Author: Dominic Regan

Part 36 Rewards

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HOCHTIEF V ATKINS ( 2019) EWHC 3028 ( TCC) saw a claimant who bettered their Part 36 quantum offer by just  £4,500 secure  an uplift of £65,000 and interest at 6% above base plus indemnity costs.

JLE V WARRINGTON NHS TRUST (2019) 1WLR 6497  –  On 21 June 2018 the claimant made a Part 36 offer in the sum of £425,000, inclusive of interest, in respect of the Bill of Costs. That offer accordingly expired on Friday 13 July 2018, i.e. the last working day before the hearing commenced.  Master McCloud assessed the bill inclusive of interest in the sum of £431,813.05, i.e. £421,089.16 plus £10,723.89 interest. The claimant therefore beat her Part 36 Offer by just under £7,000.

Had the Court  granted the default Jackson 10% uplift the claimant would receive an additional £43,181-30.

The Master considered this to be unjust given that the offer was made late on and it was only bettered by a slender margin .The Master was plainly troubled by the disparity between the amount by which the offer was beaten (£7,000) and the consequential uplift ( 6 times as much ).

She thus  declined to award the uplift. The claimant successfully appealed to Stewart J who made the award. The defendant ought to have paid up and settled. It only had itself to blame . The offer was plainly good.

In TELEFONICA  V OFFICE FOR COMMUNICATIONS (2020) EWCA Civ 1374 the claimant had bettered its offer by £4.5m or 9% yet received no more interest than would have been payable had it made no offer at all. The Appeal Court endorsed the view of Stewart J in JLE ( above ) that it would be highly unusual for the Court to grant some benefits but to withhold others .This was particularly so on the facts of this £54m case. Indemnity costs and an additional £75,000 “was an almost trivial uplift and any significant enhancement in overall relief would only have been achieved by the award of additional interest on the principal sum “ ( paragraph 42).The Judge was in error by regarding the award of 2 trivial enhancements as justification for not awarding the major enhancement, uplifted interest. The Appeal Court corrected the omission and so Telefonica gained  a useful extra £900,000.

Some Judges at first instance had flirted with the concept of withholding some of the rewards, adopting a pick and mix approach. The Appeal Court made it abundantly clear that the victor  ought to  receive each of the four enhancements pursuant to CPR 36.17(1)(b).There is nothing in the Rule which undermines or lessens entitlement to the others. The rewards are a composite package. All of them  ought to be bestowed .

On a practical note I surmise that Sir Rupert Jackson would agree. An approach which encouraged arguments about dividing up the spoils would be a blatant incentive for the paying party to raise challenges in the hope of shaving something off. Finality and certainty are secured by this approach.

HOCHTIEF was a good offer on quantum. JLE was a good one on costs. These examples demonstrate why it is crucial for a receiving party to make good, early offers to settle. We do !

You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.

Changes to Trial witness statements in the Business and Property Courts from 6th April

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From 6th April Trial witness statements in the Business and Property Courts are subject to drastic reforms . Radical features include

1. A duty to explain to a witness at the outset the proper purpose and content of a witness statement;

2. Directions as to how the interview should be conducted;

3. Provisions as to what questions can be put and how they are to be worded;

4. A duty for solicitors to preserve a dated record of the interview (SBP 3.11(3) ).

5. An obligation for each witness to sign off a declaration about compliance.

6. An obligation for the relevant legal representative to certify that they have explained the Rules to the witness and to confirm that the statement adduced was prepared in compliance with the new obligations.

When preparing budgets it is imperative that these onerous obligations are recognised when costing the acquisition and preparation of witness evidence. 

This blog was written by Professor Dominic Regan who is working with the Costs and Litigation Funding team as a consultant.

How to lose a million

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The Supreme Court has refused to entertain an appeal against the decision in XDE V NORTH MIDDLESEX UNIVERSITY HOSPITAL NHS TRUST (2020) EWCA Civ 543. The claimant was switched from legal aid to a conditional fee agreement in the run up to the implementation of the Jackson reforms.
On the face of it, this would enable those acting for the claimant to secure not only base costs but also an uplift of 100% and the cost of after the event insurance.
On settlement of this substantial claim the defendant asserted that these additional liabilities were unreasonably incurred and ought to be disallowed. The Courts agreed.
Coulson LJ noted that evidence as to the rationale of the switch was conspicuously absent. Indeed, the decision to effect the change was that of the Solicitor. It was imposed upon the client.
It remains open for a claimant who did move onto a CFA to recover additional liabilities but there is a heavy burden, demanding explicit material, to convince the court that it was done in the best interests of the client.

This blog was written by Professor Dominic Regan who is working with the Costs and Litigation Funding team as a consultant.

Landmark DBA Judgment in Lexlaw v Zuberi

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“because nobody can pretend that these Regulations represent the draftsman’s finest hour, it is appropriate if I add a few words to explain my own approach to the issues.“ 

The Court of Appeal has delivered the long awaited judgment in LEXLAW V ZUBERI. It accepts that the DBA  Regulations are less than perfect in the way they were drafted . Coulson LJ , quoted above, makes the excellent point that the argument put forward by the client equated to “ commercial suicide “ for lawyers and it was rejected outright.

The client engaged LEXLAW to pursue a claim against her bank using a DBA whereby she would pay 12% of damages recovered in the event of success .

The agreement stipulated that if she were to end the arrangement she would be liable to pay costs incurred. She made her recovery but then argued that the agreement was invalid because the Regulations do not permit one to charge anything to the client if one proceeds using a DBA .

Put succinctly, the provision to charge if the client terminated was outside the DBA and did not fall foul of the restriction upon so called ‘ hybrid ‘ arrangements. Good news for Solicitors . 

ZUBERI v LEXLAWDownload

This blog was written by Professor Dominic Regan who is working with the Costs and Litigation Funding team as a consultant.