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You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Rezek-Clarke v Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (Costs) (17 February 2017) URL: https://www.bailii.org/ew/cases/EWHC/Costs/2017/B5.html Cite as: [2017] EWHC B5 (Costs) |
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BAILII Citation Number: [2017] EWHC B5 (Costs)
Case No: JMS 1603426
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building,
Royal Courts of Justice, Strand,
London, WC2A 2LL
Date: 17/02/2017
Before :
MASTER SIMONS
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Between :
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MR ANDREW ![]() |
Claimant |
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- and - |
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Defendant |
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Mr Richard Boyle of counsel & Mr John Mistri costs lawyer for the Claimant
( instructed by Elite Law Solicitors)
Mr Richard Wilcock, Counsel for the Defendant
( instructed by Acumension Limited)
Hearing date: 10 January 2017
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Judgment Approved
Master Simons, Costs Judge :
Background
i) My finding that the bill was disproportionate;
ii) My reduction of the After the Event Insurance (AEI) insurance premium from £31,976.49 to £2,120.00;
iii) My reduction of the expense rates claimed;
iv) My reduction of Counsel's fees;
v)
My reduction of four of the fees for medical reports totalling £18,036 (including
VAT)
to £7,500, plus
VAT;
vi)
My reduction of some of the attendances on the Claimant;
vii)
My reduction of the document time claimed from 52.5 hours to 33 hours, 24 minutes.
7. The oral hearing took place this morning at which I dealt with points (iii)-(vii).
I made no adjustments to my earlier decisions with regards to the expense rate and Counsel's fees. I increased the allowances that I made for the medical disbursements by £370, plus
VAT,
and I increased by two hours the attendance times on the Claimant. I also increased the document time by four hours.
8. This judgment deals with the issues of proportionality and the ATE premium.
The Evidence
14. All work claimed in the bill was carried out after 1 April 2013.
The Rules
"CPR 44.3(2)
(2) Where the amount of costs is to be assessed on the standard basis, the Court will -
(a) only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and;
(b) resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the Paying Party.
(5) Costs incurred are proportionate if they bear a reasonable relationship to -
(a) the sums in issue in the proceedings;
(b) the value
of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or pubic importance."
Proportionality
16. Mr Wilcock submitted that this was always going to be a low value
claim and that the Claimant's solicitors should at the outset have taken steps to deal with the claim in a proportionate manner. Mr Wilcock submitted that the sum allowed at the provisional assessment, £24,604.40 was a proportionate amount of costs bearing in mind that this was a claim for medical negligence and that the Claimant's solicitors were under an obligation to investigate the claim.
17. In their reply to the Points of Dispute, the Claimants state that the costs claimed were reasonable and proportionate. They submitted that that the Defendants' conduct should be taken into account as they disputed the issue of causation and it was therefore necessary to issue proceedings. They conceded that the value
of the claim was modest but the Defendant's negligence had led to the Claimant suffering symptoms for nine months longer than necessary and this had caused his
visual
field to deteriorate. The claim was of considerable importance to the Claimant. This was a clinical negligence claim which was by its nature complex. The matter required a high degree of skill and specialised knowledge in order to prove the allegations of breach of duty and causation and it was necessary to instruct experts with specialist knowledge to prepare reports namely, a consultant ophthalmologist, a consultant neurologist, an endocrinologist as well as a GP. The solicitors further submitted that the costs claimed were reasonable given that the pre-action investigations were necessary to ascertain the appropriate Defendant.
18. In oral submissions Mr Mistri submitted that this was a clinical negligence claim whereby the solicitors were obliged to investigate issues of negligence, causation and to investigate whether or not claims could be made against other Defendants. It was clear that the Claimant had suffered damage as a result of negligence and in making their investigations it was not necessary to have the amount of damages that the Claimant could recover in mind. This type of litigation is always "front-loaded" and therefore until the evidence had been obtained, the solicitors were not in a position to advise their client as to prospects of success and the value
of the claim. The costs incurred were necessary in order to reach this stage.
19. In Jefferson v
National Freight Carriers Plc [2001] EWCA Civ 2082, the Court of Appeal quoted with approval the judgment of H H Judge Alton in the Birmingham County Court on 22 June 2000 in an unnamed case:
"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 curb the amount of work done, and the cost by reference to the need for proportionality."
21. I looked through the solicitor's file, both at the provisional assessment and prior to the hearing today, and I could see no evidence of any planning in the manner described by H H Judge Alton. The claim was always going to be low value
and indeed there is an entry in the documents schedule annexed to the bill dated 31 July 2013 "Conducting a preliminary
valuation
in the light of the information obtained to date".
22. Mr Mistri was unable to produce any evidence of any planning or any consideration of the costs to be incurred in conducting this low value
claim. The manner in which the case was conducted did not
vary
throughout the duration of the claim. An attendance noted showed that on 7 July 2014 there was a further consideration of the
value
of the claim which put the general damages at £2,000 to £5,000. On 15 December 2014 there was another review whereby one of the fee earners indicated that the figure they had previously considered for quantum was over-optimistic.
23. Notwithstanding the solicitors' knowledge of the low value
of the claim, they proceeded to instruct expensive medical experts to prepare reports the costs of which totalled almost £20,000. The costs of some of those reports were reduced by me on the grounds that their cost was disproportionate. Furthermore, I remained to be convinced as to whether or not some of the reports were indeed necessary as significant fees were being claimed by the medical experts for preparing addendum reports and for amending their reports.
25. Costs of £72,320.85 for a low value
medical negligence claim are disproportionate. They do not bear any reasonable relationship to the sums in issue in the proceedings. The litigation was not particularly complex, no additional work was generated by the conduct of the Paying Party and there were no wider factors involved in the proceedings such as reputation or public importance.
ATE Premium
28. Point 4 of the Points of Dispute (running to five pages and being contrary to Practice Direction 8.2 - CPR 47.9) challenged the insurance premium on a number of grounds. It stated that the premium did not comply with the requirements of s58C(2) of the Courts and Legal Services Act 1990 nor did it comply with the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No. 2) Regulations 2013. Furthermore, whilst the Defendant did not dispute that ATE insurance for the costs of reports relating to liability and/or causation was reasonable and necessary, they submitted that the amount of the premium was disproportionate. They submitted that in view
of this low
value
claim the Claimant's solicitors should have explored alternative insurance providers.
32. The Reply to this issue was even longer and more prolix than the Points of Dispute. In summary the Claimant stated that the policy complied with the statutory requirements. It was reasonable and necessary to take out the insurance policy and they referred to the Supreme Court's comments in Coventry v
Lawrence (No. 3) [2015] UKSC 50 at para. 40, with the following comments made with reference to paragraphs 105 and 106 of Rogers
v
Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134:
"In other words, the Court did not ask whether the premium was proportionate to the importance of the case and what was at stake. Instead it adopted the Lowndes approach. If the premium was necessarily incurred, it was proportionate. And it was proportionate even though it was disproportionately high when compared with the amount of damages reasonably claimed. ATE insurance was integral to the fundamental objective to improving access to justice in civil litigation. A premium that was reasonable in amount (having regard to the litigation risk) was necessary and, therefore proportionate."
35. At provisional assessment I endorsed the following on the Points of Dispute:
"The premium is clearly disproportionate. Based on my own experience, I will allow £2,120 inclusive of IPT."
The Parties' Submissions
49. Mr Boyle referred to CPR 44.3(5) and submitted that when considering proportionality one had to look at factors other than the value
of the claim. One of the factors was the complexity of the litigation. This was complex litigation as it related to medical negligence that required the evidence of five medical experts. Furthermore, it was necessary to look at wider factors such as the necessary cost of insuring which was an important element of providing access to justice.
51. Mr Boyle also submitted that the documentation supplied by the Defendant contained a number of premiums that were for policies issued pre-LASPO. The post-LASPO policies produced are entirely different. Some policies do not include any non-recoverable elements and some do not provide an indemnity to the Claimant for the value
of the premium if the case is lost. He set out in his skeleton argument a number of reasons why no consideration should be given to the comparisons provided by the Defendant.
56. Mr Wilcock submitted that in this case the choice of policy was unreasonable. There had been no evidence to indicate whether the solicitors considered that the use of this particular insurance policy was suitable in this particular case. There was no evidence of any thought given by the solicitor as to why they were advising the client to pay such a substantial premium where the case was of limited value.
The evidence that had been produced by the Claimant was generic and not specific to this particular case.
57. Mr Wilcock explained that the reason why some of the comparative premiums that had been put forward by the Defendants related to policies that were pre-LASPO. Although those pre-LASPO policies insured much greater risks, nevertheless the premiums were very
similar to those post-LASPO when the risk and the limit of liability to the insurer was substantially reduced.
58. Mr Wilcock rejected the submissions made on behalf of the Claimant that it was necessary for the Defendants to produce expert evidence. He submitted that it was not necessary for expert evidence to be provided to show that the amount of premium was disproportionate. This was so whether or not the premium was £31,976.49 or £22,225.23. In either case the premium was disproportionate to this low value
claim.
59. Mr Wilcock referred to CPR 44.3(5). The premium was not proportionate as it did not bear a reasonable relationship to the sums in issue in the proceedings. The Claimant's very
best case was that the claim was worth approximately £5,000 so that a premium in excess of the £30,000 bore no relationship whatsoever to that sum.
My conclusions on ATE premium
66. Mr Mistri was unable to produce any evidence to indicate that the choice of the insurance policy was anything other than a mechanical exercise carried out by the fee earner. Although it was quite clear from the moment the instructions were taken that this was going to be a low value
claim, no consideration appears to have been given as to the proportionate costs of running the case. If the solicitors decided that they needed to utilise the services of five separate medical experts, it should have been obvious to them that if they were going to utilise this particular insurance policy then this would likely mean an expensive premium. No consideration was given by the solicitors as to whether or not this particular policy was appropriate to this particular low
value
case. Whilst it may well be that this type of policy is appropriate for many of Thompsons' cases it cannot be the case that it is suitable for every case. Thompsons would have been aware that there are many other insurance products on the market that may have been more appropriate to this particular low
value
case, but no attempt was made by them to investigate this.
69. Costs incurred are proportionate if they bear a reasonable relationship to the sums in issue in the proceedings. This insurance premium claimed bears no reasonable relationship to a claim which at best amounted to £5,000 but settled at £3,250. The Claimants say that I should also look at the complexity of the litigation, the conduct of the Defendant and wider factors. I do not consider that this litigation was complex. In my judgment this was a routine low value
medical negligence case. Proceedings were issued not as a result of the complexity of the case but because of the solicitors concerns about limitation. The case was settled shortly after proceedings were served. The fact that there were a number of medical experts instructed does not make a case complex.
70. I do not accept that as this issue of proportionality relates to an insurance premium it means that this is a wider factor that I have to take into account when dealing with the question of proportionality. One of the reasons that I have given as to why I consider that this premium was disproportionate is that there was a failure on the part of the solicitors to give any consideration as to other options. The facts are case specific. I am not deciding that this type of policy is inappropriate for low value
cases. What I am deciding is that in this particular case no thought was given as to whether or not this policy was appropriate. This issue should have been part of the planning described by H. H. Judge Alton to which I referred in paragraph 19 of this Judgment.
71. I reject Mr Boyle's submission that I should not give consideration to the evidence of alternative policies that have been produced by the Defendants. I accept that this evidence does have its limitations but what is clear from the evidence is that there are alternative products available on the market that the Claimant's solicitors could have considered when dealing with this particular low value medical negligence case.
Final Conclusions