INTEREST IS NOT PAYABLE ON AN ADDITIONAL AMOUNT AWARDED UNDER CPR 36.17(4)(d)

July 10, 2019June 12, 2019 Matthew RoseLeave a comment

Where the Court awards an “additional amount” under CPR 36.17(4)(d) as a claimant / receiving party beating its own Part 36 offer, the additional amount will not attract “enhanced” interest under CPR 36.17(4)(a).

In FZO -v- Adams & Anor [2019] EWHC 1286 (QB) the court allowed an additional amount under CPR 36.17(4)(d), but held that interest under CPR 36.17(4)(a) – enhanced interest at 10% above base rate – was not payable on that amount. Giving judgment, Mrs Justice Cutts found that the construction of CPR 36.17(4)(d) was that the “additional amount” was not a “sum awarded” and that the words “additional” and “amount” mean that the award is in addition to the enhanced interest at CPR 36.17(4)(a).

It should be noted that CPR 36.17(4) states that where the claimant has beaten their own offer the court “…must, unless it considers it unjust to do so, order that the claimant is entitled to…” and thereafter lists the consequences (enhanced interest, additional amount, etc). This does not appear to accord with the judge’s acceptance of the defendant’s submission that the additional amount is not a “sum awarded”. On the construction of CPR 36.17(4) it seems that those consequences are sums awarded by the court, albeit they are sums which the court is bound to award save where it considers it to be unjust.

Notwithstanding, the second strand of the judge’s reasoning appears wholly sound insofar as the “additional amount” is additional to the other consequences and therefore not itself subject to those consequences.

However, practitioners should be aware that this applies only to interest arising under CPR 36.17(4)(a). As the additional amount is a sum which a party is ordered to pay, and (as above) is a sum which the court orders that party to pay, it is a judgment debt and thus interest will, in the author’s opinion, arise under section 17 of the Judgments Act 1838 at the rate of 8% should payment not be made within the prescribed period (14 days pursuant to CPR 40.11 unless otherwise ordered)

Matthew Rose is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at matthew.rose@clarionsolicitors.com and 0113 222 3248. You can contact the Clarion Costs Team on 0113 246 0622.

An Order for a payment on account in Part 36 settlement

January 17, 2019January 17, 2019 annaramliLeave a comment

We found in Culliford & Anor v Thorpe [2018] EWHC 2532 (Ch) that a payment on account can be made by the Court after the judgement has been made and after the Order has been sealed. Previously, it had been widely understood that a Part 36 agreement, as it is a deemed Order for costs under CPR 44.9(b), provides authority for a party to apply for an Order for a payment on account and the Court can make such an Order upon settlement, as obligated pursuant to CPR 44.2(8).

However, in the High Court case of Finnegan v Frank Spiers [2018] EWHC 3064 (Ch ),a successful professional negligence claim from last year, Mr Justice Birss ruled that the Court does not have the power to make an Order for a payment on account where a claim is settled by way of Part 36, as the agreement does not provide authority to do so.

It was considered and argued by the Claimant Counsel that the decision for a payment on account should be based on the authority under CPR 44.9 for a deemed costs Order. The Part 36 agreement is a deemed costs Order and provides authority for costs to be assessed on the standard basis, outlined under CPR 44.3(2) and which Part 36 indicates. Counsel for the Claimant relied on the rule under CPR 44.2(8) – where an order has been made for costs to be assessed by way of detailed assessment, as they would be here, then an order shall be made for a payment on account.

Presiding over the case, Justice Birss ruled that Part 36 was a self-contained code, as is written within the part. He highlighted that it is clearly not entirely complete given the inclusion of the CPR 44.9; however, as it is a self-contained code, it should follow that it should be treated as such. Part 36 contains its own authority for the consequence of costs following settlement, and as such, there is no reason that CPR 44.2(8) should be followed when looking at whether to make an order for a payment on account. Justice Birss stated that much of CPR 44.2 is not applicable to Part 36 settlement and therefore one could not correctly apply CPR 44.2(8) to the rule. This is because the place for any authority for making a payment on account following Part 36 should be within the Part itself, from which it is absent. Furthermore, the Defendant Counsel argued that CPR 44.9 is in place in order to trigger the detailed assessment proceedings; however, it does not include any other provision of Part 44.2 when triggering the process, therefore highlighting that it should be no different when dealing with Part 36. Justice Birss dismissed the Claimant’s appeal.

The ruling has caused much debate, and was a topic of discussion at the annual Association of Costs Lawyers Conference, in which even the Counsel for the Defendant, Mr Rupert Cohen, agreed with costs judges that perhaps the decision went the wrong way. I am sure that it will not be the last time we see argument over this point and will discuss further any decisions that arise on this blog.

CH (By his Litigation Friend the Official Solicitor) and a Metropolitan Council (2017)

September 18, 2017 daniellelwalker1Leave a comment

An application was made on behalf of the claimant for approval of a proposed settlement of his claim against the Local Authority. The claim originated following proceedings that were issued in the Court of Protection and a claim for damages pursuant to the Human Rights Act 1998 (HRA 1998). A Part 8 claim was brought under the Civil Procedure Rules, pursuant to the decision in Luton v SW (2017).

CPR 21.10, stipulates where a party is a Protected Party, the Court must approve any proposed settlement. CH was identified as a Protected Party and a declaration had been made that he lacked the capacity to litigate. The Court of Protection itself, does not make specific provisions for approving a settlement, however the Court has the power to do so, as explained by Charles J in YA (F) v A Local Authority (2010).

Facts of the Case
The Protected Party was was 38 years of age and was born with Downs Syndrome and had associated learning difficulties. He married WH in 2010 and they lived together in his parents home. They enjoyed normal conjugal relations until 27 May 2015.

The Protected Party and his wife, WH sought fertility treatment as they wanted to start a family. The Local Authority had a duty towards the Protected Party, and in late 2014 he was assessed by a Consultant Psychologist who determined that he lacked the capacity to consent to sexual relationships. The Protected Party and WH were informed by a letter, dated 27 March 2015. The letter stated that WH was to abstain from sexual relations with the Protected Party due to his apparent lack of capacity to consent and if not adhered to, relations would amount to a serious criminal offence under the Sexual Offences Act 2003. WH was also informed that if she failed to comply, safeguarding measures would be implemented and one of the parties would be removed from the home.

The parties complied and WH moved into a separate bedroom and any physical contact with the Protected Party ceased, which obviously had a detrimental affect upon the Protected Party himself, as he could not fully comprehend the reason for his wife’s actions.

The Consultant Psychologist stated that the Protected Party required a sex education course to help him achieve the necessary capacity. This advice was in line with Section 3 of the Mental Capacity Act 2005 which provides “a person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.” The Local Authority failed to implement that advice, despite numerous requests to do so and having received protracted correspondence.

The Protected Party’s sister, SH acting as his Litigation Friend initiated proceedings in the Court of Protection in February 2016. It required an Order of the Court to implement the original psychological advice, following which the relevant course began on 27 June 2016. It was reported that the Protected Party had made sufficient progress in all areas, however further sex education was required, which was undertaken in Early 2017. On 19 March 2017, the Psychologist stated in writing that the Protected Party now had the required capacity to consent to sexual relations. The Local Authority thereafter accepted this decision.

A letter before action was sent to the Local Authority on behalf of the Protected Party, in compliance with the guidance set out in the case of H v Northamptonshire CC (2017). The Local Authority are a public body and are subject to sections 6 and 8 of the Human Rights Act 1998. Section 6(1) provides that “it is unlawful for a public authority to act in a way which is incompatible with a convention right.” Article 8 also states that ” everyone has the right to respect private and family life, his home and his correspondence.”

Breaches
The issues identified were the delay in implementing the advised programmes of education. This stemmed from 27 March 2015 when conjugal relations were required to cease, to the start of the first sexual education programme on 27 June 2016. The Local Authority did not contest the same.

Remedy
The remedy lies in damages governed by Section 8 of the HRA 1998. Section 8(3) states where an “award is necessary to afford justification to the person in whose favour it is made.” Where an award is made, the Court must under section 8(4), “take into account the principles applied by the European Court of Human Rights in relation to the award of compensation under Article 41 of the Convention.

The Defendant offered;
(1) to make a formal apology for the delays
(2) to pay the Protected Party damages in the sum of £10,000 as a result of the delay
(3) to pay the Protected Party’s pre-action costs in the sum of £7,395 (inclusive of VAT)
(4) to pay the Protected Party’s costs of the Part 8 application and seeking approvals of the Court for the settlement.

Considerations
WH had also pursued her own claim under the HRA 1998 and the claim had settled for an undisclosed amount. The Local Authority had also agreed to pay the Protected Party’s costs of the Court of Protection Proceedings which totalled £21,600 (inclusive of VAT). It was imperative that this information was noted so as to ensure that there was no recouping of costs against damages under Section 25 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, (LASPO).

Quantum
The Judge considered the appropriate quantum of damages for the Protected Party’s deprivation of his normal conjugal relations with his wife for a period of at least 12 months. It transpired that there were no exact comparators in any reported case in England and Wales either in Tort law or under the Convention relevant to compulsory cessation of conjugal relationships.

Judge Hedley concluded that the proposed settlement was in the best interests of the Protected Party and reflected a fair outcome to the proceedings. As no Deputy was appointed for property and affairs, it was agreed that the monies would be paid into a Court Funds Office Account. The Judge also allowed for an additional £2,000 to be paid immediately to allow for the installation of an en-suite bathroom to the Protected Party’s matrimonial bedroom.

The intrusion was essentially lawful and had been properly motivated as a safeguarding measure, however the delays had led to proceedings being issued and unnecessary costs of litigation.It does however, highlight that vulnerable people with disabilities are entitled to be protected under Article 8 of the Human Rights Act, in the same way as any other member of society.

This blog was prepared by Danielle Walker who is a Costs Lawyer and Associate at Clarion Solicitors. Danielle specialises in Court of Protection Costs. Danielle can be contacted on 0113 222 3213 or at danielle.walker@clarionsolicitors.com.

Will Court of Protection bills be affected by the changes?

January 28, 2016February 12, 2016 Julianne BrownLeave a comment

At the Civil Procedure Rules Committee meeting the question was asked of the Hutton Committee (the committee which LJ Jackson tasked with devising a new bill of costs):

What about Court of Protection, solicitor/client disputes, Arbitration Act and Tribunals – does the new bill format apply? Read More »