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You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Law v Liverpool City Council [2005] EWHC 90020 (Costs) (10 May 2005) URL: https://www.bailii.org/ew/cases/EWHC/Costs/2005/90020.html Cite as: [2005] EWHC 90020 (Costs) |
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35 Vernon Street
Liverpool L2 2 BX
B e f o r e :
BETWEEN:
____________________
PHILLIP LAW |
Claimant |
|
- and - |
||
LIVERPOOL CITY COUNCIL |
Defendant |
|
And |
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BERRYBRIDGE HOUSING ASSOCIATION |
____________________
Compril Limited
14J Queensway House
East Middlesbrough Industrial Estate
Middlesbrough
TS3 8TF
Telephone 01642 232324
Facsimile 01642244001
MR WELLS, COUNSEL APPEARED FOR THE SECOND DEFENDANT
____________________
Crown Copyright ©
HIS HONOUR JUDGE STEWART:
"(1) Held there was no valid CFA governing the works done by the claimant's solicitors in the claim against the second defendants, but there was a valid retainer;
(2) The second defendant do pay the claimant's costs from 1st September 2004; the costs if obtained of medical evidence and other costs incurred in the, (should be "generic" not "genetic") claim, but first defendant do pay claimant's costs wasted by their failure to notify the claimant's solicitors of the second defendant's involvement before 1st September "04. All these costs to be subject to detailed assessment in default of agreement.
(3) No order as to today's costs;
(4) Leave to appeal refused. "
"7. Mr Williams has rightly pointed out the the issue is a contractual issue; so what is the contract? It seems to me the contract must be the contract entered into on 28th March 2003. There is no: other subsequent contract relating to a CFA. Now that contract is to govern a claim made by Irvings on behalf of William with the help of his father, Philip Law, Litigation Friend against Liverpool City Council. It does not say, ' or any other party to whom proceedings will have to be brought'. It seems to me at the time the agreement was entered into it was in the contemplation of both parties that a claim had been brought against Liverpool City Council and at that stage no one else. There is no amendment by way of letter or by fresh agreement to cover Berrybridge Housing Association Ltd when they had been identified as a potential second defendant.
8. In that context I am urged by Mr Williams applying dicta of Lord Hoffman in ISC LTD v West Bromwich Building Society [1998] 1 WLR 896; in particular his comments at pages 912 and 913 of the WLR to look at the intention of the parties to look at what they intended to cover and give the words their natural ordinary meaning" My difficulties so far as the claimant's arguments is concerned is that if one gives the words, 'you are claiming against the City Council for damages for personal injuries' their natural meaning is to cover a claim against that defendant and that
9. Taking on board what Lord Hoffman said and bearing in mind that we have moved away from the old nit-picking approach in relation to commercial documents, I regret that I cannot accede to the claimant's argument that the conditional fee agreement in front of me at the moment covered work done in suing the second defendants.
10. I am grateful to Mr Williams also for the arguments put forward in relation to King v Victoria Insurance Co [1896] AC 250 but I consider the law on CFA's is effectively governed by statute. Statute requires there to be an agreement the construction I have given as to the agreement as to a CFA which concerns or names the second defendants. Therefore there is no CFA agreement in relation to the second defendants, therefore the arguments in King v Victoria Insurance Co do not apply. It therefore seems to me there is no CFA against the second defendants.
11. The second issue is whether or not there is a retainer from the claimants where they wish to carry on the claim against the second defendants. I have not seen any correspondence but I accept what has been said on behalf of counsel for the claimant's solicitors that instructions would have been sought from the claimants before the second defendants were added and that instructions would have been sought from the claimant thereafter from his father - the father more than the son because of the age of the son - on the ongoing case and whether any offers should be accepted. I think therefore that there must have been a retainer with implied terms as to payment. Payment would be the payment obviously without any success fee because there could not be a success in this situation but at the charging rate set out for work done in the original agreement.
12. I therefore conclude on that basis that there was a solicitor and client retainer but no CFA covering the work done by Irvings for the claimant as against the second defendants which will mean that insofar as the second defendants are found liable for breach of the indemnity principle on the part of the claimant's solicitors and they are entitled to costs but obviously no success fee because there is no CFA."
"A contract required by law to be made in or evidenced by writing can only be varied by writing".
The question therefore is whether at the time of the making of the agreement it was the intention of the parties that the CFA agreement could or would cover a claim against a party other than the first defendant and in particular the second defendant.
"Object of Construction.
The object of all construction of the terms of a written agreement is to discover there from the intention of the parties to the agreement.....
The Intention of the Parties,
The task of ascertaining the intention of the parties must be approached objectively, the question is not what one or other of the parties meant or understood by the words used but "the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract". The cardinal presumption is that the parties have intended what they have in fact said. So that their words must be construed as they stand. That is to say that the meaning of the document or of a particular part of it is to be sought in the document itself. "One must consider the meaning of the words used not what one may guess to be the intention of the parties". However, this is not to say that the meaning of the words in a written document must be ascertained by reference to the words of the document alone, in the modern law the Court will in principle look at all the circumstances surrounding the making of the contract which would assist in determining how the language of the document would have been understood by a reasonable man."
"It is of course true that the law is not concerned with the speaker's subjective intentions but the notion that the law's concern is therefore with the 'meaning of his words conceals the important ambiguity. The ambiguity lies in a failure to distinguish between the meaning of words and the question of what would be understood as the meaning of a person who uses words. The meaning of words as they would appear in a dictionary and the effects of their syntactical arrangement as it would appear in a grammar is part of the material which we use to understand the speaker's utterance. But it is only a part; another part is our knowledge of the background against which the utterance was made. It is that background which enables us, not only to choose the intended meaning when a word has more than one dictionary meaning, but also.... to understand the speaker's meaning often without ambiguity when he has used the wrong words".
"Such documents are interpreted by Judges by the common sense principles by which any serious 'utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of 'legal' interpretation has been discarded. The principles may be summarised as follows:
i. interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably be available to the parties in the situation in which they were at the time of the contract.ii. the background most famously referred to by Lord Wilberforce as the 'matrix of fact' but this statement is if anything an understated description of what background may include. Subject to the requirement that it should have been reasonably available to the parties and the exceptions to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable msn.iii. (is not relevant.)iv. the meaning which the document (or any other utterance) would convey to a reasonable man is not the ssme thing as the meaning of the words .... the background may not merely enable the reasonable man to choose between the possible meanings: of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntaxv. the "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that parties have made linguistic mistakes particularly in formal documents. On the other hand, if one were to nevertheless conclude from the background that something must have gone wrong with the language, the law does not, require Judges:to attribute to the parties an intention which they plainly could not have had, Lord Diplock made this point more vigorously when he said in Antaios Compania Noverra SA v Salem Reteriana AB [1985] AC 191 p.201."If detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense".
(1) . If the CFA said "a claim for damages n relation to your broken leg suffered on 1st May 2005" and it turned out that the leg was not in fact broken but only badly bruised, it could no doubt be argued that there was no valid retainer in relation to a claim for a badly bruised leg, only a broken one and there was no broken leg.
(2) .If the accident was in fact on 2nd May not the 1st, one could conclude again that there was no valid retainer for a claim in respect of the accident on the 2nd. The examples could continue.
I do not accept that there is any real correlation between the point I have to decide and these very precise analogies. I am construing the relevant parts of this contract, if that sort of example comes up it would have to be the subject of a determination having heard arguments on both sides.
"Those passages in my judgment are powerful supports for the approach adopted by Master Wright in this case. When the Plaintiffs first consulted their Solicitors all they really knew was that they had bought a business that was said to be profitable but which turned out to be anything but profitable. Exactly who was responsible on any legal basis upon which they could seek redress would not necessarily be clear to them.... The plaintiff's Solicitors as in many situations would have to explore all the possibilities and their investigations would not necessarily be focused for some time on the ultimate target, or all the ultimate targets, that is not infrequently the situation in litigation. The mere fact this particular Defendant had not yet been identified cannot, in my judgment, per se, prevent costs at that stage being costs that are recoverable in subsequent litigation."
Mr Hutton makes the point in his skeleton that the purpose there of the retainer was to obtain compensation for losses suffered.
"However what the District Judge appears to have ignored is the implications of such a decision in relation to future cases. If he was correct that the CFA did not cover the claim against the Housing Association but only against the City Council then as soon as it was clear from the documents produced by the City Council that it was the Housing Association which was responsible the Solicitors would have been entitled to reach the conclusion that the claim covered by the CFA, namely that against the Council, was likely to fail. Therefore clause 7(ii) of the CFA applied so that the Solicitors could terminate the CAF immediately."
He then cites clause 7(ii) which reads:
"We can end the agreement if we believe you are unlikely to win. If this happens you will only have to pay our disbursements and these will include barrister's fees if the barrister has no conditional fee agreement with us"
He then continues:
"In other words, if the District Judge was correct, then the solicitors in a similar case would he perfectly entitled to end the agreement, bill the client immediately for all the disbursements to date (and take enforcement action if he did not pay them) and leave him high and dry in this litigation, all because it turned out during the litigation that the Council had sold on that particular housing stock. This is despite the fact that the client (in fact , a Litigation Friend) would no doubt say that it never mattered to him which organisation was liable, all he wanted was a solicitor to help him to obtain damages for his son. Whoever might end up being liable to pay them he would be stuck with no solicitor and a bill for disbursements (including medical expert fees and court fees at the very least). That is the inexorable logic of the District Judge's decision; it is a deeply unattractive vista.
"Pay us if you end this agreement
You can end the agreement at any time; we then have the right to decide whether you must:
- Pay our basic charges and our disbursements including Barristers' fees when we ask for them or
- Pay our basic charges and our disbursements including Barristers' fees and success fees if you go on to win your claim for damages.
"His first submission was that 'unenforceable' only unenforceable in proceedings between solicitor and client. So it is not open to the paying parties to take the point. A great deal of the written and oral submissions to us concern this point and in particular the distinction between an unenforceable and an illegal contract. It faces the immediate difficulty that in Dymond v Lavelle [2002] 1 AC 384 the Defendant was able to resist paying the claimant's car hire charges on the grounds that the hire agreement was an unenforceable consumer credit agreement between the claimant and the hirer."
It is difficult to see any difference in principle between this situation and that. I adopt that reasoning.
In paragraph 25 of the judgment, the Leaded Master said this:
"In my view the words, 'your claim against Hertz UK Ltd car hire for damages for personal injury suffered on 7th January 2000' meant 'the claim for damages arising out of the accident and which was being handled by Hertz' and therefore must be taken to include the claim that was subsequently issued against Mr Prescott. The intention of the parties is obvious. The purpose of the 2002 agreement was to provide funding for the continuation of the claim which had been the subject of correspondence between Pinto Potts and Hertz for the preceding 3 years. There was only ever one 'claim'."
On the facts in that case, the Master felt that it was a permissible interpretation of the CFA contract to construe it as he did. The facts of this case are very substantially different and I am not assisted in this particular case by the Learned Master's reasoning.
"Dear Mr Law, , '
Pursuant to this accident, Liverpool Cily Council have sent us papers to state that they do not own the properties that were derelict and the cause of this accident. As a result further investigations will need to be carried out and I will make an application to the Court at the hearing on Monday morning".
Then there are some consequential matters. There 10th of February 2005 against Mr Law.
"I have now received correspondence from the Solicitors of Berrybridge Housing and I will be making an application to the Court to include them
in the proceedings."
And further matters, and then the 4th of March 05.
"Dear Mr Law,
The Solicitors of Berry bridge Housing have requested a period of time to investigate the matter and we have granted them this. They have until the 3rd of May 2005 to respond oh liability or we will amend the proceedings to include them."
As I mentioned before section 53(8)(a) of the 1990 Act as incorporated and amended in section 27 of the 1999 Act require that a CFA must be in writing, and also (3)(c) it must comply with such requirements (if any) as may be prescribed by the Lord Chancellor. And the Lord Chancellor has prescribed so far as it is relevant in this case, the CFA Regulations whereby Regulation 5. says the agreement must be signed by the client and the Legal Representative.
"In this sense a contract which has been evidenced in writing could not be varied orally"
And he there gives an example:
"The position is the same where a contract ... which must be made is writing is varied in a way which does not satisfy the statutory formal requirements. For example where a contract for the sale of land which was made in a document signed by both parties, is varied in a material respect by an exchange of letters each of which is signed by only one party. In one case..."
(And that is a reference to a case of McCausond v Duncan Warwick Ltd. [1997] 1 WLR 38)
"... such a variation substituted an earlier completion date for that specified in the original contract, and it was held that the vendor could not insist on an earlier date."
In my judgment having regard to ail the points made by Mr Hutton, that this CFA can only on its true and proper construction, however purposively one applies that construction, be construed as to cover only the Liverpool City Council and not the second defendant.