This judgment concerned a request for an oral hearing by Paragon Personal Finance, the paying party, following a costs assessment by Master O’ Hare and Mrs Registrar dr Mambro in the Supreme Court on 05 February 2015.
Paragon were dissatisfied with the costs assessment, and in accordance with Rule 53 of the Supreme Court Rules 2009, they requested an oral hearing on two points of principle; the first regarding the validity of an assigned CFA, and the second regarding the recoverability of additional liabilities after the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
The Supreme Court, by a majority of 4 to 1, dismissed the appeal and upheld the costs assessment from February 2015.
The CFA had originally been entered into on 19 June 2008, and the ATE Policy was purchased on 29 October 2008. Both therefore under the 1999 Access to Justice Act regime, which enabled the receiving party to recoverable additional liabilities from their opponent. However, they were subsequently varied after 01 April 2013, and hence after the introduction of the LASPO regime, to cover firstly Paragon’s appeal in the Court of Appeal, and secondly their appeal to the Supreme Court.
When deciding whether or not the success fee was recoverable, Lord Sumption closely considered the language of LASPO Section 44(6), and in particular where it states if the litigation is in “connection with the matter that is the subject of the proceedings”.
He found that the success fee was recoverable as “an amendment of the existing CFA is a natural way of dealing with further proceedings in the same action”.
However, when looking at the recoverability of the ATE Premium, it was noted that the language used in LASPO Section 46 (3) differed and stated that the “amendments made by this section do not apply to a costs order made in favour of a party to proceedings who took out a costs insurance policy in relation to the proceedings”.
The key difference being the language used and the interpretation of the scope each provides. Paragon argued that the language used regarding the recoverability of the success fee was much wider than that for the ATE Premium. Whilst recognising “in the ordinary course…there is also a presumption that differences in the language used to describe comparable concepts are intended to reflect differences in meaning”, Lord Sumption concluded that the use of different language was no more than recognising that the CFA was an undertaking and that “the relationship between the body and the beneficiary of the undertaking may be wider than just the conduct of the litigation”, whilst an ATE policy “by their nature are concerned with specific litigation”.
It was therefore concluded that if an ATE policy had been taken out for the costs of a trial, the insured is entitled, after the commencement date, to top up the cover for appeals, and to include them within his assessable costs under the 1999 costs regime.
It must be remembered that litigation is often commenced over the different interpretations of rules. Language is therefore fundamental. With LJ Jackson set to introduce new rules in the foreseeable future in relation to fixed costs, it is essential that those drafting the rules do so with precision and clarity to ensure LJ Jackson’s intentions are exactly what the rules say.
If you have any questions or queries in relation this blog please contact Joanne Chase (firstname.lastname@example.org and 0113 336 3327) or the Clarion Costs Team on 0113 2460622