B e f o r e :
|LXM (BY HER LITIGATION FRIEND KLM)|
|MID ESSEX HOSPITAL SERVICES NHS TRUST|
Cliffords Inn, Fetter Lane, London EC4A 1LD
Tel: 020 7269 0370
Crown Copyright ©
'Explained that in view of the fact that the letter of response from the defendants does not deny causation it merely makes no admissions and in view of the fact that they are seeking to defend the claim in relation to breach of duty when we have the very strong opinion from Peter Buchan, we are justified in issuing proceedings, however the scope of the Legal Aid Certificate will have to be extended and this will bring in the Special Cases Unit. I explained the disadvantages of continuing the Legal Aid. The irrecoverable statutory charge costs will be considerable because of the need to prepare costed case plans and deal with the other increasingly bureaucratic procedures that are being required by the Legal Services Commission. The Legal Services Commission can be slow in approving increases to the scope and cost limitation that can lead to delays. The LSC has issued a consultation paper suggesting that they may restrict the fees that can be paid to experts and they have suggested fees that are 50% of the current going rate. This will be a disincentive to the experts. The claimant's litigation friend will have to get an undertaking as to costs but there is some doubt as to whether the costs protection provided by Section 17 of the Legal Aid Act 1998 will extend to the litigation friend. I made it clear that I was quite happy to continue to act on a Legal Aid basis but I was equally willing to switch to a conditional fee agreement provided that we could obtain insurance. If we then proceeded on a CFA with insurance, the irrecoverable costs would be less. There would be no delay caused by the LSC. There would be no threat of any interference by the LSC into our dealings with the experts and the litigation friend's undertaking as to costs would be covered by insurance. They said that they would be happy to proceed on a conditional fee basis and therefore I would see if I could arrange insurance.'
'The letter of response from the defendants is interesting because it does not in fact deny causation. It merely makes no admission. The letter in fact concentrates on attempts to justify the standard of the obstetric care although of course we have a very strong opinion from Peter Buchan that the obstetric care was substantially below a proper standard. In these circumstances, I believe that we are justified in pursuing the claimant's claim by issuing court proceedings.'
'In recent years, the Legal Services Commission have required solicitors to carry out a great deal of work before they will be satisfied that Legal Aid funding should be given in the first place and thereafter that it should continue. The costs associated with that work are not recoverable from the defendants and therefore have to be paid by the client if the claim succeeds, for example, as explained above, if the claimant's Legal Aid is to continue, I will have to ask the Legal Services Commission to extend the Legal Aid Certificate to cover the work that will be necessary to issue court proceedings and then pursue the claim to trial. Before they will do this, the Commission will require us to prepare a detailed case plan which itemises all of the work that will be necessary and breaks down the anticipated costs. The preparation of these case plans require a lot of work because they have to provide very detailed information. It is both our own experience and that of other solicitors that these case plans can take up to eight hours and in some cases longer to prepare. The cost of that work will not be paid by the defendants but will have to be paid by the claimant out of her compensation if her claim succeeds. On the other hand, this work will not be necessary if the claim is to be funded in the future by a conditional fee agreement and therefore, although there will be other costs that cannot be recovered from the defendants, the irrecoverable costs will be lower if we switch to conditional fee funding.'
'Please note in particular that we make the following promises. Whilst the claimant's claim continues, we will never ask you to pay any money to anybody. If the claim does not succeed, neither you nor she will ever be required to pay any money to anybody ever. The only money that we will ask to be paid to us is from the money that we recover from the defendants if the claim is successful. However, if at the conclusion of the case, you are dissatisfied with the amount that we ask you to pay from the claimant's compensation, you will have the right to have that sum checked by the court under a process known as detailed assessment. To be frank, we have a fairly strong preference for working under a conditional fee agreement rather than Legal Aid simply because of the administrative difficulties for us in dealing with the Legal Services Commission who are not very efficient and who are increasingly bureaucratic in their approach. We are not alone in this. Most solicitors are very frustrated by their dealings with the Legal Services Commission. We also feel on balance that for the reasons set out above, it would be more advantageous for the claimant to proceed on a conditional fee rather than a Legal Aid basis. I should however like to make it clear that if it is your preference to continue with Legal Aid, then I will be happy to do so. I am happy to leave the choice to you and whatever you choose, you will receive precisely the same standard of service from us.'
'Unfortunately and very frustratingly there has been a development in that one of the costs judges at the Supreme Court Costs Office has ruled albeit in a completely different type of case that a solicitor who entered into a conditional fee agreement with their client who was eligible for Legal Aid was not entitled to be paid any fees for any work that he carried out. That decision was not only made by a fairly junior judge but it is also case specific in that in the circumstances of that particular case as outlined in the judgment, it probably was in the client's best interests to have Legal Aid rather than a conditional fee agreement. I do not believe that the situation is the same for the claimant but I think it would be prudent for me to review the judgment very carefully before we switch to a conditional fee agreement in the claimant's case. I am not therefore immediately applying to discharge her Legal Aid Certificate and have not issued the insurance policy.
'I explained that we were willing to move onto a CFA. We were aware of the Bowen v Bridgend Council decision but felt that we could distinguish it. We therefore explained the advantages and disadvantages of Legal Aid/CFA to the claimant's parents and we also told them that although it was a matter for them, they will receive the same service whichever method they adopt. We had a personal preference for CFAs. They therefore instructed us that they were willing to switch to a CFA and have signed the agreement. We were then about to issue the policy when we became aware of Master O'Hare's judgment in Hughes v London Borough of Newham. This has made us a little more nervous about switching to a CFA and we therefore decided that we would take counsel's opinion before doing so. Obviously the cost of taking the opinion will be met by us and will not form part of the cost of the claimant's claim.'
'We are therefore now clear to issue and serve proceedings but before doing that we must put in place a satisfactory method of funding the claim because after court proceedings are issued, you will potentially become liable for the defendant's legal costs should the claim not succeed. Hitherto of course, the claim has been funded by the Legal Services Commission but for the reasons set out in my letter of the 8th June, it has been agreed that we will switch to a conditional fee agreement. Unfortunately however, as we were about to do that, some uncertainty arose following a recent court decision as to whether we could do so. Consequently, although you signed the necessary document at the end of August, I explained in my letter to you of the 31st August that we should not in fact make the switch to a conditional fee agreement nor discharge the claimant's Legal Aid until I have time to consider the impact of the recent court decision. There has also been another development in that the regulations relating to the way in which conditional fee agreements must be entered into changed as from the 1st November. Having reviewed these recent developments, I am now able to confirm that we can switch to a conditional fee agreement although it will be necessary for the agreement to take a slightly different form from the one that was previously sent to you and signed. I am in the process of preparing the new agreement which I hope to be in a position to send to you within the next two weeks. The difference between the new agreement and the one that you have previously signed but was never implemented is that under the new agreement we will make it clear that we will not under any circumstances require the claimant to make any payment towards any of the costs out of any compensation that may be awarded. This in fact puts her in a better position than she would be with Legal Aid where there would inevitably be some costs that would not be paid by the defendants even if the claimant were successful and those costs would then be paid to us by the Legal Services Commission who in turn would deduct them from the claimant's damages. Therefore, as we are now willing to promise that we will not under any circumstances require any payment from the claimant or yourselves, she will in fact be significantly better off with a conditional fee agreement than she would under Legal Aid.'
'On the information that is at present available to us, it seems that community legal services funding may be available to the claimant but it is not a better option to her than this agreement. We have advised you in detail as to the advantages and disadvantages of community legal services funding compared to this agreement and you have told us that you would prefer us to pursue your claim under this agreement rather than community legal services funding.'
'If you win, you will have to pay us the basic charges, the success fee and the expenses. However, the provisions of paragraph 17 of this agreement will apply so that the total sum that we will ask you to pay for the basic charges, the success fee and the expenses will not exceed the total sum for those items that is actually recovered from your opponent.'
'If you win, it may be possible to recover some of the basic charges, the success fee and the expenses from your opponent but the total sum that we will ask you to pay under paragraph 12 of this agreement will not exceed the total sum for the basic charges, the success fee or the expenses that are actually recovered from your opponent.'
'It is important to understand that Temple Legal Protection Limited may have the right to cancel the policy immediately if you do not keep to your obligations under it, if you abandon or stop your claim without their prior consent, if this agreement ends before your claim ends or if you transfer your claim to other solicitors. If the policy is cancelled, you will still have to pay the premium but Temple Legal Protection Limited will be released from any obligation to pay any claim that may be submitted to them. We would also have the right to cancel this agreement in accordance with paragraph 85 and if court proceedings have already been issued, you would become liable to pay your opponent's legal costs unless you go on with your claim and win or arrange alternative insurance cover.'
'You can end this agreement at any time and for any reason, even if your claim has not fully been dealt with. We will then have the right as our option to decide whether you must either (a) immediately pay to us the basic charges and the expenses including the fee but not the success fee of any barrister who has worked on your claim whether or not he or she has a conditional fee agreement with us. You will then be released from any liability for the success fee or the success fee of any barrister who has a conditional fee agreement with us even if you go on with your claim and win or (b) immediately pay to us the expenses including the fee of any barrister who does not have a conditional fee agreement with us. You will then pay no more to us unless you go on with your claim and win, in which event you will then immediately also have to pay to us basic charges, the success fee and the fee and success fee of any barrister who has worked on your claim and who has a conditional fee agreement with us.
'In respect of any claims made during the period of insurance up to the limit of indemnity (a) for opponent's costs in the event that the insured becomes liable to pay such costs either by order of the court or because the legal action has been withdrawn, discontinued or settled subject to the prior approval of the insurer which shall not be unreasonably withheld and (b) for the insured's disbursements if the insured becomes liable to pay the opponent's costs by order of the court or because the legal action has been withdrawn with the prior approval of the insurer or the legal action has been discontinued with the prior approval of the insurer or settled in the opponent's favour.'
'If you win your claim, you are primarily liable to pay our basic charges, success fee, your disbursements, after the event insurance premium and VAT. Your opponents will be ordered to pay part or all of your legal costs and those costs will be recoverable from your opponent to the extent that they are reasonable and proportionate to the value of your claim. If it appears to us that you are unlikely to recover all of your legal costs from your opponents we will give you a reasonable estimate of any potential shortfall which will be payable out of your damages.'
'You do not pay any basic charges, success fee or VAT to us. You will be responsible for payment of our disbursements although these may be recovered from your insurance if you have taken out an after the event insurance policy. You are liable to pay your opponent's charges and disbursements except for any opponent's success fee. If you have taken out after the event insurance policy, the insurers will pay your opponent's charges and disbursements.'
'If you end the agreement but continue to pursue your claim yourself, or through other solicitors, you remain primarily responsible for payment of our basic charges, VAT, disbursements and insurance premium. If you go on to win, you will pay our success fee. You may be able to recover part or all of these costs from your opponent.'
'If you reject and supported by our advice you continue to pursue your claim but you recover damages that are less than the sum offered or paid by your opponents, we will not charge you our basic charges or success fee but the work done after the expiry of 21 days following receipt of the notice of the offer or payment. We will charge you our basic charges, success fee, VAT, disbursements and insurance premium for the work done before that date, which you should be entitled to recover from your opponents. The legal costs payable will not be limited by reference to the amount of damages which may be recovered on your behalf. Your opponents will be entitled to an order for costs against you but you may be covered for this risk by your insurance policy.'
'If the court carries out an assessment of our charges and disallows any amount whether of basic charges, disbursements, success fee or insurance premium, for any reason whatever, including on the ground that the level at which the success fee was set is unreasonable in view of what we knew or should have known at the time it was set, that amount ceases to be payable under this agreement, unless the court is satisfied that it should continue to be payable.'
'If you end the agreement, we then have the right to decide whether you must pay the basic charges and your disbursements including barrister's fees when we ask for them, or pay the basic charges and your disbursements including barrister's fees and success fees if you go on to win your claim for damages.'
'We can end this agreement if you do not keep to your responsibilities in condition two. We then have the right to decide whether you must pay the basic charges and your disbursements including barrister's fees when we ask for them or pay the basic charges and your disbursements including barrister's fees and success fee if you go on to win your claim for damages.'
'The premium for this policy is only payable if you succeed in your case. What is meant by success is set out in the CFA and the policy. It is also only payable when you have won the case. Normally, your opponent will be required to meet the costs of this policy along with your other costs. It is important that you understand that your opponent can challenge the level of the premium under this or any ATE policy. The courts have the authority to decide whether your opponent should pay the premium in full or part or even not at all. Whatever the courts decide is payable by your opponent, you are responsible for paying the whole premium to us. This may mean you have to meet part or all of the premium out of your own funds. Your solicitor is not permitted under the policy to release your damages to you until you have agreed with us how the premium is to be paid.'
'(a) determining the level of indemnity required to afford the insured protection in the event of an unsuccessful outcome at the conclusion of the legal proceedings. This shall be the sum of expenses and opponent's costs. (b) Multiplying the level of indemnity referred to in (a) by the premium rate as stated in the schedule (c) adding insurance premium tax which is payable on the premium at the rate prescribed at the date when the premium is payable.'
'However, in deciding whether such an objection is sustainable in practice, the focus is primarily upon the reasonable interests of the plaintiff in the litigation so that in relation to broad categories of costs, such as those generated by the decision of a plaintiff to employ a particular status or type of solicitor or counsel or one located in a particular area, one looks to see whether, having regard to the extent and importance of the litigation to a reasonably minded plaintiff, a reasonable choice or decision has been made. If satisfied that the choice or decision was reasonable, it is the second question, what is a reasonable amount to be allowed which imports consideration of the appropriate rate or fee for a solicitor or counsel of the status or type retained.'
'As the judge rightly pointed out, the central question in this appeal is whether it was reasonable in all the circumstances for Mr Sarwar acting on his solicitor's advice to incur the cost of the ATE premium without making any further enquiries into the possible existence of BTE cover.'
'I have no hesitation in saying that no client who walks into a solicitor's office waving a public funding certificate which would cover his claim for personal injuries would be advised by a solicitor to tear up that certificate and enter into a conditional fee agreement. That in practice this is what happened in this case does, in my judgment, amount to a very material adverse effect on the protection afforded to this claimant because he has incurred liabilities under the conditional fee agreement and under the disbursement funding loan agreement which he would not otherwise have incurred.'
'The judge was not persuaded that the financial disadvantages of the CFA brought to C were outweighed by the financial and other advantages the CFA were said to have over legal aid. Not using legal aid made C liable to pay disbursements insofar as these were not paid by D, unless he successfully sought a solicitor and client assessment so as to avoid them. It also exposed him to liability for interest upon a disbursement loan but since that was very small, under £53, this additional liability was not by itself significant. By agreeing to pay a success fee which included 5% in respect of the deferment element, C was liable to pay 5% of the base costs i.e. a sum of £1,800. That by itself was a substantial disadvantage. C would also be liable to pay both base costs and allowed success fees in respect of any profit costs which were disallowed as between litigants unless he successfully applied for a solicitor and client assessment to avoid those costs. C also had at least notional liability to pay the difference between the insurance premium paid and the insurance premium allowed. There was a substantial risk that now the full facts were known, the professional indemnity insurers of the first firm of solicitors might seek to set aside their agreement to indemnify him for this expense. The judge did not accept that the substantial disadvantages outlined above could be avoided by the courts assessing costs between litigants. In any event, to do so would merely increase the disadvantage to C as between solicitor and client. The advantages said to outweigh the disadvantages did not in fact do so. The freedom from bureaucracy if it existed was a benefit to the solicitor not the client. It was unreal to suggest that the costs protection provided by the ATE cover was better than the costs protection provided to legally aided litigants under Section 11 of the Access to Justice Act 1999. Although the receipt of damages without waiting for the delay of detailed assessment was valuable, its value did not exceed the extra burdens the CFA placed upon C. The judge also disallowed the appeal as to the recovery of the ATE premium. The costs judge had exercised his judgment as to whether the premium should have been incurred and held that it should not. Although at the time it was purchased, no other form of costs protection was available to C, the costs judge felt that the responsibility for that misfortune should fall upon C rather than D. The costs judge's ruling on that question could not be categorised as wrong.'
'In deciding whether the costs claimed are reasonable and on the standard basis assessment proportionate, the court will consider the amount of any additional liability separately from the base costs.'
'In other words, what is required is a two stage approach. There has to be a global approach and an item by item approach. The global approach will indicate whether the total sum claimed is or appears to be disproportionate having particular regard to the considerations which CPR Rule 44.5 (3) states are relevant. If the costs as a whole are not disproportionate according to that test, then all that is normally required is that each item should have been reasonably incurred and the cost for that item should be reasonable. If on the other hand the costs as a whole appear disproportionate, then the court will want to be satisfied that the work in relation to each item was necessary and if necessary, that the cost of the item is reasonable. If because of lack of planning or due to other reasons, the global costs are disproportionately high, then the requirement that the costs should be proportionate means that no more should be payable than would have been payable if the litigation had been conducted in a proportionate manner. This in turn means that reasonable costs will only be recovered for the items which were necessary, if the litigation had been conducted in a proportionate manner.'
End of judgment.