SCCO Reference: CL1405288
SENIOR COURTS COSTS OFFICE
Thomas More Building,
Royal Courts of Justice, Strand,
London, WC2A 2LL
B e f o r e :
| Oliver Davis
(A child and protected party by Lisa Marie Davis, his Litigation Friend)
|Wiltshire Primary Care Trust
Joshua Munro (instructed by Acumension) for the Defendant
Hearing dates: 21 August and 30 September 2015
Crown Copyright ©
"(1) Where the court is to assess the amounts of costs …the court will not …allow costs which have been unreasonably incurred or are unreasonable in amount…
(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; and
(b) resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party…."
"…The court is to have regard to all the circumstances in deciding whether costs are –
If it is assessing on the standard basis –
Proportionately and reasonably incurred;
Were proportionate and reasonable in amount…"
"When the court is considering the factors to be taken into account in assessing an additional liability, it will have regard to the facts and circumstances as they reasonably appeared to the solicitor or counsel when the funding arrangement was entered into…"
"In deciding whether a percentage increase is reasonable, relevant factors to be taken into account may include:
(a) The risk that the circumstances in which the costs, fees or expenses would be payable might or might not occur;
(b) The legal representative's liability for any disbursements;
What other methods of financing the costs were available to the receiving party."
The CFA and the ATE Policy
The Background: Mr Parford's account
I write further to your telephone conversation with Elizabeth Williams earlier today when you discussed your desire to progress the investigation of the value of Oliver's claim without delay and how this could be achieved…
On the basis of Leading Counsel's opinion, but without knowing whether and on what basis the Defendant might seek to deny liability, I would currently put Oliver's prospects of success at 60%....
The Defendant's Solicitors reverted to me requesting clarification of Oliver's case, in so far as it relates to causation of his Injuries and this clarification was sent to them on 30 October…
The Defendant's Solicitors have written to me today suggesting that their time for serving the letter of response should run from the date upon which they received the clarification which I provided and that as such, the letter of response is not due to be served until 31 January 2010. I do not agree with their calculation of the date by which the letter of response should be served but, in reality, there is little point in arguing with them about this date since they will serve the letter of response when they are ready to do so…
I advised you after the Conference With Leading Counsel that I would revert to the Legal Services Commission to request them to extend the scope and financial limitation currently Imposed upon Oliver's Certificate of Public Funding to enable me to immediately commence the investigation of the value of Oliver's claim, which would involve the instruction of several expert witnesses. I submitted an application but, as I have advised you, the application was turned down. I was informed that the Legal Services Commission would not authorise the incursion of any expenditure in relation to the valuation of Oliver's claim until they had had the opportunity of considering the terms of the letter of response.
Unfortunately, this means that the time between now and receiving the Legal Services Commission's authorisation to proceed, following service of the letter of response will simply be wasted. It will lead to the delay in instructing the expert witnesses whose opinions are required and therefore result in a delay in obtaining their written opinion. This delay will inevitably delay the possibility of seeking a voluntary interim payment of damages, in the event that the letter of response contains a complete admission of liability or alternatively, in making a formal application to the Court for an interim payment of damages if the Defendant refuses to agree to make a voluntary Interim payment.
I appreciate that your present circumstances are wholly unacceptable for you and your husband and Oliver. You urgently need to move to suitable alternative accommodation and you urgently require a substantial interim payment of damages to enable you to engage a Case Manager who will assist in the employment of carers to help you look after Oliver. This is increasingly important as both you and your husband have found that as Oliver becomes older and larger that he is more difficult to lift and carry than he used to be, as a result of which you have already or are likely to suffer back injuries yourselves. I also understand that you need an interim payment of damages to enable you to purchase certain items of equipment which you would like to have available for Oliver's use and that you would also like to purchase a suitable alternative vehicle In which Oliver could travel.
I understand from your discussion with Elizabeth Williams that there is a distinct possibility that your husband, Matthew, will be made redundant in the near future. If this were to happen, your financial position would become even more difficult and you would no longer be in a position to purchase any of the items which you need for Oliver on an ongoing basis which hitherto you have been funding yourselves.
I have advised you that, if the Defendant makes a full admission of liability in the letter of response, you would be entitled to request an immediate interim payment of damages for Oliver. However, until suitable expert opinion has been obtained, it will be impossible to cost Oliver's needs and therefore, it will not be possible to evaluate how large an interim payment is required…
I am hopeful that, if I am able to instruct the appropriate expert witnesses in the near future…should it be necessary to make a formal application to the Court, by the time that it is possible to do so in March or April next year.
What is abundantly clear, however, is that, if it is not possible to instruct the expert witnesses until after I have received authority to do so from the Legal Services Commission following service of the letter of response, there will then be a significant delay before a request for a voluntary interim payment can be made, let alone a formal application to the Court.
Unfortunately, as a result of the Legal Services Commission's refusal to allow me to proceed as I have indicated above, I believe that it is no longer in Oliver's best interests to pursue his claim utilising the benefit of Public Funding. If you wish to continue to do so, then there will be an inevitable delay in investigating the value of Oliver's claim which will delay any request for or application to the Court for an interim payment of damages.
I understand that Elizabeth Williams discussed the possibility of changing the basis of funding Oliver's claim to enable the investigation of the value of his claim to be undertaken without any delay. It was suggested that an application be made to the Legal Services Commission to discharge Oliver's Certificate of Public Funding so that a Conditional Fee Agreement can be signed in relation to the future funding of Oliver's claim. If this were to be done, I would be able to commence the investigation of the value of Oliver's claim immediately the Conditional Fee Agreement had been signed.
I understand that you instructed Elizabeth Williams that you would like to do so as you wish to progress the investigation of the value of Oliver's claim without any delay whatsoever. Elizabeth Williams advised you that I would write to you today enclosing a form of authority, which I am doing and which I would be grateful if you could sign, date and return to me confirming that you would like me to apply for the immediate discharge of Oliver's Certificate of Public Funding.
I would be grateful if you could telephone me upon receipt of this letter to have a brief discussion to confirm your instructions. I do not know whether you have access to email but if you do, I would also invite you to confirm your instructions to proceed, by email, in order to save time.
I would also take this opportunity of advising you of the authorisation which the Legal Services Commission would be likely to provide upon receipt of the letter of response. If the letter of response contains a full admission of liability, authorisation is likely to be provided to commence Court proceedings and obtain Judgment in Oliver's favour against the Defendant and also to commence the investigation of the value of Oliver's claim. However, if the letter of response denies either breach of duty of care and/or causation of Injury, the Legal Services Commission… will require me to seek a direction from the Court that the liability issues be tried as a preliminary issue in advance of any valuation of Oliver's claim. No authorisation will be given to undertake the investigation of the value of Oliver's claim. I believe that this would also be detrimental to Oliver's claim. It would potentially cause some difficulties and would potentially delay settlement of Oliver's claim, at a later stage of the proceedings.
I have written you a separate letter pealing with the potential advantages and disadvantages for Oliver of his claim being funded by the Legal Services Commission or alternatively under the provisions of a Conditional Fee Agreement. However, in summary, I would re-affirm that I believe that it would be in Oliver's best interests to discharge his Certificate of Public Funding and to enter into a Conditional Fee Agreement under the terms of which the investigation of his claim can be pursued expeditiously, without any delay…."
"The Legal Services Commission maintain an upper hourly rate which they are prepared to allow Solicitors to pay to expert witnesses. This means that to some extent, your solicitor can be constrained in instructing the most appropriate experts as many of the experts involved in cases such as Oliver's case, will charge a higher hourly rate than the Legal Services Commission will agree to pay. This may result in the need to instruct less experienced experts or possibly result in delays in obtaining expert opinions as the experts who are willing to act at Publicly Funded rates may be extremely busy.
In addition, the Legal Services Commission will impose financial limitations in relation to the different stages of Oliver's case and it is quite likely that those financial limitations will not enable your Solicitor to undertake all the work which is considered necessary to investigate and litigate Oliver's Claim properly….
Whilst I have indicated above that one of the benefits of a Certificate of Public Funding is that you will usually be protected against having to pay the Defendant's legal costs or any part of them if the claim is unsuccessful, you may be responsible for paying part of the Defendant's legal casts If any adverse costs orders have been made in favour of the Defendant during the course of the claim and Oliver's claim is ultimately successful…the Defendant would particularise the amount of their costs and would then seek to deduct those costs from Oliver's damages or the legal costs which the Defendant had to pay to Oliver…
It is also possible that if Oliver's claim were successful that the Legal services Commission's statutory Charge might apply to certain elements of his legal costs or expenses. It is possible that if there were elements of his legal costs, for example, the costs incurred in unsuccessfully defending an application made by the Defendant, that those costs would ultimately be paid by Oliver from his damages.
You will see that whilst there are certain benefits of Oliver funding his claim with the benefit of Public Funding, there are also certain potential disadvantages…"
"If we were acting for Oliver under the terms of a Conditional Fee Agreement, we would arrange for Andrew Spink QC and any other Barrister who might be involved in this case, to act under a Conditional Fee Agreement which they would enter Into with Wolferstans. This would similarly provide that in the event that Oliver's claim was unsuccessful, they would not receive payment for their services but if the claim was successful, they would receive payment of both their base costs and a success fee.
The Conditional Fee Agreement which we would offer Oliver would be on the basis that we would only seek to charge for those legal costs which we were ultimately able to recover from the Defendant. We would waive our unrecovered costs and any costs which we were technically entitled to claim from Oliver rather than the Defendant.
We would advise you to take out a policy of After the Event Insurance to indemnify Oliver in relation to the expenses which were being incurred on his behalf and also to indemnify him In relation to any costs which he may become liable to pay to the Defendant. We can arrange for such a policy to be taken out which would not only provide sufficient indemnity cover for Oliver but would also enable us to "ring fence" Oliver's damages so that if an adverse costs order were obtained during the course of the proceedings, those costs would not ultimately be deducted from Oliver's damages.
An After the Event Insurance Policy can be arranged without the need to pay a premium at the time that the policy is taken out. The policy premium is fully deferred until the end of the case and is also self- insured so that if the case is concluded unsuccessfully, the policy holder never has to pay the premium. In the event that Oliver's claim is concluded successfully, the policy can be claimed from the Defendant.
Oliver would remain responsible for the expenses which are incurred on his behalf during the investigation and/or litigation of his claim but only to the extent that they are indemnified under the terms of the After the Event Insurance Policy. These expenses would be incurred and funded by Wolferstans on Oliver's behalf during the course of the claim. If the claim were concluded successfully, these expenses can be claimed from the Defendant and in the event that the claim is concluded unsuccessfully they can be claimed from the After the Event Insurance Company. In both of these circumstances the payments received would be used to reimburse Wolferstans for the payments that had been made on Oliver's behalf.
The cost to Wolferstans of funding all of the expenses which are likely to be incurred during the course of Oliver's claim will be very substantial. Therefore, I would require your agreement to seeking to recover the disbursements incurred to any particular date from the Defendant as part of any application for an interim payment of damages. Upon receipt of such an interim payment, you would agree to reimburse Wolferstans in respect of the expenses which had been incurred to that date and to make a payment on account of recoverable future expenses. At the conclusion of the claim, when those expenses are paid by the Defendant, they will be reimbursed to Oliver.
There are a number of advantages to utilising a Conditional Fee Agreement to fund Oliver's claim, not least the fact that it would enable us to progress the investigation and litigation of Oliver's claim as we think fit rather than being constrained by the need to revert to the Legal Services Commission periodically to seek their authorisation to proceed. In addition, under the terms of the Conditional Fee Agreement which I am proposing and with the security provided by a suitable After the Event Insurance Policy, Oliver will not be in any worse position and indeed he is likely to be in a better position in certain respects than if his claim were to continue to be funded with the benefit of Public Funding."
"Mrs Davis said that she is very keen to progress the investigation of the value of Oliver's claim as soon as possible. She confirmed that their financial position as well as the housing situation is very difficult and she would like to be able to seek an interim payment for damages at the earliest possible stage, if the Defendants make admissions in the letter of response.
Mrs Davis asked whether she would be liable to pay Oliver's fees or the other side's fees if he continued to be publicly funded.
I explained that in the event of a successful outcome there was a possibility that the Statutory Charge might apply to some element of Oliver's costs. If that were the case then those costs would be paid to Wolferstans by the Legal Services Commission who would require an equivalent amount to be deducted from Oliver's damages…
I said that in the event of a successful conclusion Oliver would have no liability to pay the Defendant's costs save in respect of possible interlocutory adverse costs orders. If such orders existed then they would also be deducted from the damages.
I said that if Oliver's claim was funded by a Conditional Fee Agreement it would be offered on the basis that we would seek to recover our costs from the other side and if there was shortfall we would not seek to claim that from Oliver's damages.
In the event that Oliver's claim was unsuccessful he would be protected by a policy of indemnity insurance which we would arrange on his behalf which would provide cover for any adverse costs order and would also provide cover for any disbursements which had been incurred on Oliver's behalf during the conduct of the claim from the time that the Conditional Fee Agreement was signed, that is, the expenses which will relate to the medical experts' fees, court fees and so on and so forth….
I explained that at the present time whilst Oliver was publicly funded any disbursements which were incurred were paid by Wolferstans and reimbursed by the Legal Services Commission. If the funding changed to a Conditional Fee Agreement the disbursements would be funded by Wolferstans but we were unable to seek immediate reimbursement from her. At the end of the case we would seek to recover them from the Defendant if the claim was successful or the indemnity insurance company if it was not…
I said that in the event of a successful conclusion Oliver would have no liability to pay the Defendant's costs save in respect of possible interlocutory adverse costs orders, If such orders existed then they would also be deducted from the damages.
I said that if Oliver's claim was funded by a Conditional Fee Agreement it would be offered on the basis that we would seek to recover our costs from the other side and if there was shortfall. We would not seek to claim that from Oliver's damages…
She said that from what I had advised if the method of funding was changed that we would be able to progress matters more expeditiously than we would be able to do if public funding remained in place. I confirmed that that was so. She said that as she wanted to press on with matters as soon as possible providing that Oliver or indeed she and her husband were not financially disadvantaged by transferring the method of funding then she would very much want me to do so.
I confirmed that Oliver would be in no worse a financial position if public funding were discharged and a Conditional Fee Agreement were signed and in certain respects he would be in a better position. It would certainly allow us to progress the investigation of the quantum aspect of the claim more quickly and in those circumstances if the Defendant did make a complete admission of liability in the letter of claim or did so in the Defence that we would be in a much better position to seek an interim payment of damages. I said that by changing the method of funding it was likely to save a period of approximately 3 months or possibly more.
Mrs Davis said that she definitely wanted to change the method of funding, in the circumstances…"
Mr McGrath's Account
"Nonetheless, it is also accepted that the majority of Oliver's ongoing disabilities have occurred as a consequence of inadequate care on behalf of the PCT and on behalf of our client, we extend their apologies for the injury that has befallen Oliver as a consequence of this inadequate and substandard management".
Mr Parford's Response
The Claimant's Submissions
"The test of reasonableness which [the costs officers] must apply is directed to their assessment of the costs incurred by the receiving party… It is not directed to the entirely different question whether the cost to the paying party would be prohibitively expensive…"
The Defendant's submissions
Submissions in Response
Mr Parford's Third Statement
Retrospective Success Fee
The Claimed Tactical Advantages of the CFA and ATE Policy
The November 2009 Advice
The ATE Premium
Other Weaknesses in the "Ring Fencing" Arrangement