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You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Warren v Hill Dickinson LLP [2018] EWHC B6 (Costs) (26 March 2018) URL: https://www.bailii.org/ew/cases/EWHC/Costs/2018/B6.html Cite as: [2018] EWHC B6 (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 :
____________________
Frank Warren |
Claimant |
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- and - |
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Hill Dickinson LLP |
Defendant |
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Nicholas Bacon QC (instructed by Hill Dickinson LLP) for the Defendant
Hearing dates: 13-16 November 2017
____________________
Crown Copyright ©
Master Leonard:
The Burns CFA
"… Could you pass the below to Frank please? … Dear Frank… Thank you for instructing us in relation to your claim against Ricky Burns.… We write to confirm your instructions to us, and enclose our Terms of Business which set out the basis upon which we are acting for you. We would be grateful if you would please read, sign and return a copy of the Terms of Business to us… We are instructed to act for both you, as an individual, and W. Promotions Ltd, as a corporate entity, in relation to… A claim for damages for breach of the joint Management Agreement that you entered into with Ricky Burns… A claim for damages for breach of the Promotional Agreement… A claim for any other relief that may be awarded by the court…
As you know proceedings have been issued and served already… Once we have received the Defence then we will be able to better advise you on the merits of the claim and the potential cost position. At this stage, as you know, from the information we have, both Jonathan Crystal and I consider that the claim is sound. However we have not had a formal response… so it is difficult to assess the arguments your opponent is likely to raise…
We have agreed to act for you in this matter on a "no-win no fee" basis… I have enclosed with this letter a copy of your CFA with this firm, together with a document entitled 'What you need to know about a Conditional Fee Agreement'. The information in the Terms of Business document which relates to the payment of my firm's fees during the course of your case is superseded by the CFA. The essence of the CFA is that you are not obliged to pay my firm's professional charges unless you are successful in the proceedings, in particular...
If you win the case, you will be liable to pay my firm's fees. However, the likelihood is that your opponents will be ordered to pay the majority of your costs… If you lose the case, you will not have to pay any of my firm's fees… Any disbursements such as Court fees and your barrister's fees will be payable by you as the case progresses. Should it become necessary to instruct a barrister, it may be that we will be able to do so on a conditional fee basis, however this cannot be guaranteed… You will also need to pay other fees, such as Court fees and fees of a mediator and expert…
Whilst I have summarised above what it means to enter into a CFA, I would be grateful if you would please read the enclosed documents very carefully and let me know if you would like to discuss any of the contents…"
"The first claimant's claim against Mr Ricky Burns for damages resulting from the breach of the joint management agreement signed by the first claimant and the defendant on 15th May 2010…
The second claimant's claim for damages for breach of the Promotional Agreement dated 30th July 2010 and the Second Addendum to that Agreement dated 16th September 2011…"
"If you win the case, you are liable to pay our disbursements, basic charges and a success fee. The amount of these is not based on or limited by the damages. You may be able to recover from your opponent our disbursements, basic charges, success fee and the premium for any insurance policy you take out as set out in the document 'What you need to know about a Conditional Fee Agreement'…"
"The provisions and terms of this document incorporate the Law Society Conditions and form part of your Conditional Fee Agreement and are binding upon you. Any amendments or additions to the Law Society Conditions which are made from time to time will apply to you. You should read this document carefully and ask us about anything you find unclear…"
"Lose: The court has dismissed your case, you have stopped it on our advice or you do not Win as defined below…
Win: The case is finally decided in your favour, whether by a court's decision or by agreement, upon terms including the payment to you of damages, compensation, costs or any other financial contribution … 'Finally' means that your opponent is not allowed to appeal against the court's decision; or has not appealed in time; or has lost any appeal…"
"The court will decide how much you can recover if you and your opponent cannot agree the amount. If the amount agreed or allowed by the court does not cover all our basic charges and disbursements, you will be liable to pay the difference…"
"If you lose, you do not have to pay any of the basic charges or success fee except as provided for elsewhere in this agreement. You do have to pay… us for our disbursements…"
The Morrison CFA
"… Could you pass the below to Frank please? … Dear Frank… Thank you for instructing us in relation to your defamation claim against Mr. Morrison.… We write to confirm your instructions to us, and enclose our Terms of Business which set out the basis upon which we are acting for you. We would be grateful if you would please read, sign and return a copy of the Terms of Business to us… As you know we have sent letters of claim to Alex Morrison who has not responded at all… I understand that as there is been no response then you are keen to issue proceedings… Taking into account the risk and benefits, I consider that the potential outcomes justify the risk and expense involved… I am happy to discuss our advice further, but if you would like to proceed, the next step in your case is to finalise the Particulars of Claim…
We have agreed to act for you in this matter on a "no-win no fee" basis at this stage… I attach a copy of your CFA with this firm, together with a document entitled 'What you need to know about a Conditional Fee Agreement'. The information in the Terms of Business document which relates to the payment of my firm's fees during the course of your case is superseded by the CFA. The essence of the CFA is that you are not obliged to pay my firm's professional charges unless you are successful in the proceedings, in particular...
If you win the case, you will be liable to pay my firm's fees. However, the likelihood is that your opponents will be ordered to pay the majority of your costs… If you lose the case, you will not have to pay any of my firm's fees… Any disbursements such as Court fees and your barrister's fees will be payable by you as the case progresses. Should it become necessary to instruct a barrister, it may be that we will be able to do so on a conditional fee basis, however this cannot be guaranteed… You will also need to pay other fees, such as Court fees and fees of a mediator and expert…
Whilst I have summarised above what it means to enter into a CFA, I would be grateful if you would please read the enclosed documents very carefully and let me know if you would like to discuss any of the contents…"
"Your claim against Mr Alex Morrison, manager of Mr Ricky Burns, for statements made by him to the press in or around March 2013…"
"Win: The case is finally decided in your favour, whether by a court's decision or by agreement, upon terms including either the provision of an agreed apology, retraction or other form of words, or the provision of an undertaking, or the granting of an injunction restraining your opponent from further publication or other action or the payment to you of damages, compensation, costs or any other financial contribution…"
PSB's Terms of Business
"This document sets out our terms of business and, together with the accompanying letter (or email) and conditional fee agreement (if any) governs our retainer… This is an important document and if you have any queries about it, please contact us. By instructing us or continuing to instruct us after receipt of this document, you are deemed to have accepted our terms of business and unless otherwise agreed with you, these terms of business will apply to future work…"
"We aim to offer all our clients a professional and consistent service, but if you have any concerns in this regard which you are unable to resolve with the partner handling the matter, please ask for a copy of our client care policy… Whilst retained by you we will… Act with integrity… Act in your best interest subject to the proper administration of justice… Give you our best advice, taking into account your needs and circumstances, and properly explain the legal work we are undertaking…"
"We will assume, unless you instruct us otherwise that… any director, employee, agent or representative who gives us instructions on your behalf is authorised to do so… when we act for two or more clients in the same matter, each client has the ability to gives instructions on behalf of the other(s)…"
"If we receive instructions from or on behalf of more than one person or company each of those for whom we act are separately responsible for payment of all our fees and disbursements… If we accept instructions from a corporate organisation (including a company, partnership and LLP) and this document is signed by a director (officer, member or partner) then in consideration of us accepting instructions, that person agrees to be personally liable to us if the organisation does not pay our fees or disbursements…"
Counsel in the Burns and Morrison Cases
"… This is the CFA for Adrienne on the Morrison libel claim. If the claim is unsuccessful then of course she will not get paid. The slight anomaly is that if successful, but Morrison does not pay, then she is entitled to fees and Frank has a primary liability for these. This is the same for the CFAs which JC and I have entered into, but it is less likely that we would seek to recover those fees from Frank. I mention this only so that he is aware that if the claim is successful, but we are unable to recover fees from Morrison, then he could be liable for Adrienne's fees nonetheless…"
Assignments and Further Agreements
"Dear Frank… I am excited to tell you that Magnus Boyd and I have been approached by Hill Dickinson LLP to set up a reputation protection team in London… Magnus intends to start 16 September and I will join him by 14 October at the latest… I am writing to seek your consent to transfer your files to my new firm. Alternatively, you are entitled to remain with PSB Law LLP or instruct a new firm completely. If you do wish to transfer your files or instruct a new firm, then there will be aspects of your retainer with PSB Law with which we need to deal. Magnus and I leave at the end of this week, so we look forward to hearing from you as soon as practicable… If you would like to transfer your files then please let me know and I will write you further to advise on the arrangements and retainer aspects…"
"We were acting on a CFA basis on these matters at PSB and have assigned the cases to Hill Dickinson so that we can continue to act on a CFA basis. That said, there are a couple of loopholes in the law on assignment and we are therefore (as a firm) taking advice from counsel in relation to these issues for you and our other clients and hope to finalise the position in the next week or so …"
"I have always acted for you on the basis that we act on a CFA where we can and I am happy to continue on that basis, although because of the change in recoverability of success fees, let me know if that still works for you… In addition, over the last few years, I have been happy to help in more general terms. As you know, we are always available for review or a steer on a legal issue and we can always spend an hour or so considering the merits of potential actions or indeed getting a letter or two out to take stuff down from the Internet. If that works for you, then I do not intend to change it… However, in relation to other matters… which become more substantive than an hour or two's work and do not move on to a CFA, from the beginning of May we will need to charge you for our time. We will let you know in advance if this is the case so that you can decide whether you want to proceed with this firm before costs are incurred. An alternative, as we have discussed recently, would be to roll this work up… into a monthly retainer, but let me know if you want to explore that further…"
The Outcome of the Claim Against Mr Burns
The Outcome of the Claim Against Mr Morrison
Other Litigation: The Tower Claim
"… We would be grateful if you would please read, sign and return a copy of the Terms of Business and Conditional Fee Agreement to us… We confirm that we have agreed to act for you on conditional fee basis in relation to the Litigation. As you know, this means that we only get paid if we are successful and then we will seek to (and should be able to) recover costs from our opponents. I'm still obliged however to give you an estimate of our costs…"
"This agreement is a legally binding contract between you and your legal representative. Before you sign, please read it carefully… If you win the case, you are liable to pay disbursements, basic charges and a success fee. The amount of these is not based on or limited by the damages. You may be able to recover from your opponent our disbursements, basic charges, success fee and the premium for any insurance policy you take out as set out in the document "what you need to know about a Conditional Fee Agreement…"
"The court will decide how much you can recover if you and your opponent cannot agree the amount. If the amount agreed or allowed by the court does not cover all our basic charges and disbursements, you will be liable to pay the difference… In all circumstances, you remain ultimately responsible for payment of all disbursements, basic charges and, if appropriate, success fee..."
"In litigation matters which result in court hearings, the general rule is that the loser will be ordered to pay the winner's costs. This means that if you win the case, you might be able to recover from your opponent some of the charges and expenses that you have to pay to us. If you lose the case, however, the reverse will apply and you might be required to pay some or all of your opponent's costs. You should also be aware that, even if you win the case, the charges and expenses which you will have to paid was unlikely to be greater than the amount you can actually recover from your opponent. This is because costs assessed on the standard basis typically represent around 60-90% or so of actual costs incurred. It is also possible that your opponent may not have sufficient assets to make payment of any amount of costs ordered to be paid. This is of course a commercial risk that you should be aware of from the start as the costs can sometimes exceed the value of the claim…
… It is important for you to be aware that you are at all times primarily responsible for paying the whole of our charges and expenses. Any recovery you are able to obtain from your opponent in respect of your costs will serve to reimburse you in respect of the amounts that you are primarily responsible for paying to us. Even if you are successful, your opponents might not be ordered to pay all of your costs or, for other reasons, the costs might not be recovered from your opponent in full. If the other party proves to be financially unsound, you may not get back any of your costs even if you win the case…"
"… You are aware of the consequences of Part 36 offers and the real issue is that if you lose at trial or fail to beat the damages offered of £250,000 then you would be liable to pay your opponent's costs together with interest on those costs from the date that the offer expires… As you know from the advice we have received… success in this case is by no means certain… The additional risk here is that although they are currently funding Jeff Kaye's claim, his insurers have reserved their rights to avoid the cover… This means that you could fight to trial and win but then only be able to recover any sum awarded against assets which Jeff Kaye has… There is a significant risk that any victory against Jeff Kaye, which is far from certain in itself, would not lead to any actual recovery of money… I appreciate that were you to accept the offer… Then you would be left with a significant shortfall and on that basis you are not minded to accept the sum. However, this needs to be set against the risk of going to trial and even winning and not recovering anything and also going to trial and losing… even though we are acting on a CFA, were you to be successful but our fees not recoverable, then you would also be liable for these…"
"She also stated that I would be liable for Hill Dickinson's fees even if I won and my fees were not recoverable; but as this was never what had been agreed between us, I was not concerned."
"As you are aware from our telephone conversation earlier today, we are no longer able to support your litigation… on a conditional fee basis… It is our view that there is now a real risk that you will fail to recover substantial damages in your claim because, if you are successful, Jeff Kaye's professional indemnity insurers will be able to avoid the policy and neither Jeff Kaye or any of the other defendants have sufficient assets (as far as we are aware). You and I agreed that we would not give you formal advice on the settlement offer of the merits generally until you had the chance to speak with counsel. However, we have been unable to get counsel's view because we are not in funds. If we are unable to meet with counsel by next week and if you would like us to, we will provide formal advice.… Our ability to act in your best interests has been compromised by the lack of instructions and in particular our inability to instruct an expert to provide his report within the timeframe ordered by the Court… We have been unable to meet the deadline because we were not in funds to instruct the expert… Under the conditional fee agreement which you signed with PSB law on 26 October 2011 and which was assigned to Hill Dickinson and under the conditional fee agreement with my firm on 12 June 2014… You have certain responsibilities to us. These include providing instructions, cooperating with us and paying for disbursements with the 21 days of request of payment. The failure to comply with these obligations means that we have the right to terminate the CFA. I'm afraid that having been unable to discuss matters with you today, we are left with no choice but to exercise this right…"
"I hope you appreciate that terminating the CFA in the MCash case was not a decision which I took lightly. We have worked together for almost 10 years and you have always been very supportive of my career … In order to support you, I have often not charged for rates or charged you at all (Bellew, DeGale, Luxembourg) … As promised I have considered funding for the MCash matter and had a chat with my partners… Were we to continue on a CFA and win then, as is the normal position under the CFA, you would be liable for our base costs together with uplift. Therefore, if you won the litigation with us acting on a CFA and you did not recover costs from any of the Defendants… you would be liable for my firm's costs of, say, £500,000 plus VAT…"
Other Litigation: the Bellew Claim
"This Claim is not entirely straightforward… But I… consider that it is a decent claim… It seems to make sense for my firm to act on a CFA basis so that our costs are recoverable from the Hearns if we are successful. If Frank is happy with that, we will get the relevant stuff drafted and over to you."
"It makes sense to run the Bellew litigation on a CFA basis as there is a possibility of winning and recovering costs from one or other of the Defendants, unlike some of the… hearings we have done recently… As you know (apart from disbursements such as the barrister's fees and Court fees) the essence of the CFA is that if we do not win the case, we do not get paid, but if we do win we recover costs together with a success fee from one or other of the defendants… The essence of the CFA is that there is no obligation to pay my firm's professional charges unless the proceedings are successful… If Frank wins the case, he will be liable to pay my firm's fees but these will be recoverable from his opponents…."
"…the point of my previous email, as I hope you gathered, was to set out what we need to set out so that, if we are successful, we will be able to recover costs (+ success fees) from the Defendants. I can say without hesitation that if we aren't successful or don't recover fees, then we wouldn't charge Frank. However if we do win I don't want to jeopardise our ability to recover costs against Bellew and the Hearns because we haven't sent terms of business etc. etc. Hope this makes sense and do call/email if not… If Frank is happy with the CFA, could you ask him to sign and return it to us."
Conflict Between the Evidence of Mr Warren and Ms Basha
The First Issue: whether Mr Warren has achieved a "Win" under the Burns and Morrison CFAs
Conclusions: Ms Basha's Obligations in Relation to Contracts of Retainer
Conclusions: The Existence of the "Net Gain" agreement
Conclusions: The Legal Merits of Mr Warren's "Net Gain" Case
Conclusions: Whether Mr Warren Has Achieved a "Win"
The Second Issue: The Validity of the Assignment of the Burns and Morrison CFAs
Conclusions: The Circumstances of Ms Basha's Move from PSB to the Defendant
Conclusions: Mr Warren's Motivation in Undertaking the Burns and Morrison Claims
Mr Warren's Submissions on the validity of the Assignment
Budana
Conclusions on the Validity of the Transfer of the Burns and Morrison CFAs
Summary of Conclusions