Archive for the ‘News’ Category

‘There must be some way out of here – I can’t get no relief.’

Challenging-a-Bill-of-Costs

Prophetic words of Bob Dylan ( from All Along the Watch Tower) and never more so than in Venulum Property Investments Ltd v Space Architecture & Others [2013] EWHC 1242 (TCC),

This case demonstrates the approach that  court is now being obliged to take  to deadlines  under the new regime.

It also confirms the views aired recently  by the panel members at the recent Association of Costs Lawyers (ACL) national conference, where the eminent Costs Masters and Judges advised that  relief from sanction applications will be less likely to succeed  as missing of deadlines  would not be seen to be good reason.

So to save all the issues which would follow a strike out, Default Costs Certificate, etc., how to get relief?

The simplest way is to ensure that the fee earners are pre-diarising deadlines, critically within the Case management system, and act upon the reminders expediently.

When it comes to matters such as Costs Budgets, as soon as  the court notice arrives,  get the file to the Costs professionals as soon as possible – there’s a lot of work for both, them and the file handler, to do to ensure the budgets are supported with appropriate estimates from any experts to be instructed, and  the file handler needs to be planning from the start, who, why and what  may be needed for the evidence! So think ahead  (or back from) for  the deadlines, diarise and action on the reminder. 

For costs budgets think seven before the CMC, for filing and exchanging the budgets ( remember it’s a two way street and your opponent must also take action)

Then think seven days before that for the attempt to agree the budget with your opponent.

Then think a further seven days before that to ensure you have the experts’ estimates for their potential involvement.

And then allow at least a further seven days for your Costs Lawyer / Draftsman, to draft an appropriate phased costs budget  based on the information  given to him, and ensure that he is fully aware of the way  that the case is envisaged to proceed ( number and type of  witnesses, etc). Help the Costs professionals by  keeping a check on how long it takes  for your firm ( on average)  to execute certain taks such as  instructions to Counsel, or PTR preparation and advise him  with the data.

Don’t leave it until the last minute – costs budgets must be filed and exchanged not less than seven days  before the CMC, and attempts are supposed to be made to agree the budget or phases thereof with your opponent!

Miss that Costs Budget deadline, and the sanction is only the court fees will be allowed!

The message is clear to the professionals in costs, and if  the file is not passed  promptly , a poor budget to which you are tied by the court could result.     

For those who think that this may be a short lived storm in a teacup, look to Singapore where the basis of the rules evolved from.

There,  the system went from overload to very efficient within two years of implementing this type of working. 

Then again, it may be felt that  the costs professionals are running scared – those that think this, will , no doubt, need to make their applications  – and keep their fingers crossed at court!


THE LIVERPOOL ATE PREMIUM TEST CASES

In mid-2011 a number of Part 44.12A cases were received in Liverpool and from the Claim Forms it was apparent that the profit costs were agreed under either Section II or Section VI of Part 45 and disbursements were agreed save for the claimed ATE premium, either in whole or in part (and in a handful of cases the medical report fee as well).
By early September the number of such cases had become substantial and RCJ was receiving standard form letters from two defendants’ solicitors indicating that either a) they had similar cases pending in the SCCO (without identifying such cases); or b) saying they had over one hundred such cases pending and requesting a stay. He took the decision to stay all such claims with a view to setting up a number of cases to be dealt with as test cases.
In early December RCJ selected fourteen cases from those before him. Although he had little information about the policies involved, he selected a number of both Claimants’ and Defendants’ representatives with a view to securing as wide a representation of the parties’ interests as possible.

On 12th December RCJ gave directions to bring those cases to a hearing. Those directions included the following provisions:
“6. Receiving Party’s solicitors shall if so advised serve witness statements setting out their reasons for their choice of ATE policy and exhibiting the policy terms and conditions and schedule, and their understanding of the policy options available to them by 3rd February 2012.
7. Paying Party’s solicitors/insurers shall if so advised serve witness statements setting out details of any policies they consider appropriate and their terms and conditions by 3rd February 2012.
10. Any party is at liberty to apply in writing for reconsideration of the above directions by 6th January 2012”.

At the same time RCJ issued a further note in which he said:
“ . . . I am also anxious that as many issues as possible can be dealt with at the same time. As far as I am aware the principal potential issues are
a) whether it is reasonable for a Receiving Party to use a block rated policy when cheaper individually rated policies are available;
b) whether the use of staged premium policies is reasonable or necessary; and
c) whether in Protocol cases there is a need for an ATE policy before Stage 3 given the minimal risk of the Claimant not recovering costs.”

On the basis of the Claimant and Defendant’s representatives’ submissions RCJ made the following obserevations:-
General considerations
These type of cases must be dealt with having regard to Part 44.4 (1).( The court will not allow costs (which includes disbursements) which have been unreasonably incurred or are unreasonable in amount.
It was not asserted that it was unreasonable to incur ATE premiums in these cases – the argument is primarily as to the timing of the decision and the choice of policy.
The timing of the decision as to funding
RCJ considered in line with Callery (No. 1) and that these principles apply as much to Protocol cases as any other, and it was reasonable to enter into the funding arrangements when the Claimants did, which in these cases was at the first instruction of their solicitors.
He was ‘‘fortified ‘by the fact that the staged premium policies are designed to be used throughout the Protocol process, not just after Stage 1 or Stage 2.’
The choice of policy
RCJ considered the guidance from Callery (No. 1) (that the premium must be a reasonable one). Staged premium policies were also considered as in Rogers.
The evidence in these cases was that the average single premium fell roughly between £350 and £450. The staged policies had a range of stage 2 (or B) premiums after exit from the Protocol but before issue of between £350 and £544.50. It was observed that there was little difference between the two models at this point.
On that basis, there was no “right or wrong” decisions made. Both single premium and staged premium policies were legitimate
RCJ also made observations on the ‘commercial reality’ that solicitors consider policies and providers available and generally restrict themselves to one or two providers.
Conclusion
RCJ held ‘Claimant and his solicitor are entitled to choose either a single premium policy or one with staged premiums. Either is permissible; neither can properly be said to be unreasonable, if taken out at the outset.’
This Decision should now pave the way to settlement of thousands of cases currently stayed by the ATE issues particularly in the light of the SCCO decision in Phillips v. Whiddett ( Master Leonard, 2November 2011, SCCO Ref:1104738)


Judgement handed down 16th February 2012 to applause interest remains recoverable!

Simcoe v Jacuzzi Group UK Plc

The Court of Appeal has now handed down Judgment in the case of Simcoe v Jacuzzi Group UK PLC and after considerable debate and some controversial decisions that brought into question years of established practice the Court have finally brought clarity to the issue of whether or not interest is recoverable from the date of the authority giving rise to costs as opposed to the date of the final costs certificate.

Firstly, CPR Part 40.8(1) is ultra vires in the County Court and has no application to County Court proceedings. Accordingly, there no discretion for a judge in the County Court to “order otherwise”. Secondly, the incipitur rule applies by force of secondary legislation and interest on costs runs from the date of the costs order. Thirdly, regardless of the ultra vires point, the incipitur rule remains the ‘normal rule’ and the starting point for interest runs from the date of the costs order.

The Court of Appeal also clarified a much vaunted argument by Defendants that the Claimant is not ‘out of pocket’ in any event. The Court found the fact a Claimant’s claim may be funded under a CFA and the Claimant is not ‘out of pocket’ is not a good reason to “order otherwise”. When the case has been ‘funded’ by someone – be it (in effect) the solicitor or a third party funder there is no reason not to award interest and any suggestion of a windfall is addressed by interest being payable by the Claimant to the funding party.


Prime Legal Growth

Prime Legal Grows

Well what a busy Christmas we’ve had here at Prime Legal, in the run up to Christmas we have been fortunate to secure more space on site at our existing offices.  Nevertheless, the holiday period saw intense activity getting the offices ready for a New Year start. We have had an entirely new IT system and phones installed, in true PLC spirit we were even in at 6am on New Year’s Day.

December also brought us a round of interviews for our planned expansion and have recruited a further 3 staff from leading Legal250 firms to complement our existing team, now with a good balance of claimant and defendant experience which should assist our competitive edge.

Our address and telephone numbers remain unchanged albeit with an additional line which will feature on our new letter head coming to a mailbox near you. We wish you well for the New Year and look forward to speaking with you over the coming weeks. PLCed.


One Way or Another…Qualified One-way Cost Shifting

Qualified One-way Costs Shifting or QOCS would be the method used to apportion the costs of civil litigation initially in Personal Injury Claims.

Currently two way costs shifting rules are in application, the introduction of QOCS would result in the Defendant being liable to pay the Claimants costs even if the Claimant loses; and in addition to their own costs. The Claimant would only pay the Defendants costs should the court impose a discretionary Costs Order against them. Discretionary orders will be available in certain circumstances when the Claimants conduct will be considered at the conclusion of proceedings. The issue of offers made under CPR Part 36 must be one such circumstance under review.

In essence the court would have jurisdiction to award costs based on the conduct of the parties, conduct encapsulates simply whether or not there have been reasonable attempts to settle the proceedings. Jackson says implementation of QOCS would be ‘cheaper’ for the Defendants than the rule as it currently stands and it would reduce the risk on Claimants.

Jackson also recommends success fees and ATE Premiums are no longer recoverable and must be a cost born by the claimant. In practical terms the Claimant would no longer necessarily need to purchase ATE products in conditional fee cases resulting in a substantial Defendant cost saving. Instead premiums will be deducted from damages payable if they are utilised. In relation to the success fee this would also be payable by the Claimant from any award of damages made.

The a foregoing certainly addresses long standing Judicial concern about Civil Litigation costs being excessive and disproportionate. The Law Society has voiced concern over further eroding access to justice; increased business operating costs and resulting in a de facto windfall for insurers.

Many Claimants will stand to lose a substantial portion of their damages. Lawyers will think twice about taking on high risk/lower value claims unless the means justify the rewards. The net result being Litigation moves inexorably closer to a contingent fee based system all the signs point in this direction.


To Tweet or not to Tweet the Immortal Question

Well all the talk at the moment is Jackson; ABS’s and the will they won’t they on making the referral fee a criminal or regulatory offence. An impact statement from the MoJ is due out this week. Professional buck passing the highest level. I have read so many interesting tweets of late that made me realise the power and importance of the social media interface.

You are getting news as it happens, whilst its even in the thought process of the individual, the candid outbursts are real and in the main unregulated like so many sanitised press releases. What I’m getting at is harnessing the social media and being able to deliver important information on legal costs as it happens.

In short we are now on facebook and twitter and recommend you follow us to take advantage of key information that we will pass to you as it comes to us. Join us on our social media adventure it is not all about costs, and there will be the odd frivolous and light hearted moment in the deep dark times of austerity.


The Dangerous Fees Act 2011

October 2011

The Dangerous Fees Act 2011 By Neil Rose Editor, Legal Futures

A senior figure in the world of legal regulation has described to me the impending effort to ban referral fees as the Dangerous Fees Act, recalling the infamously half-baked and kneejerk Dangerous Dogs Act 1991.

It had become increasingly clear, since Jack Straw’s intervention in June, that government support for a ban had warmed up significantly. Saying that, justice minister Jonathan Djanogly appeared on the Today programme the day after Mr Straw began his campaign, and observed that “banning anything is not necessarily going to solve the problem. It will find another route”.

Privately, the Ministry of Justice (MoJ) knows this. Announcing a ban is for show and for headlines. It is politics, not policy. If ministers really want rid of claims management companies, then ban them, not referral fees. But they know they can’t do that, because these businesses will just become alternative business structures and do the whole case themselves, a move that was likely anyway but that this announcement will surely speed up.

Ministers clearly don’t have a philosophical problem with referral fees or they would stop them in conveyancing as well. The Legal Services Board, after all, found no regulatory case for banning them (it explicitly did not consider the public policy arguments). Short of scrapping claims farmers, restricting advertising would be a more effective way of clamping down on the industry.

It is accepted that defining referral fees in such a way as to catch every arrangement an imaginative solicitor or claims manager can dream up is nigh-on impossible.

It will stop the upfront referral fee, but there are many ways to skin this particular cat. Indeed, the notes to editors in the MoJ press release begins by saying: “Please note there is no universally recognised definition of ‘referral fees’.” Good luck with trying to find one.

Is a solicitor who outsources to another company all of his personal injury marketing, as well as preliminary work like accident investigation and witness statements, caught by the ban when he pays for those services? Why should a solicitor not be able to do that? Is the government going to ban outsourcing? These questions become sharper given that justice secretary Ken Clarke has indicated the ban is likely to take the form of a criminal, rather than regulatory, offence.

The MoJ also recognises that the ban is no silver bullet; it remains focused on reducing the amount of money in the system that allows fat referral fees to be paid, and the announcement frankly offers little hope to campaigners that the Jackson reforms can be derailed.

The language of the government announcement will make claimant lawyers despair. In explaining how referral fees work, the press release begins: “You have an accident and you are induced through a TV advert or SMS text message to make a ‘no-win, no-fee’ claim.” Implicit in this is the suggestion that a claim should not be brought at all. It is hard to understand such a tone. Claims farmers looking to make a quick buck overplay this, but what about access to justice?

And despite all the reports over the last seven years finding there is no compensation culture, those ever-present two words help explain what has happened. It is a moot point whether the perception of a compensation culture is just as bad, because this is simply an argument the claimant lobby is destined to lose, come what may. The idea is now ingrained in the public consciousness, shamelessly encouraged by the government.

There will be many solicitors pleased with this decision, having always found paying for work distasteful. But before they rejoice too much, they should look at what is coming down the road – especially the admittedly small number which have built good PI businesses without paying referral fees. There is no gain to the insurance industry from getting shot of referral fees if fees overall don’t go down; quite the opposite, in fact, as they stand to lose substantial referral fee income of their own. The MoJ has said a ban will mean it will have to look at the level of fixed fees in the RTA portal and the predictable costs scheme for those cases that fall out of the portal.

Speaking in Parliament recently, Mr Straw said processing claims through the RTA portal “costs the law firm no more than £100 in staff time to operate. The flat fee is £1,200, so even if a firm pays a £650 introduction fee it can make exorbitant profits”. He said the fee should be cut in half to £600. The Association of Personal Injury Lawyers suggested Mr Straw was “deluded if he thinks a lawyer could possibly give advice to an injured person for £100”.

In its contentious report published shortly before the ban was announced, the Association of British Insurers effectively said that with average referral fees in motor at £800, the fee currently paid for portal cases that settle at stage 2 should fall even further, to £400: “Removing the referral fee element would enable the fixed costs to be significantly reduced – the claimant’s solicitor would receive the same as before, but up to £800 would be saved per case, reducing costs for compensators and ultimately consumers and taxpayers.”

The association also spoke approvingly of Germany, where it said comparable fixed costs are €300 (£265): “It is a system that works efficiently to deliver justice and proper compensation to claimants without adding unnecessary costs.”

One assumes insurers build marketing costs into their prices, so it is hard to see why solicitors should not be allowed to as well. The MoJ says the level of fees will ultimately be a matter of negotiation between the two sides. But I wouldn’t like to be the mediator who tries to broker an agreement on what a reasonable figure for post-ban marketing costs should be. Given how difficult it proved to set the fees first for the predictable costs scheme and then the portal, expect blood on the floor.

Side by side with this is the insurance industry’s assault on the ‘whiplash culture’, which is fast gathering pace too and could reduce the number of claims full stop. A referral fee ban was the last major recommendation of the Jackson report not taken up. It may now be that the Jackson juggernaut is unstoppable.


Costs in Infant matters

October 2011

In settlements involving infants less than £1,000.00 the defendants argue entitlement is only Small Claims Costs.  Clear disparity in recoverable costs of the costs regimes – just a few pounds either way can affect costs substantially.

In an infant case that settles below £1,000.00 it is not a small claims matter. Even if the Small claims track would be the normal track for the value of the claim, the Small claims costs do not apply. Please refer Rule 21.10(2)(b) CPR which states that Infant matters must follow the Part 8 procedure. Part 8, Rule 8.9(c) CPR states that the matter shall be allocated to the multi-track and Part 26 (allocation) does not apply. Furthermore, rule 8.9 describes itself as a modification of the general rule, which is taken to mean that it over-rides other rules.

It follows then that Multi-track costs apply and not Small Claims Costs (or even Part 45 predictive costs for that matter)

Counsel should be instructed to ask for costs to be assessed on the standard basis to be dealt with by detailed assessment if not agreed. Counsel can recover his opinion fee as being necessarily and reasonably incurred and counsel should look to Thaxton v Goodman (2010) for the recovery of his attendance fee, approved in the sum of £150.00

However, there are rumours circulating that Thaxton is to be appealed. A number of low level judgments, e.g DJ Platts decision in GW -v- BW & TA -v- RP  [2011] EW Misc 10 (CC) are becoming cited more often in support of no counsel’s fees and indeed no actual need for an Infant Approval hearing in any event.

There is some hope though, if the matter has not been settled by the Judge at Approval hearing, it is still “live.” (see Drinkall -v- Whitwood [2003] ADR LR 11/06)  Negotiate a-plenty for the correct decision as to liability for costs before the hearing and send it to costs draftsman with counsel’s carefully phrased Order after the Hearing.


Defendants refuse to pay for medical reports

September 2011

 “I’ve accepted a Part 36 offer for £500.00 and the defendants refuse to pay  for two medical reports I needed, stating inter alia CPR 27.14(f) a sum not exceeding the amount specified … for an expert’s fees””  The Small Claims Track costs do not apply.

 1. The provisions for acceptance of a Part 36 offer are found in 36.10(3)    CPR. Costs follow on the “standard basis if the amount of costs is not agreed”

 2. Further according to 27.2(1) (g) CPR, Part 36 offers do not apply to small claims in any event.

 3. Finally under 27.14(1) CPR costs on the Small Claims Track only apply when the “case … has been allocated to the small claims track” see also 44.9 CPR for confirmation as to when costs regimes effectively “bite”.

 Therefore in this scenario, costs are not just limited to a sole expert’s fee, or fixed fees for costs and witnesses. The usual tests of reasonableness of disbursements will apply and recourse to the Courts via a Part 8 application (under 44.12A CPR) should be sought (as a last resort) to resolve the matter.


Beware of Summary Assessment on Your Costs

September 2011

So you forgot to ask Counsel to request a detailed assessment; and reassured yourself it wouldn’t be too bad, after all Summary assessment can’t be that different, can it? Please take a look at the case of Tanya Grand -v- Parma Gill [2011] EWCA Civ 902. This case followed a Landlord and Tennant action on appeal. The Claimant claimed, attendances, travel and research running to 1,226.5 hours and paid disbursements of £2,700.00.

The Court following Summary Assessment awarded a modest £703.77! The amounts claimed are on the face of it extreme but the lesson to be learned carries a clear warning concerning the unpredictable nature of summary assessment. Please only claim what is recoverable, reasonable and that which can be justified. Alternatively, ask counsel to request detailed assessment and pass the file to the Costs Lawyers!