Tag: #clarioncosts

Complexity pays – securing hourly rates in excess of guideline rates

angelanakoLeave a comment

Introduction

The case of Micula & Ors v Romania [2024] EWHC 3566 (SCCO) involved the enforcement of an arbitral award issued by the International Centre for Settlement of Investment Disputes (ICSID). The issue of hourly rates charged by legal professionals was a central point of discussion in the judgment, focusing on the importance of the complexity of the matter in determining the appropriate hourly rate to award.

Background of the case

Micula & Ors v Romania involved the enforcement of an arbitral award issued by the ICSID. The Claimants were investors who were eligible for a tax incentives scheme, and the Defendant, Romania, had repealed the scheme. To compensate for the damage sustained from the repeal of the scheme, the Micula brothers requested the establishment of an arbitral tribunal under the ICSID convention and, in 2013, an arbitral award of EUR 178 million was awarded to the Claimants in compensation for the repeal. The Claimants subsequently took steps to enforce the arbitral award.

The decision regarding the hourly rates and legal costs

The issue of costs recovery in respect of the enforcement proceedings was heard before Costs Judge Leonard in the Senior Courts Costs Office (SCCO). The hourly rates charged by the Claimant’s legal team were considered and discussed in relation to the complexity of the case and the expertise required.

The Costs Judge considered CPR 44.4 (3) to highlight the ‘factors to be taken into account in deciding the amount of costs’, and he suggested that the application of hourly rates should be grounded on the circumstances of the claim. He noted that the work was undertaken between 2014 and 2017 when guideline rates had not increased since 2010, claiming that during this time they were of less value as a starting point in any context, much less a detailed assessment, indicating that the hourly rates claimed were to be analysed based on other factors alongside the guideline rates.

Moreover, Costs Judge Leonard then referred to Choudhury J in Powerrapid and emphasised that the Master of the Rolls had made clear that guideline rates were no more than a guidance and a starting point for judges undertaking summary assessment, and a possible helpful starting point on detailed assessment.

It was made clear by the Judge that facts such as international elements, value, and importance may justify significantly higher rates. The Costs Judge also explained that Choudhury J himself accepted that whether guideline hourly rates were helpful as a starting point was a matter for the Costs Judge, having regard to the relevant circumstances. However, it was also mentioned that increased hourly rates claimed later in the bill were excessive beyond what could be awarded, making clear that the rates must remain reasonable and proportionate.

Ultimately, the Costs Judge allowed an hourly rate at a maximum of £700 per hour for Grade A, £500 per hour for Grade B, £380 per hour for Grade C and £200 per hour for Grade D. In reaching this decision, the Costs Judge concluded that it was a “complex case with substantial international elements” meaning that the case was “top end” for commercial litigation and required the skill, effort and responsibility undertaken by the receiving party’s solicitors to also be top end of the scale.

Conclusion

The Micula & Ors v Romania case underlines the significance of considering the circumstances of a case when determining the appropriate hourly rates. It provides insight into the approach adopted when assessing hourly rates and it sets out the key components that are taken into account by the Costs Judge at detailed assessment.

 

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

The importance of fulfilling duties as Deputy – the recent case of AECO, Re [2025] EWCOP 5 (T2)

Leah MorrisLeave a comment

In the recent case of AECO, Re [2025] EWCOP 5 (T2), HHJ Cronin addressed the Public Guardian’s application to remove JO as the Deputy for AECO, a woman with Retts Syndrome and several mental and physical disabilities. The case centred on concerns regarding JO’s ability to properly manage AECO’s finances and property. AECO, who has always required significant care, was represented by her mother, JO, and her brother, but JO was not represented legally during the hearing.

JO had served as AECO’s Deputy since 2014, but the Public Guardian raised multiple issues concerning her management of the Deputyship. These included a failure to submit timely annual reports, late payment of supervision fees, mixing AECO’s funds with her own, the improper occupation of AECO’s property, and questionable financial transactions involving large sums directed towards JO and her son. Additionally, JO was accused of not cooperating with the Public Guardian and the interim Deputy.

Key Issues with JO’s Conduct

1. Failure to Report and Pay Fees: JO had failed to submit annual supervision reports on time for several years and was behind on her payments for supervision fees, despite reminders.

2. Mixing of Funds: JO did not open a designated Deputyship bank account for AECO, mixing AECO’s money with her own. This made it impossible to distinguish between their finances.

3. Property Occupation: JO and her son had stayed in AECO’s property for extended periods without contributing to the additional costs, which was a breach of proper financial stewardship.

4. Questionable Financial Transactions: There were concerns about large sums of money being transferred to JO and her son, which required further investigation.

5. Lack of Cooperation: JO had failed to provide necessary documents and cooperate with professionals, despite clear instructions.

These failures had resulted in financial mismanagement, potentially harming AECO’s entitlement to housing benefits and violating her tenancy agreement. The judge emphasized that AECO’s money had been mismanaged, and the situation had become untenable for her continued well-being.

The Court’s Decision

The Court concluded that JO was no longer fit to serve as AECO’s Deputy. Her repeated failures in managing AECO’s affairs and her lack of cooperation with the necessary authorities left AECO’s financial situation precarious, as her money had been lost. In light of these issues, it was determined that removing JO as the Deputy was in AECO’s best interests.

Despite the Court’s desire for a family member to manage AECO’s affairs, they found that no suitable family member was available to take on this responsibility. As a result, the Court confirmed the appointment of Jenny Pierce, an experienced Court of Protection Deputy, to manage AECO’s property and affairs moving forward.

Conclusion

This case highlights the importance of transparency, responsibility, and cooperation in managing the affairs of vulnerable individuals. When a Deputy fails in their duties, it can have serious consequences for the individual they are meant to protect. In this case, the Court’s decision to remove JO and appoint a professional Deputy underscores the need for proper oversight in managing the property and finances of those who cannot do so themselves.

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

Breakdown of agency uplift on expert fees … a step closer to clarity?

ujjainimistryLeave a comment

In the recent case of JXX v Archibald [2025] EWHC 69 (SCCO) Costs Judge Rowley considered whether a breakdown of an expert’s fee is required when the expert is instructed by an agency.

The Defendant applied for a declaration that the Claimant’s bill of costs was non-compliant with the CPR and requested that the detailed assessment proceedings were stayed until the Claimant filed and served copies of the experts’ fee notes and separate breakdowns of the costs of the medical agency and experts. The application also sought that the bill of costs was to be struck out in its entirety or the claims that relate to medical evidence were to be assessed at zero.

This led to the question – is the Claimant obligated to provide a breakdown of the expert fee note to show the percentage of the fee being taken by the medical expert agency?

Background information

A Consultant Ophthalmologist was instructed by the Claimant, directly in the first instance and then through the medical agency for further evidence; with fees amounting to around £120,000. Medical and Professional Services Limited (‘MAPS’) was the agency used in this case and the Defendant’s noticed a ‘stark and shocking’ difference in the fees of the expert from when they were directly instructed, compared to when they were instructed via MAPS. The invoices provided by the expert to MAPS had been increased by approximately 60%

In the Defendant’s Points of Dispute, they stated that the “Claimant was accordingly required to file and serve a breakdown in respect of each, and every fee rendered by MAPS… and the Court can arrive at a reasonable and proportionate allowance. […] Pending this further information the Defendant puts in dispute each and every fee charged by MAPS and declines to make any offer for any such fees at this time.”

The Claimant responded to this point, in an attempt to justify their use of MAPS and submitted that all expert fees were “reasonable and proportionate on a global basis, particularly taking into account the specialist skill, knowledge and expertise of the experts involved.” The Claimant also requested a breakdown from MAPS.

The Claimant’s argument against MAPS’ approach

The Claimant argued that MAPS was instructed to prepare a medical report and to provide all relevant services, and the fee claimed was one which the Claimant was liable to pay and was appropriately invoiced and vouched for on the assessment.

Unhelpfully, MAPS declined to provide a breakdown of the expert’s fees, and the managing director claimed it was not part of MAPS’ standard policy to supply such information as it was regarded as being “unimportant and misleading when considering the overall reasonable cost of obtaining the medical expert evidence … as well as being confidential”.

Cost Judge Rowley stated that “the approach of MAPS has left the Claimant in something of a bind” on the basis that MAPS’ involvement required a ‘slight’ increase in the fee but would result in a ‘significant’ drop in the Solicitor’s own charges. The extent of MAPS’ charges was to be justified by showing the work it has done, but as there was no evidence provided, the position was not expected to change.

He also goes onto say that “if the MRO decides not to justify its charged by way of evidence, it seems to me to be likely that the composite fee would be reduced on assessment.” A justification of the charges is based on a comparison of the work done by the third party and if it would be cheaper if it was carried out by the Claimant’s solicitor.

This comparison means looking at whether it was reasonable for the report (or similar work product) to be produced by the expert without any additional quasi-legal work being carried out.

Conclusion

There are two options a Claimant could take when faced with a composite invoice; they could pursue assessment:

  1. on the basis of the expert’s evidence and the agency work in obtaining that evidence if the information sought by the Defendant is provided; or
  2. on the hypothetical basis that there has been no MAPS involvement, and the fees claimed are solely for the expert’s evidence, if no such information is provided.

The Defendant would then be entitled to produce and rely on comparative evidence, dependant on the approach taken.

On a practical level, when contemplating instructing a medical agency, calculating and comparing the additional time of the lawyer in the event of a direct instruction versus the costs of the agency, may be useful when determining the overall costs benefit.

Practitioners may opt to instruct experts directly and avoid using medical agencies altogether.

This is an example of yet another case in favour of evidencing the breakdown.

Ujjaini Mistry is a Paralegal in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Uplifted Guideline Hourly Rates from 1 January 2025

ujjainimistryLeave a comment

The Guideline Hourly Rates have increased with effect from 1 January 2025.

In December 2023, the Master of the Rolls accepted the recommendations of the Civil Justice Council Costs Review, which was published in May 2023. One of the recommendations was to annually review and increase the Guideline Hourly Rates in accordance with the Services Producer Price Index (SPPI).

The Guideline Hourly Rates are now as follows (the brackets reflecting the rates effective from 1 January 2024 to 31 December 2024):

Grade Fee Earner London 1 London 2 London 3 National 1 National 2
A Solicitors and legal executives with over 8 years’ experience £566

(£546)

 £413

(£398)

 £312

(£301)

 £288

(£278)

 £282

(£255)
B Solicitors and legal executives with over 4 years’ experience £385

(£371)

 £319

(£308)

 £256

(£247)

 £242

(£233)

 £242

(£233)
C Other solicitors or legal executives and fee earners of equivalent experience £299

(£288)

 £269

(£260)

 £204

(£197)

 £197

(£190)

 £196

(£189)
D Trainee solicitors, paralegals and other fee earners £205

(£198)

 £153

(£148)

 £143

(£138)

 £139

(£134)

 £139

(£134)

 

 

There has been an average of a 5%  increase to Grade A rates and 4% increase to Grade B, Grade C and Grade D rates.

Ujjaini Mistry is a Paralegal in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Getting it Right – CPR 2.8 and calculating dates for service

Joanne ChaseLeave a comment

Calculation of Time

The recent case of Corfield v Howard [2024] EWHC 2727 (Comm) is a reminder of the importance of calculating time for service and filing of Court documents.

In the above matter, the Defendant applied for declaratory relief as to the meaning of enforcement of a settlement agreement scheduled to a Tomlin order. In accordance with a consent order, skeleton arguments were due to be served and filed one clear day before the hearing. The Court staff noted that no skeleton arguments had been filed and served by the due date. Their time was therefore taken up identifying the breach and writing chasing letters to the parties’ representatives. Both parties subsequently filed their skeleton arguments. HHJ Judge Davis-White KC sated that he did not need to enquire further as to where the fault lay, however, he said that Counsel and instructing solicitors should liaise in good time to ensure that the required skeleton argument can be prepared by Counsel by the required time.

The Judge went on further to state that:

“the delivery of skeleton arguments in accordance with guidance of court order is essential for the efficient running of the courts”. Although the Judge was able to proceed with the hearing on this occasion, the Judge did warn that “the court is likely to impose sanctions in cases as egregious as these”.

Although there were no sanctions in this case, it serves as a timely reminder that compliance with court imposed deadlines is mandatory and, in an appropriate case, the Court may impose sanctions for a failure to comply. Getting it wrong can be costly, and, in the extreme, fatal to the case.

The Rules

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.”

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”

Examples

Where a CMC is listed for 28 March and the Court orders bundles to be filed no later than 7 days before the CMC, the last date for filing is 20 March.

Alternatively, where a witness statement must be served 5 days before a hearing listed on Tuesday 18 March, the deadline for service is Monday 10 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.

Conclusion

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.

Joanne Chase is a Legal Director in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

The Precedent U Document: A Practical Guide

angelanakoLeave a comment

The Fixed Costs Determination process (FCD) was implemented on 1 October 2024 and with this new procedure the Precedent U was also introduced. The Precedent U is the first formal document, implemented for use specifically in the fixed costs regime.

For an overview of the FCD procedure, please see our comprehensive overview of the same. Below is a guide on how the form looks and what information is required to complete it.

Section A

This first section outlines the case details and the receiving party is also required to set out the track, band and value of the claim. The receiving party is also required to complete the relevant fixed costs calculations, and outline disbursements and court fees that they are seeking to recover.

It is at this stage that the receiving party should also indicate whether they are seeking costs pursuant to CPR 45.9, CPR 45.10, or CPR 45.50 (3) and / or CPR 45.13. The provisions deal with increased costs based on exceptional circumstances, vulnerability, and unreasonable conduct as well as assessment of fees on non-issued personal injury cases.

For the information provided within Section A to be valid, a statement of truth must also be signed by the receiving party to verify the costs which are being sought.

Section B

This section has three columns.

The first column is completed by the receiving party and outlines the sum of the fixed costs claimed, disbursements and court fees claimed and an explanation in support of those fees.

The second column provides the paying party the opportunity to respond to the receiving party’s claim, with the chance to make an offer for each item and outline an explanation as to why the original sums are not agreed.

The third column is completed by the Court if the parties are unable to reach agreement and the matter is determined by them.

Section B also requires a signature by the paying party.

Section C

Section C requires the receiving party to outline the basis of their claim for additional sums and provides the receiving party the opportunity to respond.

As touched on above, this section only requires completion when costs are sought pursuant to CPR 45.9, 45.10, 45.50(3) and/or 45.13. Therefore, Section C will only be used when claims are made for costs exceeding fixed recoverable costs where there are exceptional circumstances, unreasonable conduct and/or there is a vulnerable party or witness. It will also be used in the context of stage S1 costs, in non-personal injury claims where the costs are subject to a cap as opposed to being fixed.

When claiming costs under any of the conditions exhibited above, a separate N260 must be completed and submitted.

The form is limited in size and it may also be the case that a witness statement and supporting evidence is prepared and advanced when this section is completed.

 

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

CD, Re (Treatment: Haemodialysis) [2024]

maidiedeightonLeave a comment

Application for declarations that it was not in CD’s best interests to have new haemodialysis catheter fitted and that he should instead receive palliative care.

CD is a 66 year old originally from Bangladesh and has end-stage renal disease and other conditions. Problems arose with his catheter and attempts to insert a long-term tunnelled catheter were unsuccessful due to his agitation, leading him to repeatedly try to pull it out. While there was consensus that the temporary catheter needed to be removed, the NHS Trust proposed that CD should receive palliative care instead.

Professional evidence indicated that without dialysis, CD might have only two weeks to live, but with treatment, he could potentially survive for an additional three to six months.

However, Judge Poole ultimately rejected this proposal. He recognized the complexities of the situation but emphasized the importance of preserving life.

He states at [29] “The presumption that steps should be taken to preserve life, the family’s views, evidence as to CD’s beliefs and values and his past wishes and feelings, and the evidence of the pleasures that he still derives from interactions with his family and others and from good food, weigh in favour of his undergoing the procedure and continuing with dialysis. I am cautious about finding that it is in his best interests to undergo a procedure the purpose of which he might unknowingly frustrate by pulling out a catheter, but without the insertion of a catheter his life cannot be preserved, and his life, if preserved, will continue to bring him real benefits alongside its burdens. There is no advanced decision to consider but the evidence is that CD is a man who, if he still had capacity, would not want his life to end prematurely unless its burdens became wholly overwhelming.”

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

Gifting – New guidance issued by the Office of the Public Guardian

Tanya ForanLeave a comment

The Office of the Public Guardian have this month issued updated guidance on gifting for both Deputies and Attorneys on behalf of P.

Both Deputies and Attorneys must follow stricter protocols when giving gifts on behalf of P. The gifts must coincide with past habits and financial means and need to comply with the MCA 2005. Approval must be sought from the Court of Protection when making gifts, with the exception of small customary amounts such as for birthdays, holidays and other similar events.

It is necessary to ensure that when making gifts, the Deputy or Attorney are acting in P’s best interests given their wishes, feelings and financial position. Also, a sufficient paper trail should be kept to explain how the decision was arrived at and what factors were taken into account.

The Deputy or Attorney must consider whether P has:

  • The capacity to understand the decision to make a gift;
  • Whether P is able to take part in the decision making process.

What cannot be given as a gift:

  • A loan
  • Making a large gift
  • Creating a trust over P’s property
  • Living rent free in a property owned by P
  • Selling a property for less than its value or transferring property into another name
  • Changing a Will by a deed of variation
  • Maintaining and support another person
  • Removing cash assets to reduce P’s estate

Exceptions include gifts given to friends and family on customary occasions such as birthdays, weddings and religious celebrations, gifts that were previously given either to a person or charity and must be of reasonable value, taking into account the circumstances and the size of P’s estate.

What is deemed as a reasonable gift?

Various factors must be taken into account including:

  • The impact of the gift on P’s estate;
    • Whether making the gift is in P’s best interests; and
    • The current and future needs of P.

A best interests decision should be made and properly recorded including details of all other issues taken into account. These include P’s previous habits, how the gift may affect an inheritance and the payment of inheritance tax. P’s life expectancy should be considered together with P’s future financial position and the relationship between P and the person receiving the gift also, importantly P’s wishes and feelings, taking into account any previous Wills prepared.

For the full guidance please click on the link giving-gifts-guidance.pdf (publishing.service.gov.uk)

If you have any questions on the information above or have any general queries with regard to seeking costs, please contact me at Tanya.Foran@clarionsolicitors.com.

Fixed Costs Determination Process: An overview and points of discussion

Daniel MurrayLeave a comment

The Fixed Costs Determination process (FCD), which was proposed within Lord Justice Jackson’s infamous review of civil litigation costs in 2017, is to be finally implemented on 1 October this year. 1 year on from the implementation of his other expansive recommendations and the extension of the Fixed Recoverable Costs regime.

There was initially some optimism within the legal costs world, that the process would not be implemented when it was omitted from the new rules. However, minutes from the CPRC meetings, released over the last 10 months or so, revealed an intention to implement the new streamlined process this year.

The procedure for the new process, which will be incorporated into CPR 45.63 to CPR 45.66 has been published in Civil Procedure (Amendment No.3) Rules 2024 and 171st update – Practice Directions amendments. The new Precedent U, which will be completed by receiving parties as part of the process has also been released for review.

How does the process operate?

Determination after a hearing

The new process will require any party who intends to claim any fixed costs or disbursements in a case captured by CPR 45, to file at court and serve on any party against whom an order for payment is intended to be sought a completed Precedent U. This new document must include, if applicable, the details of any claim under rule 45.9, rule 45.10 or rule 45.13, and is to be filed and served no later than 24 hours before the time fixed for the hearing. This is a slight variation on the current rules in relation to final hearings, where statements must be filed at Court 48 hours prior to the hearing commencing.

The Court may then summarily assess the costs, or if it is unable to make a summary determination at the hearing, then it may order a determination on paper, or a further hearing and make any directions it sees fit. The costs of that determination will be treated as an interim application and costs limited under CPR 45.8. Those costs currently amount to £250 plus VAT on cases which are assigned to bands 1-3 of the Fast Track, and £333 plus VAT on cases which are assigned to band 4 of the Fast Track or allocated to the Intermediate Track.

Determination where parties agree on all issues except costs

Where the parties have reached agreement on all issues except costs, then the receiving party may make an application for those costs to be determined under the new streamlined process. On an issued matter, this will be by way of a Part 23 application as is the current procedure when a fixed costs dispute arises.

On an unissued matter, the application will be made when Part 8 costs only proceedings are commenced pursuant to CPR 46.14.

Applications, whether on issued or unissued matters, should be supported by the written agreement or confirmation, together with a completed Precedent U containing details of the costs or disbursements to which the applicant claims to be entitled and, if applicable, the details of any claim under rule 45.9 (a claim for costs exceeding fixed costs as a result of exceptional circumstances), rule 45.10 (a claim for costs exceeding fixed costs as a result of vulnerability of the Claimant or a witness), or rule 45.13 a claim for costs exceeding fixed costs as a result of unreasonable behaviour).

Any evidence in response from the paying party must be filed within 21 days of service of the application on issued matters, and within 21 days of filing the acknowledgment of service where proceedings have not been started.

The determination may then take place on papers or at a final hearing, but regardless, the fees recoverable will be limited to £500 plus VAT as set out in Table 17 of the soon to be amended Practice Direction 45, plus any relevant application fees.

Appealing outcomes

The Court will record its decision by annotating the Precedent U document and the parties will have 21 days from service of the decision to appeal the outcome. If an application is made, then a hearing will be held to determine the issues, and the applicant must achieve an outcome at least 20% more favourable to them, otherwise they will be liable for the costs of and incidental to the hearing. These costs will, however, be limited again to those outlined in CPR 45.8.

Final key points

Where a party seeks an assessment of costs because of exceptional circumstances, vulnerability, or where the matter settles at S.1 on the Intermediate Track and is a non-PI matter, then the Court has the power to give directions that those costs can be assessed in conjunction with the fixed costs determination.

Part 36 consequences are disapplied from the process.

Discussion

Those of us involved in fixed costs dispute know that currently, the process can be a drawn out, expensive and disproportionate exercise. A streamlined process, designed specifically to deal with what is likely to be largely disbursement disputes is to be welcomed.

It is interesting that the base figure allowed for the process (a maximum of £500), has not been uplifted for inflation, in the same way that those costs tables were. When fees are broken down into hours, the process allows for less than 4 hours of Grade D band 2 time for preparing a statement and written submissions, as well as attempting to agree costs before an application is made. That is not withstanding the fact that submissions in relation to costs exceeding fixed costs can be technically complex and arguably justify the input of more experienced fee earners.

Further limitations on fees recoverable where the Court does not determine costs at the final hearing also seems a harsh added stipulation, with a maximum of £333 recoverable, to include a potential attendance at a hearing.

By disapplying the consequences of Part 36 from the process, there appears to be little by way of incentive for parties to reach agreement. This is exacerbated by the fact that the adverse costs exposure if decisions are unsuccessfully appealed, is limited to less than £400. The provisional assessment process, which currently captures most cases that will proceed through this process after its implementation, removes its cap on recoverable fees when initial outcomes are appealed. A mechanism that operates as a real deterrent for zealous challenges.

As things stand, this new process would not apply to cases to which the fixed costs implemented on 1 October 2023 apply. This seems something which could and perhaps should be rectified prior to the rules coming into effect and requires clarification.

Finally, the interplay between requests for assessment of fees above fixed costs and the new process remain unclear. Whilst it is noted that there is the possibility for both the new process and detailed assessment to run in conjunction, how this will operate is still uncertain.

For further information on the process, or assistance once it is implemented please contact Clarion’s Costs and Litigation Funding Department who can be contacted on any fixed costs issues, at our dedicated fixed costs email address at FRC@clarionsolicitors.com.

QOCS and Fundamental Dishonesty: where are we now?

Katie SpencerLeave a comment

The rules surrounding qualified one-way costs shifting (QOCS) were first introduced in April 2013, with the general rule being that a Claimant who has suffered a personal injury cannot be ordered to pay the costs of a Defendant, even if they lose their claim. QOCS applies in all personal injury claims, apart from when the Claimant is found to be fundamentally dishonest.

Fundamental dishonesty is an argument that can be raised by a Defendant when they believe the Claimant has not been truthful when bringing a claim.

Howlett v Davies [2017] was the first Court of Appeal case where the exception to QOCS was considered, supporting the procedure that should take place when a Claimant has been fundamentally dishonest. In this case, the Claimants alleged that they were passengers in the vehicle at the time of a road traffic accident. However, this was disproven factually as they were found to be lying regarding their presence. The Claimants were found to be fundamentally dishonest within the meaning of CPR 44.16(1) and costs were awarded against the Claimants as an exception.

Changes to the rules on QOCS were introduced on 6 April 2023, applying to any cases issued thereafter.

A main effect this has had relates to Part 36 offers; Part 36 offers now have the added incentive that costs after the 21-day period can be enforced against damages, without an Order from the Court.

It has been over 10 years since the rules on QOCS were introduced and more than a year since the changes were implemented, so where are we now?

In the recent personal injury case of Hamed v Ministry of Justice [2024], the Judge found the Claimant to be dishonest when exaggerating the injuries sustained. Therefore, no damages were awarded and QOCS were disapplied pursuant to the provision of CPR 44.16.

Practice Direction 44, Paragraph 12.4 states:

“In a case to which rule 44.16(1) applies (fundamentally dishonest claims) –

(a) the court will normally direct that issues arising out of an allegation that the claim is fundamentally dishonest be determined at the trial;

(b) where the proceedings have been settled, the court will not, save in exceptional circumstances, order that issues arising out of an allegation that the claim was fundamentally dishonest be determined in those proceedings;

(c) where the claimant has served a notice of discontinuance, the court may direct that issues arising out of an allegation that the claim was fundamentally dishonest be determined notwithstanding that the notice has not been set aside pursuant to rule 38.4;

(d) the court may, as it thinks fair and just, determine the costs attributable to the claim having been found to be fundamentally dishonest.”

 

Different courts are therefore adopting a consistent approach to exceptions to QOCS, despite the rule change of April 2023. The same outcome was drawn in both Howlett v Davies [2017] and Hamed v Ministry of Justice [2024].

Similarly, in the case of Shaw v Wilde [2024], the Defendant raised the argument that the Claimant had been fundamentally dishonest where the Claimant had lied to experts and the Court about the extent of his injuries. It was found that the Claimant should pay the Defendant’s costs due to this dishonesty. Again, CPR 44.16(1) was used to support this decision.

In conclusion, despite the progression of time, the rules surrounding QOCS and Fundamental Dishonesty are applied consistently.