The door to third party assessments pushed opened by the Court of Appeal…. Or is it?

January 24, 2024February 5, 2024 Daniel MurrayLeave a comment

The door to third party assessments pushed opened by the Court of Appeal…. Or is it?

The Court of Appeal has delivered judgment in the case of Thomson Snell & Passmore v Kenig [2024] EWCA Civ 15. The case concerned two important issues, namely, whether a beneficiary may obtain an order for an assessment of Solicitor’s costs, pursuant to S.71(3) Solicitors Act 1974, and the extent of such assessment.

Background to Third Party Assessments

Section 71 (1) and (3) of the Solicitors Act 1974 make provision for the assessment of a Solicitor’s bill of costs by a party other than the party chargeable with the bill.

The provisions differ, with S.71 (1) dealing essentially with applications by third parties who wish to challenge costs which they are ultimately liable for because of a contractual relationship. Whereas S.71(3) deals with applications by third parties who are beneficiaries of an estate or trustees, and to whom a fiduciary duty is owed.

It is worth highlighting at this point that the provisions of S.70 Solicitors Act are also relevant for the purpose of third party Assessments. This is in respect of the timescales they place on individuals challenging a bill of costs. Pursuant to S.71(4), the Court shall have regard to these under any S.71 application, in so far as they are capable of being applied.

The First Instance decision

The application for assessment was brought by Mr Kenig, who, along with another individual, was beneficiary to a will. The administrator of the estate had appointed his own firm of Solicitors to deal with the administration of the estate and had subsequently paid bills which were delivered, in the total sum of £54,410.99 from the estate funds. The last bill had been paid 8 months prior to Mr Kenig’s application, but others had been paid more than 12 months before his application.

Mr Kenig sought to challenge the fees, but his attempts were rebutted, on the grounds that the decision in Tim Martin Interiors Ltd v Akin Gump LLP [2011] EWCA Civ 1574, limited the scope of any assessment and therefore any such assessment would be fruitless and should not be allowed. That decision dealt with an application made pursuant to S.71(1), and arose as a result of a contractual relationship. It established that the approach to these assessments was very narrow and with regards to quantification of a bill, it only allowed an assessing judge to apply a ‘blue pencil’ approach and eliminate only items which fell outside of the scope of the retainer, or which would only be allowable on a special arrangement basis between a Solicitor and Client.

At first instance, Costs Judge Brown distinguished the decision in Tim Martin and ordered that there were ‘special circumstances’ for allowing an assessment of the bills. He instead felt bound by the historic decision in re Brown (1867) LR 4 Eq 464, which had permitted an assessment of fees by a trustee of a will under the provisions of S.38 of the Solicitors Act 1843, which had essentially become S.71(3) of the 1974 Act.

Key to his decision were several factors. Namely:

Lloyd LJ in Tim Martin dealt only with an application conducted under S.71(1) and where S. 71(1) provides limitations on the Court, akin to S.70, S.71(3) placed no such limitations and provided wider discretion
There is a material difference between cases in which the legal relations between the person chargeable with the bill and the third parties are ones of contract, and those where fiduciary duties are owed to beneficiaries or trustees.
Discrepancies in the case between initial fee estimates and the final charges required justification, and even if Tim Martin was directly applicable, there would still be a realistic prospect that material deductions might be made from the Solicitors’ bills

This was appealed by the Solicitors, on the grounds that the Costs Judge Brown had erred in distinguishing Tim Martin. Other grounds were refused permission or dropped.

The Appeal

At the appeal hearing, Lord Justice Stuart – Smith, with support from Lord Justice Nugee and Lord Justice Coulson , upheld the decision of the High Court, that the Courts were not bound by the principles in Tim Martin in relation to S.71(3) applications, and any observations about that section, or the historic provisions of it’s predecessor S.39 of the 1843 Act were obiter.

Lord Justice Stuart – Smith continued and confirmed that “there are material differences between applications under section 71(3) and those under section 71(1) because of the different nature of the interests of the third party that the different sub sections are intended to reflect. The consequence of Lloyd LJ’s mistaken assumption is that his judgment cannot be relied upon as saying anything authoritative about the position that obtains where an application and assessment are brought under section 71(3)”.

At paragraph 57 the importance of protecting the interests of the beneficiaries / estate was of the upmost importance, because of the fact the executor / trustee carried no risk because of their ability to pay fees out of estate funds.

Where does it leave us?

The decision, first and foremost, is a positive one for beneficiaries / trustees. Executors / Administrators are often in a professional capacity in these types of cases and choose to instruct other departments within their own firms to carry out the administration of the estate. The rights of beneficiaries who have no input in these appointments, to challenge final fees, seems only fair.

It must be remembered that the appeal was only on two limited grounds, whether the Court was bound to apply the principles in Tim Martin, and as a result that application was fruitless. In the initial judgment (at paragraph 21), the Costs Judge considered issues in relation to the fact that some of the bills challenged had been paid 12 months previously and decided that the scope of S.71(3) was sufficient to allow him to exercise discretion to allow an assessment in any event. This is not the case where individuals chargeable with the bill seek an assessment, which would not be permitted pursuant to S.70(4).

Lord Justice Stuart-Smith (at paragraphs 54-55) comments on this issue, and whilst confirming that he was hesitant to comment beyond the ground of appeal, did acknowledge that this could be a point of jurisdiction. Could it therefore mean that in future cases, where there is a delay and the Court is asked to consider whether the Court’s requirement to consider the factors of S.70 (pursuant to S.71(4)), then an assessment would be barred? If beneficiaries were informed of these payments as and when they are made, does this strengthen any charging party’s case if taking this point?

The judgment also leaves doubt regarding the effects of fully informed consent and approval on any assessment, given the presumptions in CPR 46.9. Although in this case the Court sided with Mr Kenig’s submissions that informed consent was merely a ‘material factor’ and there should be no hard and fast rule when considering its effect. It was acknowledged that ‘fully informed consent by the executor (if proved) is likely to be a major consideration, which in many cases may prove to be determinative’ [58]. Given that bills were approved and paid, steps beyond this are clearly required to demonstrate approval, but if this can be done, could this also mean an assessment would be fruitless?

Only time will tell if third party assessments will now gather momentum and whether the decision really does extend the scope of any quantum reductions. It seems however, that this is still very much a debate for another day.

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

Disbursements & the E-bill

January 11, 2024January 11, 2024 Tanya Foran2 Comments

A disbursement is a payment made on behalf of a client or third party, for which reimbursement is subsequently sought from the client. In COP terms, this means a payment made by the Deputy that needs to be reimbursed by the Protected Party.

With the new E-Bill, all work now needs to be categorised. This also applies to disbursements. The types of categories in the E-Bill are as follows:

travel expenses
costs draftsman’s fees
counsel’s fees
court fees
bank fees
internal solicitor fees
external solicitor fees
OPG fee
courier fees
land registry fees
expert fees
other

Many of the items in the list do not need to be assessed and would be better placed in the annual Deputyship report (e.g. court fees) and as such, this has caused some confusion as to what disbursements need to be assessed and what disbursements do not need to be assessed. As a result of the confusion, we obtained guidance from the costs officers.

According to the Costs Officers, the disbursements that MUST be included in a general management bill for assessment are:

travel expenses
counsel’s fees
bank fees

land registry fees
courier fees
expert fees

The Costs Officers also advised that internal and external solicitor fees would be dependent on the case and the orders made. Whilst these fees are not usually included in general management files, should this come up on one of your matters and you are unsure, please ask us for further guidance.

In certain applications (such as Statutory Wills) there will be no Deputyship report where disbursements can be claimed. In these types of bills, ALL disbursements incurred must be claimed within the bill – if not claimed in the bill you will not be able to bill the disbursement to the client.

For more information, please contact Tanya Foran by email at Tanya.Foran@clarionsolicitors.com.

East Suffolk and North Essex NHS Foundation Trust v DL & Anor [2023] EWCOP 47

January 10, 2024February 6, 2024 hawamayetLeave a comment

This was a Hearing to determine the type of treatment plan which should be put in place to feed and hydrate P.

The Protected Party (P) is in her thirties and is currently detained under section 3 of the Metal Health Act 1983 in hospital. P has a mild learning disability, complex PTSD, a dissociative disorder and an Emotionally Unstable Personality Disorder at a borderline level. She has a history of violence towards herself and others, including those who care about her. Since August 2023, P has been limiting her intake of food and hydration. Her current dietary habits are incompatible with life. It has been accepted by all parties, which included clinicians from the Hospital Trust that without clinical intervention, P will die. P’s siblings believed that hospital interventions were traumatic for P, such that they worsened rather than improved P’s condition. The Judge met with P virtually and understood that she expressed a desire to get better.

The Court weighed up all the factors in the balance and declared that providing hydration and nutrition to P in accordance with a treatment plan and an escalation plan if the treatment plan was not to work, was lawful and in P’s best interests. The plan outlined that P would be electively admitted into a side room on a ward of the hospital, that there would be a physical restraint in place to enable IV access and then a chemical restraint or sedative would be required to get P to a level where she required minimal physical restraint. If P was unable to be safely managed on the ward, the treatment plan outlined that she would be moved to an Intensive Therapy Unit and would require sedation and a PICC line.

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

Reductions to costs won’t be applied automatically- rules the High Court

December 4, 2023December 4, 2023 ujjainimistryLeave a comment

Where a paying party requests a reduction in costs on the basis that “there is always a reduction,” the request will not necessarily be granted and a lower figure automatically awarded, where the costs are deemed reasonable and proportionate.

In his decision in Next Generation Holdings Ltd & Anor v Finch & Ors [2023] EWHC 2925 (Ch), HHJ Johns KC said that it ‘would be wrong’ to lower any costs payable, simply on the assumption that reductions are often made.

Background Information

The case involved a financial dispute which arose following a Share Purchase Agreement. Subsequently, allegations of fraudulent misrepresentation were made against the Defendant, who proceeded to seek a contribution from a Third Party (KD).

At the end of the 3-week trial in June 2023, HHJ Johns KC decided that the third party was not liable, but the initial defendants were.

A consequential judgment on matters resulting from the initial judgment, including costs, was handed down on 17 November 2023.

Summary Assessment

The sum of £65,640 plus VAT was sought by the third party for costs, which included advice and representation by the direct access barrister instructed on her behalf, with this figure including a sum of £52,500 for representation at trial. It was at this stage that Counsel for the Defendants, sought a reduction of costs on the basis that ‘there always is’ […] a reduction in costs. He also insisted that the hourly rate of Counsel, at £495, was too high and that trial preparation claimed, at over 5 days was too long.

Delivering judgment, HHJ Johns KC opined that the £52,500 trial fee was reasonable for a complex fraud trial that involved a significant amount of documentation. It was highlighted that the role of the Third Party’s Counsel was a smaller role than that of the other parties instructed Solicitors but five days trial preparation was proportionate in the matter.

The suggestion that the hourly rate was too high was also immediately dismissed, on the basis that the guideline rate for an equivalent Solicitor was £512. Furthermore, the Defendant’s Counsel fees of £525,425 were also deemed demonstrative of the fact that the sums claimed by the Third Party’s Counsel were proportionate. HHJ Johns KC considered that the total sum of £65,640 was “well within the range of proportionate figures” and it would have been wrong for any reductions to have been made, especially considering the fact the Third Party would have been defending a claim with a value of over £3 million if found liable.

This case demonstrates that to obtain reductions to costs claimed, paying parties must have legitimate reasons for seeking to do so.

Ujjaini Mistry is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Uplifted Guideline Hourly Rates from 1 January 2024

December 1, 2023December 1, 2023 Ellena Hunter1 Comment

It has today been published that the Master of the Rolls has accepted the recommendations of the Civil Justice Council Costs Review, which was published in May 2023.

The 2021 Guideline Hourly Rates will be uplifted as of 1 January 2024 in accordance with the Services Producer Price Index (SPPI). The Guideline Hourly Rates will then be uplifted annually in accordance with the SPPI.

The rates from 1 January 2024 will be as follows (the brackets reflecting the present rates):

Grade	Fee earner	London 1	London 2	London 3	National 1	National 2
A	Solicitors and legal executives with over 8 years’ experience	£546 (£512)	£398 (£373)	£301 (£282)	£278 (£261)	£272 (£255)
B	Solicitors and legal executives with over 4 years’ experience	£371 (£348)	£308 (£289)	£247 (£232)	£233 (£218)	£233 (£218)
C	Other solicitors or legal executives and fee earners of equivalent experience	£288 (£270)	£260 (£244)	£197 (£185)	£190 (£178)	£189 (£177)
D	Trainee solicitors, paralegals and other fee earners	£198 (£186)	£148 (£139)	£138 (£129)	£134 (£126)	£134 (£126)

The Master of the Rolls has also stated that he will establish a further working group to examine the methodology underpinning Guideline Hourly Rates.

Further, the Master of the Rolls has also asked the Civil Procedure Rules Committee to take forward the suggestions in the May 2023 Costs Review with regard to costs budgeting and pilot the same.

Ellena Hunter is an Associate in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Understanding the E-bill once assessed

November 20, 2023November 20, 2023 elliescallyLeave a comment

At Clarion, we prepare over 2500 Court of Protection bills of costs each year to be assessed by the Senior Court Costs Office. We also review the bills once they have been assessed, monitor the common reductions and give advice to our clients on the outcomes of their assessment.

With the introduction of the e-bill, it can be more difficult to understand what has been reduced and the total costs allowed upon assessment. Below is a quick guide on how to understand the Costs Officer’s reductions.

Time allowed

Column K on Tab 6 of the e-bill which is labelled “Time Allowed” shows the amount of units allowed by the Costs Officer for each respective entry. If the amount of units have been changed from the original amount, the box will be highlighted as yellow and the new amount allowed will have been entered by the Costs Officer.

Fee earner allowed

Column M on Tab 6 of the e-bill labelled “FE Allowed” shows the fee earner/grade of fee earner. Again, if the fee earner has been changed by the Costs Officer, the box will be highlighted as yellow. The Costs Officer will use “A” for a Grade A fee earner, “B” for a Grade B fee earner, “C” for a Grade C fee earner and “D” for a Grade D fee earner. Please review Tab 4 which is where the fee earners are shown to ascertain whether all the rates have been allowed as claimed in the original bill. If a fee earners rate has been changed, the box will be highlighted as yellow and the new rate will have been entered by the Costs Officer, which will subsequently apply to all work entries shown on Tab 6. If you scroll down on this page, the Grades used and created by the Costs Officer will be shown.

The Costs Officer’s Comments

Column Z called “Finding text” shows the reasons as to why the Costs Officer has reduced the entry. Tab 17 deciphers the codes the Costs Officer may use and are shown below. These codes cover the most common reasons for reductions seen across COP assessments:

Total allowed

Tab 12 is now a pre-populated bill summary document based on the changes made in the earlier tabs, and shows clearly how much the profit costs were originally, and how much has been allowed on assessment, as well as the allowed VAT amount and whether the Costs Draftsman’s fee has been allowed or reduced.

Please get in touch with us at Costs.Support@Clarionsolicitors.com if you require any assistance to understand the e-bill once assessed. We can help provide you with advice in relation to whether we think you should appeal the reductions, what you can appeal and what you cannot appeal. We can also assist with drafting a request for reassessment letter. It is very important that you understand the reductions made to ensure that you’re happy with the outcome of the assessment.

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

Kenton v Slee Blackwell [2023] EWHC 2613 (SCCO)

November 6, 2023February 6, 2024 ujjainimistryLeave a comment

Senior Costs Judge Gordon-Saker found that providing a ‘hopelessly inaccurate estimate’ and an inadequate risk assessment regarding a success fee will result in the claim for costs against the client being decreased significantly.

Background

In Kenton v Slee Blackwell [2023] EWHC 2613 (SCCO), the Claimant sued her previous solicitors who had acted for her in a professional negligence claim against another firm, ABC. They had entered into a Conditional Fee Agreement (CFA) in May 2018, with a success fee of 80% if the claim concluded before trial and 90% if it concluded at trial. After mediation, ABC agreed to pay Kenton’s costs in the sum of £138,000.

Slee Blackwell, subsequently, sent Ms. Kenton a bill which amounted to approximately £342,000, where approximately £90,000was payable to the Claimant after damages.

The Defendant’s did not adduce their own evidence or cross-examine Ms Kenton’s witness statement.

But this raised numerous concerns and questions by the Claimant as she had relied on the estimates provided by the Defendant’s, as well as the success fee outlined in the CFA. Judge Gordon-Saker addresses the two key issues of: reliance on costs estimates, and the risk assessment in creating the success fee. This blog will explore his reasoning and decision in turn.

Costs Estimate

Ms Kenton clearly relied on the estimates provided by the Defendant; it was one of the reaons why, she decided to proceed with them to act on her behalf. Slee Blackwell’s estimates outlined as follows:

£5,000 to £20,000 if settlement was reached before issuing of proceedings.
or
£30,000 to £50,000 if the case went to a contested hearing.

In addition to the above estimates, Slee Blackwell’s Ms Slade also explained how she was ‘yet to have a single case where [her] basic fees have been £100k […] the closest is £85k with a fully contested trial’. So, it was expected, from the Claimant’s point of view, that fees would not exceed this, especially since the case settled prior trial.

Unfortunately, the reliance on the estimates by the Claimant was heavily disputed by the Defendants, claiming that it would have been ‘unreasonable’ as it would not have accounted for the ‘unanticipated work required in considering the documents from ABC’. They argued that Ms Kenton did not complain about the original estimates after the costs exceeded £100k as per the costs spreadsheets that were sent to her 5 times over the period of the claim.

However, Judge Gordon-Saker found in the Claimant’s favour that the estimate was ‘inadequate’ and ‘a reasonable estimate of profit costs would have been about £50,000 before issue of proceedings’– not between £5,000 and £20,000. The Defendant’s did not provide a reason as to why the costs far exceeded the estimate and the Judge deemed it would be ‘reasonably expected for [the client] to pay a figure close to the estimate upon which she relied’’. He also added how the Claimant did not have the opportunity to ‘do something different’ as she had already signed the CFA and knew she would ultimately be liable if she tried to terminate it- ‘she could not escape it’. Therefore, £40,000 was the sum that the Claimant was expected to pay.

Success Fee

A risk assessment was carried out by the Defendant’s, which justified the success fees of 80% or 90% (as explained above). Mr Brighton, for the Defendant’s, argued to the Court that the success fees were reasonable and in accordance with the uncertainties involved and was given to the Claimant in an informed manner, to which she had approved. The Claimant contended this line of reasoning by stating these fees were unreasonably high.

Judge Gordon-Saker also agreed with the Claimants in this issue in that the risk assessment was ‘lacking’ and, therefore, there was no informed approval of the Claimant in accordance with CPR 46.9 (3) and (4). He points to paragraph 37 from Herbert v HH Law Ltd [2019] EWCA Civ 527 where informed approval means “that the approval was given following a full and fair explanation to the client” and Judge Gordon-Saker clearly states that the assessment was not a ‘proper assessment of the prospects of successes.’ The risk assessment that would be deemed reasonable and realistic would have generated a success fee of 50% of the basic charges; which was the final decision of the Court in this matter.

Summary

This case emphasises the importance of informed communication with the client, alongside the significance of correctly estimating figures and costs as the figures produced and presented to the client could be the last factor that contributes to the client’s decision in proceeding with the case. Solicitor’s should set out all estimates and charges in a clear format and any risk assessment’s should be undertaken with all factors of the case considered.

Ujjaini Mistry is a Paralegal in Clarion’s Costs and Litigation Funding Team. You can contact her at ujjaini.mistry@clarionsolicitors.com or on 07436033368.

Discounted CFAs: unenforceable provisions cannot be severed and there is no quantum meruit basis of entitlement

October 26, 2023April 3, 2024 Joanne ChaseLeave a comment

The Court of Appeal’s judgment in Diag Human SE v Volterra Fietta [2023] EWCA Civ 1107, upheld the Senior Courts Costs Office and High Court rulings that solicitors who had entered into an unenforceable discounted CFA could not obtain any payment under the CFA. The unenforceable provisions could not be severed from the CFA, there was no quantum meruit basis on which the solicitors were entitled to be paid for their services, and sums paid to the solicitors on account had to be returned.

Background

From 2017-2019, Volterra Fietta (“Volterra”) represented Diag Human SE (“Diag”), a Liechtenstein based company, in a London-seated arbitration against the Czech Republic.

Diag instructed Volterra and entered into a standard retainer with hourly rates. After some months, the retainer was changed by a “side letter” to a discounted CFA (also entered into with Diag’s controlling mind, Dr Josef Šťáva). The terms of the discounted CFA provided for Volterra’s fees to be subject to an initial discount of 30%. In the event of success, various additional sums were payable to Volterra, the effect of which could have been to amount to a success fee of over 100%.

Diag fell out with Volterra and terminated the retainer. Volterra was subsequently replaced by Mishcon de Reya in the underlying arbitration. In May 2022, the arbitral tribunal issued its award, finding against the Czech Republic and ordering compensation in the sum of US $650m.

Following the falling out, Diag argued that the CFA was unenforceable because it did not comply with the Courts and Legal Services Act 1990 s.58 and s.58A. Volterra put in a bill seeking only the discounted fees (70% of the normal fees) and the clients commenced detailed assessment under s. 70 Solicitors Act 1974.

The Volterra CFA entered into by Diag and Dr Šťáva was deemed by the Court to be unenforceable by the SCCO. A ruling by Mrs Justice Foster DBE in in the High Court upheld the decision, confirming that Diag had no liability for costs under the unenforceable retainer. The ruling found that Volterra were not therefore entitled to any payment under its CFA and the US $1.6m they had already paid was to be refunded.

In this appeal it was accepted by Volterra that the CFA was unenforceable, but they argued that all of the parts of the side letter other than the 30% discount could be severed, alternatively that they were entitled to a quantum meruit in the amount of the discounted fees. They also argued that they were in any event entitled to retain the sums paid on account, which the clients sought the return of.

Result

All of Volterra’s arguments were rejected. The main judgment was given by Stuart-Smith LJ, with a short concurring judgment from Andrews LJ. Newey LJ agreed with both judgments.

The Court took as its starting point that the CFA as a whole was rendered unenforceable and reiterated Dyson LJ’s dicta from Garrett v Halton BC [2006] EWCA Civ 1017 to the effect that the CFA legislative regime is deliberately draconian.

Severance: to implement the severance proposed would fundamentally change the nature of the contract so that it would cease to be the sort of contract that the parties had originally entered into. Andrews LJ rejected Volterra’s submission that the discounted fees would always be payable. She noted that, if that was right:

“there would be little incentive to solicitors to adhere to the straightforward requirements of the regulations laid down for the protection of their clients, if the worst that could happen if they failed to do so would be that they would be paid the amount that the client had agreed to pay for their services win or lose.”

Quantum Meruit: Having dismissed the possibility of severance, quantum meruit was also dismissed:

“The clients cannot be said to have been ‘unjustly’ enriched by the receipt of services for which solicitors cannot claim to be paid under a contract which failed to comply with the specific requirements that would have made it a lawful and enforceable CFA. Equity will not step in to relieve the solicitors from the consequences of providing services pursuant to an unlawful agreement which they are precluded from enforcing”.

Repayment: The Court held that s. 70 Solicitors Act 1974 gave rise to a self-contained regime, under which repayment of sums paid on account of a bill being assessed would automatically be ordered if the bill was assessed at less than what had been paid.

Conclusion

The case highlights the importance of complying with all relevant CFA regulations. Law firms must ensure that their CFAs are clear and contain all the information that clients need to make an informed decision about whether to enter into the agreement. It is also a reminder to law firms that they must ensure that CFAs comply with all relevant rules. The case has once again emphasised the serious implications for solicitors.

The Supreme Court’s decision in R (PACCAR) v Competition Appeal Tribunal [2023] UKSC 28 (handed down between argument and judgment in Diag) gives the case significance for litigation funders.

The PACCAR judgment held that most litigation funding agreements were DBAs. The implication of that decision is that many (if not most) litigation funding agreements will not be enforceable as they were not drafted with the DBA regulations in mind. Since PACCAR it was thought that funders would be able to sever the offending clauses as a matter of principle or, at least they would be entitled to be paid on a quantum meruit basis. The decision in Diag does not determine either point but demonstrates the potential difficulties that lie ahead for funders in making either argument. Courts will have to consider whether the funder should face the full consequences of the unenforceability of their agreement or whether to allow those consequences to be ameliorated or avoided by permitting severance or the payment of a quantum meruit.

Proposals for change to Practice Direction on Interim Remedies and Security for Costs

October 20, 2023October 20, 2023 Bethany CollingsLeave a comment

Introduction

At present, the Civil Procedure Rule Part 25 has two Practice Directions: Practice Direction 25A and Practice Direction 25B. The Civil Procedure Rule Committee confirmed within their most recently approved minutes (attached below) that a new shorter Practice Direction will be introduced.

Agreed key points include:

Applications and evidence (Rule 25.3) should contain a signpost to Part 23 (general rules applications and court orders) to assist users;
Under evidence (Rule 25.7) it was noted that the reason why notice was given is a material fact and an obligation already exists, without the need for it to be expressly provided for in the rules;
There is a need for the supervising solicitor provision under the provision for service, timing and individuals involved (Rule 25.17) is to be redrafted;
Form numbers should be replaced with “approved form”;
Other drafting revisions as noted by the Secretariat, to be adopted for further review and resolution, prior to consultation; and
Remaining provisions within the Practice Directions that are not within the draft reformed rules, could be removed altogether because:

the reference to out of hours contact details can be done by a signpost and appropriate web information;
the reference to finding a Supervising Solicitor from the Law Society or London Solicitors Litigation Association can be removed, because it is in relevant Court Guides;
the statement about privilege is a statement of the law and does not need to be repeated in a Practice Direction in this way; and
the statement that applications for interim remedies in IP cases ought to go to the Chancery Division does not need to be made here because that is the effect of the relevant rules already.

Post meeting it was confirmed that paragraph 25.1(1)(p) (the reference to continuations subject to guarantees under Article 9 of Directive 2004/48/EC) can be removed because it is unnecessary. It was confirmed that the remedy is available in the courts irrespective of its being listed in that rule in that way and the reference to the Directive is potentially confusing.

There will also be a review of courts forms, specifically the:

N244 Application notice;
N16A Application for injunction;
N361 Notice of application for relief in pending action;
PF43 Application for security for costs; and
PF44 Order for security for costs.

Bethany Collings is a Paralegal in the Costs and Litigation Funding Team at Clarion Solicitors. You can contact her at bethany.collings@clarionsolicitors.com or on 07774951949.

CPR Committee Minutes Download

Master orders Labour Party to present common and non-common elements in single costs budget

October 13, 2023October 13, 2023 Anna LockyerLeave a comment

On the basis it would be “expensive and speculative” to produce separate costs budgets for the defended claim and the Part 20 claim, Master Dagnall decided only one budget would be required at the CCMC stage.

By way of background, Taylor and others v Evans (as representative of the Labour Party) and others (Named Third Parties) [2023] EWHC 2490 (KB) is a data protection claim relating to an internal report that was compiled when the Labour Party was being investigated by the Equality and Human Rights Commission regarding allegations of anti-Semitism.

The draft report was leaked soon after the last general election at a time when Jeremy Corbyn was being replaced by Sir Keir Starmer. The Defendant’s main defence and premise on which their Part 20 claim is brought, is that third parties, who at the material time were employees and officers of the Defendant but aligned with Mr Corbyn, leaked the internal report and were engaged in a conspiracy to undermine Sir Keir Starmer.

In relation to budgeting Master Dagnall took the view that “if the main claim and the Part 20 claim are to be tried together as I have directed is to be the case, then, unless there is some particularly good reason, they are simply producing figures for each phase.”

Master Dagnall then went on to say “at this point the underlying purpose of the budgeting process is to tell parties, what is reasonable and proportionate for each party to spend; and this is done by the court and the other parties simply being given proposed figures for each phase, and the figures for each phase then being settled by agreement or court approval.”

“It seems to me it would be perfectly possible for a judge at trial to say that a particular costs order should be made which reflects the fact that some issues were, it turns out, not the concerns of the claimants and they have sought to distance themselves from those issues. It seems to me those are decisions which can only be taken at trial itself and I am not convinced myself at this point that it is clear that such is going to be the situation, and do not think that I should be directing the budgeting process on the basis that such is likely to occur.”

“I also bear in mind that it is always open to the judge to consider that there is good reason to depart from the costs budgets, and the judge can deal with such a situation at trial in a number of different ways, by making a variety of different costs orders or simply directing that the cost budgets will, in one way or another, be given no or only limited weight. But it seems to me that these are all matters pre-eminently for the trial judge. Costs budgeting may effectively limit the spending decisions taken by parties as they go along, but the actual consequences as to what should happen to costs should be matter for the trial judge.”

“In any event, I do not regard it as clear enough that there are uncommon costs to make a specific direction about any particular category of costs.”

“The parties are under their ordinary duties when preparing costs budgets to consider whether or not the ordinary form of them is inappropriate. If they do so consider, and consider that there are costs which simply relate only to one of the other sides and not another, then the court would normally expect them to refer to that and, in some way or other, reflect it in their material.”

“For me to lay down any rule at this point seems to me as inappropriate, so I am not going to do so.”

“In my judgment, the parties should just simply provide costs budgets on the ordinary basis.”

Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Clarion Legal Costs

Tag: Clarion Costs Team