the extent of the vertical extension, that is what value of claims will be covered, and the detail and amount of fixed costs for any piece of work.

 

Horizontal extension refers to other types of legal work. At present only personal injury work – and not all of that – is covered.

 

There is no significant judicial or political opposition to the revolution in the delivery of legal services, of which fixed costs are a part.

 

The Prisons and Courts Bill, which introduces massive changes, including online courts and severe curtailments of general damages in personal injury cases, received an unopposed Second Reading in the House of Commons on 20 March 2017.

 

Thus not a single member of Parliament from any party voted against these proposals and the same will almost certainly be true in relation to fixed costs.

 

Civil litigators need to recognise the reality that the issue is how and to what extent fixed costs come in, not whether they come in.

 

We can already be fairly sure of the date. In its response to the consultation paper on raising the small claims limit in personal injury matters the Government indicated that it intended to bring in all of the reforms together on 1 October 2018 and it is virtually certain that that will be the date when fixed costs come in for all types of civil litigation without exception.

 

The maximum damages cap being considered by Lord Justice Jackson is £250,000.00, but it may be that initially, on 1 October 2018, there will be a lower maximum figure, perhaps £100,000.00.

 

The current personal injury fixed costs scheme has the same upper limit as the fast track, that is £25,000.00.

 

Lord Justice Jackson has referred to spreading fixed costs to “the lower reaches of the multi-track” but is now considering having an Intermediate Track, possibly covering claims between £25,000.00 and £100,000.00.

 

It is anticipated that this track will have some of the features of the fast-track and some of the features of the multi-track.

 

Following the decision in Qader & Others v Esure Ltd & Khan v McGee [2016] EWCA Civ 1109, 16 November 2016 and rule 8(1) of the Civil Procedure (Amendment) Rules 2017 – effective 6 April 2017 – any claim allocated to the multi-track ceases to be subject to fixed costs, both in relation to costs already incurred and future costs.

In these blogs I will look in much greater detail at specific areas, such as advocacy fees, the role of counsel, Part 36, indemnity costs, children’s cases and much more.

 

The reaction of lawyers to the concept of fixed costs in civil proceedings has been overwhelmingly negative and in particular the Law Society and the Bar Council have essentially refused to engage with the idea. In my view that is a huge mistake.

 

It should be self-evident that the purpose of the legal system is to serve litigants and potential litigants and not lawyers. Any lawyer who does not realise that legal costs are ludicrously expensive to the extent of excluding virtually the entire population, including small and medium sized businesses, is living in Fantasy Land.

 

A system whereby the potential adverse consequences for a client are fixed and certain, and where the client knows exactly what they will recover in the event of success allows clients, and indeed lawyers to budget and plan accordingly.

 

Also, once the tyranny of the hourly rate is escaped then lawyers are rewarded for their skill, expertise, speed and judgment and not for ploughing through hundreds of thousands of pages of meaningless documents.

 

Good lawyers will benefit; the plodders will lose out. So what?

 

Fixed Recoverable Costs remove the need for budgets, costs draftsmen and time recording and judgments about which level of fee earner is appropriate for the work.

 

In employment work and family work there are generally no recoverable costs in any event and in most personal injury cases, over 90% – costs are already fixed.

 

In the personal injury field Fixed Recoverable Costs work and they have changed the behaviour of lawyers for the better. The same will happen with general civil litigation.

 

A key issue will be the extent to which the process of litigation is re-engineered to make it more efficient and to allow lawyers to both reduce and quantify costs in advance, and still make a profit. The Prisons and Courts Bill, currently before Parliament, is the key measure in this regard.

 

A measure of how far we have to go can be shown by the case of Thompson v Reeve (1) The Motor Insurance Bureau (2) Mid Essex Hospital Services NHS Trust (3), 20 March 2017, Claim number HQ14P03864 – Queen’s Bench Division of the High Court.

 

The claimant had by email withdrawn a Part 36 offer and the defendants argued that that was an invalid withdrawal as they had not consented to service by email and therefore they were free to accept the apparently withdrawn offer.
The court accepted that that was the position but granted the claimant relief from sanctions, thus curing the bad service.
That a court needs to do that in 2017 is madness. Any lawyer, business or organisation not accepting service by email should not be allowed to participate in the litigation process.

 

There are a whole load of legal dinosaurs and the sooner they are extinct the better.

 

Written by kerryunderwood

March 30, 2017 at 8:37 am

Posted in Uncategorized

RIGHTS OF AUDIENCE AT STAGE 3 HEARING

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I am trekking in the Sahara Desert to raise money for the Lord’s Taverners’ cricket charity for disabled and disadvantaged children. If you find my blogs helpful how about making a donation? All donations go straight to the charity as the trekkers pay all of their own expenses. Please donate here.

 

This is all dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs – which can be ordered here.

 

In McShane v Lincoln, Birkenhead County Court, case number B11B1440 – 28 June 2016

 

the District Judge held that a stage 3 hearing in the portal process required a qualified solicitor or barrister or CILEX fellow to appear and that no one else had rights of audience.

 

Section 12(1) of the Legal Services Act 2007 designates certain activities as “reserved legal activities” including the exercise of a right of audience and the conduct of litigation.

 

Schedule 2, paragraph 3 of the Act, defines a right of audience:

 

“(1) A “right of audience” means the right to appear before and address a court, including the right to call and examine witnesses.

 

(2) But a “right of audience” does not include a right to appear before or address a court, or to call or examine witnesses, in relation to any particular court or in relation to particular proceedings, if immediately before the appointed day no restriction was placed on the persons entitled to exercise that right.”

 

Section 13(2) of the Act provides that a person is entitled to carry on a reserved legal activity where:

 

  • the person is an authorised person in relation to the relevant authority; or

 

  • the person is an exempt person in relation to that activity.

 

The claimant submitted that the agent, who it was accepted did not himself have the necessary qualifications to exercise rights of audience, was an exempt person.

 

The relevant exemption in relation to a solicitor’s agent is set out in schedule 3 paragraph 1(7):

 

“The person is exempt if—

 

  • the person is an individual whose work includes assisting in the conduct of litigation,

 

  • the person is assisting in the conduct of litigation—

 

  • under instructions given (either generally or in relation to the proceedings) by an individual to whom sub-paragraph (8) applies, and

 

  • under the supervision of that individual, and

 

  • the proceedings are not reserved family proceedings and are being heard in chambers—

 

  • in the High Court or county court, or

 

  • in the family court by a judge…”

 

Schedule 3 paragraph 8 states:

 

“This sub-paragraph applies to—

 

  • any authorised person in relation to an activity which constitutes the conduct of litigation;

 

  • any person who by virtue of section 193 is not required to be entitled to carry on such an activity.”

 

The court pointed out that the importance in determining this issue is that if the solicitor’s agent is not exempt, then he may be committing a criminal offence under section 14 of the Legal Services Act 2007:

 

“(1)        It is an offence for a person to carry on an activity (“the relevant activity”) which is a reserved legal activity unless that person is entitled to carry on the relevant activity.

 

(2)          In proceedings for an offence under subsection (1), it is a defence for the accused to show that the accused did not know, and could not reasonably have been expected to know, that the offence was being committed.

 

The court here said that the issues it had to decide where:

 

  • Is the hearing in Chambers?

 

  • Is the advocate assisting in the conduct of the litigation?

 

  • Is the advocate assisting under instructions given by and under the supervision of an authorised person as defined in subparagraph (8)?

 

It was agreed that if the answer to any of those questions is no then the solicitor’s agent did not have a right of audience at a stage 3 hearing.

 

Here the court held that in accordance with CPR 39.2 stage 3 hearings will be public hearings, and do not take place in “chambers” as the term was understood in the previous rules which it was accepted should determine this aspect of the case.

 

The pre 1999 equivalent was an Assessment of Damages Hearing, which was held in Open Court with the judge and advocates robed, and oral evidence given on oath.

 

The matter could now be dealt with by way of a disposal hearing upon the case papers, without the presence of the claimant but that was still a final contested hearing and still a public hearing.

 

That was enough to dispose of the matter but the judge went on to consider the other point.

 

The judge held that the work of a solicitor’s agent does not include assisting with the conduct of litigation and under section 12 of the Legal Services Act 2007 “conduct of litigation” and “exercise of a right of audience” are distinct and separate reserved legal activities.

 

This was demonstrated by the fact that under Schedule 3, paragraph 1(2) the court had power to grant a right of audience on a case by case basis, but there is no such power in relation to the conduct of litigation.

 

The court considered that the decision in Agassi v Robinson [2006] 1 WLR 2126, in relation to the predecessor to the Legal Services Act 2007, that is section 119 of the Courts and Legal Services Act 1990, was relevant and that the same principles should apply.

 

The judge then said:

 

“I am not satisfied therefore that applying this definition, a solicitor’s agent’s work includes assisting in the conduct of litigation (as required under Schedule 3, paragraph 7(a)). This may be distinguished from the work of a solicitor’s clerk or legal executive employed by the solicitor who assists with the preparation of the case before attending a hearing who is clearly assisting in the conduct of litigation.”

 

Historically solicitors would instruct other solicitors firms to appear on their behalf in other parts of the country. This was described as “agency work” and largely involved attending on housing matters, particularly mortgage possession claims which under the CPR are heard in private. However it also included appearing on interlocutory hearings as they were known, as these were heard in chambers. For open court work solicitors or counsel were instructed.

 

With the introduction of the CPR the demarcation between what is or is not a public hearing has become blurred and thus who may appear at such hearings are unclear. There is currently some disquiet amongst those who have expended very considerably to achieve the necessary qualifications to exercise the right of audience that this is being exercised regularly in breach of the regulations.
The case of a solicitor’s agent is markedly different to that of the historical instruction of an agent. The concept of a solicitor’s agent is a relatively new development, and many thus employed are persons who have legal qualifications but for some reason or other cannot obtain a professional qualification or employment as a solicitor or barrister. They will normally act as a freelance and self-employed advocate and have no previous involvement in the case until instructed to attend the hearing.

 

The judge also found that the solicitor’s agent was not supervised by an authorised litigator as per paragraph 1(7)(b) of Schedule 3 of the Legal Services Act 2007.

 

The judge said:

 

“There are important reasons for this provision, which provides protection to the public in the event of negligence or misconduct, as solicitors and barristers are required by law to have professional indemnity insurance, and are subject to regulation and possible disciplinary sanction by their professional bodies.”

 

Although this is a first instance decision, it researches thoroughly the law and is an important, and in my view correct, decision.

 

McKenzie Friends

 

How does this decision square with the increasing use of McKenzie Friends?

 

In Ravenscroft v Canal and River Trust [2016] EWHC 2282 (Ch)

 

Chief Master Marsh gave guidance.

 

He said that the starting point was to consider whether the applicant reasonably needed such assistance. If so the scope of that assistance should be determined and that required consideration of the applicant’s personal position, the context in which the application was made, the principles in the overriding objective and the guidance in Practice Notes: McKenzie Friends: Civil and Family Courts [2010] 1 WLR 1881.

 

Here the Master held that it was appropriate to appoint a McKenzie Friend and for him to have rights of advocacy in a full High Court trial, but that is “an exceptional course of action… only justified by exceptional circumstances”.

 

The Master said that the permission was not open-ended and could be withdrawn at any time if it was abused or if the McKenzie Friend sought to delay the conduct of the trial.

 

Here the claimant had difficulty in understanding written material, as well as the technical nature of the case and thus it was reasonable for him to call on assistance. The McKenzie Friend proposed to act free of charge and had already won a similar case when representing himself.

 

However the McKenzie Friend also had a number of unmet costs orders against him, including ones in favour of the defendant here.

 

Comment

 

A worrying decision that comes very close to saying that anyone who needs representation can choose anyone and does not need to have a lawyer.

 

This representative has ignored costs orders against him and thus can represent people in court but treat court orders that he does not like with impunity.

 

Thus this person is allowed to appear in a High Court trial but a solicitor’s agent is not allowed to appear at a stage 3 hearing.

 

I remain of the view that it is a criminal offence to appear in court as an unqualified representative, except in certain circumstances, and that was the view of the judge in the case of McShane v Lincoln, considered above. Those circumstances include applications in chambers and matters in the Small Claims Court.

 

On what basis has any judge the power to overrule the criminal law?

 

My view is that a judge who does so is potentially guilty of the criminal offence of aiding and abetting an offence under section 14 of the Legal Services Act 2007.

Written by kerryunderwood

March 28, 2017 at 9:19 am

Posted in Uncategorized

CREDIT HIRE AND PHYSIOTHERAPY: COURTS CUT CLAIMS

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I am trekking in the Sahara Desert to raise money for the Lord’s Taverners’ cricket charity for disabled and disadvantaged children. If you find my blogs helpful how about making a donation? All donations go straight to the charity as the trekkers pay all of their own expenses. Please donate here.

 

Credit Hire

 

In McBride v UK Insurance Ltd and Clayton v EUI Ltd [2017] EWCA Civ 144

 

the Court of Appeal upheld its own approach in Stevens v Equity Syndicate [2015] EWCA Civ 93, that is that the basic credit hire rate was to be calculated by reference to the lowest reasonable rate.

 

The Court of Appeal held that the exception to that rule applied only when the claimant was impecunious and was a narrow exception.

 

As a matter of principle a credit hire company cannot recover the full rate simply because it was not possible to obtain a basic higher rate with a nil excess.

 

The Court of Appeal said:

 

“76. Accordingly, in my judgment, where a nil excess is not available from car hire companies, the correct approach is to treat the nil excess separately from the comparison exercise between the default credit hire rate and the basic hire rate with an excess. It will almost invariably be the case that it was reasonable for the claimant to seek a nil excess for the reasons given in Bee v Jenson and, on that hypothesis, the only question for the Court will be how much should be recoverable as the cost of purchasing a nil excess.”

 

At paragraph 95 the court said:

 

“…one should never lose sight of the fact that the “stripping out” exercise advocated by Dimond v Lovell is necessarily an approximate and artificial one because, by definition, the claimant did not in fact hire a comparable car from a mainstream or reputable local car hire company. He actually hired from the credit hire company, so that inevitably the evidence is sought after the event of what rate of car hire could have been obtained, on the hypothetical basis that he had hired from a car hire company instead.”

 

The Court of Appeal said that the adjustments made by the judge, doing the best that he could on the evidence, were not to be criticized and nor would it have been appropriate for the judge simply to award the credit hire in full because of the absence of direct evidence of a seven day hire rate or an excess waiver product for the vehicles hired.

 

The Court of Appeal gave guidance as to the question of excess waiver insurance:

 

“…I consider that where there is evidence of the availability of an excess elimination insurance as a stand-alone product from Questor or other providers such as Insurance4carhire.com, the Courts should admit and accept such evidence as evidence of the reasonable cost of obtaining a nil excess, provided of course that the quote obtained from such a provider is for a car which is comparable with the one hired from the credit hire company and is for the same period as the period of actual hire from the credit hire company. Certainly the Court should not reject such evidence because the judge or the claimant has not heard of the product, as the district judge did here. The exercise is an objective one and such evidence should be admissible irrespective of the subjective knowledge or lack of it of the Court or the claimant. Information about the availability of such products can, in any event, be readily accessed on the internet. It is apparent that, whilst some judges in the County Courts have not been admitting such evidence, others have: see the findings of the judge in one of the cases appealed in Dickinson v Tesco [2013] EWCA Civ 36; [2013] RTR 27 referred to at [26] of the judgment of Aikens LJ. The admission and acceptance of evidence of these stand-alone products should be the norm.”

 

Physiotherapy costs: Credit Hire Principles Apply

 

In Nuttal v Chew, 22 March 2017, Leeds County Court, Unreported

 

the judge at a stage 3 road traffic damages assessment held that the recoverable physiotherapy treatment fees were limited to the rates charged by the physiotherapist offered by the defendant’s insurers.

 

The Claimant suffered a lower back injury in a road traffic accident on 28 April 2016.

 

By letter to the Claimant’s solicitors dated 5 May 2016, which was included in the Stage 2 documents, the Defendant’s insurers stated,

 

“Please note we are able to and willing to instruct a Rehabilitation Provider to assess your client’s needs for rehabilitation and provide rehabilitation as required at a cost of £41 per session.  We will therefore only consider any rehabilitation costs up to £41 per session, as per the Rehabilitation code 2007. We also bring your attention to the judgement in the case of Copley v Lawn  in respect of mitigation”.

 

Six sessions of physiotherapy were recommended by the Claimant’s medical report dated 24 May 2016.

 

The Claimant obtained treatment from a physiotherapist of her own choice and claimed special damages of  £455, comprised of invoices for £50 for “telephone triage”, £75 for “initial assessment”, and £55 each for six sessions of physiotherapy treatment.

 

The court accepted the argument that special damages for physiotherapy treatment should be limited to the cost of six sessions of treatment at the rate of £41 per session, which would have been charged by the physiotherapist offered by the Defendant’s insurers, totaling only £246.

 

The Deputy District Judge found that the principles, applied by the Court of Appeal to the rates of charge for credit hire vehicles which were recoverable in damages, in the case of Copley v Lawn [2009] EWCA Civ 580 were applicable to the rates recoverable for private physiotherapy treatment: and that a Claimant could not recover the full costs resulting from her making her own choice of physiotherapy treatment at a rate higher than the rates which she knew would have been charged had she accepted an offer of alternative treatment made by the Defendant’s insurers.

 

 

 

 

 

Written by kerryunderwood

March 24, 2017 at 6:44 am

Posted in Uncategorized

PART 36: WHAT HAPPENS WHEN THE OTHER SIDE’S OFFER IS BETTER THAN YOUR OWN?

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I am trekking in the Sahara Desert to raise money for the Lord’s Taverners’ cricket charity for disabled and disadvantaged children. If you find my blogs helpful how about making a donation? All donations go straight to the charity as the trekkers pay all of their own expenses. Please donate here.

 

This is all dealt with in my Personal Injury Reforms course this May, which can be booked here

 

Accepting a defendant’s higher offer

 

A claimant makes a Part 36 offer of £3,000.00 and this is not accepted within time.

 

A year later the defendant makes a Part 36 offer of £4,000.00, even though the claimant’s original offer of £3,000.00 remains available for acceptance.

 

What is the claimant then to do?

 

On the face of it, the answer is obvious – the claimant accepts an offer which is £1,000.00 more than their own unwithdrawn offer, which is still capable of acceptance.

 

However accepting a defendant’s Part 36 offer appears to restrict the claimant to ordinary costs, that is on the standard basis, or in a fixed costs case – fixed costs- whereas if the defendant had simply accepted the claimant’s one year old offer, for a lower sum, the defendant then risks being ordered to pay indemnity costs for the whole of the period of late acceptance.

 

The difference between fixed or standard costs and indemnity costs may well exceed the extra damages that the defendant is offering.

 

If the claimant does not accept the defendant’s offer then the defendant is free to accept the earlier offer and although the claimant’s solicitor stands to get more costs the client loses out and it is hard to see how such a course of action could be justified.

 

If the claimant solicitor immediately withdraws its own offer, so that the defendant cannot accept it, and then declines to accept the defendant’s offer, then it is back to square one with the claimant being at risk of failing to beat the defendant’s Part 36 offer but the defendant being at no risk of indemnity costs because there is no claimant’s offer on the table.

 

This is now happening quite a lot and the issue needs to be addressed, especially as fixed costs spread to other areas of work and to cases with a higher value.

 

As this happens there may be a very considerable advantage in the defendants making a Part 36 offer slightly above the claimant’s Part 36 offer.

 

Accepting a claimant’s lower offer

 

Of course this can work the other way round.

 

A defendant makes a Part 36 offer of £4,000.00 and a year later the claimant makes a Part 36 offer of £3,000.00 and if the defendant accepts that sum then the claimant avoids the adverse costs consequences of accepting a defendant’s offer late and also gets its costs for that one year period.

 

Wording along the following lines would deal with the problem:

 

“Where a claimant accepts a defendant’s Part 36 offer which is at least as high as its own outstanding Part 36 offer then the consequences shall be the same in terms of costs and additional damages etc. as if the defendant had accepted late the claimant’s offer save that the level of damages shall be that in the defendant’s offer.

 

Where a defendant accepts a claimant’s Part 36 offer which is lower than or equal to the defendant’s earlier unwithdrawn Part 36 offer then the costs consequences shall be the same as if the claimant had accepted the defendant’s offer late, save that the amount of damages will be that in the claimant’s lower offer.”

 

Set-off on late acceptance

 

A claimant accepts a defendant’s Part 36 offer late and thus is liable for the defendant’s costs from the date of expiry of the Part 36 offer to the date of late acceptance.

 

There is no time limit in relation to the defendant paying the claimant’s pre-Part 36 costs and therefore the defendant can withhold all the costs until its own post Part 36 costs are quantified.

 

However, in those circumstances, is the paying party allowed to withhold damages by way of set-off against post Part 36 expiry costs? A paying party would wish to do so if it expects its post Part 36 costs to be greater than the claimant’s pre Part 36 costs.

 

CPR 36.6(2) provides:

 

“(2) A defendant’s offer that includes an offer to pay all or part of the sum at a date later than 14 days following the date of acceptance will not be treated as a Part 36 offer unless the offeree accepts the offer.”

 

The general rule is that a paying party must make payment within 14 days of acceptance of the offer and there appears to be no provision for a paying party to withhold damages, as compared with costs, by way of potential set-off.

 

Part 36 offer v non-Part 36 offer

 

A defendant makes a non-Part 36 offer early on of £5,000.00 and very much later the claimant, who has ignored the offer, makes a Part 36 offer of £5,000.00 which the defendant accepts.
Does the defendant have to pay all of the costs or can they successfully argue that they should only pay costs up to the time of their non-Part 36 offer, relying on CPR 44.2 (4)(c) which says that the court must take into account any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply?

 

In my view when, in those circumstances, the defendant accepts the Part 36 offer then they accept the costs consequences and therefore have to pay the claimant’s costs.

 

Had there been no offer by the claimant and therefore no acceptance by the defendant then the defendant’s offer could have been taken into account by the court in determining the issue of costs.

 

However on the defendant’s acceptance of the claimant’s offer, albeit in the same sum, then the court will not be dealing with the principle of costs.

 

Part 36 is of extreme complexity but CPR 36.2 reads:

 

“(2) Nothing in this Section prevents a party making an offer to settle in whatever way that party chooses, but if the offer is not made in accordance with rule 36.5, it will not have the consequences specified in this Section.

 

(Rule 44.2 requires the court to consider an offer to settle that does not have the costs consequences set out in this Section in deciding what order to make about costs.)”

 

CPR 36.13 reads, where appropriate:

 

“(1) Subject to paragraphs (2) and (4) and to rule 36.20, where a Part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.

 

(Rule 36.20 makes provision for the costs consequences of accepting a Part 36 offer in certain personal injury claims where the claim no longer proceeds under the RTA or EL/PL Protocol.)”

 

Thus that rule applies whether it is the claimant’s offer, or the defendant’s offer, which is accepted as the reference there is to the offeror and not the claimant or defendant whereas other provisions refer to the claimant or defendant.

 

My view is that a valid Part 36 offer must trump a non-Part 36 offer. If it were otherwise then a defendant can make an offer that has no legal consequences but then seek to rely on it to avoid the costs consequences of the claimant’s valid Part 36 offer.

 

To interpret the provisions in any other way would render Part 36 largely meaningless, but there is a tension between CPR 36 and the general provisions on costs.

 

This has arisen in a number of cases, including the key issue of whether a claimant is entitled to indemnity costs on late acceptance by a defendant generally and whether a claimant is entitled to indemnity costs on obtaining judgment in a fixed costs case.

 

The latter point has been found in claimants’ favour in the Court of Appeal case of Broadhurst v Tan and Taylor v Smith [2016] EWCA Civ 94 (23 February 2016).

 

Thus my view is that the defendant does indeed have to pay all of the costs.

 

Withdrawing Part 36 offer by email
In Thompson v (1) Reeve (2) The Motor Insurance Bureau (3) Mid Essex Hospital Services NHS Trust, Queen’s Bench Division of the High Court, Claim number HQ14P03864 20 March 2017

 

Master Yoxall allowed CPR 3.10 to be used to rectify the claimant’s admitted error in withdrawing a Part 36 offer by email where the parties receiving the notice had not indicated in writing that they were willing to accept service by email.

 

Thus the Claimant’s withdrawal of the Part 36 offer was deemed valid, which meant that it was not capable of acceptance by the defendants.

 

The situation arose due to the recent change in the discount rate.

 

Comment (1)

 

So the MIB and the NHS Trust – both state/quasi state bodies sought to use a technicality to avoid a very severely and negligently injured child from getting the correct level of damages.

 

It would be nice if the NHSLA and the MIB behaved other than in this way.

 

Comment (2)

 

Proposed amendment to the Civil Procedure Rules

 

“ Any body which does not consent to service by email shall recover no costs and should always be liable to pay costs on the indemnity basis.”

 

Please see my related blogs:-

 

Personal Injury Reforms Course – 2017 Tour

 

Personal Injury Reforms Announced

 

 

Written by kerryunderwood

March 23, 2017 at 6:34 am

Posted in Uncategorized

AFTER-THE-EVENT INSURANCE: TWO NEW CASES

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ATE and security for costs

 

In The RBS Rights Issue Litigation [2017] EWHC 463 (Ch)

 

the court ordered the claimants to give details of funders under the court’s inherent jurisdiction ancillary to CPR 25.14.

 

An application for security might face difficulty as the trial was imminent, but the court could not say it was so unrealistic or hopeless that the defendants should not have disclosure.

 

The court refused to order that details of ATE insurance be given.

 

This was sought under its case management powers and the judge concluded that the documents were not needed for case management purposes.

 

He was also concerned it could lead to further satellite litigation.

 

However, he expressed some reservations about whether there was sufficient funding and, in light of that, suggested there should be more transparency about the ATE insurance.

 

The decision provides detailed guidance regarding such applications, including that:

 

  • It was not a condition of making an order for disclosure of funders ancillary to CPR 25.14, that the applicant had unequivocally determined to bring an application for security once details were revealed. However, the applicant must, at least, demonstrate that its putative application for security was a real possibility and had realistic grounds, and was not being suggested simply for some tactical purpose.

 

  • In an appropriate case, the court’s case management powers under CPR 3.1 did extend to requiring disclosure of an ATE policy when this was necessary to enable the court to exercise its case management function. However, whether a party will be able to enforce damages and costs orders is not a matter which affects case management. Generally, an ATE policy, which does not impact on the issues in the case, will not be relevant. But there may be exceptions, for example, where the ATE policy has been deployed in the proceedings to influence or impact on a decision. That may be especially likely in group litigation.

 

  • It was unlikely that privilege attached to an ATE policy.

 

ATE and Third Party Rights

 

In Denso Manufacturing UK Ltd v Great Lakes Reinsurance (UK) plc [2017] EWHC 391 (Comm)

 

the Commercial Court, part of the High Court but shortly to be the Business and Property Court, held that After-the-Event insurers were entitled to deny liability to a third party on the basis that their own insured had breached the policy.

 

Following litigation between the insured and the third party, the insured was ordered to pay some of the third party’s costs, but went into liquidation without making payment.

 

Relying on the statutory scheme in the Third Parties (Rights against Insurers) Act 1930, the third party commenced proceedings directly against the insurers, who denied liability, alleging that the insured had breached a number of policy conditions precedent to liability relating to, among other things, obligations to co-operate in any claim and provide information.

 

The decision is an interesting example of the court’s approach to the interpretation of conditions in an insurance contract. In particular, although the policy included a general “Due Observance” condition, which sought to create conditions precedent, the court examined each of the individual conditions in order to determine whether they could be construed as conditions precedent.

 

The decision is also a reminder that, for the purpose of the 1930 Act, the transfer of rights to a third party is subject to the defences available to insurers against the insured.

 

Although, under the Third Parties (Rights against Insurers) Act 2010, a third party is also in no better position under the insurance contract than the insured, and, generally, an insurer is able to raise any defence against the third party that would have been available to it against an insured, there are some exceptions.

 

For example, an insurer cannot allege non-performance by the insured where the third party has fulfilled the relevant policy conditions.

 

In the circumstances, had the 2010 Act applied, it might have been possible for the third party, upon the insured’s insolvency, to comply with the policy conditions by promptly sending, directly to insurers, all communications relating to settlement offers and the detailed assessment proceedings.

 

However, in practice, this will only be possible where the third party has succeeded in obtaining the relevant policy information from the insured or its agents in time to enable it to comply with any conditions.

 

 

Written by kerryunderwood

March 22, 2017 at 6:43 am

Posted in Uncategorized

PROPORTIONALITY AND CLINICAL NEGLIGENCE: ANOTHER CASE FOR FIXED COSTS

with 2 comments


In Andrew Rezek-Clarke v Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5

 

the Senior Courts Costs Office considered the costs in a clinical negligence case which had settled for £3,250.00.

 

At an oral hearing the Master broadly upheld his decision made on provisional assessment that the costs claimed of £72,320.85 were disproportionate and should be reduced to £24,604.40.

 

This included a reduction in the After-the-Event insurance premium from £31,976.49 to £2,120.00 and experts’ fees from £18,036.00 to £9,000.00.

 

All of the work was post 1 April 2013 and therefore governed by the new rule on proportionality which means that even if work is reasonably and necessarily done it can still be disproportionate.
The Master criticised the claimant’s solicitors for not planning the necessary work and the way to approach the matter, given that they knew that this was a low value claim which, at its highest, was worth £5,000.00.

 

Here the court quoted with approval the passage from HH Judge Alton in Birmingham County Court on 22 June 2000 in an unnamed case, itself approved by the Court of Appeal in Jefferson v National Freight Carriers Plc [2001] EWCA Civ 2082:

 

“In modern litigation, with the emphasis on proportionality, it is necessary for parties to make an assessment at the outset of the likely value of the claim and its importance and complexity, and then to plan in advance the necessary work, the appropriate level of person to carry out the work, the overall time which will be necessary and appropriate to spend on the various stages in bringing the action to trial, and the likely overall cost. While it is not unusual for costs to exceed the amount in issue, it is, in the context of modern litigation such as the present case, one reason for seeking to curb the amount of work done, and the cost by reference to the need for proportionality.” (Paragraph 19 of the judgment).

 

Here the Master said that that was even more relevant today as the rules regarding proportionality are now much more onerous.

 

The Master also held that additional liabilities, here the ATE premium, fall to be considered in the context of proportionality in relation to post 1 April 2013 cases.

 

ATE premiums remain recoverable in clinical negligence cases in relation to the costs of medical reports relating to liability and/or causation.

 

These are governed by the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No. 2) Regulations 2013.

 

The Master had this to say:

 

“Furthermore, it is often the case that the fee claimed for a medical report includes the fee charged by a medical agency. I query whether any attempt is made by the solicitors or the insurers when calculating the premium, to distinguish between the actual cost of the report and the fee paid to the medical agency.”

Written by kerryunderwood

March 20, 2017 at 6:55 am

Posted in Uncategorized

MIB CAVE IN FOLLOWING MY BLOG

with 9 comments


On 8 February 2017 I posted a blog – NEW MIB UNTRACED DRIVERS SCHEME: INSURERS AT IT AGAIN.

 

I was highly critical of clause 10(1) which I refer to as “a deliberate exclusion of solicitors from the process at the beginning.”

 

Following that blog that agreement dated 10 January 2017 and made between the Secretary of State for Transport and the Motor Insurers Bureau, which was due to come in on 1 March 2017, was revoked even before it came into force.

 

A fresh agreement dated 28 February 2017 has been entered into and the offending part of clause 10(1) has been removed.

 

The MIB only published the replacement scheme on 2 March 2017,  that is one day after it came into effect.
This followed some interesting comments and exchanges on my blog by Paul Ryman-Tubb, which you can see on the original blog.

 

In particular on 24 February 2017 Paul Ryman-Tubb accused me of writing an article which lacked accuracy but refused to say in what respects it was inaccurate.

 

Presumably Mr Ryman-Tubb knew at that stage that the MIB and the Government were in fact going to agree with my point and amend their agreement accordingly.

 

Apart from demonstrating the power of blogs this shows the importance of never letting the Government, insurers, consumer groups or anyone else get away with seeking to remove lawyers from the process.

 

Lawyers stand between civilization and tyranny.

 

Please see my related blogs:

 

NEW MIB UNTRACED DRIVERS SCHEME: INSURERS AT IT AGAIN.

 

MIB UNTRACED DRIVERS AGREEMENT FIXED COSTS SCHEME: THE SHAPE OF THINGS TO COME

Written by kerryunderwood

March 7, 2017 at 12:49 pm

Posted in Uncategorized

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