Tag: clarion legal costs

Attendances on Case Manager, MDT and Deputy should materially progress matter to be included in Costs Budget

Anna LockyerLeave a comment

In the case of Hadley v Przybylo [2023] EWHC 1392 (KB) it was ruled that fee earner time dealing with Case Managers, Multi-Disciplinary Teams and Court of Protection Deputies should not be included in the main costs budget phases if the work does not materially progress the case.

At the budget discussion stage of this serious personal injury case, several costs management issues were narrowed, but there was no reconciliation between the parties as to whether case management and MDT meetings, and attendances on deputies for health, welfare and finance could be included in the budget.

The Claimant argued it was the practice of the Masters to include these costs and that:

“attendance by a fee earner at these case management meetings etc are reasonably necessary to progress the litigation because they assist in maintaining the Schedule of Loss as the claim goes along. It is [] something of a ‘live feed’ from the Claimant’s care and treatment at medical-professional level and the deputies, to the lawyers. What is claimed in the budget is about 1 hour each week with the Case Manager and 1 hour each week with each of the two Deputies, totalling 3 hours a week in the Issues and Statements of Case phase, as part of work on drafting and updating the Schedule of Loss on an ongoing basis.”

The Defendant argued the contrary submitting that:

“as a matter of principle such attendance charges ought to be ruled as inadmissible in a budget. They are not progressive of litigation any more than, say, having lawyers attend every medical treatment appointment would be. They are not properly included. In addition, whether or not in principle ever allowable in a budget, they do not fall within the guidance as to the categories of matter to be included in the Issues and Statements of Case phase in any event. Furthermore, their experience in contrast with that of the Claimants is that such charges are often rejected for inclusion in budgets.”

Master McCloud acknowledged this to be a grey area and appeared to make an example, albeit rife for challenge, in her decision to side with the Defendants.

Reference was made to Practice Direction 3D 10. (b) and the fact case manager attendance costs in this case formed a part of the maintenance of the Schedule of Loss. It was found that these specific types of costs did not materially progress the case, and therefore not budgetable or a recoverable head of costs in principle.

“In my judgment having a fee earner attending rehabilitation case management meetings is not progressive in the above sense and does not fall within the notion of ‘costs’. Likewise a fee earner attending on deputies so as to seek input into the ongoing drafting of the case in the form of the Schedule, when deputies do not properly play a part in such work, is not progressive.”

Master McCloud did indicate that these costs may be recoverable in damages but failed to elaborate, apart from to say it is for the Claimant to consider whether at trial those costs may be claimable as damages. 

The argument that attending on case managers and deputies was integral to producing the Schedule of Loss was described as “weak” by the Master.

The Master went on to clarify that information about case management or incurred expenses could be achieved by the occasional letter to the case manager or deputy or from obtaining documents for later disclosure. Furthermore, in their witness statements and that these costs could be included in the budget as they are “qualitatively” different things from attending meetings for input into a schedule of loss. It was decided that if they were allowable in the budget, then they are best placed in ‘contingency phases’.

Although this decision hinders budgeting time spent in case manager, MDT and deputy  meetings, Master McCloud allowed permission to appeal and invited the Rules Committee to provide guidance in the very same judgment. It seems then that the intention of this ruling is to ‘flush out’ some clarity. 

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

Solicitors’ Duty of Care to their Clients (Forster v Reynolds Porter Chamberlain LLP)

Joanne ChaseLeave a comment

Introduction

Mr Justice Fancourt, Vice-Chancellor of the County Palatine of Lancaster, in the Business and Property Court in Leeds held that Reynolds Porter Chamberlain LLP (RPC) owed a duty of care to its client, Deborah Forster (‘the Claimant’). Specifically it had a duty to keep her informed of the ‘staggeringly high level of costs’ that were accruing throughout the retainer, with the commensurate risk of a shortfall in costs recovery that would erode any judgment she obtained.

By the time the case settled, the costs had reached £5m. The Claimant had agreed to pay these costs under the terms of a conditional fee agreement (CFA), however, she argued that RPC had been negligent in failing to keep her informed of the costs of litigation, and in failing to advise her on the risks of incurring high costs.

This case is significant for practitioners in the field of commercial litigation, as it clarifies the duties that solicitors owe to their clients under a CFA. The court’s decision in this case makes it clear that solicitors must keep their clients informed of the costs of litigation, and that they must advise their clients on the risks of incurring high costs, even if the client has agreed to pay those costs on a ‘no win, no fee’ basis.

As a separate point, the case highlights the importance of choosing the right expert in commercial litigation. The court’s decision in this case suggests that solicitors should advise their clients to use experts who are likely to be cost-effective, in addition to providing reliable and accurate evidence.

What are the practical implications?

The case has a number of practical implications for practitioners in the field of commercial litigation. First, it clarifies the duties that solicitors owe to their clients. Under a CFA, a solicitor agrees to represent a client on a ‘no win, no fee’ basis. This means that the client does not have to pay their solicitor’s fees unless the client wins the case. However, the client is still liable for the other party’s costs if they lose the case.

The court’s decision makes it clear that solicitors must keep their clients informed of the costs of litigation. The court also held that solicitors must advise their clients on the risks of incurring high costs, including the risk that the client may be unable to recover their costs from the other party if they lose the case.

Second, the case highlights the importance of choosing the right experts in commercial litigation. The court’s decision suggests that solicitors should advise their clients to use experts who are likely to be cost-effective, and who are likely to provide reliable and accurate evidence. Practitioners will need to be more mindful of the risks of incurring high costs, and they will need to advise their clients on how to mitigate those risks.

Overall, the decision is a reminder to all practitioners of the importance of managing costs in litigation and keeping their clients informed of the costs of litigation and risks of incurring high costs.

What was the background?

The Claimant, Deborah Forster, was a director of a company called Stayput Solutions Ltd. In 2008, two other directors, Kate Bleasdale and John Cariss (the Opponents) acquired overall majority control of the company and then caused it to sack the Claimant. The Claimant brought a claim against the Opponents for fraudulent misrepresentation, and for relief under section 994 of the Companies Act 2006.  

In October 2011 the parties agreed, by way of Tomlin Order, that the Claimant would receive £350,000 compensation and 80% of her costs of the claim and the petition. However, only £50,000 of this was paid by the Opponents, who were eventually made bankrupt on the Claimant’s petition in 2015. Nothing more was recovered from them.

The Claimant’s subsequent claim for damages from RPC was essentially for loss of the opportunity to enforce the Tomlin Order promptly and thereby recover more of the agreed sums. The Tomlin order should have been converted to a judgment debt and then enforced against the Opponents’ assets in late 2011 and 2012. The issue of the solicitor’s breach of duty also then arose as part of this claim.

The main issues before the court were therefore:

  • whether the Claimant suffered loss as a result of RPC’s negligence
  • whether RPC owed a duty of care to the Claimant to keep her informed of the costs of litigation
  • whether RPC was negligent in failing to advise the Claimant on the risks of incurring high costs
  • if so, what damages should the Claimant be awarded?

What did the court decide?

The court held that RPC owed a duty of care to the Claimant to keep her informed of the costs of litigation. The court also held that RPC was negligent in failing to advise the Claimant on the risks of incurring high costs. The fact that the claim was funded under a CFA did not mean costs were not a matter for the client. There remained a risk to the Claimant of being liable to pay the shortfall between chargeable fees and disbursements and the costs recovered from the Opponents.

Whilst that was a breach of duty, it had caused no loss. However, the Claimant had suffered a loss of chance regarding enforcement of the settlement due to a conflict between the solicitors and funders who had made a loan to the Claimant. Judgment was entered for £192,500. 

Analysis

The court’s decision in Forster v RPC is significant for solicitors, as it clarifies their duties to their clients when acting under a CFA:

  • solicitors have a duty to keep their clients properly informed of the costs of litigation
  • this duty is not limited to cases where the client is paying the costs of litigation themselves
  • solicitors must keep their clients informed of the costs of litigation, even if the client is being funded by a third party
  • solicitors must take reasonable steps to ensure that their clients understand the costs of litigation
  • solicitors must warn their clients of the potential for significant costs in litigation
  • solicitors must take steps to mitigate the risk of their clients incurring significant costs

The court’s decision is therefore likely to have implications for the way that CFAs are drafted and used. Solicitors will need to be more mindful of the risks of incurring high costs, and they will need to advise their clients on how to mitigate those risks. Solicitors will also need to be more transparent about the costs of litigation, and they will need to ensure that their clients are fully aware of the risks before they agree to a CFA.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com

If you have any queries, please contact us for a more in depth discussion.

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

Guideline Hourly Rates are the starting point not the finishing point

Robert PattersonLeave a comment

Arguments concerning solicitors hourly rates have always been a central issue in the assessment of costs, regardless of whether there is a detailed assessment or a summary assessment. Those arguments can be particularly important in cases where the rates claimed exceed the guideline hourly rates. Indeed, those who represent paying parties will deploy numerous arguments to achieve reductions, but one argument that is becoming increasingly common is the suggestion that an hourly rate in excess of guidelines should not be awarded unless a ‘clear and compelling justification’ has been given.

This particular line of argument derives from the case of Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor [2022] EWCA Civ 466. In that case the court was faced with a summary assessment involving hourly rates ranging from £801.40 to £1,131.75 for a Grade A and £443.27 to £704 per hour for a Grade C. The justification provided for those rates was that it is almost always the case the rates will exceed guidelines in competition litigation. Rates in excess of guidelines were not allowed and Males, LJ that:

“[…] If a rate in excess of the guideline rate is to be charged to the paying party, a clear and compelling justification must be provided. It is not enough to say that the case is a commercial case, or a competition case, or that it has an international element, unless there is something about these factors in the case in question which justifies exceeding the guideline rate.”

Males LJ made a similar finding in Athena Capital Fund SICAV-FIS SCA & Ors v Secretariat of State for the Holy See [2022] EWCA Civ 1061 when faced with rates well in excess of the guidelines.

Although the above decisions are frequently relied on, the point made by Males LJ may not be applicable in all cases. This is because in both Samsung and Athena, the court was dealing with a summary assessment rather than a detailed assessment and the two types of assessment are conceptually different. That difference was recently explained Master Rowley in Various Claimants v News Group Newspapers Ltd [2023] EWHC 827 (SCCO):

“70. I also accept the argument that the GHR may be a useful starting point in a detailed assessment as well as in a summary assessment. I do not, however, consider that the guidance given by Males LJ regarding the need for a “clear and compelling justification” for exceeding the GHR extends with any great force to this particular situation.

71. The GHR are provided predominantly to assist judges who do not specialise in costs cases to deal with a summary assessment of costs when faced with the successful party’s summary assessment schedule and competing arguments from the advocates.

72. The relevance to the GHR being a starting point in detailed assessments is no more than a reflection of the scarcity of any other starting point. Expense of time calculations or other potential starting points, as is demonstrated here, are invariably absent. But a starting point by its very name does not suggest it is the finishing point and that is particularly so where the court has the opportunity for the parties to address it in detail in respect of the CPR 44.4 factors.”

The Master went on to allow hourly rates in excess of guidelines. Accordingly, the decision in Samsung does not represent an additional test for receiving parties to overcome and detailed submissions in respect of the eight pillars of wisdom in CPR rule 44.4 are likely to be more effective in securing hourly rates in excess of guidelines.

Robert Patterson is a Senior Associate in Clarion’s Costs and Litigation Funding Team, and can be contacted at robert.patterson@clarionsolicitors.com.

Estimated time or pure imagination?

Helen ApplebyLeave a comment

In Ikin -v- Shawbrook Bank Limited (2023) the judgment of Senior Costs Judge Gordon Saker looks at the issues surrounding estimated time and contains many points for litigators to take on board. Remember, the responsibility lies not just with the person preparing the Bill but with the Solicitor certifying the accuracy of the Bill.

Brief background

This case involved several Claimants, who brought claims of misrepresentation by finance companies regarding the installation of solar panel systems. 9 Claimants were represented by the same Solicitor. One claim for costs was assessed (at nil) by Regional Costs Judge Baldwin, “The Kinder Claim”. The remaining 8 claims were transferred to the SCCO, to assess counsel’s fees, the expert’s fees and profit costs.

In 2 of the bills (Ikin and Walsh), there were identical generic time entries claimed (18 in total). They were identical in both wording and time claimed.

Part 18 Requests were served, requesting clarification as to whether any time within the Bills was estimated. The response was bland and the Claimants were asked to provide a schedule of estimated time – this was never produced.

On Assessment

The first Bill to be assessed, Scott, was found to be riddled with issues. No time recording ledger was provided and it was evident that no time had been recorded within the substantive action. In truth, almost all the profit costs claimed had been estimated by the Costs Draftsman, some of which were not supported by the file of papers.

The Judge requested an explanation from the Claimants’ Solicitor. A Witness Statement from the conducting Solicitor confirmed she “had no experience of dealing with costs in this type of claim and so had instructed KE Costs (“KEC”), a firm of costs lawyers, “who indicated they had experience of dealing with similar costs arising out of solar claims in the North East”. Miss Wall said that she had assumed “that the descriptions given [of the work recorded in the bill] were fair representations of the work that had been done”. When checking the bill before signing it, she made sure that all the disbursements had been included and “that each stage of the case has been accurately identified”. However she did “not sit there and look at every single line individually and check the accuracy of every single line, because that just seems disproportionate”. She had relied on the expertise of the people she was instructing.

Amended Bills were lodged with the Court where by the descriptions to the time had been updated, however, the sums and time claimed remained unchanged. The amended Bill in Ikin was claimed at £29,774.90 and assessed at £9,250.00.

Ruling and Conduct point

The judge considered the issues relating to the Claimants’ Solicitor’s conduct.  In particular the importance of the Solicitor’s signature on a bill of costs. In this case, there was a clear misconduct point, the Judge found the bills were not accurate and claimed costs the Claimants would not have been liable to pay to Parkerwall (their instructed Solicitor). The Judge imposed two sanctions. The assessed costs were reduced by 60% and the Claimant’s Solicitor was ordered to pay 75% of the Defendant’s costs of the assessment on the Indemnity Basis.

Civil Procedure Rules

“This is an appropriate case in which to disallow costs under r.44.11(2)(a). The Claimants’ legal representatives have claimed costs which their clients were not entitled and have attempted to mislead the Court. In Gempride Ltd -v- Bamrah (2018), the Court of Appeal substituted an order that one half of the profit costs otherwise payable under Part 1 of the Claimant’s bill should be disallowed. That followed findings that the Claimant Solicitor had certified a bill which claimed an hourly rate in excess of the rate that she was obliged to pay and had wrongly stated in her replies that BTE insurance was not available to her. There was no finding of dishonesty.

It seems to me that the present cases are comparable. Eight bills have either been reduced significantly or have been agreed in significantly reduced amounts as a result of the misleading entries and the overestimation of time. As the parties have agreed global figures for profit costs and disbursements in the six unassessed cases, rather than disallow one half of the profit costs I would disallow a smaller proportion of the total figures.”

Costs follow the event

The Judge’s attention then turned to the costs of the detailed assessment. “Clearly this is a case where the court should make a different order to the usual order that the paying party pays the costs of the receiving party (CPR 47.20(1)). The conduct of the receiving parties’ solicitors reasonably required investigation. That led to a significant lengthening of the detailed assessment hearings. But for that investigation, the hearings might have been avoided completely. The conduct has been found to be wanting, and the bills have been reduced substantially.

Without an order under r.44.11(2)(b), the appropriate order under r.47.20 would have been that the Claimants should pay at least a proportion of the Defendants’ costs of the detailed assessment proceedings. As between the Claimants and their solicitors, the latter should bear those costs.

Some time was spent investigating the fees of counsel and the experts, which, in the event, did not lead to significant reductions. Whatever apparent irregularities there were in billing, the work had been done and the Claimants were entitled to recover the costs of that work. The Claimants should be entitled to the costs of those issues, but they were a relatively small part of the whole. The appropriate order under r.47.20 would have been that the Claimants should pay 75 per cent of the Defendants’ costs.

The fault, however lies, at the door of the Claimants’ Solicitors, rather than the Claimants, and so the appropriate order is that the Claimants’ Solicitor should pay those costs under r.44.11(2)(b). On any view the conduct of the Claimants’ Solicitor has taken these cases “out of the norm” and it is appropriate that the costs should be assessed on the indemnity basis.”

Summary

This brings home the importance of accurate time recording and certification by Solicitors. It remains the Solicitors responsibility to ensure that the certificate of accuracy guarantees the accuracy of the costs claimed.

Helen Appleby is an Associate in Clarion’s Costs and Litigation Funding Team. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Reductions to COP assessments and what you need to know about them

Casey McGregorLeave a comment

At Clarion, we prepare over 2500 Court of Protection bills of costs per year to be assessed by the Senior Court Costs Office. We also review the bills once they have been assessed and monitor the common reductions. Based on our experience, we have identified the 5 most common reductions and the reasoning behind the same. The below 5 reductions are in line with published case law and are therefore not likely to be allowed if a re-assessment is requested.

Arranging payments

You may notice that arranging payments are reduced throughout the bill of costs. This is in line with the Case of Jamie Walker (2002) whereby Master O’Hare defined checking the file to ensure an invoice has not already been paid, checking sufficient funds are in the account and writing a cheque and getting it signed as non-fee earner work. Arranging payments and considering invoices are typically reduced to 3 minutes within the bill of costs at Grade D rates in line with this. We therefore suggest payments and considering invoices are delegated to a Grade D fee earner. This is something that the Professional Deputies Forum would like to challenge in the future, as significant payments require consideration and often approval above Grade D rates. We hope that this case law will be reconsidered in the future.

Enclosure letters

Where you may have sent a letter enclosing payment of an invoice or an email confirming settlement of an invoice, this will be classed as an ‘enclosure letter’. In line with the case of Leighanne Radcliffe (2004), letters were reduced from the standard rate of 6 minutes to 3 minutes within the bill of costs. We therefore recommend that enclosure letters are delegated to a junior fee earner and the time is limited where possible to prevent overbilling.

Two fee earners at an attendance

If you have claimed two fee earners in attendance, in our experience, it will only be allowed in exceptional circumstances. Typically, the second fee earner’s time is struck out or reduced. In the case of Garylee Grimsley (1998) and further to R v LegalAid Board Ex Parte Bruce (1991), two fee earners at an attendance were reduced as it was deemed to be duplicative work. It stated, “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”. Therefore, we recommend that two fee earners should only be claimed at an attendance whereby it is necessary and reasonable to do so, as there is a higher cost to the Protected Party. Cases where two fee earners may be considered reasonable are where there is a significant safety risk or the second fee earner has different expertise, but this time is still subject to assessment and it’s important that the reasoning is clear within your file notes to justify the attendance of both fee earners.

High level of contact with the Protected Party

You may see a reduction occur whereby there is a high level of contact with the Protected Party, as it is seen to be the Deputy’s duty to keep the costs at a minimum for the Protected Party. Excessive contact would lead to a higher level of costs, which is not in the best interests of the Protected Party. A reduction could occur in line with the case of Trudy Samler (2001). This case raises the question of whether the contact was instigated by the Protected Party and whether the Deputy should be paid for such contact. Excessive contact with the Protected Party could therefore be reduced due to this case and we recommend that Deputy’s keep an eye on this. We recommend that Deputies try and manage the levels of contact with any party and involve other professionals to support the Protected Party or their family in order to manage costs.

Record keeping

Work in relation to updating the Protected Party’s financial records is typically reduced by the Costs Officers on assessment. In the case of Philpott (2015- unwritten), Master Haworth stated “It seems to me that the inputting of data into P’s ledger is not fee earning work. At most it is bookkeeping which, to my mind, is an overhead of a solicitor’s practice. This work has to be distinguished from for example, reviewing or perusing the data to come to a decision as to what then needs to be done with a P’s funds. To my mind that may well amount to fee earning work for which the solicitors can charge separately at the appropriate rate.” Therefore, we recommend that the work is distinguished in this way in order to avoid the reduction on assessment and the word ‘updating’ should also be avoided.

We are happy to review the assessed bills and provide advice to any professional Deputy who is not happy with the outcome of their assessment. Please contact Casey for more information at casey.mcgregor@clarionsolicitors.com

Manchester University Hospitals NHS Foundation Trust and JS and Manchester City Council [2023]

Leah MorrisLeave a comment

This case concerns a 17 year old who had been detained under s2 of the Mental Health Act but was deprived of her liberty when that authority lapsed.

Background of P

By way of background, P has a diagnosis of Autistic Spectrum Disorder (ASD), Attention Deficit Hyperactivity Disorder (ADHD), learning disability and an attachment disorder. Due to P’s complex mental health needs, this meant that she was in danger by her own hand as well as at the hands of others.

Overview

P had been admitted to a specialist child and adolescent psychiatric unit as an ‘informal patient’, meaning she had been assessed as having capacity to consent to admission. P was discharged to the care of her mother over concerns she could become institutionalised. Following this, P ran away from home and into traffic. She was detained by the police who were so concerned about her mental health that they used their powers under s136 of the Mental Health Act to detain her and take her to a place of safety.

It was here that a Mental Health Act assessment was carried out and P was assessed as not requiring admission. P was therefore discharged back into her mother’s care with a community based care and treatment plan.

Several days later, P was detained under s2 of the Mental Health Act following an overdose. After recovery, she remained on the ward even after authority to detain expired. It was agreed that being on the ward was inappropriate and detrimental to her health.

P’s Care and Treatment in Hospital

Due to P’s attempts to self-harm, the hospital put in place a ‘Care Plan of Restrictions’. Incidents were recorded by the hospital and HHJ Burrows considered these when providing the judgment.

Court of Protection Application

From the date that the s2 expired, P was not subject to any lawful regime of detention. P was subject to a regime of detention due to the fact that she was under continuous supervision and control and was not free to leave the ward, in light of the ‘Care Plan of Restrictions’ that were imposed. HHJ Burrows accepted that during that time, P lacked the capacity to make decisions in regard to her care and treatment due to her mental health conditions. Because of this, P was therefore not able to consent to her residence, care, treatment or to being deprived of her liberty.

On 10 February 2023, the hospital made an application to the Court of Protection seeking several declarations in relation to P remaining at the hospital in her best interests and to be subject to the restrictions contained in the care plan.

Judgment

HHJ Burrows declared that once the s2 authority had expired, P had been unlawfully deprived of her liberty. HHJ Burrows considered P’s capacity and the capacity assessment conducted in order to assist with the judgment.

Conclusion

It was concluded that P was ineligible to be deprived of her liberty in the hospital under the Mental Capacity Act. She was within the scope of the Mental Health Act under Case E. HHJ Burrows concluded that for the reasons given, P could have been detained and treated under the Mental Health Act.

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

Update on implementation of the extension to fixed recoverable costs

Robert PattersonLeave a comment

This third instalment of Clarion’s mini-series on preparing for the forthcoming fixed costs reforms, looks at recently announced changes following the Civil Procedure Rule Committee meeting on 3 March 2023.

It was intended that the new rules would take effect in October 2022, however implementation was delayed until April 2023. It was then announced in November 2022 that there would be a further delay until October 2023 due to the complexity of the reforms. It is still intended that the new rules will take effect from October 2023, however there will be changes to the scheme when it comes into effect.

Latest developments

The most important development is that there will be a general transitional provision whereby the new rules will apply to claims where proceedings are issued on or after 1 October 2023, save where the claim is for personal injury (including disease claims). In personal injury claims, the new rules will apply where the cause of action accrues on or after 1 October 2023 and they will apply to  disease claims where the letter of claim has not been sent to the Defendant before 1 October 2023.

A proposed new practice direction has been drafted setting out the rates for the fast track, intermediate track, and noise induced hearing loss claims. Previous versions of the rates were based on an initial report prepared by Lord Justice Jackson in 2017, and it has now been confirmed the rates will be uprated for inflation using the January 2023 Services Producer Price Index. This is an interesting development, as it was not expected that the rates would be uprated.

Other changes being considered include amended provisions in respect of disclosure to achieve a consistent approach between the fast track and intermediate track.

Next steps

Further drafting work will continue and it is anticipated that the final draft amendments will be presented to the committee ahead of the next meeting on 31 March 2023. This mini-series will be updated as and when further information becomes available.

Robert Patterson is a Senior Associate in Clarion’s Costs and Litigation Funding team. You can contact the team at CivlandCommercialCosts@clarionsolicitors.com

Circumventing QOCS via a non-party cost order

Joanne ChaseLeave a comment

Introduction

The case of PME v The Scout Association and Bolt Burdon Kemp LLP  [2023] EWHC 158 (SCCO) dealt with issues related to enforcing adverse costs through a non-party costs order (NPCO) against a claimant’s solicitors.

As it stands, the application of QOCS usually prevents defendants from enforcing their entitlement to costs against a claimant if the matter settles before trial.

That was the position in this case, as without the permission of the court, the Defendant had no means of recovering from the Claimant the costs which the Claimant was ordered to pay. The Defendant confirmed that it had no intention of attempting enforcement against the Claimant and instead an application was made by the Defendant to seek to enforce their costs orders against the Claimant’s solicitor.

The Law

The operation of the QOCS rules, as clarified by Cartwright v Venduct Engineering Ltd  [2018] EWCA Civ 1654 and Ho v Adelekun [2021] UKSC 43 (On appeal from: [2020] EWCA Civ 517) confers an indirect benefit upon any solicitor acting under a “CFA lite” or capped CFA arrangement, in that they can pursue the costs of the claim at reduced financial risk because defendants often cannot enforce their entitlement to costs against a claimant.

Before QOCS they would have borne the cost of any adverse costs orders themselves rather than passing them on to their client. Now, absent an NPCO, they may risk only their own costs and expenses. That, again, is just a consequence of the way the QOCS regime works.

Section 51 of the Senior Courts Act 1981, empowers courts to make costs orders against parties other than those who have brought or defended litigation. There must be good reason to do so. In this case, it was the applicant’s position that BBK were more than a solicitor simply acting as a solicitor as permitted by the Courts and Legal Services Act 1990.  

The Defendant asserted that only BBK, and not the Claimant, had had any financial interest in the outcome of the proceedings, based upon the terms of the retainer agreement between the Claimant and BBK.

The Claimant argued that it was no part of (and was never suggested in) the Jackson reforms, or the policy behind the introduction of QOCS, that one of the effects of QOCS should be to shift, in whole or part, the liability for costs of any part of personal injury proceedings from Claimants to their solicitors. Rather, the intention was to remove that liability (in most circumstances) in return for defendants being relieved of the obligation to pay ATE premiums and to enhance access to justice.

It was therefore contended that the Defendant’s application was an attempt to circumvent what it perceived to be the unsatisfactory operation of the QOCS rules as drafted; hence the attempt to reinterpret CPR 44.16 as changing the basis upon which an NPCO can be made.

Judgment

Costs Judge Leonard, applying his substantial experience of these types of cases, concluded that:

“… if an NPCO could be justified whenever a costs order is made against the client of a solicitor pursuing costs under a CFA lite or capped CFA, merely because the client has no significant stake in the recovery of costs, then NPCOs would not be exceptional. They would become routine.”

He was not, therefore, satisfied that it would be just or consistent with established authority to make an NPCO against BBK. The application was therefore dismissed.

Analysis

This is another test case in relation to QOCS that was decided against the defendant. However, for most cases going forward this judgment will have no effect. From 6 April the Civil Procedure Rules will be changed significantly to permit enforcement in most circumstances against claimants.  

I would expect further test cases in relation to the application of these new rules going forward.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com

Sunderland City Council v Macpherson (2023) EWCOP 3

Ella WilkinsonLeave a comment

The case of Sunderland City Council v Macpherson (2023) EWCOP 3 concerned the various orders which prevented FP’s mother from filming her and posting it on social media, as she lacked the capacity to give consent. This application by Sunderland City Council related to five alleged breaches of those orders amounting to contempt of court by Lioubov Macpherson (FP’s mother) as defendant in the proceedings. The judgment also deals with press reporting of the proceedings.

Background

FP was diagnosed with paranoid schizophrenia, experiencing auditory hallucinations including that people were going to kill her and to harvest her internal organs. She has been in and out of hospital over the past few years and since November 2021 has been living at her current care home, placement 3. FP’s schizophrenia has resulted in her resistance to treatment, and she requires care 24 hours a day. She continues to suffer from delusions and experiences  episodes of screaming. FP lacks capacity to make decisions regarding where she should live, her care, and her contact with others.

FP’s mother had been criticised in earlier proceedings (as seen in the previous judgment in SCC v FP and others [2022[ EWCOP 30)  over her behaviour towards care workers and attempts to control FP’s care, while also lacking a basic understanding of the impact of FP’s mental disorder. FP’s mother often told FP that the care staff were abusing her, and that she did not need the medication that they were providing her, as she did not have schizophrenia.

The defendant’s contact with FP was restricted and it was also ordered that the defendant  would have restricted contact with FP’s care staff and medical professionals. The judge also extended various orders prohibiting FP’s mother from recording FP and posting that content on social media, as it was considered to be demeaning and a breach of FP’s privacy.

Proceedings

The application to commit was originally brought in three applications made in November and December 2022. Those applications contained eleven alleged breaches of the injunctive orders made on 30 June 2022.The defendant admitted to the eleven alleged breaches at the first hearing of committal applications on 8 December 2022, however at the hearing on 16 January 2023, Sunderland City Council indicated that it did not seek to persuade the court that six of the admitted breaches constituted contempt of court.

Poole J reviewed the range of sentencing options available to him in the circumstances. The Judge noted that the defendant  ‘almost dared the court to sentence her’, however, that to imprison her would not be in the best interests of her elderly husband, of whom she acted as primary carer, or in the best interests of FP, as it would cause her further distress and upset and could lead to the deterioration of her mental state.

Conclusion:

Despite FP’s actions being an imprisonable offense, Poole J concluded that under the mitigating circumstances, alongside the fact that the posts had been removed from social media, he would suspend FP’s sentence of 28 days for 12 months. Poole J also concluded that the defendant could be names given the committal proceedings and ordered the amendment of the Transparency Order accordingly. 

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

E-Bill FAQs – How does the new Court of Protection E-Bill work?

Laura SugarmanLeave a comment

From 1 November 2022 the COP E-Bill came into force. This will look slightly different to the Bills that COP practitioners are used to and will include some additional information including various categories and a separate part for the inclusion of P’s assets. We recently participated in a successful pilot scheme and will be submitting all Bills from 1 November 2022 in this new format.

Below are some common queries about the E-Bill and how to resolve these.

How does the Deputy or person authorised by the firm to sign on behalf of the Deputy certify the Bill of Costs?

The Deputy or authorised person is still required to certify the Bill as before. However, on the new E-Bill format the legal representative’s name can be typed or printed into the ‘Certification’ tab. Please be aware that the ‘Post Assessment Certificates’ section is only to be certified once you are requesting the Final Costs Certificate following assessment.

Where will information relating to any interim payments taken be entered?

Similarly to the PDF Bills, the E-Bill requires you to disclose any interim payments taken on account of costs for the period. This information should be entered on the ‘Certification’ tab in the first box.

How will the new E-Bill be E-filed using the SCCO portal?

The process for E-filing the Bill of Costs remains very much the same. You are still required to submit the certified Bill, Order, certified N258B and disbursement evidence as before, but use the new options on the E-filing service beginning ‘COP E-Bill’. If the Bill and N258B are not certified by an authorised person, then the submission will be rejected by the SCCO.

What will happen to the E-Bill on assessment?

Once the E-Bill is received and approved by the SCCO, it will be allocated to a Costs Officer who will review and assess in the usual way. The Costs Officer is able to make changes to the Bill where appropriate and the E-Bill will recalculate this automatically. The Costs Officer will use a series of codes and mark these on the E-Bill so that you can determine the reasons given for the reductions.

How will the E-Bill be returned following assessment?

The E-Bill now includes a contact email address section on the front sheet, which should be completed when drafting the Bill. Following assessment, the E-Bill will be sent via email to the address provided.

How should the E-Bill be served on interested parties where required?

If you are required to serve the Bill on interested parties then this should be provided to them as a PDF version of the E-Bill. Please request this from your Costs Draftsperson who would be more than willing to assist.

How can I ensure my E-Bill is compliant with new the new requirements?

There are some new requirements when using the E-Bill format that are likely to cause some minor issues if they are missed. Below are some ways in which you can assist your Costs Draftsperson in ensuring the E-Bill is ready to be submitted to the SCCO.

SCCO reference – there is a section on the front sheet that relates to the unique SCCO reference for each matter. This can be inputted prior to submission to the SCCO to help avoid any rejections based on the matter already existing. Please provide the SCCO reference to your Costs Draftsperson if known.

OPG105 estimated costs – there is an increased emphasis on providing the OPG105 estimated costs for the period when using the E-Bill. Please provide the OPG105 costs estimate to your Costs Draftsperson so that this can be included in the Bill.

P’s assets – the E-Bill now includes a specific section relating to P’s assets so that the Costs Officer can consider these. Please provide this information to your Costs Draftsperson and they will include it in the Bill accordingly.

Fee earner rates – please provide a breakdown of the fee earners who have worked on the matter and their date of professional qualification so that these can be included in the Bill.

Amendments – if you require any amendments to the E-Bill please consult your Costs Draftsperson. The E-Bill uses complex algorithms to calculate the totals within the Bill and any changes made could affect these and corrupt the Bill. We therefore recommend that you ask your Costs Draftsperson to make any amendments you require, rather than attempting this yourself, as it could cause issues with the E-Bill later down the line.

The introduction of the COP E-Bill will revolutionise the COP sector and should have a positive impact on assessment times and also result in less administration time following assessment, as the Bill is automatically recalculated in this format.

Additional information on E-Bills can be found here: https://www.judiciary.uk/guidance-and-resources/electronic-bills-in-court-of-protection-cases-pilot-in-the-senior-courts-costs-office/

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