SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
Strand London WC 2A 2LL
B e f o r e :
| Allan Coleman
|- and -
George McDonald (instructed by CMS Cameron McKenna LLP) for the Defendant
Hearing date: 1 August 2016
Crown Copyright ©
"Please note that we intend to enter contracts for After the Event insurance to protect our clients in respect of adverse costs and disbursements. In the event that you wish to avoid the additional liability of ATE premiums, this can be avoided if you are willing to provide a guarantee, at this stage, that you will not seek to enforce adverse costs against our clients."
"We note your intention to enter into contracts for after the event insurance in relation to adverse costs and disbursements. Our client is prepared to agree not to enforce adverse costs/disbursements relating to a specific claim against the relevant claimant up to a date 14 days after the date of our substantive response to each claimant's detailed letter of claim in order to give your clients an opportunity to fully consider our client's response in each case. However, we wish to make clear at this stage that in such a case our client will require full supporting medical records and, if these have already been obtained, medical expert reports for each of the prospective claimants in order for it to be in a position to properly investigate the claims. In cases where medical reports have not yet been obtained we would expect the pre-action protocol to apply."
"We acknowledge your client's offer not to enforce adverse costs/disbursements relating to a specific claim against the relevant claimant up to a date 14 days after the date of your substantive response to their specific letter of claim.
Whilst we believe that your proposal is reasonable in principle, we do foresee some practical difficulties. It can take time to arrange After the Event insurance cover. As such, we feel that a period of one month, as opposed to 14 days, would be desirable to provide us with sufficient time to consider your client's substantive response and for us to arrange suitable After the Event Insurance, if required.
Further, we also take this opportunity to place you on notice that the After the Event insurance premium is likely to be higher should any of our clients be required to enter into such a policy at that later juncture, due to the increased litigation risk."
"Our client confirms that it will not enforce adverse costs or disbursements relating to any specific claim against the relevant claimant up to a date one month after the date of our substantive response to the claimant's detailed letter of claim."
"The Claimant is part of a larger group of individuals who are bringing legal action… under similar circumstances. As you know some of these claims have been issued to protect our clients' positions on limitation. Drafting Particulars of Claim and obtaining expert evidence in each case is proving time-consuming and expensive. Given the strength of the claims as to prospects and causation, we invite you to consider whether or not you require us to serve Particulars of Claim and supporting evidence in each case or, in order to save time and costs, whether you have any alternative proposals for disposing of these cases…
Further to your letter dated 19 July 2011, we note you will not enforce adverse cost disbursements relating to Mr Coleman's claim up until one month after the date of your substantive response to this Letter of Claim."
"… from our experience in dealing with claims concerning products of this type it is clear that each claim will be markedly different and will need to be investigated and handled as such…"
"… our client is not in any position to consider the merits of implementing a settlement protocol at this stage in view of the inadequacy of the information you have provided as to your clients' claims to date.
Our client is still actively investigating the merits of these… claims and we are exploring the defences which we consider are open to our client. Based on the… letters of claim provided to date, we do not agree with your assertion that your clients' cases on liability and causation are strong. A settlement protocol is not, therefore, something our client is considering at this time."
"… in light of your refusal to agree to one-way costs shifting, we will now go ahead and take out ATE insurance."
"As it is our client's intention, at or before the end of the period up to 23 January 2012, to make a commercial offer of settlement to your client in respect of this matter, our client therefore requests that your client does not take any further steps, or incur any further costs, in this claim during this period…
In relation to the other claims you have notified, where you have provided us with a formal Letter of Claim in accordance with the pre-action protocol, our client's preferred strategy would be to adopt a process broadly similar to the one outlined above in relation to this claim and we will be writing to you separately in respect of those claims."
"in light of the above, our client requests that your client does not take any further steps, or incur any further costs, in this claim during this period. We therefore ask you to confirm that your client will not incur any further costs in this period. If, in spite of the contents of this letter, any such costs are incurred, we will bring it to the attention of the Court at the appropriate time on the issue of costs."
"If your client does not accept the settlement offer, we reserve the right to bring the contents of this letter to the attention of the court on the issue of costs. In those circumstances, we intend to seek an order requiring your client to pay our client's costs from the expiry of the Deadline, together with interest on those costs from that date until payment."
"We write to advise you that we have now obtained a quotation for After the Event insurance cover in respect of these claims. The cover offered is on the deferred basis, with a minimum premium payable.
In the event that your client wishes to avoid the additional liability of an ATE premium, this can be avoided if your client is willing to agree to unqualified one-way costs shifting.
In the event that we do not hear from you by close of business on Friday, 17 February 2012, we confirm that we will go ahead and take out the policy."
"… We think it particularly pertinent to remind you… that we considered that these claims were likely to be highly individual in nature and therefore better resolved on a case by case basis…"
"We understand from your letter that, with the exception of Mr Christopher Pitt, none of the claimants or prospective claimants who have instructed you have the benefit of After-the-event (ATE) insurance cover… We further understand from you that there are currently 27 claimants in total.
We also understand that you now consider that it is necessary for each of those claimants or prospective claimants to obtain ATE insurance to indemnify them against any adverse costs orders that our client may obtain in any current or prospective litigation.
You suggest that your clients would not seek such cover if our client agrees to "unqualified one-way costs shifting" in each of those cases. You have not, however, explained exactly what you mean by such a phrase. We assume that you ask our client thereby to agree to waive all of its rights to recover in relation to any costs in any of these claims (whether individual are common costs) that are incurred in the future. It is not clear, however, whether you also ask client to waive any entitlement that it might have in relation to costs that it has already incurred in any of these claims or prospective claims…
We consider that there is no good reason why your clients should be exposed to this further expense at this time. We do not consider that it is necessary, reasonable or proportionate in any of these cases, irrespective whether proceedings have been issued or are merely prospective…"
"… our client has not yet served any defence in any of these issued proceedings. In order to facilitate our general discussions in settlement of all of these claims, our client proposes that these five claims be stayed generally, terminable upon one month's written notice by either party to the proceedings.
In the four of these cases that do not yet have ATE insurance (that is, all save Pitt) we are also willing to offer a temporary costs amnesty in order to obviate the need for such insurance. For the avoidance of doubt, this offer is as follows. In any of these four cases in which your client forebears obtaining ATE insurance until the conclusion of the period of the stay, our client will agree to waive its right to recover the individual costs that it has incurred, or will incur, in that case until the conclusion of the period of the stay-save that our client reserves all its rights to seek recovery of any costs it incurs in this period of stay in responding to any steps taken by any of the claimants in their respective proceedings, or in responding to any GLO application or other litigation started on behalf of an individual claimant collectively with others. In the interest of clarity, our client again reserves its right to seek to recover its costs against any claimant by way of a Bill of Costs in any action brought by an individual, or against the claimants collectively.
In the light of the above, we cannot see that it is necessary or reasonable for your clients to incur the cost of any ATE insurance. In the event therefore that any of your clients' costs claims proceed to detailed assessment, we shall bring this correspondence, including our client's offer as to costs above, to the attention of the costs judge and will strongly resist recovery of any such premium(s), quite aside from any objections we may wish to make with regard to the level of any premium and its calculation…"
"… Whilst your client has offered a temporary costs amnesty, it is not an irrevocable one way costs shift. If in the future your client withdraws its temporary offer, then our clients will potentially face an adverse costs liability.
Further, with respect to disbursements, our clients remain at risk. After the Event insurance is a recognised means of protecting against this risk, and we cannot see how our clients would be criticised for protecting their position.
The policy that has been offered to our clients is a group Pursuit policy… In the event that your client is willing to agree to full one-way costs shifting… We would look to obtain a policy to cover disbursements alone. However, on the current terms offered, our clients continue to be at risk of adverse costs and it remains in their interests take out full cover…
We confirm that we will accept the policy quotation unless you confirm by 9 March 2012 that your client will agree to full one-way costs shifting."
"… We refer to the disbursements to which you state that your clients remain at risk… Insofar as you mean your clients' future risk of having to pay for our client's disbursements, the temporary costs amnesty, as set out in our letter of 20 February 2012, applies to both costs and disbursements… Insofar as you intend to provide insurance cover for your clients against liability for their own disbursements, we consider purchasing ATE insurance an unreasonable step to take, especially in light of the settlement discussions afoot…"
"… As we explained by letter dated 25 April 2012 and over the phone, we strongly consider that permitting the extension that we had asked for would have been in the interest of both parties as it would have provided an opportunity for potential early resolution pending the conclusions of the expert reports. We do not consider that your client would have suffered any significant prejudice by agreeing to such extension, particularly as in any event we consider expert reports will be required in order for the court to rule… We also consider that such extension would have assisted in the costs-efficiency of this case…"
The Conditional Fee Agreement
The ATE Policy
"The Insured recovers money or obtains the right to recover money or the right to money or the Insured in any way derives benefit measurable in monetary terms from pursuing the Legal Proceedings, whether by way of judgment or settlement or by any other means."
"… Legal Proceedings will be deemed Successful if the Insured is offered or obtains at any time a net entitlement to money and/or damages and/or costs which, taking into account any counter-or cross-claim in the Legal Proceedings, equals or exceeds the definition of Success as shown in the Schedule…"
"… should the Court reach a decision at trial, such that fewer than 50% of members at that time of the Insured obtain an award which equals or exceeds the Definition of Success the Premium will be reduced pro-rata and the Policy will meet claims made by Unsuccessful members of the Insured in like manner to an Unsuccessful outcome…
this Policy covers the Insured as a whole. The individuals agree that if some members of the Insured wish to accept an offer following which the remainder or part of the remainder of the Insured is advised by the Solicitor to discontinue as a result of the prospects of their individual claims not being sufficient, 50% of any damages awarded to the Insured must be used to pay any costs the Opponent may be entitled to by virtue of any such discontinuance(s). The Insurer will only indemnify the Insured, subject to the other Terms and Conditions of the Policy, in respect of any costs of the Opponent which remain to be met following the exhaustion of 50% of the damages recovered by other members of the Group…"
The Evidence Given on behalf of The Claimant
Submissions on whether the ATE Premium should have been Incurred
Conclusions on the Reasonableness of Incurring the ATE Premium
The Calculation of the ATE Premium
The Amount of the Defendant's costs
The Calculation of the Premium: Evidence and Submissions
Conclusions on the Calculation of the ATE Premium
Summary of Conclusions