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Confused by QOCS? A brief summary of everything you need to know…

jochaseLeave a comment

Qualified One way Costs Shifting (QOCS) was introduced in April 2013 for personal injury matters and it is essentially a rule that means a successful defendant cannot recover their costs from an unsuccessful claimant except in specific circumstances (such as the claim being fundamentally dishonest).

2018 saw 3 decisions of interest; one from the Court of Appeal, and 2 County Court decisions that conflicted each other. It is likely that the issues in the County Court decisions will be tested again, hopefully with binding authority.

Court of Appeal – 28/06/18: Cartwright v Venduct Engineering Limited [2018] EWCA Civ 1654

This was a NIHL (Noise Induced Hearing Loss) claim where the claimant pursued 2 defendants (as is often the case with industrial disease matters).

The claimant successfully negotiated settlement against defendant 1, and dismissed the claim against defendant 2. Defendant 2 argued that their costs (following the discontinued claim) could be enforced against the claimant up to the level of damages recovered from defendant 1. It was argued that the purpose of QOCS was to ensure that the claimant was no worse off after litigation had been conducted than before it had started. The court of appeal agreed – defendant 2 was entitled to their costs, limited to the amount of damages recovered from defendant 1.

This decision confirmed that a claimant was not entitled to QOCS protection when they issued against a defendant (in a multi defendant case where they succeeded against a different defendant) and their claim was ultimately unsuccessful (prior to this decision, the rule had been if no fundamental dishonesty had been proven by a successful defendant, then the claimant would be protected by QOCS in this scenario – the county court decision of Bowman).

The Cartwright decision means that litigators now need to be extremely vigilant when deciding against which defendants to issue their claim. If they do not adequately consider and evaluate the risks against each and every defendant, there is potential for a professional negligence claim.

The second issue decided in Cartwright was whether a successful QOCS defendant could enforce a tomlin order (remembering that a tomlin order is a record of settlement and not an order of the court). The rules state that QOCS applies to orders for costs made against the Claimant and therefore Cartwright found that defendants would not be able to enforce a tomlin order or Part 36 agreement in order to benefit from QOCS on the basis they are not orders made by the court. The order must either have been made at trial, or be within a consent order or provisional damages order.

Ketchion v McEwan – Jun 2018 (County Court decision)

This was an RTA matter where the claimant brought a claim for financial loss (but not personal injury). The defendant denied liability and issued a part 20 counterclaim for personal injury. The matter proceeded to a fast track trial – the judge found the defendant to be 100% at fault and therefore entered judgment and dismissed the counterclaim.

The claimant sought their costs but the judge ordered that the defendant was protected by QOCS (given the existence of his unsuccessful counterclaim). Therefore, despite the claimant succeeding in full, their costs were not recoverable as the defendant had QOCS protection. The claimant sought permission to appeal but this was dismissed – the judge found that the rules referred to “proceedings” and that this captured the claim AND counterclaim. It should not be limited to just the claim – any successful claim could be precluded from recovering costs by an unsuccessful counter claim.

Waring v McDonnell – Nov 2018 (County Court decision)

This was a claim involving 2 cyclists. One brought a claim for personal injury, the other a counterclaim for personal injury. The counterclaim was unsuccessful and the court found that the defendant/Part 20 claimant was not protected by QOCS. This decision was to deter the bringing of frivolous counter claims in order to avoid a costs order/benefit from QOCS. It was found that the defendant was not an unsuccessful claimant, but an unsuccessful defendant and that he would only have been entitled to QOCS protection if he had brought his own PI claim.

So, what’s next? 

It is recognised that there is currently some tension in the drafting of the QOCS rules, and that they need to be re-worded in order to iron out issues.  Currently, the term “proceedings” in Cartwright encompasses multiple defendants, however, in the county court decisions, “proceedings” do not include counterclaims.

There is also an increasing trend in defendants arguing fundamental dishonesty in order to set aside QOCS. There is currently limited authority on what constitutes fundamental dishonesty, however, the Court of Appeal decision of Howlett v Davies & Another [2017] EWCA Civ 1696 concluded that fraud did not have to be pleaded for the Court to make a finding of dishonesty. The defendant merely had to have given adequate warning to the claimant of their intention to submit evidence that could lead to the Court making such a finding, such as within their defence.

Finally, there is talk about extending the QOCS regime to non-clinical professional negligence claims, and also private nuisance proceedings. It, therefore, appears that QOCS is going to expand beyond the realms of personal injury in the not too distant future.

Joanne Chase is a Senior Associate Costs Lawyer in the Costs and Litigation Funding Department at Clarion Solicitors.

You can contact her at joanne.chase@clarionsolicitors.com and 0113 336 3327, or the Clarion Costs Team on 0113 246 0622.

 

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Court of Protection Costs – How to get paid and what happens to your costs?

joshuasiddingLeave a comment

As many hard-working solicitors are focused on ensuring their clients get the best service, it is possible for them to lose sight of their own costs. Here is a refresher guide to the procedure for getting paid.

The Payment Process

The process begins when the anniversary of the Order/matter completes, and the files are sent to your Costs Lawyer or Law Costs Draftsman; at Clarion, we offer the expertise of both. It is good practice to do this annually, as close to the end of the annual management year as possible (Section 6 of PD19B). This means that no costs are lost if there is an overlap period from the previous months or years.

Secondly, whilst the file is with your trusted Costs Lawyer or Law Costs Draftsman, the Bill of Costs is prepared. A Detailed Bill is required for matters with profit costs exceeding £3,000 and a Short Form Bill is needed for matters with profit costs lower than £3,000. There is no difference in the procedure for the bills – the difference in their names reflects their differing length and the amount of detail that they contain.

The Bill of Costs is then completed and, along with supporting documents, filed with the Senior Courts Costs Office (SCCO) for assessment, after which its returned by the SCCO to your lawyer.

Process for reassessment

Upon reviewing the assessment, if you are unhappy with it, you can lodge a request for reassessment with the SCCO. Here at Clarion, we are more than happy to review any assessments and consider an appeal; we can also lodge the request for reassessment on your behalf. Please get in touch with a member of our Costs Team to find out more.

The process for the request for reassessment is as follows:

  • If you are unhappy with the outcome of the assessment, you can request a reassessment within 14 days of the original assessment.
  • The Bill of Costs is returned to the Costs Officer for reconsideration in respect of the points appealed.
  • The Costs Officer will generally accept where they have made an error. They base their assessment on the points raised before them, so these points need to be justified; Costs Officers have been known to be unpredictable.
  • If you are still unhappy with the assessment, you can proceed to an oral hearing before a Costs Master, but be aware that this can be an expensive and timely process.

When you are happy with the assessment outcome, copies of the assessed Bill of Costs are served on the interested parties (if applicable) who have 14 days to challenge the Bill.

Once the assessment is finalised then a Costs Summary can be completed and filed with the SCCO, allowing the Costs Certificate to be drawn, and you to get paid.

Then the procedure will repeat, as and when the time period (annually) completes, although there are various scenarios which would result in changes to the process as described above. In these circumstances, get in contact with our team and we can assist, where necessary, to ensure that you are paid.

Joshua Sidding is a Paralegal in the Court of Protection Team of the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Joshua.sidding@clarionsolicitors.com and 0113 222 3245, or the Clarion Costs Team on 0113 246 0622.

You can also take advantage of our free telephone advice service – available outside of office hours – by calling 07764 501252.

Clearing the Special Circumstances Hurdle; Section 70 (3)(c) of the Solicitors Act

jochaseLeave a comment

The case of Eurasian Natural Resources Corporation Ltd v Dechert LLP [2017] EWHC B4 (Costs) addressed what is a special circumstance for the purpose of securing an application for the assessment of a solicitor’s bill where payment had been made, but 12 months had not yet lapsed.

Section 70 (3)(c) of the Solicitors Act 1974 states that, where a paying party wishes to have the costs assessed but has failed to make an application within one month of delivery of their solicitor’s invoice, and where the paying party has either; allowed 12 months to lapse following delivery of the invoice, had judgment against them for recovery of the costs billed, or where they have paid the bill in full but 12 months has yet to lapse post payment, the court will not make an order expect in special circumstances.

Eurasian Natural Resources Corporation Ltd addresses what those special circumstances could look like. This particular case was subject to private proceedings; however, the Judgment has been made public with a small number of redactions.

The defendant rendered invoices totalling circa. £13.6 million, which were all paid in full. The claimant was unable to seek an assessment of invoices totalling £3.9 million on the basis they had been rendered and paid more than 12 months prior – the Court had no jurisdiction to assess those costs. The parties also agreed that invoices totalling £5.5 million could be assessed on the basis one month had not yet passed. A balance of £4.2 million remained, spread across 15 invoices where the Claimant had to show special circumstances in order to obtain an order for their assessment.

The claimant identified seven different reasons why this was a special circumstance, with Master Rowley accepting six of those seven reasons.

The starting point for the claimant was whether there was a special feature in the case which required an explanation, and whether this meant it was reasonable to proceed to a detailed assessment.

Firstly, Master Rowley accepted that a special circumstance existed in the discrepancy between the estimates provided to the client and the costs actually billed by the solicitor. This provided reason to proceed to a detailed assessment. He continued, however, to also comment on whether further submissions amounted to special circumstances.

Master Rowley found that the size of the bills, whilst not a direct special circumstance, could be a ‘magnifying prism’ to billing irregularities, which was also identified as a low hurdle to demonstrate a special circumstance in this case.

He also found that the relationship between the claimant and his solicitor was very important, as the claimant in this case highly valued their solicitor’s relationship with the Serious Fraud Office. The claimant was aware that a relationship breakdown with their solicitor would not only lose their prized expertise, but may also undermine the Serious Fraud Office’s confidence in the investigation. This point, whilst very case specific, highlights the fragility of some relationships and demonstrates why some claimants may not, despite wanting to, challenge the levels of fees within the one month as required by s.70 of the Solicitors Act 1974.

Secondees from Addleshaw Goddard had assisted the claimant’s legal department during the matter and as part of their duties they had queried the defendant’s billing. The claimant submitted that the defendant’s hostile reaction to these modest queries showed how unrealistic it was to expect the claimant to formally challenge the fees during the course of the retainer, to which Master Rowley agreed. This, again, amounted to a special circumstance.

Finally, Mr Rowley also concluded that the parties’ conduct in Solicitors Act proceedings could be relevant. In this case, the defendant’s conduct of these proceedings (in that they sustained attempts to avoid scrutiny of their charges), would amount to a special circumstance in that they called for an explanation.

The one submission that was rejected as a special circumstance was the fact that there was going to be, in any event, a detailed assessment of the invoices totalling £5.5 million. Master Rowley did not accept that the existence of other invoices resulted in a special circumstance.

There is a wealth of information considered within this one judgment, with Master Rowley succinctly summarising what amounts to special circumstances at paragraph 102;

“The only one which does not amount to a special circumstance is the existence of other bills being assessed (factor 3). The peculiarities of the solicitor client relationship here making Solicitors Act applications unrealistic (4) combined with the defendant’s response to any challenges (5) amounts to a special circumstance in my view. So too does the defendant’s approach to these proceedings (7). The billing irregularities (6) would amount to a special circumstance when viewed through the magnifying prism of the size of the bills (2)”.

 

This Judgment helpfully provides guidance on what factors may be deemed a special circumstance when attempting to secure an application for the assessment of a solicitor’s bill where payment has been made, but 12 months has not yet lapsed. It must be remembered that this case is very fact sensitive, but for any paying party finding themselves in a position where they are considering an application for the assessment of a bill paid less than 12 months prior, this case may be exactly what they need.

If you have any questions or queries in relation this blog please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.

 

Getting it Right – CPR 2.8 and calculating dates for service

jochaseLeave a comment

So many times, we question ourselves over whether we have calculated the correct date for service or filing of an important Court document. Getting it wrong can be costly, and, in the extreme, fatal to the case.

CPR Part 6 is at the heart of the rules relating to service of documents, and Practice Direction 6A relates to service within the United Kingdom.

CPR 2.8 sets out how we go about calculating time, and parts 2.8 (2) and (3) specifically explains the clear day rule which often catches practitioners out:

“(2) A period of time expressed as a number of days shall be computed as clear days.

(3) In this rule ‘clear days’ means that in computing the number of days –

(a) the day on which the period begins; and

(b) if the end of the period is defined by reference to an event, the day on which that event occurs

are not included.”

For example, where a CMC is listed for March 30th and the Court orders bundles to be filed no later than 7 days before the CMC, the last date for filing is March 22nd.

CPR 2.8 (4) continues to explain that:

“Where the specified period –

(a) is 5 days or less; and

(b) includes –

(i) a Saturday or Sunday; or

(ii) a Bank Holiday, Christmas Day or Good Friday,

that day does not count”

Therefore, where a witness statement must be served 5 days before a hearing listed on Tuesday 14th March, the deadline for service is Monday 6th March.

Interestingly, CPR 44 practice direction 9.5 (4) provides different rules for the filing and service of a statement of costs before a fast track trial and other hearings;

“The statement of costs must be filed at court and copies of it must be served on any party against whom an order for payment of those costs is intended to be sought as soon as possible and in any event –

(a) for a fast track trial, not less than 2 days before the trial; and

(b) for all other hearings, not less than 24 hours before the time fixed for the hearing.

Where a fast track trial is listed for 1.30pm on the first Tuesday after Easter, taking into account the clear day rule and CPR 2.8 (4), the statement of costs must be filed and served no later than the Tuesday before. Wednesday and Thursday provide the 2 clear days, with Good Friday, Easter Saturday, Sunday and Monday not counting. Therefore, in this instance, 7 days before the hearing – suddenly the 2 days turn into 7 days.

However, if it were an interim application hearing listed for 1.30pm on the first Tuesday after Easter, the statement of costs must be filed and served no later than 1.30pm on Maundy Thursday.  What is crucial here is that this rule provides for hours and not clear days. Therefore, filing and serving at 1pm on Maundy Thursday would be perfectly acceptable despite it being within no clear days of the hearing. The clear day rule does not apply when the rules specify the deadline as a number of hours rather than a number of days.

Being aware of this subtle difference could prove to be a very useful tool for any practitioners who are under time constraints for the filing and service of Court documents. A note of advice –  if in doubt then check the rules. The rules regarding filing and service can easily catch you out, particularly bearing in mind that there are also rules surrounding the method of filing and service, i.e. service by email, fax etc., in addition to those relating to timing.

If you have any questions or queries in relation this blog please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.