Tag: Costs Management

Sandwell and West Birmingham Hospitals NHS Trust v GH [2023] EWCOP 50 

Stephanie KayeLeave a comment

This case involves an application made by an NHS Trust, seeking a declaration that an individual lacked capacity to make decisions about treatment for breast cancer, specifically the undertaking of breast cancer surgery (a mastectomy) and associated care and treatment. 

Background: 

In March 2023 GH, a 52-year-old woman with a prior diagnosis schizoaffective disorder was diagnosed with breast cancer,  and has refused all treatment because of her described ‘delusional’ beliefs. As a response, the Trust that manages her cancer treatment applied to the Court of Protection for declarations and orders that P lacked capacity to conduct the proceedings and to make decisions about whether to agree to undergo the necessary breast cancer surgery and associated care and treatment.

Dr Aziz concluded that there were issues with regards to her mental capacity as determined by the capacity assessment. This was decided on the basis that P had been in regular contact with mental health services since 2006, and had previously been detained under Section 3 of the Mental Health Act 1983 for suffering with psychosis, which involved GH hearing voices on a regular basis. In 2012, she suffered a relapse which was thought to be due to non-compliance with her medication. This resulted in her once again being detained under the Mental Health Act from 2022 to early 2023.

Conclusion: 

Mr Justice Poole stated that he was ‘satisfied that all practicable steps to help GH have been taken without success. There have been a number of discussions with her and professionals have tried to strip down the information to the basic information she requires, using straightforward language. The problem for GH is not that she cannot understand the key concepts involved, it is that she has delusional beliefs that prevent her from understanding and therefore weighing and using relevant information, namely that she has breast cancer’.

The court subsequently concluded that it was in GH’s best interests to undergo the necessary surgery in respect of her breast cancer diagnosis. GH subsequently underwent the mastectomy surgery which she did not resist, the tumour was operable, and she has recovered well from the procedure with no adverse effects noted with regards to her mental health.

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

Bethany CollingsLeave a comment

Introduction

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

Agreed key points include:

  • Applications and evidence (Rule 25.3) should contain a signpost to Part 23 (general rules applications and court orders) to assist users;
  • Under evidence (Rule 25.7) it was noted that the reason why notice was given is a material fact and an obligation already exists, without the need for it to be expressly provided for in the rules;
  • There is a need for the supervising solicitor provision under the provision for service, timing and individuals involved (Rule 25.17) is to be redrafted;
  • Form numbers should be replaced with “approved form”;
  • Other drafting revisions as noted by the Secretariat, to be adopted for further review and resolution, prior to consultation; and
  • Remaining provisions within the Practice Directions that are not within the draft reformed rules, could be removed altogether because:
  1. the reference to out of hours contact details can be done by a signpost and appropriate web information;
  2. the reference to finding a Supervising Solicitor from the Law Society or London Solicitors Litigation Association can be removed, because it is in relevant Court Guides;
  3. the statement about privilege is a statement of the law and does not need to be repeated in a Practice Direction in this way; and
  4. the statement that applications for interim remedies in IP cases ought to go to the Chancery Division does not need to be made here because that is the effect of the relevant rules already.

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

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

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

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

CPR Committee MinutesDownload

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

Anna LockyerLeave a comment

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

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

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

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

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

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

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

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

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

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

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

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

Failure to explain costs budget overspend prevents costs recovery from client

Robert PattersonLeave a comment

The recent case of JXC v NIS [2023] EWHC 1000 (SCCO) (21 April 2023) is an example of a solicitor who had successfully concluded a claim of the utmost severity, but went on to encounter difficulties in securing payment from their client of costs which could either not be claimed from the Defendant or were not recovered from the Defendant.

In this case the solicitor represented a 19-year-old Royal Marines Commando, who sustained catastrophic head injuries when he fell 20 feet from an assault course, which had no safety netting installed. The claim, naturally enough, took a long time to conclude; the CFA was entered into in August 2013 and the award of damages, which had a total capitalised value of £14,000,000, was not approved until March 2021. At the conclusion of the claim, the solicitor presented the Defendant with a bill of costs in the sum of £1,300,488.44 and went on to secure a negotiated settlement amounting to £1,050,000. Subsequently the solicitor sought payment of the shortfall, which had been limited to £212,974.69.

The Court was therefore principally concerned with the nature of information provided to the client’s litigation friend as to base costs recovery from the Defendant and the costs budget.

Although the solicitor had informed the litigation friend that not all of their costs would be recovered and had indicated on 6 occasions between 2017 and 2021 that there would be a shortfall (even going as far as to quantify the shortfall at £245,000 in January 2021), the solicitor had not advised the litigation friend on anything to do with the Court approved costs budget. The client’s budget was first set by the Court on 27 January 2015 and was updated twice more in July 2018 and again on 22 June 2020. The solicitor went on to incur costs in excess of the approved budget which were calculated at £204,759.17.

The solicitor conceded that she had not asked the litigation friend to approve any of the costs budgets, had not given any specific advice to the litigation friend in respect of any budget overspend and had not advised on any corrective action that could be taken. It was nevertheless argued on her behalf that the litigation friend was aware that there would be a shortfall and that the shortfall would be approximately £245,000, which was higher than the claimed shortfall in any event. In other words, the advice given was sufficient to enable the litigation friend to make informed decisions notwithstanding the lack of specific advice on the costs budget.

The Court did not agree. In any solicitor/own client assessment, the solicitor is afforded a degree of protection by the presumptions in CPR rule 46.9(3)(a) and (b) that costs are presumed to be reasonably incurred and reasonable in amount if they were expressly or impliedly approved by the client. The Court found that the client had not been aware of the limits imposed by the costs management order, they could not have expressly or impliedly approved the expenditure. Accordingly, the solicitor was not entitled to rely on the presumptions in CPR rule 46.9(3)(a) and (b). Furthermore, the Court concluded that a budget overspend was not of itself unusual in nature for the purposes of CPR rule 46.9(3)(c), however the scale of the overspend was found to be unusual in amount.

As a consequence of the above, the budget overspend was considered to be unreasonably incurred and unreasonable in amount with the result that the solicitor could not recover any shortfall from the client because the budget overspend exceeded the total claimed shortfall.

In this case the Court was carrying out a detailed assessment under CPR rule 46.4(2) of costs payable to a protected party’s solicitor out of money belonging to the protected party. However, as such assessments involve consideration of CPR rules 46.9(3) and (4), the issues considered in this case should be of interest to any party involved in an assessment under the Solicitors Act 1974. The case also demonstrates the importance of giving appropriate advice at all stages of the costs management process.

For further information, please contact Robert Patterson, who is a Senior Associate in Clarion’s Costs and Litigation Funding Department and can be contacted at robert.patterson@clarionsolicitors.com.

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

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.

10 Years of Cost Budgeting: Where we started, and where are we going?

Daniel MurrayLeave a comment

This month sees 10 years since the introduction of costs budgeting, which means we have experienced a decade of improved transparency on costs through the litigation journey.

Since the implementation of the Jackson Reforms there have been several case law developments and changes to the Civil Procedure Rules which in turn have shaped the overall effectiveness of costs management.

In the latest Clarion costs podcast, Anna Lockyer and Daniel Murray reflect on these changes, consider the impact these have had on engagement with the budgeting process and discuss the likely future of costs management as the outcome of the Civil Justice Council consultation on costs budgeting is awaited. You can listen to this discussion below.

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

High Court resists approving budgets at CCMC; agreed figures neither reasonable nor proportionate

Anna LockyerLeave a comment

In the case of Lemos and Ors -v- Church Bay Trust Company Ltd and Ors [2023] EWHC 157 (Ch) Judge Jones did not accept that budgets were reasonable and proportionate, despite being largely agreed by the parties. Instead of holding a further hearing to consider submissions on the agreed figures, the Judge highlighted disapproval on the Costs Management Order by specifying that “budgets remain unjustified in terms of reasonableness and proportionality”.

Background

The sum in issue in this Section 423 Insolvency Act matter is £8m.

Ahead of the CCMC, Ds’ budget was agreed by Cs at c.£1.2m (estimated costs at c.£850k) but Ds raised some issues with Cs’ budget drawn at c.£1.9m.

The CCMC

Judge Jones referred to his general experience of insolvency proceedings and said he expected budgets to be in the region of £350k – £600k. He emphasised that this was only an initial impression which could be proved incorrect if the parties were able to point to the relevant factors at CPR 44.3(5) and 44.4(3) to justify higher budgets for the purpose of costs management.

The judge felt that the parties’ budgets did not explain how the agreed costs were justified, in terms of anticipated days/hours and grades involved, but essentially excused this on the basis the parties had relied on their prior agreement and had only prepared to address specific issues of dispute.

To avoid further escalation of costs arguments, the judge decided not to adjourn the CCMC for further information to be provided and dealt only with the contentious costs of Cs’ budget. This resulted in a provisional estimated costs figure of c.£893k.

More information from the parties was subsequently requested to be made available afterwards so reasonableness and proportionality could be assessed.

The Judgment

Handed down some 3 months post-CCMC, once additional information had been considered relating to the agreed costs, the judgment dissected the disclosure phase in particular, asserting it remained unexplained how Cs started with 381,000 documents when only 4,000 documents reached the third stage.

In relation to witness statement costs the figures were found to be based very much on numbers and not substance, even though Cs’ key witness is based in Greece, is elderly and does not speak English as a first language. There were also criticisms of trial preparation phase hours, particularly in view of the fact leading and junior counsel were involved and in relation to the trial phase, there was criticism of 4 fee earners being factored in to attend the hearing.

In relation to Ds’ budget it was decided that they were taking a more reasonable approach but that the information provided was not enough to justify costs of over £1m being reasonable and proportionate.

A recording in a new order was consequently made which confirms that on the information currently available the court does not consider that the budgets are reasonable and proportionate and estimated costs are therefore not approved. Reference can be made to this judgment for the court’s comments upon the budgets in any subsequent assessment proceedings.

Summary

The approach taken in this case is worth bearing in mind when preparing for CCMC. If certainty of approved budgets will benefit you as either the prospective receiving party or paying party, having submissions to hand to justify the reasonableness and proportionality of costs for agreed phases may prove incredibly useful and avoid budgeted costs being examined later down the line.

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

Gloucestershire County Council and AB (By Her Litigation Friend, The Official Solicitor), SB and NHS Gloucestershire Integrated Care Board

elliescallyLeave a comment

This recent case concerned the care plans in place for an individual, AB, given the risk of her self-harming. Further points surrounding her capacity to access the internet and social media were also considered within the case, as well as her ability to access implements that could be used to inflict self-harm.

History:

In September 2022, a standard authorisation was granted by the Local Authority (Gloucestershire County Council) in respect of AB’s care and support arrangements within Placement A, following her reaching the age of 18. 

The same was challenged by the Official Solicitor who, on behalf of AB, challenged several matters such as whether the mental capacity requirements had been met, whether the best interests requirements had been met, and asked the Court to consider the period during which the standard authorisation was to be in force and the conditions subject to which the standard authorisation was given. Observations were also made regarding the relevance of Article 2 European Convention on Human Rights, and a duty which had arisen for the Local Authority that would require them to take reasonable steps to provide protection to AB from a real and immediate risk to life.

A hearing was listed for 28 and 29 September 2022, and the parties and the Court had identified the issues for determination as follows: whether AB had capacity to access the internet, and if AB did lack capacity, what was in her best interests in this regard and was the best interests qualifying requirement met in respect of AB’s care and support arrangements.

Whilst preparing for the hearing, it was revealed that the AB was self-harming. AB was subject to significant levels of restraint when her self-harm was of concern to her care staff. There was an incident on 18 August 2022, whereby AB self-harmed by cutting her neck region. This resulted in a “Safe Self Harm Care Plan (Cutting)” being prepared by the care provider.

Hearing

On 28 September 2022, the Court heard evidence from a registered mental health nurse who had implemented the care plan and an independent expert, Dt Ty Glover.

On 29 September 2022, the Senior Judge attend upon AB via Microsoft Teams, and it was noted that AB expressed confusion about the “lack of consistency in how she was permitted to self-harm and when she was not, and a feeling that she was not properly supported whilst at the same time overly restricted.”

Following various pieces of evidence provided by several parties, it was agreed that a risk assessment, an immediate review of practices, and consideration in relation to whether tolerating a degree of self-harm from AB was clinically appropriate and in her best interests needed to be undertaken urgently.

The Official Solicitor stated that the practice in which the carers were able to implement their own care plans was “clinically, ethically and legally unsustainable”. Also, the Official Solicitor questioned the legality with regard to whether a self-harm arrangement could be authorised by way of a schedule one.

Following this, an applicant at the Local Authority submitted that a social worker would be appointed for AB urgently. In addition, it was noted that the Deprivation of Liberty Safeguards Assessor and best interests assessor were not aware of the support arrangements around restraining AB and wider support provisions in place.

It was discussed and considered between the parties whether AB’s care arrangements should revert to how they were previously or whether a new approach should be implemented. The Senior Judge invited the parties to consider a hybrid approach.

In relation to whether AB had capacity to access the internet and social media, it was put forward by the Official Solicitor and the other parties that in the particular circumstances of AB, it was unknown whether AN would be subject to self-harm videos and encouragement of the same.

Outcome

At the outcome of the hearing, it was ordered that the standard authorisation dated 26 September 2022 was terminated.

It was ordered and directed in the interim that:

  • AB would reside in Placement A conforming to the arrangements set out by the Local Authority and under the care plans made in September 2022.
  • AB’s access to social media and the internet may be restricted when in distress
  • AB’s access to items in which she could use for self-harm would be limited in her best interests
  • Any changes to make AB’s care plan more restrictive must be brought before the Court
  • That the restrictions in place pursuant to the care plan in place for AB amounted to a deprivation of her liberty, authorised as being in her best interests and as necessary to prevent harm to her

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