Tag: clarion legal costs

Solicitor able to indemnify client?

Anna LockyerLeave a comment

Can a solicitor acting for an impecunious client offer indemnity for adverse costs when ATE insurance is unobtainable? Master Rowley rejected the Defendant’s argument that such an agreement was champertous in Edwards v Slater & Gordon UK Limited [2021] SCCO (15/09/2021), but an appeal of this decision is being heard in the High Court this week, so some clarity of this important but ambiguous area of law should follow.

Whether a solicitor’s role extends to bearing the risk of liability for adverse costs is controversial in more ways than one.

If an ATE provider declines to insure a claim or if the premium is set too high, in the absence of indemnity from a solicitor, a claim may not proceed at all. This raises questions about how far ATE providers should be keepers to the gates of justice and no doubt is a common frustration of claimant solicitors.

An obvious consideration for the solicitor and their practice should be whether they would be able to afford adverse costs liabilities in the event of an unsuccessful claim. This issue came to the fore in the Edwards case as the Defendant alleged that the Claimant solicitors did not have adequate financial backing.

Most importantly, the legality of indemnifying a client must be at the very top of the checklist when deciding whether to offer indemnity, as supporting litigation for a share of the proceeds would ordinarily be considered champertous and contrary to public policy. Prior to the Courts and Legal Services Act 1990, contingent funding arrangements offered by solicitors were completely prohibited under the rules against maintenance and champerty, and although the Act sanctioned exceptions in certain circumstances, these are limited and strict conditions must be met to ensure enforceability.

Although the recent Court of Appeal case of Farrar v Candey Limited [2022] EWCA Civ 295 attempted to widen the scope for legitimate solicitor-client agreements, the case was dismissed.

Watch this space for the outcome of the Edwards v Slater & Gordon appeal…

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

The use of the Damages Claim Portal now mandatory for all claims for damages commencing in the County Court

Daniel MurrayLeave a comment

In a move which is very much in line with the Master of the Rolls vision for online digital justice, the use of the Damages Claims Portal for all claims for damages commencing in the County Court, is now mandatory for legally represented Claimants from today.

The pilot scheme had previously been in effect from May 2021 and will run until April 2024. The 142nd update to the CPR, which was released on 28 March makes the use of the online system mandatory.

There are a number of exceptions to this requirement, amongst which are, if the Claimant is a protected party, or the case is one to which the Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit applies.

The full list of exemptions and guidance on how to follow the portal process can be found in Practice Direction 51ZB.

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

Supreme Court finds in favour of Claimant Solicitors seeking an equitable lien over costs

Daniel MurrayLeave a comment

In a favorable judgment for Claimant Solicitors, the Supreme Court has decided by a narrow 3:2 majority that the Claimant’s Solicitors were entitled to an equitable lien over their clients’ compensation for their costs.

The Facts

The case centered around proceedings brought against Ryanair by Bott & Co Solicitors, a North West firm who handle a high volume of delayed flight compensation claims. The Defendant had been leapfrogging the Claimant’s Solicitors once a claim was submitted and settling matters with the Claimants, who in turn were not passing on costs due to Bott & Co. The Claimant’s Solicitors acted on Conditional Fee Agreements in the cases, with costs being 25% of the total compensation amount awarded to the client plus VAT, plus an administration fee. Costs were to be deducted from the compensation before it was paid to the Claimants. Bott brought proceedings, seeking both an equitable lien over the compensation and injunction to prevent Ryanair taking this approach in cases where notice that they had been retained had been provided.

The Decision

In determining the key issues, consideration was given to the Court’s earlier decision in Edmonson v Haven [2018] UKSC 21. Here the Supreme Court examined the role of the solicitor’s equitable lien in the context of modern litigation, where access to justice is a central underlying goal and out of court settlements and alternative dispute resolution are encouraged. In Edmonson, the Court had decided that the solicitor was entitled to an equitable lien over the settlement fund because the work had made a significant contribution to the settlement of the client’s personal injury claim. That case flowed from the position whereby a Claim Notification Form had been submitted through the Pre-Action Protocol for Low Value Personal Injury Claims. This, in the words of Lord Burrows ‘implicitly overruled’ the Court of Appeal’s decision in Meguerditchian v Lightbound [1917] 2 KB 298, which decided that the trigger for an equitable lien was whether proceedings had been issued.

Being bound to follow the decision in Edmonson, Lord Burrows for the majority, stated that ‘the appropriate test for a solicitor’s equitable lien is whether a solicitor provides services (within the scope of the retainer with its client) in relation to the making of a client’s claim (with or without legal proceedings) which significantly contribute to the successful recovery of a fund by the client’. It was decided that although the majority of flight compensation claims are settled without any dispute, the act of advancing the Letter of Claim by Bott & Co, was sufficient to satisfy this test.

The decision of the Court also centred around promoting access to justice, with the logic being that this would be promoted further if Solicitors were comfortable knowing that they had the security of a lien to recover their costs. Lady Arden for the majority stated that ‘effective access to justice has become a foremost animating principle of the equitable lien’.

In their dissenting judgements, Lord Legatt and Lady Rose based their decisions, amongst other reasons, on the fact that there was no real prospect of a dispute in these types of cases.

The result

The fact that the requirement for a dispute does not form part of the test for establishing an equitable lien, opens the door for the application of this case to a greater number of cases, particularly as litigation continues to be driven to become more streamlined. The decision, as acknowledged by Lord Burrows in his judgement, is ‘at the outer limits of a solicitor’s equitable lien’, but nonetheless provides Solicitors with a greater degree of certainty and ensures there should be firms willing to undertake relatively low value work on behalf of Claimants in the future, which can only be a good thing.

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

Further notice from the SCCO on COP assessment delays is now available

Stephanie KayeLeave a comment

On 22 March, the SCCO released a further notice in relation to the ongoing delays with assessments.

In summary, turnaround at present is as follows:

  • Costs Officers are currently being assigned bills of costs received in or after late September.
  • The Admin Team are processing the return of assessed bills received back from the Cost Officers in the last week of February.
  • New filings for assessment received in late January are being considered.
  • Certificate request filings received in mid-March are being received and actioned as acknowledgement of the requests to receive payment before the end of the financial year.

The SCCO have requested that enquiries about the progress of bills which supported paperwork was submitted around or after late September and any e-filings that have not been accepted/rejected that were submitted after late January are limited to aid in the efforts to focus on the reduction of the backlog.

Please see the link below for the full notice released:

Notice-to-COP-customers-21-March-2022-SCCODownload

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

When is a Deputy Entitled to Have a Bill of Costs Assessed by the Senior Courts Costs Office?

Laura SugarmanLeave a comment

Professional Deputies are entitled to take costs for the work that they have carried out throughout a management year. This must be completed in accordance with the rules set by the Court of Protection, Senior Courts Costs Office, and Office of the Public Guardian. The Deputy will most likely opt for their costs to be assessed by the SCCO, and otherwise they could take fixed costs.

When a Deputy is appointed, the Court of Protection make a Court Order outlining the authority of the Deputy. One such authority is the Deputy’s entitlement to be paid in respect of the work done on behalf of P. Under the ‘Costs and expenses’ section of the Court Order, the Costs Judge will outline how the Deputy should be remunerated for their costs, which is typically either fixed costs or detailed assessment by a Costs Officer.

If the Deputy would like to have their costs assessed, as the time they have spent outweighs the amount allowed by fixed costs, then they must have authority within the Order to do so.

Below is an example of a costs clause within an Order that grants authority for the Deputy to receive fixed costs only:

            ‘The Deputy is entitled to receive fixed costs in relation to this application, and to receive fixed costs for the general management of the Protected Party’s affairs.’

As a reminder, some of the key current fixed costs available are set out in Practice Direction 19B of the Court of Protection Rules (2017), and are as follows:

  • £950.00 + VAT for a Deputyship application
  • £1,670.00 + VAT for the first year of general management of P’s affairs
  • £1,320.00 + VAT for second and subsequent years of managing P’s affairs

You can find the full Practice Direction here, if you require further information: https://www.judiciary.uk/publications/fixed-costs-in-the-court-of-protection/

Below is an example of a costs clause within an Order which gives authority for the Deputy to have their costs assessed by the SCCO, or to take fixed costs if they prefer:

            ‘The Deputy is entitled to receive fixed costs in relation to this application, and to receive fixed costs for the general management of the Protected Party’s affairs. If the Deputy would prefer the costs to be assessed, this order is to be treated as authority to the Senior Courts Costs Office to carry out a detailed assessment on the standard basis.’

Where a Court Order provides for detailed assessment of the Deputy’s costs, Deputies may decide to take fixed costs in lieu of detailed assessment, but this is not mandatory. If you have authority for the assessment of costs in your Order and you will exceed the fixed costs amount, we recommend that you opt for assessment instead, as it is very likely that you will recover more than the fixed costs amount.

If a Deputy has incurred more time than allowed under the fixed costs amount when administering P’s affairs, but only has authority to take fixed costs, then they may choose to apply to the Court of Protection for an amended Court Order granting authority to have their costs assessed.

If a Court order does not grant authority for costs at all, then the Deputy can apply to the Court of Protection to amend the Court Order to include a clause for costs. Otherwise, the Deputy would have no authority to charge for the work that they have completed.

For further information, please contact Lewis.Grant@ClarionSolicitors.com

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

Your Bitcoin is no good here, ‘I need something more real’ orders the High Court

Daniel MurrayLeave a comment

Further guidance has been given on several issues in relation to security for costs, in the recent case of Tulip Trading Ltd v Bitcoin Association for BSV, which is one of the cases currently ongoing and involving the creator of the crypto currency, Bitcoin.

The guidance comes following an initial hearing whereby an order granting security on grounds of impecuniosity had been made. It was agreed between the parties that the amount to be ordered as security for the Defendant, and the liability for and amount of the costs of the security applications would be determined on written submissions without a hearing.

Principles

Master Clark, delivering judgment, summarised several principles in relation to the quantifying of security. He confirmed that the relevant principles were those set out in the 2021 White Book at 25.12.7, and summarised in Pisante v Logothesis [2020] EWHC :

“(i) The appropriate quantum is a matter for the court’s discretion, the overall question being what is just in all the circumstances of the case. In approaching the exercise, the court will not attempt to conduct an exercise similar to a detailed assessment, but will instead approach the evidence as to the amount of costs which will be incurred on a robust basis and applying a broad brush (see also Excalibur Ventures v Texas Keystone [2012] EWHC 975 (QB) § 15).

(ii) In some cases, the court may apply an overall percentage discount to a schedule of costs having regard to (a) the uncertainties of litigation, including the possibility of early settlement and (b) the fact that the costs estimate prepared for the application may well include some detailed items which the claimant could later successfully challenge on a detailed assessment between litigants. There is no hard and fast rule as to the percentage discount to apply. Each case has to be decided upon its own circumstances and it is not always appropriate to make any discount.

(iii) In deciding the amount of security to award, the court may take into account the “balance of prejudice” as it is sometimes called: a comparison between the harm the applicant would suffer if too little security is given and the harm the claimant would suffer if the amount secured is too high. The balance usually favours the applicant: an under-secured applicant will be unable to recover the balance of the costs which is unsecured whereas, if the applicant is not subsequently awarded costs, or if too much security is given, the claimant may suffer only the cost of having to put up security, or the excess amount of security, as the case may be (see also Excalibur § 18).

…(v) In determining the amount of security, the court must take into account the amount that the respondent is likely to be able to raise. The court should not normally make continuation of their claim dependent upon a condition which it is.

Issues as to the amount

There were three issues of principle which arose between the parties as to the amount of security which was to be awarded:

(1) whether the starting point should be that no reduction will be made on assessment;

(2) whether the court should consider and take into account the likelihood that costs would be awarded on the indemnity basis;

(3) the extent to which the court should take into account the Guideline Hourly Rates applicable to summary assessment.

With regards to the first principle, Master Clark refused to award the entirety of the costs as claimed, and distinguished from caselaw relied upon by the Defendants. It was determined that these were not relevant authorities on the basis that security had been granted under the non-residence condition (CPR24.13(2)(a)) and the Judge had applied a discount to the amount awarded to reflect a sliding scale of risk of non-enforcement.

The relevance of a potential final indemnity costs order was given little weight by Master Clark, who was unwilling to determine the security amount on this assumption, as he was unwilling to determine the merits of the claim at that stage.

It was determined that the case was of such significant complexity and value (over $4 billion) to attract rates in excess of the guideline hourly rates, and as such it was confirmed that these were of limited assistance.

Amount of security to be ordered: discussion and conclusions

It was determined that security for70% of the Defendants incurred and estimated costs would be ordered once all issues had been considered.

Once this had been determined, the Defendants sought security in one of the two usual methods; through payment into the Court, or via bank guarantee given by a reputable first class London bank.

The Claimant however, proposed that security be given by the transfer of digital assets to their own Solicitors. Namely, two forms of Bitcoin, with the proviso that a 10% buffer in addition to the value of the security be transferred and written confirmation of the transfer be provided, along with the public addresses of the Bitcoin. The 10% buffer was proposed to address the volatility in the value of Bitcoin.

Master Clark rejected the Claimant’s proposals, stating:

“The security offered by the claimant would not result in protection for the defendants equal to a payment into court, or first class guarantee. It would expose them to a risk to which they would not be exposed with the usual forms of security: namely of a fall in value of Bitcoin, which could result in their security being effectively valueless. The top-up provisions proposed by the claimant do not fully meet this risk,…”

Given the ever growing popularity of crypto currency, the case is unlikely to be the final occasion in which payment using crypto currency or other digital assets as opposed to traditional currency is proposed. Especially given the current Master of the Rolls, Sir Geoffrey Vos’, enthusiasm for the legal profession to embrace technology. Whilst highly uncertain at the moment, the long term stability of Bitcoin is likely to be determined the more it spreads into the mainstream in our economy. Should this occur in the coming years, then perhaps we will be in a position whereby the payment of damages and costs will be ordered by non traditional forms of currency?

Should you have any queries regarding an application for security for costs you can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com

Who are the interested parties and who should be served in COP cases?

Casey McGregorLeave a comment

An interested party is anyone with a financial interest in the outcome of the assessment. Rule 47.19 of the CPR enables the court to direct under rule 47.19(3) that the receiving party must serve a copy of the request for assessment and copies of the documents which accompany it, on any person who has a financial interest in the outcome of the assessment.

Practice Direction 47, para (18.2) explains what is or is not a ‘financial interest’. It states ‘A person has a financial interest in the outcome of the assessment if the assessment will or may affect the amount of money or property to which that person is or may become entitled out of the fund. Where an interest in the fund is itself held by a trustee for the benefit of some other person, that trustee will be treated as the person having such a financial interest unless it is not appropriate to do so. ‘Trustee’ includes a personal representative, receiver or any other person acting in a fiduciary capacity’.

The SCCO expect the professional Deputy to determine who such an interested party may be and for the Deputy to take a sensible, pragmatic approach. It may not be appropriate to serve every beneficiary of P’s estate, for example. It is recommended that any interested parties are highlighted for the SCCO’s attention when e-filing your bill of costs.

Sometimes the SCCO will indicate on the assessment that the bill of costs needs to be served on the interested parties, but even where they don’t state that, it is up to the Deputy or Claimant to decide if the bill should be served. There have been instances where a Final Costs Certificate has been obtained and an interested party has come forward asking why they were not served at the time, wishing to challenge the outcome of the assessment. If the SCCO decided that party should have been served, the Claimant may be liable for the costs of that additional process as a result of not following procedure.

The link to the procedure rules can be found at: https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part-47-procedure-for-detailed-assessment/practice-direction-46-costs-special-cases2#18.1

If you have any questions, please do not hesitate to contact Casey Mcgregor at casey.mcgregor@clarionsolicitors.com

Was it in P’s best interests to live at home?

Ella WilkinsonLeave a comment

In the recent case of Hull City Council v A & Ors [2021] EWCOP 60, the issue of whether P should be moved into a residential home, or whether she could remain in her property was considered.

By way of background, P is 76 years old, and suffers from late-onset vascular dementia, as well as agitation, anxiety disorder, psychosis, and delusions. As a result of this, P lacks capacity to conduct litigation, and to make decisions in relation to her care and residence. P is a widow, and has four living sons.

An application was submitted by the Local Authority, stating that it was in P’s best interests to transfer her immediately from her home into a residential care placement, as well as a request for the making of injunctive orders against P’s son, referred to as B (second respondent), to prevent him from obstructing the move.

B had presented proposals previously that he act as P’s primary carer, with her to remain living at home, with an assurance that he would seek additional professional support as and when required. The Court initially approved these proposals as being in P’s best interests. P was thereafter cared for by B, with a considerable level of support also being provided by external carers, who attended upon P at least three times a day.

With regards to B, his background includes a long history of criminal activity, including the supply and possession of cannabis, several convictions for assault, and a ten-year sentence of imprisonment for grievous bodily harm with intent. This history was not known to the Court when the option of B acting as P’s main carer was approved as being in her best interests.

During the proceedings, P consistently expressed a wish to continue living at her property. In addition, she has not been vaccinated against COVID19 and no further application has been made with regards to the making of a best interests decision on this point.

As a result of this, B cancelled all external care and support arrangements in place for P, she stopped attending a local day care centre, and visitors were not permitted to the property. B has also reacted in a hostile manner to visits from social workers, has become abusive and agitated on occasion, and has also refused to meet with social services at an external location. Concerns were also raised as to a bruise noted on P’s arm, to which B indicated had occurred as an accident, as well as disclosure from the Humberside Police, relating to previous threats made by B towards P, to kill her and burn her house down.

Orders were subsequently made by the Court on 29 October 2021 on a without notice basis, requiring B to allow a health and welfare check to be undertaken on P at her home, without him present to prevent obstruction or interference with the same. At this stage, the application regarding where P should reside and who should provide her care was adjourned.

Having considered P’s wishes and feelings, the relevant statutory provisions, and other recent events brought to the Court’s attention, it was held that it could not be in P’s interests to allow her to continue to live at the property and to be cared for by B. Taking into account B’s refusal to work with the other parties and the Court, it was noted that the only viable option would be to remove P from her home for an interim period, and for her to be cared for at a residential placement.

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

Can Deputies claim for tax work within the Bill of Costs?

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Can Deputies claim for tax work within the Bill of Costs?

During the Deputyship period, the Deputy may need to enlist the help of a tax advisor to assess P’s taxable income and to determine whether it is necessary to prepare a tax return for the tax year in question.

Bill of Costs. This time is often recovered at Grade C hourly rates and is not considered to merit a Grade B or A fee earner. The hourly rate of the tax advisor would need to be reflected in your client care letter. Some of this work may be considered Grade D in nature

When the tax work is carried out externally and the Deputy receives an invoice for the work carried out, this can be settled directly from P’s estate.

If it is necessary for the Deputy to prepare a tax return for P and they do not want the time assessed for it, they are able to claim fixed costs for this work. These fixed fees are outlined in Practice Direction 19B of the Court of Protection Rules (2017). If the tax return is completed in house efficiently, it may be more appropriate to take fixed costs for the task, which is better for cash flow.

  • For the preparation of a basic HMRC income tax return, the fixed cost available is ‘an amount not exceeding £250.00 (plus VAT).’
  • For the preparation of a complex HMRC tax return, the fixed cost available is ‘an amount not exceeding £600.00 (plus VAT).’ A complex tax return may arise where P has multiple investment portfolios or more than one rental property for example.

Overall, the Deputy is able to claim tax work done internally within the Bill of Costs, or depending on the level of time incurred, it may be more cost effective to take the applicable fixed cost for the work. However, work done by an external provider should be settled directly from P’s estate following the receipt of the invoice.

If you would like any further information of this, then please contact Scott on 07769607134 or by email at scott.kemp@clarionsolicitors.com

More changes are coming to costs in the latest amendments to the CPR – Civil Procedure (Amendment) Rules 2021

Anna LockyerLeave a comment

More changes are coming to costs in the latest amendments to the CPR – Civil Procedure (Amendment) Rules 2021, which comes into force on 6 April 2021, and the 127th update to the PD. 

Costs Management

These changes are not significant, however it is noted that there has been one amendment that is worthy of mention particularly for practical reasons. During the last tranche of costs changes in October 2020 (122nd update) when the costs practice directions and rules were consolidated and the precedent H guidance notes were incorporated into PD 3E, it was identified that one of the amendments created difficulties in terms of drafting of the budget. The amendment related to CPR 3.17(3)(a) which stated that the Court may not approve costs incurred before the date of any costs management hearing and replaced the previous practice direction that referred to how the courts may not approve incurred costs up to and including the date of the costs and case management hearing. This amendment resulted in the provision of updated incurred costs information that included an element of estimated costs, i.e. the costs associated with attending the CCMC. Please see follow this link https://www.clarionsolicitors.com/articles/costs-and-litigation-funding-newsletter-october-2020 for more a detailed analysis in that regard.

Master Cook recognised the difficulties that rule change made in the 122nd update created and has now addressed this in this latest tranche of rule changes. The rules have been amended, as follows:

“(3) Subject to rule 3.15A, the court (a) may not approve costs incurred up to and including the date of any costs management hearing; but (b) may record its comments on those costs and take those costs into account when considering the reasonableness and proportionality of all budgeted costs.”

This is a change that is very much welcomed and simplifies the presentation of incurred costs.

Some minor amendments to the cost management Practice direction 3E have been made which are limited to substituting “budgeted costs” for total costs (incurred and estimated) in paragraph 4b of practice direction 3E; and the substitution of interlocutory for interim at paragraph 10 (a). The final amendment relates to the table found in PD 3E in the Disclosure section, where ”third party” is to be substituted with “non-party”.

Summary assessment

The PD 51X Costs for Summary Assessment Pilot scheme has been running for nearly 2 years and the judiciary have confirmed that they have received some useful comments, however they have extended the voluntary pilot scheme for a further year to enable the capture of more data.

Capped Costs Pilot

PD51W Capped Costs pilot scheme was launched in January 2019 and has run for 2 years. The scheme was limited to cases valued up to £250,000 in the Business and Property Courts in Manchester, Leeds and London Circuit Commercial Court. It followed a recommendation made by Sir Rupert Jackson in his 2017 report as part of his push for fixed costs. There has been limited uptake with only one case being heard under the pilot and consequently the scheme has not been extended.

The CPRC have commented that “it was acknowledged that the broad aims remain as current as ever and the need for schemes of this kind for the efficient despatch of medium value claims, whether as pilots or not, will continue to be considered in the context of post Covid-19 recovery and new ways of conducting business litigation”.

Joanne Chase is a Senior Associate in our Costs and Litigation Funding team. If you have any questions, please contact her on 07826 166 300 or at joanne.chase@clarionsolicitors.com .