COP hourly rates – the wait is over!

Following a Hearing on 26 May 2020, the judgment by Master Whalan was handed down today, indicating a 20% increase to the rates payable in Court of Protection cases. After 10 years of no pay rise, the judgment is welcomed by professionals nationally.

The case was brought by 4 professional deputies from 4 different law firms as applicants collectively, namely Wrigleys Solicitors, Freeths LLP, Boyes Turner LLP and Gillhams Solicitors. The issue brought before the Senior Courts Costs Office was that of hourly rates and the fact that the Guideline Hourly Rates (GHR) had not changed for 10 years, but factors like inflation, increasing workload and growing responsibility on professional deputies had caused concern as to the sustainability of Court of Protection work. Clarion prepared the 4 bills of costs for submission, claiming the GHR of 2010 plus a percentage uplift to reflect RPI inflation (of approximately 31%) between 2010 and 2019.

A Directions Hearing took place on 17 April 2020 and the parties were asked to produce evidence in support of the claim. All four deputies, Clarion and instrumental resources from willing members of the Professional Deputies Forum produced evidence, further reinforcing that the 2010 rates were not fit for purpose.

Richard Wilcock of Exchange Chambers represented the parties at the Final Hearing, and relied on the  relevant factors in the Civil Procedure Rules, the GHR Review Committee and recent case law in his submission, all pointing to the fact that changes to the rates payable were essential. He made two key arguments; the first being that COP work is specialised, combined with the fact that deputies carry, in general, higher overheads, including increasing overhead time, which should mean that the current rates are paid with an uplift. His second argument was presented as an alternative solution, in that if the SCCO wanted to rely on the GHR as a starting point, then it must apply an empirical uplift to reflect the incidence of inflation between 2010 and 2019.

Due to inconsistencies in the evidence produced relating to overheads, Master Whalan was not convinced by the first argument. He said that the findings “do not, in my view, demonstrate that the burden is one that is exclusive to COP work or that it is atypically high in comparison with that experienced by practitioners in comparable areas of practice.” He confirmed that the approach set out in Re: Smith and others [2007] and Yazid Yahiaoui and others [2014] was still correct and applicable.

Maser Whalan then moved on Counsel’s secondary argument. He emphasised that he had no power to review the GHR, but recognised that they couldn’t provide “reasonable remuneration unless these rates are subject to some form of periodic, upwards review.” Importantly, Master Whalan states in his judgment, “I do not merely express some empathy for Deputies engaged in COP work, I recognise also the force in the submission that the failure to review the GHR since 2010 threatens the viability of work that is fundamental to the operation of the COP and the court system generally.”

On the topic of inflation, Master Whalan questioned whether CPI was more appropriate than RPI. He  said “I am satisfied that in 2020 the GHR cannot be applied reasonably or equitably without some form of monetary uplift that recognises the erosive effect of inflation”. He further specifies that “If the hourly rates claimed fall within approximately 120% of the 2010 GHR, then they should be regarded as being prima facie reasonable” and provides a suitable table of the GHR with a 20% uplift to assist the Costs Officers undertaking future COP assessments:

 Guideline Hourly Rates
BandsABCD
London 1£490£355£271£165
London 2£380£290£235£151
London 3£275-320£206-275£198£145
National 1£260£230£193£142
National 2£241£212£175£133

Master Whalan concludes by saying that the rates above are applicable to all outstanding assessments, regardless of the year the work was undertaken. He also advised that the recommendations of the GHR Working Group must be adopted in preference to his findings.

This outcome is brilliant news for COP practitioners, providing overdue ratification for the work they conduct. Importantly, the outcome will mean that this area of work continues to be sustainable.

Clarion are delighted to have been a part of this case. We will be applying the 20% uplift to all cases going forward, and are happy to revise existing bills which have not yet been assessed to reflect the changes. Please contact stephanie.kaye@clarionsolicitors.com for further information and queries.

Maximising Recovery: Payments and Dual Attendances

We continue to see assessments returned from the Court where payments have been reduced to 3 minutes at a Grade D hourly rate. Furthermore, we continuously see time claimed for attendances of two fee earners reduced to just one, as they see this as duplicative work. All of this has an impact on the recovery of your costs in Court of Protection cases.

The OPG Costs Guidance states, “three minutes will usually only be allowed in respect of paying bills by electronic transfer, cheque or enclosure letter” and “a three-minute unit is usually allowed for very short straightforward letters, emails or duplicative letters”. Where there are two fee earners, the OPG Costs Guidance states “The SCCO allows the cost of one fee earner to visit in all except the most exceptional cases.”

Background and Case Law

The matter of Leighanne Radcliffe, before Master O’Hare, dealt with arguments on routine payments. The Bill of Costs submitted was in relation to General Management costs for the period 14 August 2002 to 13 August 2003. The Provisional Assessment was not accepted and the matter proceeded to a formal Detailed Assessment. Thereafter, permission to Appeal was granted. 

The Appeal was heard before Master O’Hare and gave guidance on invoices and payments. He allowed 3 minutes per letter as reasonable, explaining that where there is a high volume of bill paying letters, it is not appropriate to allow 6 minute payments to each.

The letters were payments for utility bills and Master O’Hare further stated “in making that allowance I would disallow the extra time for generally “looking after the matter”.

This case also serves to reiterate the decision made by Master O’Hare in the Jamie Walker case in terms of 3-minute charges for routine cover letters. It is noted that time spent checking an invoice, arranging payment and preparing the cover letter/cheque is non-fee earner work and therefore a minimal 3 minutes is allowed for the whole process.

The case of Garylee Grimsley (1998) deals with the arguments of time claimed for two fee earners in attendances. Master O’Hare referred to R -v- Legal Aid Board Ex Parte Bruce (1991). He stated that:

“Solicitors are not to be expected to carry knowledge of all the law in their heads… if the problem is outside the scope of their experience they will wish to discuss it with others who are more qualified… But knowledge of the law, however acquired or recalled, is their stock in trade… In so far as expense is involved in adding to this stock in trade, it is an overhead expense and not something that can be charged to the client”

Recommendations

Always expect time claimed for payments to be reduced to 3 minutes at a Grade D rate. In order to maximise recovery, we advise to delegate this work to a lower grade fee earner and agree with your instructed Costs Draftsman to include 3 minute payments within the bill.

In respect of two fee earner attendances, only claim the highest fee earner at an attendance. If you feel there are exceptional circumstances, fully explain these in the attendance note in order for the Costs Draftsman to include this in the Bill of Costs. Again, referring to the OPG guidance the SCCO will only allow these in exceptional cases. However, there is no guidance on what is deemed as an exceptional case.

Brian Ferry is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Brian.Ferry@clarionsolicitors.com and 07741 663809 or the Clarion Costs Team on 0113 246 0622.

The latest Precedent H guidance notes

The precedent H guidance notes have never aligned with the precedent S guidance notes (Phases and Tasks Reference and Lookup table in Precedent S (bill of costs)) until the update to the precedent H guidance notes which was made last month, this update has addressed some of those discrepancies.

Please find below the amendments that have been made to the guidance notes:

Pre-action: The precedent H guidance notes states that settlement discussions, advising on settlement and Part 36 offers before proceedings were issued are to be included in the Preaction phase. However, in the Precedent S guidance these discussions are included in the ADR/Settlement phase (task “Other Settlement Matters”) . The precedent H guidance notes must be followed therefore any preaction settlement discussions should be included in the preaction phase. 

Issue/statements of case: The precedent H guidance notes have been amended to include “amendments to statements of case” in this phase, the previous guidance stated that these should be excluded from this phase. This amendment has resulted in alignment with the Precedent S guidance. 

CMC: The precedent H guidance notes have been amended to include any further CMCs that have been built into the proposed directions order whereas previously the notes stated that any additional CMCs were not to be included in this phase. The position remains regarding any estimated CMCs that have not been proposed in the directions order, these are to be included as a contingent cost. Any disclosure work, i.e. list of disclosure issues, EDQ  should be included in the disclosure phase.  

Budget – The costs in relation to this phase includes inconsistencies which present numerous difficulties. The Precedent H Guidance Notes includes “correspondence with opponent to agree directions and budgets, where possible”, and “preparation for, and attendance at, the CMC”. The same applies in relation to the PTR phase, which includes “preparation of updated costs budgets and reviewing opponent’s budget”, “correspondence with opponent to agree directions and costs budgets, if possible” and “preparation for and attendance at the PTR”. While the precedent H guidance note specifically excludes preparation of the costs budget for the first CMC, it doesn’t specifically exclude preparation of Precedent R. The Precedent S description of this task is “work on budgeting between the parties following initial completion of the first budget, including the monitoring of costs incurred against the budget and any applications for variation of the budget” –  it doesn’t mention the drafting of Precedent R and seems to relate to work post CMC.

Furthermore, in para 7.2 of PD3E the 2% cap relates to all recoverable costs of the budgeting and costs management process other than the recoverable costs of initially completing the Precedent H. If some costs budgeting items are included in the CMC and PTR phases (i.e. following the Precedent H Guidance Note), practically how is the 2% figure on the front page of Precedent H calculated? Should it include the budgeting items which appear in the CMC and PTR phases of Precedent H, or is it exclusive of them? And, what exactly is meant by “budget process” in relation to this 2% cap?

Unfortunately there is no guidance regarding the budget process or “associated material” that is referred to in the guidance notes – does this include composite summaries, breakdowns of costs?

One solution for this phase is to time record in line with the precedent S guidance notes and then when it comes to preparing the budget assess what aspects of the % cap belongs in the CCMC stage. If the time is recorded as CCMC it is a more onerous task to ascertain what element of the CCMC phase is relevant to the % cap.

Trial: The guidance note has been amended to now include counsel’s brief fee in the trial preparation phase rather than the trial phase. 

Settlement phase: The precedent H guidance note previously excluded mediation from this phase, this has now been amended to include mediation. 

Definition of budgeted and incurred costs – CPR 3.15 and PD 3E para 7.4 Incurred costs are now all costs incurred up to and including the date of the first costs management order, unless otherwise ordered. Budgeted costs are all costs to be incurred after the date of the first costs management order.

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

 

 

 

Can The Court of Protection Keep a Patient Alive?

It is well known, and often the cause of heated debate, that assisted suicide is illegal within the United Kingdom. If a person is terminally ill and wishes to die, that person would have no rights under UK law to end their life with dignity. However, recent case law suggests that there may be a slight shift in how the Court of Protection handles a terminally ill patient.

Recently, the Supreme Court judged that a 52 year old man (Mr Y) with an extensive brain injury should be allowed to die without Mr Y’s family being forced to apply to the Court of Protection. At the time of the application, Mr Y was receiving clinically assisted nutrition and hydration and although Mr Y had died at the time of the appeal, it was deemed necessary for the appeal to proceed due to the importance of the issues raised.

For clarity, once clinically assisted nutrition and hydration is withdrawn, a person is generally expected to survive no more than two weeks. Following on from the Supreme Court ruling, it has now been agreed that where the family and medical practitioners are in agreement, it is no longer necessary for an application to be made to the Court of Protection.

This decision had also been taken in another case where a woman (M) who had suffered with Huntington disease for over 25 years was permanently residing in hospital and was in a minimally conscious state. The Supreme Court judged that the clinically assisted nutrition and hydration was withdrawn and M died shortly after. Following the decision, Jackson stated “There was no statutory obligation to bring the case to court … A mandatory litigation requirement may deflect clinicians and families from making true best-interests decisions and in some cases lead to inappropriate treatment continuing by default. Indeed, the present case stands as an example, in that M received continued CANH that neither her doctors nor her family thought was in her best interests for almost a year until a court decision was eventually sought.”

However, it is worth noting that the decision in M related specifically to those living on life support, as opposed to all ‘right to die’ cases.

It is becoming clear that there is a shift appearing from the way in which those who are terminally ill are treated by the courts. Previously, an application to the Court of Protection would be required to make a decision on the care received, however, now it appears that the best interests of the terminally ill patient will be put first without the requirement of an application.

Court of Protection Costs – What happens after the death of P?

Upon the death of the Protected Party, the Deputy’s authority under the First General Order seizes with immediate effect. Once the matter is transferred to the Executors of the Estate, the Deputy can agree their costs directly without a need for assessment, if possible, which will generally save the Protected Party money overall, without the need for the assessment process. If this is not possible, it may be necessary to apply to the Court for the costs to be assessed.

The interim work and the costs of the Deputy bringing the matter to a conclusion following the death of the Protected Party have been questioned over the years, as there has been very little guidance on this issue. In many cases, there is reasonable and necessary work involved in preparing the case for the Executor to thereafter deal with the Estate, however, what is a reasonable sum for this work?

Following correspondence with the Senior Courts Costs Office (SCCO), the following change has been made to the assessment procedure with immediate effect. The SCCO may now allow ‘reasonable costs’ (post death of the Protected Party) in order that the Deputy can finalise his/her involvement in the matter. The SCCO have indicated that such costs should not be expected to exceed £1,500.00 +VAT.

As a result, where it appears that the post-death profit costs exceed £1,500.00 +VAT, the Deputy will require the authority to assess that part of the Bill of Costs. Costs below this amount are likely to be deemed reasonable on assessment but are, of course, subject to the usual assessment process and will be allowed based on what was reasonable, necessary and proportionate in the circumstances.

If you have any queries relating to post-death costs in Court of Protection cases, please do not hesitate to contact Stephanie Kaye.

The format of the precedent H budget and precedent R are working well, claims Mr Justice Birss

At February’s Civil Procedure Rules Committee meeting Mr Justice Birss reported that “work was ongoing to make certain that the new bill costs, Precedent H and Precedent H Guidance are consistent and accurate and that N260 the summary costs statement follows the same format. The content of Precedent H itself would not be changing. The Chair added that in his experience having settled down, Precedent H and R are working very well“. Therefore no changes are expected to the precedent H budget or the precedent R budget discussion report, the remaining changes relate to the bill of costs and statements of costs.

The wholesale changes to costs that we have encountered over the last 5 years were made as a result of Sir Rupert Jackson’s report whereby he likened the current bill of costs to a “Victorian style account book” making it “relatively easy for a receiving party to disguise or even hide what has gone on”. His purpose was to create transparency and unison with time recording systems and costs related documents, hence the need for the new electronic bill of costs, which is the final piece of Jackson’s jigsaw.

If the legal profession were to embrace time recording as Jackson intended, i.e. recording time in phase, task and activity, then astonishingly some 5 years after the publication of his legendary reforms, Sir Rupert Jackson may achieve his aim. However, Sir Rupert narrowly missed having his vision fully formalised and embedded into the rules during his working lifetime, his retirement has pipped him to the post.  He can now sit back and watch from afar, how his intended co-ordinated approach to costs will work in reality!

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

Sharp v Blank and Ors – What development in litigation is deemed significant enough to warrant a revision to the precedent H costs budget?

The case of Sharp v Blank and Ors addresses the difficult question – what development in litigation is deemed significant enough to warrant a revision to the precedent H costs budget?

The key points of the claim relate to the approach to be taken when applying to revise a budget and are as follows:

  • Future costs – The court found that the language used in paragraph 7.6 is of critical importance and that it is explicit – the revision is in respect of future costs.
  • Range of reasonable and proportionate costs – The court is only required to set figures that are within a range of reasonable and proportionate costs. A range suggests that the process is designed to produce figures for each budget phase in a way that is not a slave to arithmetical calculation. The court is approving, or the parties are agreeing, figures that are not ‘right’ as such, but rather figures that are within a range of acceptability.
  • Interim applications – The costs of interim applications may fall outside the budget, however the incidental costs are a significant development and a revision to the budget is required for those costs. However, interim applications may also be significant developments in addition to the consequences that flow from an interim application.
  •  Modest increases – A significant development must be understood in light of the claim – its size, complexity and the manner in which the litigation has unfolded – and also from the likely additional costs that have been, or are expected to be, incurred. The amount of the additional expense is not determinative, but it is difficult to conceive that a development leading to modest additional legal expenditure, that is modest in proportion to the amount in the relevant budget phase or phases, is likely to be significant development.
  • A development in litigation may not be immediately obvious – In some cases it may not be immediately obvious that a development in the litigation is significant development; a development which appeared at first sight not to be significant may change character.
  • Mistakes in the preparation of the budget – A mistake in the preparation of a budget, or a failure to appreciate what the litigation actually entailed, will not usually permit a party to claim later there has been a significant development because the word “development” connotes a change to the status quo that has happened since the budget was prepared. If the mistake could have been avoided, or the proper nature of the claim understood at the time the budget was prepared, there has been no change or development in the litigation. By contrast, if the claim develops into more complex and costly litigation than could reasonably have been envisaged, that may well be the result of one or more significant developments.
  • Retrospectivity – Some degree of retrospectivity is inevitable if the costs management regime is to be made to work – parties cannot be expected to down tools until a decision is made regarding the revision, however any request for a revision should be made asap.
  • Claiming additional costs at detailed assessment – If there have been significant developments, the budgets must be revised. A claim for additional costs should not be left until a detailed assessment because the parties need to know what is their exposure to costs and the costs of detailed assessment should be minimised.

Following application of the above the court found as follows:

Extension to the trial timetable – yes, it was found that the court had to ask itself at a relatively high level the essential question, namely is this a significant development. Costs management has to be, at least in part, an impressionistic exercise. It seems to me that is the right approach when considering whether there have been significant developments.

Change in number of documents for disclosure – yes under the circumstances of this case.

Application for permission to rely on additional expert and the incidental costs – yes.

Cs 3rd party disclosure application – no – The application was part of the claimants’ task in preparing the case of a trial and it did not lead to work that can properly be characterised as giving the court jurisdiction to revise the defendants’ budget

Questions to three of the Defendants’ experts – Allowance has to be made for future events and, as they unfold, there will be pluses and minuses; some items are more expensive and some lead to savings. It is not appropriate only to take work which has cost more than was originally anticipated and to say that there has been a significant development. There must be something more than merely a modest increase in the anticipated cost of the work to amount to a significant development.

Response to Mr Ellerton – Mr Ellerton sought to include additional evidence, consequently the Defendant had to produce additional witness evidence and supplemental notes form 2 experts. The court found that this was a development, but that in the context of the claim and the modest additional sums claimed that this was not a significant development.

A significant development will depend on the impact that change has on that case and will be case specific.

Sue Fox is a Senior Associate and the Head of Costs Budgeting in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

Part 36 offers, the basis of assessment, and knowing your expert

It is well known within the costs profession that there is some tension in the provisions of CPR 36.17, which deals with the costs consequences following judgment.

When a Claimant beats their own Part 36 offer, CPR 36.17 (4) provides that the Claimant is entitled to: interest not exceeding 10% above base rate from the date of expiry of the offer on the whole or part of any sum of money awarded, their costs on the indemnity basis from the date of expiry of their offer, interest on those costs, again, at a rate not exceeding 10% above base rate, and a prescribed percentage uplift limited to a maximum of £75,000 (10% on awards less than £500,000, and for awards more than £500,000, 10% on the first £500,000 and 5% of any amount above that figure thereafter).

However, for the Defendant, the rules are not quite so generous. CPR 36.17 (3) provides that the Defendant is entitled to costs from the date on which the relevant period expired, and interest on those costs. There’s no mention of indemnity basis costs, and no mention of any enhanced interest.

The recent costs decision in the case The Governors and Company of the Bank of Ireland (1) and Bank of Ireland (UK) PLC (2) v Watts Group PLC [2017] looked at this point closely, with the Defendant trying to persuade the Hon. Mr Justice Coulson that they should be awarded their costs on the indemnity basis following expiry of their first Part 36 offer, which they beat at trial, and which expired on 23 October 2015 (the parties had previously agreed that the Defendant should recover interest at 2% above base rate for the relevant period).

The Defendant relied on three main arguments; that the claim was hopeless and should never have been brought, that the Defendant had beaten their own Part 36 offer, and that the Claimant’s expert was heavily criticised by the trial judge.

The Hon. Mr Justice Coulson considered the principles that he had set out in Elvanite Full Circle Limited v Amec Earth and Environmental (UK) Limited [2013] EWHC 1643 (TCC), and summarised that “indemnity costs are appropriate only where the conduct of a paying party is unreasonable “to a high degree”. ‘Unreasonable’ in this context does not mean merely wrong or misguided in hindsight”. He went on to say that “The pursuit of a weak claim will not usually, on its own, justify an order for indemnity costs, provided that the claim was at least arguable”

In this case, he did not regard the case as being hopeless from the start, and he stated that the claim was, at least in part, supported by expert evidence and detailed witness statements.

He recognised that if the Claimant had beaten their own Part 36 offer then, in accordance with CPR 36.17(4)(b), they would have automatically been entitled to indemnity basis costs, however, he stated that whilst the rules were misaligned and considered unjustified by some, it remained the law that the same rules did not apply to successful Defendants.

He did, however, allow costs on the indemnity basis in relation to one discrete aspect of the case – the expert’s conduct, and he relied on the decisions of Balmoral v Borealis [2006] and Williams v Jervis [2009] in doing so. He considered that the expert’s conduct should be reflected in the costs order, but he did not consider that an order for indemnity basis costs in their entirety was appropriate. He recognised that the expert’s inadequacies had already been a factor in the Claimant losing at trial, and therefore “to order indemnity costs as well would be penalising the Bank twice over for the conduct of their independent expert”. He ordered that costs of the Defendant expert should be assessed on the indemnity basis, as well as costs of and occasioned by the oral evidence given by the Claimant’s expert at trial.

The Claimant paid a heavy price for relying on an expert who had never given oral evidence at a trial. However, the conduct of the expert did not persuade the Court to allow indemnity basis costs throughout. Nor did the fact that the Defendant had beaten their own Part 36 offer. And whilst the Claimant bank accepted that they lost the litigation “badly”, they denied that the claim was unreasonably brought and they warned about the dangers of applying hindsight to such decisions.

It, therefore, seems that there is a high bar to clear in persuading the judge to award indemnity basis costs in a claim where the Defendant has successfully beaten their own Part 36 offer. Like in this case, a paying party would need to consider and rely upon the factors listed in CPR 44.2 (4), in order to formulate a case that would persuade a judge to make such an award in the circumstances.

If you have any questions or queries in relation this blog or legal costs in general please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 246 0622.

When cherry picking is not allowed: More on QOCS and CFAs

The Court of Appeal decision of Catalano v Espley-Tyas Development Group Ltd [2017] EWCA Civ 1132 relates to an appeal brought by the Claimant against a decision of Deputy District Judge Harris, who found that she was not entitled to QOCS protection under a post-01 April 2013 CFA after she had previously terminated a pre-01 April 2013 CFA.

Implemented on 01 April 2013, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) abolished the ability of the winning party to recover both a success fee, and an after the event insurance premium, from the losing party. Instead, any agreed success fee was to be recovered out of the Claimant’s damages, and under CPR 44.13-44.17, Qualified One-way Costs Shifting (QOCS) was introduced. QOCS provides that any adverse costs orders made against an unsuccessful Claimant in a personal injury action could only be enforced to the extent that the amount did not exceed any damages and interest awarded to the Claimant. Therefore, if the Claimant recovered nil (or discontinued their claim or lost on liability) they, in theory, would not have to pay any amount in costs to the Defendant.

The transitional provision in CPR 44.17 states that QOCS does not apply where the Claimant had entered into a pre-commencement funding agreement. CPR 48.2 explains that a pre-commencement funding arrangement includes a pre-01 April 2013 CFA which provides for a success fee.

Ms Catalano originally funded her claim against the Defendant for loss and damages relating to noise induced hearing loss under a CFA dated 13 June 2012 (hence a pre-commencement funding arrangement). This, in the event of success, would have sought a success fee from the Defendant, and the Defendant was advised of this CFA via the letter of claim dated 06 September 2012.  The Claimant applied for ATE Insurance, however, this was rejected, leaving her exposed to adverse costs in the event of loss.

On 01 April 2013, the new QOCS rules came into force. The Claimant entered into a new CFA on 15 July 2013, which replaced the old agreement. An updated Notice of Funding was filed which confirmed that the matter was funded under a CFA dated 15 July 2013, but which also referenced the original CFA dated 13 June 2012. The box which indicated this CFA was terminated remained unticked.

The matter was listed for trial on 14 January 2015 and, just one day prior on 13 January 2015, the Claimant served a notice of discontinuance. The Defendant interpreted this notice as their deemed costs order under CPR 38.6, which automatically entitled them to their costs – they proceeded to serve a bill on the Claimant totalling £21,675.52 excluding interest.

The Claimant argued that she had the protection of QOCS on the basis the matter was funded under a CFA dated after 01 April 2013, and therefore the amount due to the Defendant was nil. However, Deputy District Judge found that the new regime was not applicable, basing his finding on a previous decision of Landau v The Big Bus Company (31 October 2014), in which Master Howarth held that QOCS did not apply where there was a pre and post 01 April 2013 funding agreement that covered only one matter. The Claimant appealed, with the decision being leapfrogged to the Court of Appeal.

On appeal, the Claimant argued that the Solicitors had terminated the first CFA and therefore, in accordance with a county court decision of Casseldine v The Diocese of Llandaff (03 July 2015), they were not entitled to any costs under it. Further, the Claimant argued that the second CFA replaced the first CFA which was no longer in force, and that the matter was therefore funded under a post 01 April 2013 CFA, without ATE insurance, and that she should have the benefit of QOCS.

In response, the Defendant argued that, whilst it was accepted that the first CFA had been terminated once the second CFA had been made, the Claimant was inserting an unwritten word into rule 48.2(1)(a)(i) so that it read “an un-terminated funding arrangement”, and that “it could not have been the intention of the rule to allow a Claimant to cherrypick the advantages of both regimes” and that since the Claimant’s application for ATE Insurance had been declined yet she continued to proceed, she was always going to face costs consequences if she lost.

Lord Justice Longmore considered the wording of CPR 48.2 (1)(a) and found that in this case there was undoubtedly a pre-commencement funding arrangement. He also found that the Claimant was “seeking to read a word into the rules which is not there”, and that “the framers of the rules could not have intended that a claimant should be able to blow hot and cold.”

The appeal was dismissed, with Lord Justice Longmore highlighting the fact that Ms Catalano and her Solicitors faced no injustice as, following the refusal of ATE insurance cover, they were open to adverse costs risks in any event.

This is a further case which considers QOCS and the parameters by which it protects unsuccessful Claimants in personal injury claims. In this case, the Claimant and her solicitors sought to benefit from the new QOCS regime so that she was protected from adverse costs risks after she was declined ATE Insurance. This, however, was unsuccessful and the Claimant was faced with not only the Defendant’s bill totalling £21,675.52 excluding interest, but also the Defendant’s costs of assessment, and the appeal costs. The Claimant was ordered to make a payment on account in respect of the appeal costs in the sum of £10,000.

If you have any questions or queries in relation this blog or legal costs in general please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 246 0622.

Sue Fox considers the practical effect of the Harrison budgeting decision

In the eagerly awaited decision in Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] WECA Civ 792 (seearticle, page 8), the key findings of the Court of Appeal were that (1) budgeted costs will not be departed from in the absence of a ‘goodreason’; (2) incurred costs do not form part of the budgeted costs; and (3) the good reason test does not apply to those incurred costs. So, what does this decision mean in practice, and what further observations can we make?

Of particular interest is how the courts will deal with ‘incurred costs’. During the Court of Appeal case, the court’s attention was drawn to incurred costs when the respondent presented what was described by Davis LJ as ‘an ingenious argument’ regarding incurred costs being potentially approved ‘through the back door’ at the budgeting stage. The respondent submitted that: ‘The incurred costs will have acquired a special status: in that, while not “approved” as such, they will have been taken into account by the court at the costs management hearing in managing the future estimated costs.’ Please click here to read the full article.

Sue Fox is a Senior Associate and the Head of Costs Budgeting in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.