English and Welsh Courts - Miscellaneous

IN THE MAIDSTONE COUNTY COURT                                          Case No: 1MS00974

The Law Courts

Barker Road

Maidstone

Kent

ME16 8EQ

Date: 28^th October 2013

BEFORE:

                                    DEPUTY DISTRICT JUDGE EDGINGTON                            

BETWEEN:                                                      

                                             (1) IVAN IBBERTSON

                                             (2) MELANIE JANE IBBERTSON                      Claimants

-and-

                                                        BLACK HORSE LTD                                Defendant

APPEARANCES:

For the Claimant:                       Mr Michael Tyler (Costs lawyer)

                                                   Civil & Commercial Costs Lawyers Limited

                                                   Chronicle House, 72 - 78 Fleet Street, London, EC4Y 1HY

                                                   Instructed by Blacklion Law LLP, Suite 2.03 The Perfume Factory, Wales Farm Road, Acton, London W3 6UG

For the Defendant:                    Mr Daniel Saoul

                                                   4 New Square, Lincoln’s Inn, London WC2A 3RJ

                                                   Instructed by Squire Patton Boggs (UK) LLP, Solicitors,

                                                   2 Park Lane, Leeds, LS3 1ES.

JUDGMENT

Approved Transcript of the Judgments

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JUDGMENT                                                                                                  28^th October 2013

DEPUTY DISTRICT JUDGE EDGINGTON:

1.             This is litigation arising from a claim being made by Mr and Mrs Ibbertson against Black Horse Limited and it is at the “tail end” of a claim; that is to say after the claim has been sorted out and the question of costs is being considered. 

2.             The position here is that a Bill of Costs was prepared, submitted to those representing Black Horse Limited, and in one of the points of dispute there arose the issue of additional liabilities; that is to say an additional percentage due under a Conditional Fee Agreement on top of the claimants’ solicitors profit costs, and also an “after the event” insurance premium.  Those additional liabilities can only be recovered if notice has been given pursuant to Civil Procedure Rules 1998 rule 44 and Practice Direction 19.2(4).

3.             The brief and succinct chronology has been helpful, namely that there was a Conditional Fee Agreement signed on 14^th June 2010 by Mr and Mrs Ibbertson.  That provided for an additional percentage of profit costs under certain circumstances.   On 15^th February 2011 a letter of claim was sent and that letter of claim referred to a Conditional Fee Agreement and possible additional matters to be claimed under that Conditional Fee Agreement.  The claim was issued on 18^th April 2011.  The Notice of Funding was not submitted or served at that time, which is accepted by the claimant’s solicitors.  It is then said that on 9^th May 2011 a letter was sent from the ATE broker which confirmed that the “after the event” insurance cover had been put in place and commenced on 18^th April 2011, being the commencement date of the Court proceedings.  Three days later on 12^th May 2011 it is said that Form N251 was sent both to the defendant’s representatives and to the Court.

4.             I am here dealing with an application for relief against sanctions under Civil Procedure Rules 1998 rule 3.9.  A lot has been said about which version of rule 3.9 applies: it has now been accepted that it is the version which applies after the 1^st April 2013 when the Jackson reforms were put into effect and this was one of many reforms made both to rule 3.9 and indeed the overriding objective.

5.             I do not think I need to go into that particular issue at great length.  Whilst I certainly understand the point being made by Mr Saoul, the fact of the matter is the facts of this case arose a long time before this amendment, and whilst rule 3.9 applies I have to be a bit circumspect about how strictly I apply that to the facts which arose certainly one year, possibly two years, beforehand.

6.             I have had representations made to me, which have been helpful and thorough.  Regrettably I was not able to see Mr Saoul’s skeleton argument but he has gone through his points with me and has referred me to three cases in particular and to the comments made by the author of the reforms; those have all been very helpful.

7.             I am conscious of the fact that certainly on the face of it, if the pleaded claim was for £8,000 the costs do seem to be disproportionate, but that is not an issue for me to deal with today.  I have to deal solely with whether the additional liabilities, that is to say the additional amounts recoverable (assuming everything was done properly under the Conditional Fee Agreement) and the ATE premium are themselves recoverable as a matter of law.

8.             It is put to me that Form N251, having been sent allegedly to the Court and to the other side on 12^th May 2011, this means that the ATE premium is recoverable because the rules were complied with as far as that is concerned, and there were only about three weeks outstanding as far as the uplift on the Conditional Fee Agreement was concerned.  That is the way it has been put to me.  Therefore the whole issue of whether this letter enclosing N251 was sent becomes extremely important because it certainly seems that the recovery of these additional liabilities only really became an issue when the points of dispute were received and responded to.

9.             What I have about the letter, is the evidence of Ms Negar Yazdani, and she I know has been available to me, if I wanted to speak to her on the telephone during this hearing.

10.         It is regrettable, and I must say this because it is something which struck me immediately when I saw this application, how inappropriate it was for a telephone hearing, because certainly it does not enable me and it does not enable Mr Saoul to really test the evidence as far as it should be tested.

11.         All I have really is a written statement from Ms Negar Yazdani saying that in her view a letter was sent; her statement is written in very general terms and as Mr Saoul rightly says that does not go into any great detail about the process by which the letter was sent.

12.         Equally I have to say that Black Horse’s evidence does not tell me anything about the processes in its solicitor’s office about receipt of letters.

13.         Nevertheless, I have been been pursuaded by the fact that the two recipients, allegedly to whom the letter was sent, did not receive the letter.  I find that the solicitors representing Black Horse Limited did not receive it.  I also have to find, simply because I have the file in front of me, that the Court did not receive that letter either.  I have to say I am very concerned to note in the replies to points of dispute that in response to the allegation about recovery of additional liabilities, it simply says:

“The Claimants do not agree with the Defendant that a success fee or ATE premium is not recoverable.  The Defendant was made aware in the Claimant’s letter before action dated 15^th February 2011 that the Claimants entered into a Conditional Fee Agreement.  The Claimants are of the view that the Defendant has dealt with the Claimants’ instructing solicitors on various claims before and they are aware of their practice to enter into a Conditional Fee Agreement which provides for a success fee.  The Claimants also note that at the time when the Defendant received the letter before action or at the time of issue, this point was never raised”.

14.         Why is the letter of 12^th May 2011 not mentioned there?  It seems to me an obvious point to make because the letter of 12^th May 2011 encloses the N251, which is precisely the alleged notice which brings the matter back within the rules.  I find it very odd I have to say, that the reply did not mention it.  I cannot and do not say that Ms Yazdani is telling lies.  She is a partner and I would not suggest that she was telling me lies or untruths.  It may be that the letter was certainly dictated, it may be the letter was certainly taken down to the post room but it does seem to me very odd that there is a lack of evidence from the claimants’ solicitors as to how that letter got out of the solicitor’s office and the general processes under which their postal system operated.

15.         I also note (if I may say so) that on the alleged copy of the crucial letter I have seen at page 58 in the bundle, the font size of the name and address of the recipient and the letter itself seem to me to be different, which is again an odd point which I have noted from looking at these documents.

16.         If, as I do, I find that on the balance of probabilities the letter of 12^th May 2011 and form N251 did not get to their recipients.  I also find that they were not posted and it seems to me that the breach of the rules is therefore much more fundamental than the claimants’ solicitors suggest.  I do find that particularly in view of the amount of the claim as pleaded that even if I were looking at the old version of CPR rule 3.9 I would be looking in more detail at the issue of prejudice.  I would have decided, in this particular case, that the prejudice was actually substantial, bearing in mind the amount of the claim itself.  An “after the event” insurance premium of this size is extremely large and is something that the recipient of a notice would be bound to ask questions about and would be bound to consider very carefully in terms of negotiating with the claimant.

17.         In all the circumstances I think that I am forced into a situation where I have to refuse the application for relief against sanctions in this particular case.

End of judgment

JUDGMENT ON COSTS                                                                             28^th October 2013

DEPUTY DISTRICT JUDGE EDGINGTON:

1.             I am asked to assess the costs following the hearing we have just had and the judgment I have given.

2.             I have the defendant’s statement of costs and it is the total sum of £5,364.  It is included, and this is no disrespect to Mr Saoul at all, a considerable amount of work as far as he is concerned.  I am a little bit concerned about that bearing in mind the point which I made earlier and which has been made now that there was a grade A fee earner involved in this case and it does seem to me to be perhaps an over-reliance on fee earners and counsel who perhaps are too experienced.  In other words either you have a grade A fee earner conducting this case and controlling it and dealing with it up to the hearing itself, or you have counsel; it seems to me that there has been an over-egging of the pudding here.

3.             I am also concerned about the amount of time which has been spent, attendances on the defendant and the defendant’s cost lawyer, and I would say that taking an overall and broad brush approach that I am going to say that the brief fee is more than generous; I think that is a reasonable fee.

4.             The fees before then, whilst I am quite sure that Mr Saoul has dealt with matters competently and with the minimum possible time, they should not have been incurred in the first place.

5.             I am going to assess the overall bill, bearing in mind those criticisms, which as I say include the attendances on the defendant and defendant’s cost lawyer and some of the earlier counsel’s fees which should have been incurred by the solicitors, at a total bill of £4,000.

End of judgment