Tag: Legal Costs

COSTS PAID BY A THIRD PARTY – BREACH OF THE INDEMNITY PRINCIPLE?

andrewmcaulayLeave a comment

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:

  1. 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”).
  2. Counsel represented the Respondents at the hearing, not EDF.
  3. The arrangement was no different to a trade union funding arrangement.
  4. 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.

Advertisements

To what extent should the Court consider the Protected Party’s capacity (and wishes) to consent to sexual relations and contraception?

georgiaclarkecopcostsLeave a comment

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

andrewmcaulayLeave a comment

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:

  1. failure to engage pre-action;
  2. improper and unjustified allegations;
  3. an exaggerated claim;
  4. a case which was speculative (both in facts and law);
  5. a claim which was brought without proper investigation;
  6. concerns as to the approach to disclosure; and
  7. 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

 

The format of the precedent H budget and precedent R are working well, claims Mr Justice Birss

Sue FoxLeave a comment

At February’s Civil Procedure Rules Committee meeting Mr Justice Birss reported that “work was ongoing to make certain that the new bill costs, Precedent H and Precedent H Guidance are consistent and accurate and that N260 the summary costs statement follows the same format. The content of Precedent H itself would not be changing. The Chair added that in his experience having settled down, Precedent H and R are working very well“. Therefore no changes are expected to the precedent H budget or the precedent R budget discussion report, the remaining changes relate to the bill of costs and statements of costs.

The wholesale changes to costs that we have encountered over the last 5 years were made as a result of Sir Rupert Jackson’s report whereby he likened the current bill of costs to a “Victorian style account book” making it “relatively easy for a receiving party to disguise or even hide what has gone on”. His purpose was to create transparency and unison with time recording systems and costs related documents, hence the need for the new electronic bill of costs, which is the final piece of Jackson’s jigsaw.

If the legal profession were to embrace time recording as Jackson intended, i.e. recording time in phase, task and activity, then astonishingly some 5 years after the publication of his legendary reforms, Sir Rupert Jackson may achieve his aim. However, Sir Rupert narrowly missed having his vision fully formalised and embedded into the rules during his working lifetime, his retirement has pipped him to the post.  He can now sit back and watch from afar, how his intended co-ordinated approach to costs will work in reality!

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

Non-Party Costs Orders

andrewmcaulayLeave a comment

The case of Housemaker Services & Anor -v- Cole and Anor [2017] is a useful case for any litigant or law firm considering whether to make an application for a non-party costs order.

Facts

  1. The claim was brought under CPR Part 8 for a limitation direction under Section 1028 of the Companies Act 2006. The underlying claim related to three disputed invoices rendered by the First Claimant to the Defendants. The First Claimant had subsequently been struck off the register and dissolved.
  2. The Court dismissed the claim because the First Claimant could not demonstrate that the dissolution of the company had caused the claim not to be brought, and therefore the Court declined to give a limitation direction.
  3. The Court ordered the First Claimant to pay the Defendants’ costs on the standard basis. The Defendants applied for Mr Wayne Williams, the sole director of the Claimant, to be joined as Second Claimant to the proceedings, for the purposes of making an application for a non-party costs order against him.
  4. The Court made the order joining Mr Williams (Second Claimant) and then gave further directions for the application against him to be dealt with on paper. The Judgment essentially deals with those submissions and the Courts determination of the application for a non-party costs order against Mr Williams.

Submissions of Interest/Note

  1. Mr Williams gave instructions to pursue the proceedings and appeared to have funded them. The First Claimant had no assets and it was highly unlikely that they would be able to satisfy an order for costs.
  2. In respect of a non-party costs order, a warning at the earliest opportunity should be given. The first warning of the application was made at a very late stage.
  3. There was no suggestion that proceedings were brought in bad faith, for an ulterior motive or improperly. 

    Useful Information/Comments from the Judgment

     

  • Paragraph 10 – “A decision to make a non-party costs order is exceptional, but this only means that it is outside of the ordinary run of cases. In a case where a non-party funds and controls or benefits from proceedings, it is ordinarily just to make him pay the costs, if his side is unsuccessful, because the non-party was gaining access to justice for himself, and thus can be regarded as the real party to the litigation”. (this was a general comment about non-party costs orders).

 

  • Paragraph 11 – “However, the director of a limited company is in a special position. It is not an abuse of the process for a limited company with no assets to bring a claim in good faith. It is always open to a defendant to such a claim to apply for security for costs. The mere fact that a director who controls the company’s litigation also funds the claim is not enough in the ordinary case to justify a non-party costs order against him if the company’s case fails”. 

     

  • Paragraph 12 – “A company is indeed owned by its members. But this does not mean that the shareholder is the “real” party to the claim. In law, the assets of the company (including any claim) belong to the company, and not to the members. Where the proceedings are brought in good faith and for the benefit of the company (rather than for some collateral purpose), the company is indeed the real claimant. If it were otherwise, the principle of the separate liability of the company from its members would be eroded”. 

     

  • Paragraph 13 – “Moreover, it is not an unusual thing, let alone wrong, that a director who is a shareholder of a company and who funds the company’s claim will ultimately benefit from it if it is successful. It is simply a consequence of the policies adopted by our company law, allowing businessmen to take some risks in seeking profit without incurring unlimited liability”. 

     

  • Paragraph 14 – “A person choosing to deal voluntarily with (or to sue) a limited liability company does so against the legal background. Any potential unfairness caused to a party who is (involuntarily) sued by such a company is remedied by the security for costs jurisdiction”. 

     

  • Paragraph 15 – “Accordingly, in order to make it just to order a director to pay the costs of unsuccessful company litigation, it is necessary to show something more. This might be, for example, that the claim is not made in good faith, or for the benefit of the company or it might be that the claim has been improperly conducted by the director”. 


    Conclusion     

    The Court decided that this was not a case where non-party costs order should be made. The Court did not find that the behaviour of Mr Williams in controlling, funding and ultimately hoping to benefit from the claim went beyond the ordinary case of the director and shareholder of a company pursuing a legal claim (paragraph 22). 

    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.

Pre 1.4.13 CFA – Advocacy or Litigation services provided OR not?

andrewmcaulayLeave a comment

The recent case of Choudhury -v- Markerstudy could have serious repercussions for receiving parties in Detailed Assessments.  Here is a brief summary of the case:

  • Rohan Choudhury (a child) suffered an accident on 12 March 2013. Rohan was a minor and was therefore represented by her Mother, Mrs Choudhury.
  • An Infant Approval hearing took place in January 2015, where the Court approved a settlement figure of £1,050.00.
  • The Claimant was represented by Irwin Mitchell solicitors, who at the time of instruction, were acting under a Collective Conditional Fee Agreement (CCFA) with Aviva.
  • Following the accident Aviva wrote to the Claimant, and thereafter, Irwin Mitchell wrote to the Claimant explaining the terms in which they would be retained. Those letters were sent before 1 April 2013, but no other work was carried out.
  • Mrs Choudhury instructed Irwin Mitchell by signing a document on 1 April 2013 and returning it. The document that she signed was the pre 1 April 2013 CCFA.
  • The Defendant argued that the retainer was invalid because it was signed and entered into on 1 April 2013, but was based on a regime which on 1 April 2013, was no longer available to litigants (and therefore invalid).
  • The Claimant stated that this was incorrect because ‘Advocacy or litigation Services were provided to the Claimant under the agreement in connection with that matter before the commencement day’ (Section 44.6, 6b of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 – ‘LASPO’).
  • The Court ruled that ‘Advocacy or litigation services’ had not been provided and therefore the retainer was invalid. As a consequence, no costs were payable by the Defendant to the Claimant as there was no indemnity between the Claimant and the Claimants Solicitors.

The District Judge clearly adopted a strict interpretation of LASPO and what amounts to ‘Advocacy and litigation services’. The paying party did not dispute that if litigation services had been provided then the retainer would have been valid.

This Judgment will no doubt cause concern to receiving parties.  Whilst the Judgment is only at County Court level, it will encourage paying parties to raise such arguments. There will still be plenty of cases left in the system where the additional liabilities were entered into very close to 1 April 2013.  In fact, it was widely reported in many legal publications (at the time) that law firms had signed up clients to Conditional Fee Agreements, and in particular ATE insurance, very close to the deadline of 1 April 2013.

Many believe that a black and white approach should be adopted in relation to the inception i.e. if the additional liability was incepted pre 1 April 2013 then it is valid and the associated additional liability recoverable, however, if it is entered into post 1 April 2013 then the additional liability is not recoverable.  The issue over ‘Advocacy or litigation services’ will create some interesting arguments!

In my opinion, what law firms should have done is sent a “holding” Letter of Claim to the Opponent (or likely Opponent) prior to 1 April 2013.  Surely, this would have provided protection from the ‘Advocacy or litigation services’ point?

The key practical point from the Judgment is that the work which was done before 1 April 2013 was effectively ‘client care’ work. In reality, the case will only have an impact on clients who were signed up to CFA’s and/or ATE insurance premiums close to 1 April 2013.  For example, if a client was on a private fee paying retainer from say January 2013, but switched to a CFA retainer in late March 2013, then ‘Advocacy or litigation services’ would have most likely been provided by the time the CFA was entered. This scenario would therefore be safe from the argument.

It is widely reported that fixed costs for all fast track work and low level multi-track work will be introduced in October 2018. Those who draft the rules as to implementation need to do so carefully as otherwise arguments and satellite litigation will take place.

This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding. He can be contacted on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com.

 

THE NEW TEST OF PROPORTIONALITY – 66% REDUCTION!

andrewmcaulay1 Comment

 

The recent case of Rezek-Clarke -v- Moorfields Eye Hospital is another example of how the new test of proportionality is being applied and the impact it is having on the receiving parties’ claims for costs.

This case related to a low value medical negligence claim.  The Claimant instructed his solicitors on 31 July 2013 and letters of claim were sent to the proposed Defendants on 20 June 2014. The Defendant admitted liability on 14 November 2014, but denied causation.  Proceedings were issued against the Defendant on 1 October 2014 (mainly due to impending limitation issues).

The claim, at best, was worth £5,000.00 and was compromised on 8 July 2015 for £3,250.00.

On 29 October 2015, the Claimant’s solicitors commenced Detailed Assessment Proceedings.  The bill of costs for detailed assessment totalled £72,320.85.  The matter proceeded to a Provisional Assessment before Master Simons on 21 July 2016, where he assessed the bill and reduced this to £24,604.40. On 24 August 2016, the Claimant requested an oral hearing in relation to the provisional assessment and that oral assessment took place on 10 January 2017.

The judgment dealt solely with the issues of proportionality and the ATE insurance premium. The Master did make some increases (to other items within the bill of costs) to what he originally allowed on Provisional Assessment, however, these other items/issues that were heard at the oral hearing did not form part of the judgment.

The key points which arose from the judgment are as follows:

Proportionality

At paragraph 19 the Master referred to the well-known case of Jefferson -v- National Freight Carriers Plc [2001] EWCA Civ 2082 where HHJ Bolton said the following:

“In modern litigation, with the emphasis on proportionality, it is necessary for parties to make an assessment at the outset of the likely value of the claim and its importance and complexity, and then to plan in advance the necessary work, the appropriate level of person to carry out the work, the overall time which will be necessary and appropriate to spend on the various stages in bringing the action to trial, and the likely overall cost. While it is not unusual for costs to exceed the amount in issue, it is, in the context of modern litigation such as the present case, one reason for seeking to kerb the amount of work done, and the cost by reference to the need for proportionality”.

Master Simons, in his judgment, seemed to be critical of the Claimant’s solicitors inability to be able to produce any evidence to support any case planning or consideration regarding the appropriate costs to be incurred (taking into account the fact that the claim was always going to be of a low value).  Looking at this point from a practical perspective, it seems logical for any Claimant solicitor, as a matter of course, to produce a case plan from the outset of a case together with a skeleton costs budget.  Documentation (evidence) of this nature could prove invaluable when trying to demonstrate to a Master or Costs Judge that case planning and consideration did take place. In the absence of such evidence the receiving party could be left in a more vulnerable position, particularly in low value claims where costs are globally disproportionate.

Furthermore, Master Simons ruled that the new test for proportionality does apply to liabilities incurred post 1 April 2013. In this case the ATE insurance premium was one which is still allowed under the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No. 2) Regulations 2013). This contradicts the decisions of Master Rowley in King v Basildon and of Master Brown in Murrells v Cambridge University. However, it is consistent with the decision of Master Saker in BNM v MGN.

What is abundantly clear is there is disagreement at the Senior Court Costs Office as to the application of the new test of proportionality in relation to post 1 April 2013 additional liabilities and clarity is required to ensure that any confusion is avoided.

ATE Insurance Premium

The ATE premium totalled £31,976.49. On Provisional Assessment, the Master reduced the premium to £2,120.00 (a reduction of circa. 93%).  This was reduced on the basis of proportionality.

The Claimant’s solicitors made the usual submissions in relation to ATE premiums and relied on the well-known case of Rogers v Merthyr Tydfil County Borough Council. However, Master Simons ruled that the case was distinguishable from ‘Rogers’ as ‘Rogers’ was decided pre-LASPO.  Paragraph 64 of the Judgment is useful to read in relation to this point, but essentially it explains that the test of proportionality was fundamentally different when the ‘Rogers’ case was decided. In ‘Rogers’ the Court concluded that if it was necessary to incur an ATE insurance premium, then it should be adjudged a proportionate expense.  However, now proportionality trumps necessity.  No doubt the ATE insurance market had some tears in their eyes when they read this paragraph of the judgment as it will no doubt cause challenges to those ATE insurance premiums which remain in the system.

Another interesting point made was at paragraph 67 of the judgment where the Master made a comment in relation to the calculation of an ATE insurance premium:

“……As the premium is deferred, surely the basis of calculation should be on the reasonable amount of the fees for the medical reports, not the actual cost…….”.

The Master therefore felt that the premium should be calculated taking into account the amount allowed on assessment and not the claimed amount.  I suspect such an approach would receive some real opposition from the ATE insurance market, as ATE insurers pay the claimed amount to experts if the claim fails.

Another interesting point is made further on in paragraph 67:

“……Furthermore, it is often the case that the fee claimed for a medical report includes the fee charged by a medical agency.  I query whether any attempt is made by solicitors or the insurers when calculating the premium, to distinguish between the actual cost of the report and the fee paid to the medical agency……”.

Clearly, for those acting for paying parties, there are some useful questions and points to raise in relation to post 1 April 2013 ATE insurance premiums following this judgment.

Preparation of the bill of costs

A separate point raised in the submissions regarding the ATE insurance premium was the calculation of the premium and in turn, the preparation of the bill of costs.  This was quite a serious point and demonstrates the importance of preparing accurate bills of costs for detailed assessment.  The premium was claimed at £31,976.49, but during the oral detailed assessment hearing, the receiving party explained that the premium had been calculated incorrectly, and that the correct amount was £22,255.23.  However, the Claimant could not provide an explanation regarding why there had been an error in the calculation and (more importantly), why the bill of costs had been certified as accurate and true when it contained such a substantial error (the error being £9,721.26).

This did seem to trouble the Master and paragraphs 61, 62 and 63 are useful to read in this regard.  The Master raised concerns regarding the lack of evidence that had been provided to support the correct level of the premium. The methodology in calculating the premium at £22,225.23 was based on witness evidence. The only evidence in front of the Master was a Schedule of Insurance which showed a premium of £30,916.50, and therefore the failure to include the correct (or evidence the correct) premium in the bill of costs caused some real prejudice to the Claimant.  At paragraph 63, Master Simons stated that he would have been justified in disallowing the premium in full.

This demonstrates the importance of preparing accurate bills of costs and ensuring that each item is correct before a bill is signed and detailed assessment proceedings are commenced. The premium was claimed incorrectly and even when the error was identified the Claimant failed to explain how the new and correct figure was calculated. This failure could not have helped the Claimant in their submissions that the premium was proportionate or support their arguments that the drastic reduction at provisional assessment was incorrect.

Summary

The real headline point that can be taken from this case is how the courts are approaching the application of the new test of proportionality to additional liabilities. This case further adds to the current confusion as to how the new test of proportionality is to be applied in relation to post 1 April 2013 additional liabilities.  Hopefully, by the end of the year we should have clarity as the Court of Appeal is due to look at the matter at some point in October.  Until then, we should all expect a mixed bag of outcomes (or adjournments) on detailed assessment from the different Masters and Costs Judges all around the country!

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 on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com.