Dover v Finsbury Food Group plc [2019] EWHC B11 (Costs)

What a terrible day for the Defendant to cut a long story short. This was an appeal from a Costs Officer’s decision which concerned a costs dispute stemming from an Employers Liability claim which was submitted via a Claims Notification Form “CNF” in 2015. As such the Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims “The Protocol” was to apply.

The Defendant did not respond to the CNF within the prescribed period under the Protocol and as such by automatic operation of 6.13 (2) of the Protocol the matter exited the Protocol. The Claim was later compromised for £70,000 pre-issue, as such Fixed Costs under Section IIIA of CPR 45 were to apply as the matter had not been allocated to the Multi Track.

Within their claim for costs, the Claimant sought a fee for Counsel advising in conference on the value of the Claimant’s claim; the Claimant sought a fee of £650.

The Defendant alleged the fee was not recoverable if the fee had been incurred after the claim had left the Protocol; or in the alternative, if the fee was allowed then it should be limited to £150 plus VAT.

As the matter had exited the Protocol it was agreed between the parties that the applicable section of the CPR which applied to this matter was Section IIIA of CPR 45.

The Rules

“CPR 45.29D

Subject to rules 45.29F, 45.29H and 45.29J, and for as long as the case is not allocated to the multi-track, in a claim started under the EL/PL Protocol  or in a claim to which the Pre-Action Protocol for Resolution of Package Travel Claims applies, the only costs allowed are—

(a) the fixed costs in rule 45.29C;

(b) disbursements in accordance with rule 45.29I.”

“CPR 45.29I

(1) Subject to paragraphs (2A) to (2E), the court—

(a) may allow a claim for a disbursement of a type mentioned in paragraphs (2) or (3); but

(b) will not allow a claim for any other type of disbursement.

(2) In a claim started under …. the EL/PL Protocol …, the disbursements referred to in paragraph (1) are—

(a) the cost of obtaining medical records and expert medical reports as provided for in the relevant Protocol;

(b) the cost of any non-medical expert reports as provided for in the relevant Protocol;

(c) the cost of any advice from a specialist solicitor or counsel as provided for in the relevant Protocol;

(d) court fees;

(e) any expert’s fee for attending the trial where the court has given permission for the expert to attend;

(f) expenses which a party or witness has reasonably incurred in travelling to and from a hearing or in staying away from home for the purposes of attending a hearing;

(g) a sum not exceeding the amount specified in Practice Direction 45 for any loss of earnings or loss of leave by a party or witness due to attending a hearing or to staying away from home for the purpose of attending a hearing; and,

(h) any other disbursement reasonably incurred due to a particular feature of the dispute.”

Paragraph 7.8 of the Protocol

“In most cases under this protocol, it is expected the claimant’s legal representative will be able to value the claim. In some cases, with a value of more than £10,000, an additional advice from a specialist solicitor or from counsel may be justified where it is reasonably required to value the claim.”

The Defendant sought to rely upon CPR 45.23B, which is in Section III of CPR 45

“CPR 45.23B

Additional advice on the value of the claim:

Where—

(a) the value of the claim for damages is more than £10,000;

(b) an additional advice has been obtained from a specialist solicitor or from counsel;

(c) that advice is reasonably required to value the claim,

the fixed costs may include an additional amount equivalent to the Stage 3 Type C fixed costs.”

For clarity, the Stage 3 Type C fixed costs referred to under CPR 45.23B is £150 plus VAT under Table 6A, this is where the Defendant got their ‘alternative’ provision from.

The Defendant’s Arguments

The Defendant had four arguments in relation to the recoverability of this Counsel fee.

1. It was the Defendant’s contention that whilst CPR 45.29I applied for the recovery of the disbursements, 2 (c) of that section referred back to the Protocol and as such there was a restriction to the recoverability of the fee only where the fee had been incurred before the matter leaves the Protocol as 7.8 of the Protocol uses the phrase under this protocol; it was the Defendant’s case the matter was not under the Protocol as it had earlier exited the Protocol.
2. If the recovery of the fee was not restricted as per point 1 above, then no fee was payable given the heading of Table 6A “Where the value of the claim for damages is more than £10,000, but not more than £25,000” which houses the Stage 3 Type C fixed costs referred to in CPR 45.23B. The Defendant contended that as the case settled for more than £25,000 no fee was payable.
3. If the Defendant were wrong on the above 2 points, the Defendant submitted that there was an error in the drafting of the rules, particularly Table 6A, similar to Qadar and Ors v Esure Limited. That the heading of the table wrongly included an upper limit of damages of £25,000 and so by operation of CPR 45.23B the fee should be limited to £150 plus VAT
4. Whether on a proper construction of CPR 45.29I (2) (c), CPR 45.29 (2) (h) permitted recovery of the fee.

The Decision

Master Brown did not agree with the Defendant on any of the above points.

1. Master Brown was of the opinion that the Defendant’s reading of the rules on this argument was strained. As if the Defendant were to be correct then it would produce an anomaly to the other rules such CPR 45.29I (2) (a) and (b) which deal with the recoverability of medical evidence, the wording of these rules also contain the phrase in the relevant Protocol. Further the Master considered the legislative history and the intention to ring-fence the cost of obtaining an advice on quantum so as to ensure claims are not under-settled.
2. Master Brown found that CPR 45.23B and Table 6A did not apply to claims which had exited the Protocol and if it were intended then CPR 45.29I (2) (c) would have included the limitation contained under Section III and it would have been included under Section IIIA.
3. In relation to the drafting error argument of the Defendant, Master Brown found that as Table 6A did not apply to this claim he did not need to consider this argument. However there is an interesting comment from Master Brown at paragraph 49:

“I accept that in cases which have a value of less than £25,000 a judge might reasonably have regard to the sums provided for under CPR 45.23B even in cases which exit the protocol. However, in cases which exit the protocols on the grounds that the value exceeds £25,000 (see [39] of Qader on this point), it is difficult to see, given the likely added complexity associated with them that it must have been intended that costs of any independent advice required would be so limited.”

• It was found that the fee was not covered by CPR 45.29I (2) (h) as this referred to any other disbursement, however the fee was already covered by CPR 45.29I (2) (c).

The Master therefore dismissed the Defendant’s appeal and allowed the Counsel fee at £500 plus VAT as per the original decision from the Costs Officer, as the fee was recoverable subject to reasonableness.

Comment

To me this seems a very logical decision, Section IIIA of CPR 45 applies to claims which have left the Protocol and CPR 45.29I (2) (h) allows recovery of Counsel’s fee for advice so long as it is provided for in the Protocol, which it is. I have regularly conducted Fixed Recoverable Costs Proceedings which involve Counsel’s fees for an Advice on quantum and recovered them.  

The comment made by Master Brown at paragraph 49, detailed above, has also provided food for thought. As it appears that he feels that if a case has a value of less than £25,000, the cost of obtaining an advice from Counsel should be limited to £150 plus VAT even if the matter has left the portal.

This blog was written by Matthew Waring who is an Associate in the Costs and Litigation Funding Team at Clarion. Matthew can be contacted on 0113 288 5639 or at Matthew.Waring@clarionsolicitors.com

Cable v Liverpool Victoria Insurance – Liverpool County Court (Appeal No 128 of 2018)

This was a case which should have been relatively straight forward, at least that’s what the Defendant thought upon receipt of a Claim Notification Form from the Claimant’s Solicitors.

The matter concerned a Road Traffic Accident which occurred in September 2014, after which the  Claimant instructed a firm of Solicitors to represent him and pursue a claim. A Claim Notification Form was sent to the Defendant, thus dealing with the matter under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents from 31 July 2013 “portal process”, this is for cases with a value of £1,000.00 to £25,000.00.

The Defendant made an early admission of liability, and as such the Defendant thought that the  matter would be capable of resolution through the portal process.

The Claimant obtained medical evidence which provided details of the Claimant’s absences from work, no definitive prognosis had been provided and a deferral to a Neurologist had been made. An interim payment of £1,000.00 was obtained from the Defendant, however no further updates were provided to the Defendant as to the evidence which had been obtained.

As the limitation period was approaching, the Claimant later issued a Part 8 Claim Form under paragraph 16.1 of Practice Direction 8B to CPR 8. The Claimant was seeking a stay in order to comply with the RTA Protocol, however the loss of earnings at that point was in excess of £200,000.00; the  matter was therefore not suitable for the portal process.

An Order was made granting a stay until 20^th August 2018 and the Claimant was ordered to provide a copy of the Claim Form to the Defendant by 20^th August 2017; this direction was not complied with until February 2018.

In August 2018, and for the first time in the case, the Defendant was informed of the case it was being expected to meet. The  Claimant’s Solicitors informed the Defendant that the Claimant had lost his £130,000.00 per year job; it was suggested that the matter was not suitable for the RTA Protocol and a transfer to Part 7 was to be sought. The neurological medical evidence was disclosed, to which the Defendant raised concerns with the Claimant’s conduct.

The Claimant issued an Application to lift the stay and transfer the matter to Part 7. An Order was subsequently  made lifting the stay and requiring an amended Claim Form and Particulars of Claim to be served but the Claimant did not comply with this direction .

The Defendant sought to oppose the transfer to Part 7 and issued an Application in September 2018 seeking to set this Order aside (thereby keeping the stay in place) and to strike out the claim. The case came before DJ Campbell in October 2018 who granted the Defendant’s Application.

The Claimant sought to appeal this decision.  The appeal came before HHJ Wood QC who confirmed that when coming to her decision DJ Campbell adopted the correct approach in relation to abuse of process and refused the appeal.

This case is important to Claimant practitioners, as it demonstrates  the importance of accurately valuing the case prior to submitting the claim to any of the Portal processes. Even if you do submit the matter in good faith (believing the matter is suitable for the portal process), you should actively consider if the matter remains suitable for the portal process and inform the Defendant if you believe if it is not (7.76 of the RTA Protocol and 7.59 of the EL/PL Protocol).

This blog was written by Matthew Waring who is an Associate in the Costs and Litigation Funding Team at Clarion. Matthew can be contacted on 0113 288 5639 or at Matthew.Waring@clarionsolicitors.com

West & Demouilpied v Stockport NHS Foundation Trust

This case provided guidance regarding two key areas, the recovery of block rated ATE Premiums and proportionality under the ‘new’ test of proportionality, which came in a mere 6 years ago.

Legal practitioners have had very little guidance on proportionality in the six years leading to this Judgment.

However, just a few weeks prior to this Judgment being given, guidance was received from Malmsten v Bohinc, which confirmed that the Court should  take a step back at the end of an assessment and weight is to be given to the relevant factors as contained within CPR 44.3; no mention of CPR 44.4 though and the ‘eight pillars of wisdom’.

The case of West & Demouilpied goes further than the guidance in Malmstem and provides that:

• There are certain costs which are “unavoidable” / “inevitable” / “an irreducible minimum without which the litigation could not have been progressed” / “fixed”. These costs are to be excluded from the Court’s consideration on proportionality; the Court suggested Court Fees and reasonable block rated ATE Premiums would fall into this category. However, it was stated that the Court may account for these exclusions within the global figure by reducing other items which were included within the proportionality assessment. On a further note, the Court did expressly state that it was not re-introducing the test under Lownds.

• The Court will undertake a line by line assessment of the Bill of Costs, assessing the reasonableness of each item. The Court may, if it is appropriate and convenient when undertaking the line by line assessment, address the proportionality of that item at the same time.

• Following the line by line assessment on the Bill of Costs, the Court will have a global figure which it considers to be a reasonable sum. This assessment is to include an assessment of every item, even the costs which would fall under the category described in point 1.

• Unlike Malmstem, the Court is to have regard to both CPR 44.3(5) and CPR 44.4(1) and assess the proportionality of the sum referred to in point 3. If that sum is found to be proportionate, then no further assessment is to be undertaken. However, if the Court finds that the sum is not proportionate then a further assessment is to be undertaken; this is not a further line by line assessment.

• The Court will consider the various categories of costs incurred “such as disclosure or expert’s reports, or a specific period where particular costs were incurred, or particular parts of the profit costs”, the costs referred to in point 1 are to be excluded from this further assessment. The Court will consider the various categories and when considering a category, assessing whether the costs incurred were disproportionate, if they were then an appropriate reduction is to be made. Once these further reductions have been made the resulting sum will be final. The Court made clear that no further assessment or standing back approach was to be undertaken as this would amount to “double counting”.

• In relation to the ATE Premiums, the Court provided guidance in relation to block rated ATE Premiums. The Court considered that reducing block rated ATE Premiums on proportionality grounds would be inappropriate and gave two reasons for the same. “Firstly, being a block-rated policy, the amount of the reasonable premium bears no relationship to the value of the claim, much less the amount for which the claim was settled. Secondly, ATE insurance is critical to access to justice in clinical negligence claims”.

Following this Judgment, challenges to  block rated ATE Premiums will decrease as the law is now very clear.

However, I do foresee some satellite litigation over what costs fall into the category described in point 1. The Court provided very little guidance on the costs which are not to be included within the assessment of proportionality, save for reasonable block rated ATE Premiums and Court Fees. Many Receiving Parties will now argue that items were “unavoidable”, and many paying parties will say they were “avoidable” – the fun continues!

Fullick & Ors v The Commissioner of Police for the Metropolis [2019] EWHC 1941 (QB)

This case, which was before The Honourable Mrs Justice Slade BDE, related to an appeal from the Judgment of Deputy Master Keens from October 2018, wherein the costs were assessed at circa £88,000.00; reduced from just over £122,000.00. The Claimant’s Bill of Costs included costs of attending two Pre-Inquest Reviews as well as the Inquest itself.

The claim was for damages for breach of Article 2 of the ECHR, negligence and misfeasance in public office following the death of a relative of the Claimants. The claim was settled for just over £18,000.00 prior to any Letter of Claim.

In respect of the costs litigation aspect of the claim, the Defendant appealed the Judgment of Master Keen on two grounds:

1. Deputy Master Keen erred in law in concluding that the £88,356.22 ordered to be paid by the Defendant was proportionate within the meaning on CPR 44.3(5) and that Deputy Master Keen failed to take into account CPR 44.3(2).
2. Deputy Master Keen wrongly accepted the Claimants’ argument that the ‘general costs of the inquest’ were recoverable costs of the action. By wrongly holding that the Inquest was ‘the battleground’ for the claim, Deputy Master Keen was led into the error of allowing the vast majority of the Inquest costs as costs of the claim.

The Defendant contended that the costs were to be assessed by reference to Kazakhstan Kagazy Plc v Zhunus [2015] EWHHC 404, wherein it is provided that the costs payable are;

“the lowest amount which [the receiving party] could reasonably be expected to spend in order to have the case conducted and presented proficiently having regard to all the circumstances”

The  Defendant also contended that the court was not bound by decisions made prior to the introduction of the Jackson reforms, Mrs Justice Slade disagreed at paragraph 44.  

“I disagree. In my judgement there is no reason to disregard previous authorities where and insofar as they deal with considerations in the current rules of court which are to be applied when assessing costs”

At Paragraph 46 Mrs Justice Slade referred to guidance provided in Roach and Anor v Home Office [2010] 2 WLR 746 and Re Gibson’s Settlement Trusts [1981] Ch 179.

“These authorities emphasise the need to identify the issues raised in the civil claim and the relevance of matters in other proceedings, the inquest in Roach, or procedures, in Gibson, to determine as a first question, whether any of those costs can in principle be claimed in the civil proceedings. Once the threshold of relevance has been passed, the costs judge will decide whether the costs claimed in respect of, in this case, the Inquest, were proportionate to the matters in issue in the civil proceedings. As for the amount of those costs, those which are disproportionate may be disallowed or reduced even if they were reasonably and necessarily incurred.”

This confirmed that the cost of attending an Inquest had to be relevant to the civil claim before the issue of proportionality was considered. Rather than the costs as a whole being assessed under the proportionality test.

Further, it was confirmed that no two cases are the same when assessing the recoverability of the costs of an Inquest in a civil claim, “It is trite but important to emphasise that each application for costs in a civil claim and related to an Inquest must be determined on its own facts”. This is as per Roach.

Mrs Justice Slade later differentiated the current claim from that of Kazakhstan Kagazy, due to this claim being about more than money.

When providing her Judgment, Mrs Justice Slade allowed ground 2 of the appeal in so far as two specific items within the Claimant’s Bill of Costs (items 68 and 69, which were documents time), where Deputy Master Keen had undertaken a broad-brush assessment rather than assessing the relevance of each cost ( the documents time claimed at items 68 and 69 had not been split into categories or subjects).

In relation to ground 1 of the appeal, Mrs Justice Slade confirmed “Deputy Master Keen did not err in taking into account the issues raised in the civil claim were not only financial but were of important to the deceased family”. The Defendant themselves acknowledged this claim was not just about the money,

By virtue of allowing ground 2 of the appeal, ground 1 of the appeal was also allowed in so far as the total costs awarded following re-assessment of items 68 and 69 were to be assessed.

This decision makes sense, as the relevance of the costs of attending the inquests are to be considered; this is established law. However, this was not undertaken as Deputy Master Keen adopted a broad-brush approach in relation to items 68 and 69 of the Bill of Costs without considering the relevance of the time claimed within the documents schedule.

Furthermore, the Court recognised that the claim was much more than just a financial claim to the Claimants. This will be welcome news to Claimant lawyers dealing with low value matters; which carry  that element of importance or justice for the Claimant which cannot be truly quantified in monetary terms.  

This blog was written by Matthew Waring who is an Associate in the Costs and Litigation Funding Team at Clarion. Matthew can be contacted on 0113 288 5639 or at Matthew.Waring@clarionsolicitors.com