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10Apr
Proportionality Decision
News

A case concerning Proportionality Decision has provided positive news for the Claimant. Master Brown whilst hearing the matter of  Murrells v Cambridge University NHS Foundation Trust provided the following costs assessment.

In the main action the Claimant was successful in recovering damages against the Defendant following the death of her husband. The Claimant recovered £9,650.00 plus costs.  The Claimant’s Bill of Costs was prepared in two parts; Part 1 for Pre-April 2013 and Part 2 for Post-April 2013. Following assessment the total costs figure was in the sum of £94,076.88 including additional liabilities. Master Brown was asked to consider whether post-April 2013 was disproportionate.

The Defendant’s  argument was for base costs to be aggregated with the additional liabilities so the total figure was disproportionate.  The Master concluded the new test of proportionality was not applicable to additional liabilities.

In Judgement

Master Brown agreed with the decision of Master Rowley in King v Basildon & Thurrock University Hospitals NHS Foundation Trust… “I do not accept that additional liabilities are subject to the new test of proportionality or, even if they were, that they should be aggregated with the Claimant’s base costs for the purposes of that test.”

” To my mind, it is relevant to have particular regard to the approach to the assessment of additional liabilities under the old pre-LASPO rules. That approach is summarised at paragraphs 40 and 41 of Coventry v Lawrence [2015] A.C. 106. In short, the Court does not ask itself whether the costs of an ATE premium or a success fee are proportionate to the importance of the case and what was at stake but looks at the litigation risk. If the premium is necessarily incurred, it is proportionate and it is proportionate even in the event that it is disproportionately high when compared with the damages reasonably claimed. The same reasoning applies to a success fee claimed by solicitors or counsel: such a fee is recoverable if it is proportionate to the risk of the lawyer not being paid (using the ‘ready reckoner’ tables).”

 

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27Feb
Defendant Awarded Costs
News

In the matter of MARK MENARY v JOE DARNTON (2016) the Defendant awarded Costs for defending the claim.  A claim was made by the claimant for personal injury and associated damages including vehicle damages following a road traffic accident. At the time of the incident the claimant was driving his motor vehicle and the defendant riding his motorcycle. The claimant alleged whilst being stationary the defendant collided into the rear of his vehicle. Throughout the defendant disputed the claim that no contact between the two vehicle had occurred.

As the claim was brought following the introduction of qualified one-way costs shifting. District Judge did not disapply

At the trial, the District Judge agreed with the defendant, no contact had been made but did not agree the claimant had been fundamental dishonesty. As a result the District Judge did not disapply the same under CPR r.44.16(1).

Appeal

The defendant appealed the decision that the claimant had not acted ‘fundamentally dishonest’ and to not grant the defendant costs in this instance.

At the appeal the first point was to consider whether the claimant had been ‘fundamentally dishonest’ in pusuing the claim. The Judge seperated the distinction from the claims which from time to time are exaggerated and concealments might be dishonest, but are not ‘fundamentally dishonest’, as they did not go to the root of the claim. Second, the fundamental dishonesty was related to the claim, not the claimant. As it had been found the claim was fundamental dishonesty, then in accordance with the overriding objective, the defendant should be allowed to recover the costs incurred in defending the action which on the balance was ‘fundamentally dishonest’.

The deputy district’s decision could not stand. His finding that there had been no collision, no road traffic accident, no injuries suffered, no damage to his vehicle. Additionally, the deputy district judge had failed fully consider two vital documents; the first, a record of the claimant’s visit to a medical walk-in centre on the day of the alleged accident in which he was reported as having told staff that he had just been injured in a car crash; the second was a telephone attendance note following a conference between the claimant and his solicitor in which he also claimed to have been injured in a road traffic accident on the day in question. These alone clearly show the claim was fundamentally dishonest.

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24Feb
Agreed Costs Budgets
News

Agreed costs budgets can be amended with the approval by your opponent and the court; however the change in litigation has to be a significant development or a good reason for the amendment. In the matter of GREIG v LAUCHLAN & ANOR (2016) the Defendant requested amendment to the agreed cost budget prior to the 10 day trial as they needed to change Counsel from a junior counsel to leading Counsel. No reason was given as to why the change was sought. This change increased the future costs considerably.

The defendant applied to vary the costs budget upwards in respect of counsel’s fees for the imminent trial of the claim. The Claimant was not in agreement to approve the same and as a result the court defendant made an application to the Court requesting approval.

Sitting in the Chancery Division Richard Millett QC did not approve the increased sum of £90,000 which was a substantial increase as there had not been a significant development in the facts of the case or good reason to do so; it was purely a change in Counsel.

Changes to approved Costs Budgets can be made but where a significant development or good reason to do so:

Practice Direction 3E Para 7.6 refers;  

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.

 

 

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23Feb
Small Claims Limit
News

The Government following a review of the small claims limit and consultations with various parties has now increased the small claims limit. The changes are a half-way house with regard to the limits the insurers wished to impose if they had the chance.

For ‘Whiplash’ (RTA) claims the small claims limit will be increased upwards to £5,000.00 and for all other personal injury claims an increase in the threshold of £2,000.00.

The original proposal championed by the insurance industry was to ban all whiplash-type injury claims and the small claims threshold to be raised to £5,000.00 for all personal injury claims.

The changes which still require legislation are to also include fixed tariffs to cap whiplash payments and also a ban on pre-medical offers for whiplash which had become a tactic for some insurers.

The changes will be brought in under the Prisons and Courts Bill; with some commentators predicting this will be implemented at the back end of 2018.

The changes in essence still allows individuals to pursue their own injury claims without legal representation which would fall within the revised small track limits; however this is likely to open the door for claims management companies to get a piece of the action and run the claims for individuals taking a slice of the awarded compensation as a fee.

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21Feb
Changes to CPR Part 3 & Part 45
News

A  number of changes to the CPR are to take place and be effective from the 6 April 2017. This blogg contains the specific issues which have brought about the changes to CPR Part 3 & Part 45.  As yet the complete details have not been  released.

Cost budgeting and the preparing of Precedent H’s has become a key aspect of all litigated matters which have been listed for multi-track or where the parties believe the matter to be more suitable for multi-track.

Currently, the incurred cost cannot be assessed by the parties or the Court at the Cost Claim Management Conference; the future costs are discussed and set by each phase. The Court and each party may pass comment upon the level of their opponents incurred costs. The revised Part 3 is likely to put in place specifics surrounding the incurred costs element and the consequence of not debating the same at the CMC. In the recent caselaw of SARPD Oil International Limited v Addax Energy SA and another  SARPD Oil International Limited v Addax Energy SA and another [2016] EWCA Civ 120 (SARPD).

At the CMC the paying party did not offer any comment upon the receiving party’s incurred costs contained in the cost budget.  Lord Justice Sales commented; “First, all the parties appreciated, or should have appreciated, that the first CMC was the appropriate occasion on which issues between them regarding the quantum of costs shown in their respective costs budgets should be debated. That was so both in relation to the estimated costs elements in the budgets, in respect of which a costs management order might be made under CPR part 3.15(2)(b) and pursuant to paragraph 7.4 of practice direction 3E to record the court’s approval of those elements, and in relation to the incurred costs elements in the budgets, in respect of which it would be open to the court to make comments under paragraph 7.4 of PD3E.”

“Moreover, CPR part 3.17 makes it clear that costs budgets are to be important instruments for all case management decisions, so parties must appreciate that if they wish to take issue with another’s costs budget they should do so at the first CMC, when there is to be debate about the costs budgets.”

“In this case the first CMC, and the process leading up to it, afforded each party a fair opportunity to make any submissions they might wish on each other’s costs budgets.”

Part 45

The new rules will amend Part 45 and more specifically clarity on the current fixed costs for RTA claims which begin life in the RTA low value personal injury portol and are then removed from the same for a valid reason and are subsequently allocated to the multi-track.  The Fixed Costs regime was not meant for multi-track claims and this will be covered under the new amendments. The caselaw which has brought about the change to offer clarity are the two claims which were joined together due to the similar legal arguments; Qader & Ors v Esure Services Ltd and Khan and Anr v McGee. Both claims started in the RTA low value personal injury portol and left the same due to the defendant denying liability.  The denial focused on the claims being fraudulent and following the issue of proceeding the matters allocated to multi-track. The claims were successful, however the Defendant/paying party argued the fixed costs should still apply.  At the Court of Appeal hearing LJ Briggs clarified fixed costs do not apply to multi-track matters.

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20Feb
Additional Liabilities vs Test of Proportionality
News

In hearing BERNARD MURRELLS (EXECUTOR OF THE ESTATE OF JILL MURRELLS (DECEASED)) v CAMBRIDGE UNIVERSITY NHS FOUNDATION TRUST (2017) Master Brown In the Senior Courts Costs Office,  concluded additional liabilities are not subject to the test of proportionality.

The Claimant’s claim for compensation settled in the sum of £9,650 and as a result of accepting the offer obtained the authority to recover costs on the standard basis from the Defendant.

The Claimant was funded by way of a CFA entered into in September 2012 and an ATE insurance premium. The Bill of Costs was prepared in two parts; Part 1 in the sum of £59,520.50 for work carried out prior to 1 April 2013, namely when the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force, and part 2 for the work carried out post 1 April 2013 in the sum of £81,048.55. The Claimant claimed a success fee of 100% on all profit costs.

The court determined that the part 1 base costs (excluding additional liabilities) amounting to around £32,000 were disproportionate pursuant to CPR r.44.4(2). Applying the test of necessity to the line-by-line assessment, the court determined that a total of £16,053.25 for base costs should be allowed in respect of part 1 of the bill. As to the part 2 base costs, the court applied the test of reasonableness set out in the new CPR r.44.3(2) and reduced the sums claimed in respect of profit costs and disbursements to arrive at a total figure of £20,436.75. The court found that the success fee of 100% was too high and that the appropriate fee was 82%. In the instant hearing, the court was required to determine whether the remaining part 2 base costs after the earlier deductions were disproportionate.

The Court was required to determine whether the remaining part 2 base costs after the earlier deductions were disproportionate.

The Court were requested by the Defendant to consider the following;
(1) The cost of the ATE premium and success fee are subject to the new test of proportionality under CPR r.44.3
(2) if part 2 of the base costs were disproportionate under the CPR.44.3 test of proportionality;
(3) whether the additional liabilities were disproportionate.

The Defendant claimed the court should re-consider base costs with additional liabilities, as the resulting total sum for part 2 of the bill was disproportionate.

Held: 

(1)Additional liabilities were not subject to the new test of proportionality under CPR.44.3 and in particular reference to  findings in King v Basildon and Thurrock University Hospitals NHS Foundation Trust unreported was applied and BNM v Mirror Group Newspapers Ltd unreported considered.

CPR r.48.1 and CPR PD 44 para.11.9 preserved the rules that existed before the 2012 Act which related to the recovery of additional liabilities, if the additional liabilities were to be considered and assessed then CPR.44.3 would have made specific reference to the same; as it is the new CPR.44.3 does not refer to additional liabilities, therefore it is difficult to apply the Defendant’s argument.

(2) Considering the factors under CPR r.44.3(5), and in particular the complexity of the matter, the remaining part 2 base costs were not disproportionate. The base costs allowed were in relationship to the issues throughout

(3) Neither the costs of the ATE premium nor the success fee were disproportionate

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17Feb
Relief from Sanctions
News

Relief from Sanctions for failing to file the Cost Budget on time…

In the matter of INTELLIMEDIA SYSTEMS LTD v RICHARDS & ORS (2017) Chancery Division Judge Warren granted the Claimant relief from sanctions for a company’s failure to file its costs budget on time. It was deemed that although the delay had disrupted the parties’ case management conference, imposing a sanction would be disproportionate.

Following the commencement of proceedings the CMC had been listed with directions including the filing of the parties’ cost budgets. The defendants filed their costs budget within the timescale set. However, the claimant solicitor was ill and duly informed the defendants by email of the same and in particular the cost budget would be filed shortly. The cost budget was filed but beyond the time limit set by CPR r.3.14.  As a result the defendants’ suggested the claimant apply for relief from sanction of the late filing. As a consequence of the late filing the budget discussion reports were due to be exchanged and the defendant did not feel the claimant was taking responsibility for the proceedings in this matter.

The claimant company applied for relief from sanctions . The defendants requested for the case management conference to be adjourned and for the claimants application for relief of sanctions to be heard.

The defendants position was set out and relied upon the three-stage test for relief from sanction in Denton v TH White Ltd [2014] EWCA Civ 906, under stage one this was not a trivial breach. Under stage two the illness of the conducting solicitor was not a reason for the late filing of the claimant’s costs budget. Under stage three, the defendant argued the claimant had not acted with the overriding objective in hand that litigation should be conducted efficiently, at a proportionate cost and to comply with the rules. The claimant argued the defendants had shown a lack of cooperation in dealing with the costs budgeting throughout between the parties.

HELD: The claimant acted in a timely fashion in applying for the relief on the day when they were made aware of the breach. The claimant’s criticism that the defendants had been uncooperative in negotiating a resolution was rejected.

Considering the first stage of the Denton test, the breach was not trivial. It had risked disrupting the case management conference and the conduct of the litigation and caused additional work for the defendants. Considering the second stage, although one could be sympathetic that the solicitor responsibly fell ill, it would have been reasonable for the preparing of the cost budget to be delegated. When considering the third stage, under r.3.9 the consequences of the claimant’s non-compliance; whether the late costs budget caused the loss of the case management conference. Had the application not been made the conference could have gone ahead as scheduled and the timetable and disclosures set.

In consideration of all the circumstances Chancery Division Judge Warren granted the claimant relief from sanctions, but as a result of not managing the proceedings as would have been expected, was ordered to pay the costs of the hearing on an indemnity basis.

 

 

 

 

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16Feb
Indemnity Based Costs
News

In the County Court at Stoke, Indemnity Based Costs were awarded to the Claimant following the Defendant’s late acceptance of the Claimant’s Part 36 offer in a claim brought under the road traffic accident low value personal injury protocol.

On the 3 February 2017. in the matter of Car Craft Test Centre and Martin v Trotman & Advantage Insurance Company, District Judge Etherington awarded indemnity based costs against a defendant who had accepted the Claimant’s Part 36 offer 10 months out of time; but before the scheduled trial.  The Claimant’s Part 36 offer was made following disclosure of the medical evidence and before commencing proceedings.

District Judge Etherington considered the issues and awarded indemnity based costs from the date that the Part 36 offer had expired.

This is seen as a significant success for all Claimants adhering to the protocol and making sensible offers by way of Part 36 and a lesson for all Defendants to consider all offers that are made as the penalty for not doing so is a large bill to pay.

 

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