Tag: Legal Costs
The SCCO Guideline Hourly Rates and no increase for 10 years…………
Third Party Funders – Exposure to Legal Costs
The Court of Appeal has recently handed down its Judgment in the case of Chapelgate Credit Opportunity Master Fund Limited -v- Money and Others [2019], which was an eagerly awaited decision for litigation funders. The outcome of the case is as follows:
The Arkin Cap should be considered when determining costs, but it is not binding on the Courts.
Paragraph 38:
“……..I do not consider that the Arkin approach represents a binding rule. Judges, as it seems to me, retain a discretion and, depending on the facts, may consider it appropriate to take into account matters other than the extent of the funder’s funding and not to limit the funder’s liability to the amount of that funding”
For those unfamiliar with litigation funding and the Arkin Cap, this arises out of the Court of Appeal decision in Arkin -v- Borchard Lines Limited 2005. In that case, a company which had provided third party funding for an unsuccessful claim was ordered to pay the costs of the winning party, but only to the extent of the funding provided. The Arkin Cap has been a principle which has been regularly applied by the Courts since. The decision in Chapelgate will cause uncertainty for litigation funders, in a world which has significantly evolved since 2005.
The Judgment increases the requirement for litigation funders to properly engage costs lawyers. Funders should be engaging costs lawyers to scrutinise a law firm’s legal budget when they are applying for funding. Costs lawyers should also be retained to monitor costs versus budget (including the opponent’s costs) and to advise on costs management orders.
Costs management orders provide more certainty on detailed assessment (unless the order for costs is made on the indemnity basis). Such measures will ensure that the funder has the maximum control possible on both the costs of the firm they are funding and the opponent’s legal costs; the latter being important in the event that an adverse order for costs is made.
This blog was written by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding Team. Andrew can be contacted on 0113 336 3334 or at mcaulay@clarionsolicitors.com
A PART 36 OFFER WHICH EXCLUDES INTEREST MAY BE VALID
A Part 36 offer in detailed assessment proceedings may be valid where it excludes interest under the Judgments Act 1838.
In Horne -v- Prescot (No.1) Ltd [2019] EWHC 1322 (QB) the Court held that a Part 36 offer on costs which excludes interest is a valid Part 36 offer, contrary to Ngassa -v- The Home Office [2018] EWHC B21.
CPR 36.5(4) states that a “part 36 offer… [for] a sum of money will be treated as inclusive of all interest…” In Ngassa it was held that therefore an offer which purported to exclude interest was not a valid Part 36 offer and therefore would not attract the consequences of Part 36.
However, in Horne the judge found that in detailed assessment proceedings, interest accruing under section 17 of the Judgments Act 1838 does not form part of the claim for costs, as it is a statutory entitlement in respect of which the Court is not required to make any finding. Therefore, unlike interest which may form a part of substantive proceedings (for example interest under the Late Payment of Commercial Debts (Interest) Act 1988) which forms part of the claim and must be Ordered by the Court, Judgments Act interest does not form a part of the “claim” for costs, and is not required to be ordered by the Court (though it may be disallowed).
Whilst the judgment in Horne is both legally sound and eminently sensible, as CPR 36 was not drafted with detailed assessment proceedings in mind (indeed until 2013 it was not possible to make a Part 36 offer in costs proceedings and is only now applicable due to a modification to Part 47 specifically applying Part 36 to detailed assessment) practitioners should bear in mind that Horne is a first instance decision and a different court on a different day may find differently. It may be prudent for practitioners to continue to include interest in Part 36 offers on costs until further authority clarifies the position. It is however a useful judgment to deploy where there is any dispute as to the validity of an offer.
Matthew Rose is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at matthew.rose@clarionsolicitors.com and 0113 222 3248. You can contact the Clarion Costs Team on 0113 246 0622.
Ensure consistency between your Costs Budget and Bill of Costs
Consistency and a true connection between Costs Management and Detailed Assessment is essential for the successful recovery of costs on Detailed Assessment.
If a costs budget is prepared incorrectly, which creates a disconnection between the costs budget and bill of costs, then you can expect a costs law obstacle course and a heavy migraine on detailed assessment.
The case of MXX -v- United Lincolnshire NHS Trust [2018] is a great example, which is summarised below:
Background, Retainer and Hourly Rates
The Claimant instructed her Solicitors in 2012 and the matter was funded by way of a Conditional Fee agreement with the rate for the conducting lawyer (Grade A) agreed at £335 per hour.
In August 2013 the rate for the conducting lawyer increased to £460 per hour (this was an error). In January 2015 the hourly rate was reduced to £350 (effective from May 2014). It was increased to £360 in 2015 and £365 in 2016.
The substantive proceedings related to a high value injury claim, with quantification being resolved in November 2016. The claim was subject to a Costs Management Order dated 2 March 2015.
Detailed Assessment Proceedings were commenced in March 2017 and the bill of costs totalled circa. £1.3 million.
Background to the Costs Management Order
At the CCMC, the District Judge dealt with estimated costs and correctly stated that the incurred costs were for detailed assessment. The hourly rate included in the costs budget for the conducting lawyer was £465 per hour.
In respect of the estimated costs, the Judge indicated a composite rate of £280 per hour, which the parties then used to agree the estimated costs for each phase.
Discrepancies between Budget and Bill
Following the commencement of detailed assessment proceedings, the Defendant compared the costs budget (Costs Management Order) with the bill of costs and noted the following discrepancies:
- Substantial differences in relation to hourly rates.The hourly rate included in the costs budget for the conducting fee earner was £465.00 per hour, but in the bill of costs hourly rates of £335.00 and £350.00 were claimed; and
- The bill of costs included roughly 144 to 147 hours less time for incurred costs than the costs budget.
The Defendant had legitimate concerns and made an Application for an Order pursuant to CPR 44.11, arising out of what the Defendant described as a mis-certification of the Claimant’s costs budget in the substantive proceedings.
Decision
It is well worthwhile reading the Judgment and the very articulate submissions advanced by both parties. This will help you to fully understand the decision, which was as follows:
- The Master did not find that the errors regarding the rates for the conducting fee earner (in respect of estimated costs) or the significant time discrepancies in relation to the time included in the costs budget and the bill of costs amounted to improper conduct.
- However, the Master did find that there was improper conduct in relation to the inflated rate/s claimed within the budget (as incurred costs).The Master had previously dealt with a case with some similar issues (Tucker v Griffiths & Hampshire Hospitals NHS Trust 2017) and decided to apply the same sanction in this case as he did in that case, which was to disallow the items claimed in the bill of costs which related to the Costs Management Order.The Defendant had submitted that the Claimant’s bill of costs should be reduced by 75% due to the errors, but the Master said:“Whilst those behind the Defendant in both cases may have considered the sanction in Tucker to be insufficient, it seemed to me to be the only appropriate sanction. There is nothing wrong with the Bill in terms of the indemnity principle. The problem lies with the budget. I consider it to be entirely appropriate to impose a sanction in respect of the work which caused the problem.That work is the non-phase time spent creating and maintaining the budget. It would be wrong in my view retrospectively to disallow some of the budget itself”.
The decision in this case (and in the case of Tucker) are both cases which were before Master Rowley at the Senior Courts Costs Office. Another Court/Judge could reach a different conclusion and I certainly expect to see this issue again before the Courts for the following reasons:
Lawyers do not time record consistently within their respective departments and firms, which means that discrepancies between budgets and bills will continue to regularly occur and a different Judge/Master may well adopt a more stringent approach;
Costs Budgets are regularly being prepared by non-specialists and prepared very “late in the day”, which leads to errors; and
There is a misconception that the costs budget is a more flexible document than a bill of costs i.e. the statement of truth to a bill of costs carries more weight than a statement of truth to a bill of costs.It is very important that all lawyers (and law firms) approach Costs Management consistently and understand the importance it has on detailed assessment. If that is done, then it leads to a consistent bill of costs, less obstacles on detailed assessment and no migraine – but maybe a headache!
This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding Team. Andrew can be contacted at mcaulay@clarionsolicitors.com or on 0113 336 3334
NB There are some other interesting points and views in the Judgment which I will cover in a further blog.
What do Court of Protection Costs draftsmen actually do?
The legal world of costs is not the biggest or most well-known, and it’s often the case that many lawyers aren’t sure what Draftsmen actually do. This is especially true if the costs are related to the Court of Protection, as it’s another area that isn’t particularly familiar to many, with some potentially not even knowing which costs are assessed, or how.
The previous blog in this series focused on the Bill of Costs and the process of claiming your costs and ultimately getting paid. This blog will instead breakdown the process of what goes into a Bill of Costs within the Court of Protection world and how the Costs Draftsmen – and women – here at Clarion can help.
Process for creating a Bill of Costs
- Arranging the file
Once we receive a file from one of our clients, it’s opened within our case management system and we assess how long the Bill will take to draft and which one of the Draftsmen would be best suited to do it. We review various points including: the specific needs of the client, the amount of work in progress (WIP) on the file received, the complexities involved, and the workload of the Draftsmen involved to determine who in our team is best placed to prepare the Bill of Costs. There are 10 of us who deal with Court of Protection costs on a daily basis.
- Drafting the Bill
Thereafter, once the file is allocated, our job is to match up entries on the file and billing ledger and cost the file as appropriate. At Clarion, we review the file of papers on a page by page basis, for completeness. The costs are calculated electronically to ensure absolute accuracy and we will make note of any issues identified, to be raised with the client. We are fully aware of the restrictions and court requirements as to what is and is not recoverable in Court of Protection cases. As a result, we will use our experience and discretion to put the bill of costs together in a way that the Court will be happy with, which is fundamental for our clients’ reputations.
- Reviewing the file and the Bill of Costs
Once the whole file is efficiently costed, the Draftsman reviews the file and ledger once more and notes any missing entries on the ledger that are not evidenced in the file. We also check if there are things within the file that could be included in the Bill of Costs, that the fee earner didn’t know could be recovered. If there is anything missing from the file, the client is informed, giving them the opportunity to provide the documents required, to ensure that a complete log of evidence is submitted to the Court.
- Collating and arranging the Bill of Costs and bundle
Once all the information is present and the Bill of Costs complete, Clarion prepares the Form N258B, which is a request for detailed assessment of the costs, if they are payable out of a fund. We also draft a comprehensive letter of advice, informing the client of possible reductions and guidance to improve costs recovery going forward. All documents are returned to the client, enabling them to easily submit them to the Court for assessment.
- The assessment
The matter is thereafter assessed by the SCCO on the Standard Basis, and Clarion will consider the outcome of the assessment, to determine if it is reasonable or not. Clarion can also assist with requests for reassessment if the outcome is not as expected.
If you would like further information about this process, then please do not hesitate to get in contact.
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
THE INDEMNITY PRINCIPLE – WHAT IS IT? IS IT IMPORTANT?
What is the Indemnity Principle?
A long-established principle which effectively means that a successful party cannot recover more in legal costs then they are liable to pay their solicitor under the terms of the contract with their solicitors.
Why does it exist?
To indemnify the winner for the reasonable legal costs incurred on the matter. In practice, the loser contributes to those costs.
If the indemnity principle did not exist, then a losing party could face a costs liability higher than the winner is liable to pay his solicitor. This would mean that a client would make a profit from the costs of the litigation which is not the intention of costs awards. The intention is to reasonably compensate the winner for the legal costs they have incurred.
Please note that there are some exceptions to the indemnity principle, for example, inter-partes claims for costs where the matter was funded by way of a Legal Aid Certificate, and fixed costs claims i.e. where the costs incurred are lower than the costs that can be claimed inter parties.
Key Case Law
Harold v Smith [1860] 5 H & N 381
Costs orders inter-partes are awarded as an indemnity to the receiving party. They are not awarded to impose a punishment on the party who pays them.
Gundry v Sainsbury [1910]
The Court of Appeal confirmed the underlying principle set out in Harold v Smith. The solicitor had acted for no charge and tried (unsuccessfully) to seek costs from the opponent. The court held that the solicitor was not entitled to recover costs as there was no agreement from the client to pay.
J H Milner & Son v Percy Bilton Limited [1966] 1 WLR 1985
Retainer (contract for services by the solicitor) is fundamental to the right to recover costs. No retainer equals no entitlement to recover costs from clients (and therefore no entitlement to costs inter-partes).
Is the Indemnity Principle important?
Taking into account the above cases (which remain good authorities) the indemnity principle is clearly very important and something which every contentious lawyer should have a sound knowledge and understanding of. Failure to do so can lead to serious professional consequences.
The importance of the indemnity principle is best illustrated by the case of Bailey v IBC Vehicles Limited [1998] 3 All ER 570 where the Court said that the signature of a Bill of Costs is that of an officer of the Court and that mis-certification of the Bill is a serious (disciplinary) offence.
In that case Lord Justice Henry said:
“the signature of the Bill of Costs under the rules is effectively a certificate by an officer of the Court that the receiving party’s solicitors are not seeking to recover in relation to any item more than they have agreed to charge under a contentious business agreement. The Court can (and should unless there is evidence to the contrary) assume that his signature to the Bill of Costs shows that the indemnity principle has not been offended”.
When lawyers sign costs budgets, statements of costs for summary assessment and Bills of Costs it is therefore fundamentally important to ensure that there is no breach of the indemnity principle.
I am now going to consider two recent cases regarding the indemnity principle:
Gempride v Jagjit Bamrah & Law Lords of London Limited [2018] EWCA CIV 1367
In this matter, the receiving party’s bill of costs claimed hourly rates higher than those which the client had agreed to pay their solicitor within the retainer. Furthermore, misleading information was provided in Replies to Points of Dispute in respect of the availability of before the event insurance.
The matter proceeded to the Court of Appeal where the Court imposed a penalty for the mis-certification of the Bill of 50% (Part 1 of the Bill of Costs only). Whilst the penalty in the end was not too severe, the real damage for the law firm was to its reputation.
HMRC v Gardiner and Others [2018] EWHC 1716 (QB)
This matter related to an appeal by HMRC in respect of an order for them to pay the Respondents’ costs in tax appeal proceedings. The Respondents were amongst several tax payers challenging penalties imposed by HMRC for incorrect tax returns.
The Respondent’s tax advisors were at the forefront of the work carried out. Counsel was instructed to represent the Respondents and the fees were paid by their tax advisors. HMRC alleged a breach of the indemnity principle (no direct retainer). That argument failed and the key points were as:
- There was never an agreement that the Respondents would never pay Counsel’s fees;
- Counsel was there to represent the Respondents, not their advisors;
- No difference to a trade union funding arrangement; and
- The key is a liability to pay (the Respondents were liable to pay the fees that were incurred, but the tax advisors paid them).This is a useful case to rely on where costs have been paid by a third party and a challenge is raised that there has been a breach of the indemnity principle as a result.
SummaryAs you can see from the authorities, the indemnity principle has been with us for some time. Lord Justice Jackson recommended the abolition of the indemnity principle in his Final Report in 2010. He was of the opinion that the indemnity principle caused more problems than it solved. However, in my view the indemnity principle should always be in place whilst we have a cost shifting environment in England and Wales. Otherwise, it could encourage inflated claims for costs and allow clients to profit on the costs of litigation and therefore increase claims for costs – which would be contrary to the whole purpose of the Jackson Reforms!
Do you have any views? – please feel free to share them.
This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding team. Andrew can be contacted at andrew.mcaulay@clarionsolicitors.com or on 0113 336 3334 or 07764 501252.
COSTS PAID BY A THIRD PARTY – BREACH OF THE INDEMNITY PRINCIPLE?
The case of HMRC -v- Gardiner and Others [2018] EWHC 1716 (QB) is a case concerning an alleged breach of the indemnity principle.
Background
The Respondents were amongst several tax payers challenging penalties imposed by HMRC for incorrect tax returns. EDF Tax Defence Ltd (“EDF”) were the tax advisors.
The Respondents were successful and HMRC were ordered to pay their costs.
Costs proceedings
EDF were at the forefront of the work carried out in the matter. Counsel was instructed to represent the Respondents and the fees were paid by EDF. HMRC therefore alleged a breach of the indemnity principle on the basis that the Respondents had not paid Counsel’s fees and that there was no direct retainer in place between the Respondents and Counsel.
The argument failed and the key points to note are as follows:
- There was never an agreement that the Respondent would not be liable for Counsel’s fees (see paragraph 30 of the Judgment – “The presumption that a client instructing a solicitor or representative to represent them will be liable for costs incurred for such representative may be rebutted by the paying party proving that there was a bargain between the client and the representative that under no circumstances was the client to be liable for costs”).
- Counsel represented the Respondents at the hearing, not EDF.
- The arrangement was no different to a trade union funding arrangement.
- The key for the indemnity principle is a liability to pay and not payment/discharge of the liability (see paragraph 30 of the Judgment – “It is liability to pay rather than who makes payment which is material”).
Had evidence been produced that the Respondents would never have been liable for Counsel’s fees, then the Court would have reached an alternative conclusion. This is therefore a useful case to rely on for parties seeking costs which have been met by a third party, but are facing indemnity principle challenges from a paying party.
This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs Litigation Funding Team. Andrew can be contacted at andrew.mcaulay@clarionsolicitors.com or on 0113 336 3334 or on 07764 501252.
To what extent should the Court consider the Protected Party’s capacity (and wishes) to consent to sexual relations and contraception?
The Protected Party is a young woman with learning disabilities. She previously lived with her family but took part in a number of social and community activities. Concerns were raised, by reason, of her learning difficulties. She was vulnerable to sexual exploitation, pregnancy and sexually transmitted diseases. There is evidence that she was sexually assaulted, and it was reported that the police expressed concern that the Protected Party should not be unsupervised as she appeared to be a target for sexual exploitation.
The Protected Party has two children, who are in the care of her family. A few years ago, an application was made to the court for an order that the Protected Party be sterilised. This application was aborted and the decision was made to consider a long term method of contraception instead. The other main issue was the concerns regarding the Protected Party’s protection against sexual exploitation.
The expert evidence of a consultant psychiatrist was that the Protected Party lacked mental capacity to consent to sexual relations, to consent to contraceptive treatment and to litigate. It was also recommended that the Protected Party should be supervised at all times when in the presence of sexually active men. She received further education about sexual matters and the Protected Party was to undergo the insertion under general anaesthetic of a copper inter-uterine device (IUD). It was advised that the Protected Party would be sedated, and the IUD would be inserted without her knowledge. This contraception would last for 10 years.
During a lengthy hearing in 2012, Parker J made an order in which, having declared that the Protected Party lacked capacity to litigate and to make decisions with regard to contraceptive treatment, she further declared that it was lawful for the Protected Party (with or without her agreement) to undergo the insertion of a copper coil IUD, to receive a Depo-Provera contraceptive injection, to undergo a full sexual health screen, and to be subject to proportionate restraint if necessary, including sedation. Following the hearing, the Protected Party underwent the operation for the insertion of the IUD. No reasoned judgment was given at the hearing in 2012 and, in the event, no further hearing took place for several years.
In 2016, the Local Authority made an application to restore the proceedings, to revisit the question of the Protected Party’s capacity to engage in sexual relations. The proceedings were to assess and evaluate the clinical risks to the Protected Party’s health presented to her by any further pregnancy; to revisit the Protected Party’s capacity to consent to contraceptive treatment; to re-evaluate the options for Protected Party’s contraceptive treatment in view of the fact that the IUD inserted in 2012 has a life of approximately ten years; to reassess the best interests decision not to inform her of the fact of the insertion of the IUD in the light of any improvement of her understanding; and to authorise her Deprivation of her Liberty at her placement.
Following the preparation of a report on future care support by the CHT, it was agreed that the IUD should remain in situ until the end of its natural life. A statement from the social worker set out four options:
(1) option A(i) – the IUD remains in place, the Protected Party is not informed of its existence, and care and supervision remains at its current level;
(2) option A (ii) – the IUD remains in place, the Protected Party is not informed of its existence, but the level of care and supervision is reduced;
(3) option B – the IUD is removed without informing the Protected Party and the risk of sexual exploitation is managed “through social means” with the current level of care and supervision;
(4) option C – the IUD remains in place and the Protected Party is informed of this.
Having analysed the benefits and disadvantages of these options, the social worker decided option 2 was in the Protected Party’s best interests.
At the hearing in 2017, the three principal issues between the parties were as follows:
(1) Does the Protected Party have capacity to consent to sexual relations?
(2) If she does, what steps should be authorised to facilitate the relationship between the Protected Party and her boyfriend, or between her and any other person with whom she wished to have a sexual relationship?
(3) Is the proposed relaxation in supervision in her best interests? In addition, however, it was thought appropriate for the court to review wider issues concerning her treatment, including the question of whether it should continue to be covert or whether the Protected Party should be informed about it.
In addition, however, it was thought appropriate for the court to review wider issues concerning her treatment, including the question of whether it should continue to be covert or whether the Protected Party should be informed about it. As there remain a number of details within the draft order which the parties have been unable to agree, it was necessary for the judge to make an order outlining the best interests of the Protected Party in relation to her capacity – general principles, capacity other than sexual relations, her capacity to consent to sexual relations, contraception, covert treatment and her sexual relationships and supervision.
In this case, there are a number of arguments against retaining the IUD. It is a clear infringement of the Protected Party’s human rights and freedom. Furthermore, this infringement has been brought about without her knowledge and without providing her with any opportunity to express her wishes and feelings. In her oral evidence, the Care Agency manager said that she thought that the Protected Party would not want to keep the IUD if asked. Secondly, although the Protected has not been expressly asked about her wishes and feelings concerning contraception, she has consistently said that she does not want to have a baby at this stage. It was necessary to consider the psychological harm that the Protected Party may encounter if; the IUD was removed and she became pregnant again or if the IUD was removed without sedation. In this instance, it was decided that it is in the Protected Party’s best interests for the IUD to remain in place until the end of its normal ten-year span. At that point, further careful consideration will have to be given as to what contraceptive treatment.
It was directed for the level of sexual supervision of the Protected Party and her boyfriend should be relaxed slightly and reviewed at a further hearing once this has been considered in more depth. Finally, the provisions of the order relating to the IUD plainly involve a Deprivation of Liberty. A clause was included within the order that such a deprivation is lawful.
If you have any queries, please do not hesitate to contact Georgia Clarke or the team at COPCosts@clarionsolicitors.com
INDEMNITY COSTS FOLLOWING DISCONTINUANCE OF PROCEEDINGS
CPR 38.3 provides that a Claimant may discontinue a claim by filing and serving a Notice of Discontinuance on the other parties. Under CPR 38.6(1) it states the following:
“Unless the court orders otherwise, a Claimant who discontinues is liable for the costs which a Defendant against whom the Claimant discontinues incurred on or before the date on which the Notice of Discontinuance was served…”.
Under CPR 44.9(1), such an order is a deemed order for costs and the basis of assessment is the standard basis.
The case of Two Right Feet Limited (in liquidation) -v- National Westminster Bank PLC and others is a case where the Claimant discontinued proceedings against the Defendants and the Defendants made an application for costs to be awarded on the indemnity basis due to the following issues:
- failure to engage pre-action;
- improper and unjustified allegations;
- an exaggerated claim;
- a case which was speculative (both in facts and law);
- a claim which was brought without proper investigation;
- concerns as to the approach to disclosure; and
- delayed discontinuance, other delays and more minor points.
Background
On 3 March 2015, the Claimant commenced proceedings against the Defendants. In the claim form, the Claimant alleged that the Defendants were liable for deceit and conspiracy. The claim was first notified to the First and Second Defendants on 9 June 2015 and the claim form was served on 3 July 2015. The amounts claimed amounted to £20 million. The claims were strenuously denied by the Defendants. On 7 October 2016 there was a case management conference where directions were set and the case was transferred into the Mercantile Court. Disclosure followed in January 2017, but on 22 February 2017 the Claimant discontinued its claim.
Indemnity Basis Costs Order
The Judgment provides very useful information for any party considering an application for an indemnity basis costs order as it cites the leading authorities (paragraph 36 is very useful to read in this regard).
The Judge concluded that an order for indemnity costs was appropriate and determined that the way in which the case had been advanced by the Claimant (and conducted) carried the case out of the norm, which is of course an important consideration for any court when deciding whether to award indemnity costs.
The case also highlights the importance of the receiving party (Defendants in this case) making an application. Notice of Discontinuance creates a deemed order for costs on the standard basis. Should a receiving party feel that they are entitled to indemnity basis costs then they should seek agreement with the paying party (Claimant in this case) or make an application to Court. A receiving party should not leave the matter for detailed assessment – the detailed assessment hearing is a forum to determine the quantum of costs, not to determine the basis of assessment.
This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding team. He can be contacted on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com
