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England and Wales High Court (Senior Courts Costs Office) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Surrey v Barnet & Chase Farm Hospitals NHS Trust [2015] EWHC B16 (Costs) (10 August 2015) URL: https://www.bailii.org/ew/cases/EWHC/Costs/2015/B16.html Cite as: [2015] EWHC B16 (Costs) |
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SENIOR COURTS COSTS OFFICE
Royal Courts of Justice London, WC2A 2LL |
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B e f o r e :
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Kai Surrey (by his Mother and Litigation Friend Amy Surrey) |
Claimant |
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- and - |
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Defendant |
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Alexander Hutton QC (instructed by Acumension) for the Defendant
Hearing dates: 4th and 5th June 2015
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Crown Copyright ©
Master Rowley:
Background
9 January 2006 – legal aid certificate granted
10 February 2012 – round table meeting at which liability was agreed
21 March 2012 – court approval of agreement on liability
26 March 2012 – liability trial due to start
15 March 2013 – legal aid certificate discharged
21 March 2013 – CFA entered into between claimant and Irwin Mitchell
22 March 2013 – After the Event ("ATE") policy taken out by the claimant with Allianz
29 August 2013 – round table meeting at which quantum was agreed
4 November 2013 – court approval of damages
Ms Stanford-Tuck's evidence
"…there was likely to be sufficient cover to fund all of my cases until conclusion, including a trial or assessment of damages hearing. If it was considered by the fee earner that there was to be any future, potential difficulty with the funding of the case until conclusion; and further if the fee earner felt the Claimant would be in a better position with a CFA with ATE funding, then the advice was that funding should be switched in advance of 1 April 2013, in order to avoid the potential adverse affects of LASPO."
"8. This was a complex, high value case with up to 15 experts. At the time of the funding review, liability was admitted and judgment had been entered for the Claimant. I was working to quantify the case ready for service of the final, quantum expert evidence, witness evidence and Schedule of Loss.
9. A Round Table Meeting was set for 26 July 2013 and an Assessment of Damages Hearing had been listed to commence on 28 October 2013. I had concerns that should negotiations fail at the Round Table Meeting, then there was currently no guarantee that the Legal Aid Agency would increase the reserve to a sufficient level to fund the disbursements and profit costs for an Assessment of Damages hearing. There is never any guarantee that the Legal Aid Agency will provide the cost limitations to fund the life of any case. Based on this previous experience, I was therefore unable to guarantee the client that the Legal Aid Agency would provide sufficient funding should the matter proceed to an Assessment of Damages hearing.
10. Had this concern arisen after April 2013, then I would have been left with no choice but to switch funding to a post LASPO CFA. A post LASPO CFA would result in my client recovering a lower level of damages, than had the claim been funded by a pre LASPO CFA.
11. Further, if the Legal Aid Agency had refused to increase the reserve for the Assessment of Damages hearing, and we had not switched funding to a CFA, then the client or Irwin Mitchell would have been exposed to unrecoverable disbursements and profit costs following the Assessment of Damages hearing. There was a risk to the client that there may not be sufficient funding to cover the cost of our work in the future and my client could be exposed to make up the shortfall of any costs not recovered from the Defendant.
12. There were other general considerations to take into account. Over recent years, significant cuts had already been made to Legal Aid funding and it was evident that I could not guarantee that the Legal Aid Agency would continue to provide funding for the life of the claim. Further with successful Legal Aid cases, a Claimant can find that any element of the solicitor's costs and disbursements which have not been recovered from the Defendant, may be payable and owed by them under the "statutory charge".
13. Legal Aid Agency funding does not protect a client's damages from the effects of failing to beat a Part 36 Offer. In such circumstances the client may be liable for such costs and these could be deducted from the damages, together with our own costs, incurred after the date which the opponent's offer should have been accepted. It also does not protect against the impact of any interlocutory or general adverse costs orders, which again could result in costs being deducted from the Claimant's damages. The same deductions would not be made under the terms of the CFA.
14. In order to avoid the risks stated above and avoid the effects of a post April 2013 CFA, I advised the Litigation Friend to switch funding to protect their position. The client was made aware of the changes coming into force in April 2013 and was advised of the advantages and disadvantages of switching funding to a CFA. At this stage, as there had not been a Part 36 offer we were able to offer the client a CFA on a guaranteed "no cost to you" basis which would fully fund all of the disbursements up to and including an Assessment of Damages hearing. The ATE insurance would also protect them against all of the risks in terms of exposure to costs due to Part 36 offers and interlocutory matters. This combination meant that the client would not have to make any payments for costs at the time, or out of damages recovered, and I could guarantee that there would be a sufficient funding retainer in place to cover all costs up to and including an Assessment of Damages hearing.
15. Further, due to the fact it was a "no cost, to you" CFA, I could guarantee the client that any shortfall in costs not recovered from the Defendant, would not be charged to the client, provided they comply with the conditions of the CFA, The costs would simply be written off. Therefore the risk of the "statutory charge" was eliminated."
The letter seeking to discharge the certificate
"Without sufficient Public Funding to cover the cost of our work, our client is exposed to make up the shortfall in any costs not recovered from the Defendant. This is clearly not in our client's best interests when there are alternative methods of funding available.
In addition, as we enter into litigation, it must be borne in mind that LSC funding does not protect a client's damages from the effects of failing to beat a Defendant's Part 36 offer. In such circumstances the client may be liable to pay the opponent's costs as these would normally have been deducted from damages, together with our own costs incurred after the date which the opponent's offer should have been accepted.
In our opinion, where there is insufficient public funding, it is in our client's best interests to have an alternative funding arrangement in place. In this case the most suitable would be a Conditional Fee Agreement with an After The Event insurance policy, which provides no risk of our client incurring costs or deductions from her compensation. We have advised our client's Litigation Friend of the same.
Our difficulty comes with the changes in the rules governing the recoverability of ATE insurance premiums from Defendants in successful claims that come in to force on 1 April 2013. If our client enters into a CFA after 1 April 2013 and her case is successful, then the ATE premium would not be recoverable from the Defendants and would leave her exposed to paying for it from her compensation. It is therefore crucial to enter into a CFA prior to 1 April 2013 in order to protect our client's funding position and to prevent her paying for the ATE premium."
The relevant law
"11.7 Subject to paragraph 17.8(2), when the court is considering the factors to be taken into account in assessing an additional liability, it will have regard to the facts and circumstances as they reasonably appeared to the solicitor or counsel when the funding arrangement was entered into and at the time of any variation of the arrangement.
11.8(1) In deciding whether a percentage increase is reasonable relevant factors to be taken into account may include:--
(a) the risk that the circumstances in which the costs, fees or expenses would be payable might or might not occur;
(b) the legal representative's liability for any disbursements,
(c) what other methods of financing the costs were available to the receiving party."
"The overriding principle is that the claimant, assisted by his/her solicitor, should act in a manner that is reasonable."
Parties' submissions
Using Legal Aid
Recoverability of claimant's own costs
"In general, in my opinion, interlocutory costs incurred in the progress of an action to trial and ordered to be paid by a plaintiff to a defendant would in equity impeach the right of the plaintiff to recover from the defendant costs of the action ordered to be paid by the defendant. A set-off of costs against costs, when all are incurred in the prosecution or defence of the same action, seems so natural and equitable as not to need any special justification. I would expect a party objecting to the set-off to give some special reason for the objection. It is, in my opinion, less obvious that a set-off of costs against damages would always be justified."
"Set-off of costs or damages to which one party is entitled against costs or damages to which another party is entitled depends upon the application of the equitable criterion I have endeavoured to express. It was treated by May J in Currie & Co v Law Society [1977] QB 990, 1000, as a 'question for the court's discretion'. It is possible to regard all questions regarding costs as being subject to the statutory discretion conferred on the court by s51 of the [Senior Courts] Act 1981. But I would not have thought that a set-off of damages against damages could properly be described as a discretionary matter, nor that a set-off of costs against damages could be so described."
LASPO
"20. Accordingly, we take the opportunity to declare that, with effect from 1 April 2013, the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, or (v) mental distress, will be 10% higher than previously, unless the claimant falls within section 44(6) of LASPO. It therefore follows that, if the action now under appeal had been the subject of a judgment after 1 April 2013, then (unless the claimant had entered into a CFA before that date) the proper award of general damages would be 10% higher than that agreed in this case, namely £22,000 rather than £20,000".
Decision
"I am unable to accept that a choice must be unreasonable if it is not made on the best available information. I think one has to consider…whether the choice was reasonable in all the circumstances. It is…possible to make the right choice for, here, not so much the wrong reasons as an incomplete set of reasons."
"An adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo, and her consent must be obtained before treatment interfering with her bodily integrity is undertaken. The doctor is therefore under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments. The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient's position would be likely to attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it.
Hourly Rates
Grade of fee earner | GHR | Rate Claimed |
A | 276 - 317 | 375 - 390 |
B | 210 - 242 | 304 - 320 |
C | 171 - 196 | 275 - 290 |
D | 110 - 126 | 130 - 150 |
Grade of fee earner | Rate allowed |
A | 2006 - 2009 = £350 2010 onwards = £375 |
B | 2006 - 2009 = £270 |
C | 2006 - 2009 = £220 2010 onwards = £250 |
D | 2006 - 2009 = £120 2010 onwards = £130 |
Level of success fee
Level of ATE premium