The case Frade & Ors v Radford & Anor [2017] EQCA Civ 1010 involved a renewed application for permission to appeal against an Order of Warby J from July 2016, which dismissed two appeals brought by the Appellant Defendants following the detailed assessment of their costs.

Master Howarth, Costs Judge, had found at the original detailed assessment of the Defendants’ costs that there was no agreement between the Defendants, their Solicitors Taylor Hampton, and Counsel, Augustus Ullstein QC, for the payment of any fees, and thus there was no liability for the Claimants to pay under an inter partes costs order. This was due to the wording and scope of the CFAs, and the omission to name all four Defendants within the CFA with Counsel.

Counsel’s CFA, dated 6 July 2011, named two Individual Defendants, but failed to include the remaining two Corporate Defendants. Following the making of the final inter partes order, the Defendants became aware of their oversight, and entered into a deed of rectification with Counsel on 30 July 2015 whereby the CFA was extended, with retrospective effect, to cover the proceedings against the Corporate Defendants.

The Claimants had argued on detailed assessment that, due to Counsel’s CFA failing to name the two Corporate Defendants, those clients had no liability to pay Counsel for any work done, and that on an inter partes assessment, the Claimants should only be liable for the fees incurred that the Individual Defendants were liable for.

On appeal, Warby J found that the deed of rectification was irrelevant inter partes. Warby J accepted that the deed of rectification “was effective to cure the position as between Counsel and his clients”, but that “events subsequent to the costs order against the Claimants were to be disregarded for the purpose of assessing their liability – at least if those events increased rather than diminished that liability”.

The Defendants therefore sought to appeal the Order of Warby J on 7 grounds, with ground 6 dealing with Counsel’s CFA and the finding that the rectified CFA was ineffective on an inter partes basis.

The Defendants argued that there was powerful evidence on file to support the fact that the failure to name the Corporate Defendants within the CFA was a simple oversight. He submitted that the CFA should be rectified to reflect the true agreement with Counsel, and that there was no rule of law that rendered the deed of rectification ineffective inter partes.

In response, Counsel for the Claimants argued that, whilst case law such as King v Telegraph Group Ltd [2005] and Holmes v Alfred McAlpine Homes (Yorkshire) Ltd [2006] allowed for a CFA to have a retrospective effect, Kellar v Williams [2004] made it clear that a variation in the charging basis between a receiving party and their client made after an inter partes costs order was ineffective against the paying party, particularly if it resulted in a larger costs burden. Counsel recognised that Kellar v Williams [2004] was persuasive authority only, being a Privy Council case, but argued that costs judges had previously followed it.

LJ Hickinbottom was persuaded that the circumstances of this case could be distinguished from Kellar v Williams on the basis it related to the rectification of a contract rather than a variation to the terms, and he found that this case raised a point of general importance that should further be considered by the Court. He therefore granted permission to appeal on Ground 6.

We await the appeal decision with interest. If a receiving party finds themselves in a similar position, this appeal decision may assist in recovering Counsel’s fees inter partes when a genuine mistake is identified and rectification of the CFA is required after the making on the order.

If you have any questions or queries in relation this blog please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.

In Shaw v Medtronic [2017] EWHC 1397 (QB), the Court of Appeal found that the claimant had not abused the Court process by filing a notice of discontinuance against the fifth defendant to benefit from the protection of qualified one-way costs shifting (QOCS).

The parties agreed that section 2 of CPR 44 applied, and in particular CPR 44.14(1) which states subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.

In this particular case, the claimant had not received any award for damages or interest, and therefore the rule would in effect mean that no costs order could be enforced against them.

During the main claim, the fifth defendant had filed an acknowledgement of service on 11 October 2016, and on 17 October 2106, they had written to the claimant’s solicitor to highlight the weaknesses of the claim. This prompted a response from the claimant’s solicitor which stated that they were not prepared to file, at that stage, a notice of discontinuance. The fifth defendant therefore, on 25 October 2016, filed an application to strike out the claim. If the fifth defendant were successful it would “bring the fifth defendant within the scope of the exception in CPR 44.15(a) to the general rule concerning qualified one-way costs shifting”.

CPR 44.15 (a) states that Orders for costs made against the claimant may be enforced to the full extent of such orders without the permission of the court where the proceedings have been struck out on the grounds that –

(a) the claimant has disclosed no reasonable grounds for bringing the proceedings;

The first judgment was given on 20 January 2017, and the claimant proceeded to file a notice of discontinuance on the fifth defendant in March 2017, before the fifth defendant’s application could be heard.

The fifth defendant attempted to persuade Mr Justice Lavender to utilise his powers under CPR 38.4 and set aside the notice of discontinuance on the basis it was an abuse of the process of the Court. However, Mr Justice Lavender found that whilst it was striking that the claimant has opted to discontinue against the fifth defendant whilst maintaining claims against the first, third and fourth defendants (through the Court of Appeal), that it may be that the claimant had realised, albeit later than they may have done, that the prospects of success in their claim against the fifth defendant were not favourable. Justice Lavender found that “it does not, in those circumstances, strike me that this is a case of abuse of process of anything sufficient to justify setting aside the notice of discontinuance”.

The fifth defendant was refused permission to appeal on the basis the decision was made on the facts of the case.

Therefore, as a litigator, the power of QOCS should always be borne in mind, particularly if the case being brought by a claimant is for non-monetary award. The filing of a notice of discontinuance is a powerful tool for claimants to have as their exposure to adverse costs would be nil. As a defendant, you should always be on the lookout for any aspects of the case which may kick into effect CPR 44.15 in order to escape the parameters of QOCS.

If you have any questions or queries in relation this blog please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.

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 (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622