piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

CPR 3.14 - How Explicit and Draconian?

The notes in the White Book below Civil Procedure Rule 3.14 suggests the “rule is explicit and the consequences of failure to comply Draconian”. The rule itself provides that “Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.” It has yet to be tested by way of an appeal to the Court of Appeal (despite the author’s best efforts on several occasions). However it would appear that guidance is likely to be forthcoming soon. In an interesting twist to an interesting case, the High Court limited costs awarded to Andrew Mitchell MP in his litigation against The Sun to applicable court fees only due to his "absolute failure" to discuss budget assumptions with the newspaper and failure to ask for additional time in advance. At a case management conference in June of this year, Mitchell and The Sun were ordered to exchange costs budges as per the new CPR regime. Mr Mitchell’s lawyers however failed to do so and thus the court, in accordance with the explicit and draconian wording of CPR 3.14, held that he would thus be "limited to a budget consisting of the applicable court fees for his claim". After hearing evidence about the reasons behind the non-compliance the sanction was not lifted. Master McCloud took a strict approach and is widely reported as holding that: “Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a CMC even at relatively short notice if proper planning has been done…", and that "The court must now, as part of dealing with cases justly, ensure that cases are dealt with at proportionate cost and so as to ensure compliance with rules, orders and practice directions…" The Master noted that it would have been "far more likely" that the sanction would have been lifted against Mitchell before the reform of the CPR in this regard. However she said that in "the absence of authority on precisely how strict the courts should be and in what circumstances", and "[i]t will be for the appeal court to determine whether such a strict approach is appropriate". That appeal would be "on the basis that the severe nature of the sanction which I have imposed in giving effect to [the costs reforms] ... are of necessity not backed by specific authority on point, and the risk of injustice if I were adopting too strict an approach is such as to provide 'some other compelling reason' for an appeal to be heard”.

Litigants in Person, the Judges and You!

      According to the government's own figures, 623,000 of the 1,000,000 people who previously received public funding each year ceased to be eligible for such assistance when the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012 came into force on 1 April 2013.   On 5 July 2013 the Judicial Working Group on Litigants in Person (LIPs) published its report on how the judiciary proposes to deal with the massive increase in LIPs in courts and tribunals. It merits careful reading by all practitioners.    www.judiciary.gov.uk/Resources/JCO/Documents/Reports/lip_2013.pdf    The challenges are immense and will be further increased by the impending rise in the financial limit for the small claims track from £5,000 to £10,000. A doubling of this limit will inevitably mean more cases fall within the small claims track where public funding is not available. As for alternative sources of assistance, the Citizens Advice Bureau estimates that local advice and community based services will lose over 77% of their public funding.    In 2012, District Judge Richard Chapman, the immediate past president of the Association of Her Majesty’s District Judges observed that already:   “Judges like me are spending more and more of our time having to deal with litigants who simply do not know the law, have never heard of the Civil Procedure Rules 1998 or the Family Procedure Rules 2010 and have breached most of the case management directions”.    The report recommends that the Ministry of Justice and Her Majesty’s Court and Tribunal Service should devote the necessary time and resources to producing, with judicial involvement, appropriate materials, including audio-visual materials, to inform LIPs what is required of them and what they can expect when they go to court as well as reviewing the information that is currently publically accessible on the various judicial websites – see [2.8] and [3.49-3.52] of the report.   The Judicial College should also urgently assess the  feasibility of providing training on LIPs –  a sort of “Quick Lit” course for judges – together with developing a  “litigants in person toolkit” utilising the existing judicial guidance – see [2.9] and [4.9-4.19] of the report.   More far reaching proposals include:   1.      The inclusion in the CPR of a dedicated rule which makes specific modifications to other rules where one or more of the parties to proceedings is a litigant in person.  2.      The introduction of a power into Rule 3.1 CPR to permit the court to direct, where at least one party is an LIP, that proceedings should be conducted as a more inquisitorial form of process.  3.      The introduction of a specific general practice direction or new rule in the CPR to address, without creating a fully inquisitorial form of procedure, the needs of  LIPs in obtaining access to justice whilst enabling  courts to manage cases consistently – see [2.10] and [5.11] of the report.    The stark reality is that in some courts and tribunals LIPs will be the rule rather than the exception. This will inevitably slow down and drive up the cost of proceedings and take up valuable judicial time. Equally inevitably, the call will surely go out from the judges to practitioners at all levels for assistance in responding to the challenges that lie ahead.   Image – www.123rf.com

Long live the Litigant in Person

Some of the readership may have heard there was a move by the Civil Justice Council to rebrand LiP’s “Self Representing Litigants”.   This is now not going to happen. Lord Dyson, Master of the Rolls has stated:   “The term ‘Litigant in Person’ (LiP) should continue to be the sole term used to describe individuals who exercise their right to conduct legal proceedings on their own behalf “   See the short practice guidance by following this link:   https://dl.dropbox.com/u/18097599/annex-a-practice-guidance_litigants-in-person-2.pdf   This sensible decision is welcome as it was important to clear this up before "J day" as it is widely expected that there will be many more LiPs as a result of the costs reforms.    

After pasties and caravans … CFAs and DBAs?

Is it just me or should we all be concerned about the way in which the legislation to implement Lord Justice Jackson’s recommendations is being introduced?   Why have there been so few announcements about what are, after all, radical and far reaching public policy changes? If we as legal professionals are unsure about the proposed changes, how can we properly advise the public after 1 April 2013?   Will legal professionals soon be joining bakers and caravanning enthusiasts in pointing out to the government the potential far reaching consequences of over hasty legislation?   In the foreword to his final report on costs in civil litigation dated 21 December 2009 Lord Justice Jackson wrote:   “ … I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice ...”   He went on to make a total of 109 separate recommendations some but not all of which have found their way into proposed new legislation. In particular the Conditional Fee Agreements Order 2013 (the CFA Order) and the Damages-based Agreements Regulations 2013 (the DBA Regulations) have now been laid before Parliament and were subject to a Motion to Approve debate in the House of Lords on 26 February 2013.   Both have been described by the General Council for the Bar (GCB) as “not fit for purpose”. The GCB also suggested that the proposed order and regulations “will deny access to justice, burden the courts’ time with unnecessary satellite litigation and limit the commercial use of DBAs”.    There are certainly grounds for concern. As we all know, the success fee under a CFA entered into after 1 April 2013 for proceedings at first instance will be capped at 25%. Article 5(2) of the proposed CFA Order provides that this will be 25% of “(a) general damages for pain, suffering, and loss of amenity; and (b) damages for pecuniary loss, other than future pecuniary loss” (my emphasis). However, in a lecture given on 29 February 2012, Lord Justice Jackson amended his view in response to submissions from a number of parties and proposed that the cap should be 25% of all damages. There must be a risk that in larger and more complicated cases which are difficult to cost budget and involve significant initial disbursements, limiting the cap to 25% of past losses will not promote “access to justice” as Lord Justice Jackson hoped but may in fact prove to be a disincentive to  taking on such cases in the first place.   Then there is VAT. As drafted, the proposed CFA Order provides that the “damages” to which the 25% cap applies are “net of any sums recoverable by the Compensation Recovery Unit of the Department for Work and Pensions”. There is no exclusion for VAT. But if VAT is included in such damages there is not only scope for uncertainty (what happens, for example, if the VAT rate changes after the CFA has been entered into but before a bill of costs is rendered?) but in the larger and more complicated cases this may be a further reason why those contemplating taking on such cases may decline to do so on the grounds that the unpredictability of the risk will not be properly compensated by the level of the CFA.   The same objections apply to the proposed DBA Regulations. As presently drafted, the cap for DBAs is inclusive of VAT but exclusive of damages for future pecuniary loss. In addition, the DBA Regulations do not allow for “hybrid” agreements i.e. agreements under which some costs are recoverable if a “win” does not occur rather than no costs at all. This is again contrary to what Lord Justice Jackson recommended and may prove a disincentive to the use of DBAs particularly in commercial cases.   Access to justice may not be as newsworthy as Cornish pasties and static caravans but in resource-intensive cases, the government’s aim of protecting the damages recoverable by claimants may actually result in some claimants being unable to obtain legal representation and thus recovering no damages at all.       Image – cornishpasties.com

CFAs prior to 1st April 2013 - will the old or new rules apply?

What do you have to do to ensure that Parts 43 to 48 of the existing rules continue to apply to CFAs entered into before 1st April 2013? Do advocacy or litigation services have to be provided before 1st April 2013 or not? For the existing rules to continue to apply to CFAs entered into before 1st April 2013 what needs to be done prior to 1st April 2013 will depend on whether you are acting under a Conditional Fee Agreement or a Collective Conditional Fee Agreement (those are the two funding arrangements defined by rule 43.2(1)(k)(i) of the existing rules). If you enter into a Conditional Fee Agreement prior to 1st April 2013 specifically for the purposes of provision of advocacy or litigation services to a person in relation to the matter which is the subject of proceedings then the new rules (CPR r.48.2(1)(a)(i)(aa)) state that the old Parts 43 to 48 will apply (with modifications about which we are yet to hear). There does not appear to be any suggestion that advocacy or litigation services actually need to be provided prior to 1st April 2013. The story is different if you have a Collective Conditional Fee Agreement. In that case the new rules seem to state that, for the old rules to apply, you have to have provided advocacy or litigation services to the person by whom the success fee is payable prior to 1st April 2013. The drafters of the rules could have made it a lot easier to understand what they were getting at by actually referring to CFAs in r.48.2(1)(a)(i)(aa) and CCFAs in r.48.2(1)(a)(i)(bb). A bit more clarity is provided by the explanatory note to Article 6 of the Conditional Fee Agreements Order 2013 (http://www.legislation.gov.uk/ukdsi/2013/9780111533437) which states “Article 6 contains a transitional and saving provision. The effect of the transitional provision is to provide that articles 4 and 5 do not apply to a CFA entered into in respect of a claim for personal injuries, or to a collective CFA under which advocacy or litigation services are provided to a person in respect of that claim, before the day on which these regulations comes into force” (i.e. 1st April 2013). That’s my take on the current rules which are still being finalised. I ought to add, in the time-honoured fashion, that this does not constitute legal advice and liability for any reliance placed on it is disclaimed…

Post Jackson CPR Amendments published – a brave new world?

The Civil Procedure Rule Committee has published CPR amendments due to come into force on 1st April 2013. Some of the key provisions for PI practitioners are as follows:- Amendment to the Overriding Objective The overriding objective will become not just “to deal with cases justly” but also “at proportionate cost”; and the definition of “dealing with a case justly” will now include “enforcing compliance with rules, practice directions and orders”. This puts both costs and compliance with directions right at the heart of the Rules – with these changes it will become more difficult to point a judge to the overriding objective when asking him or her to overlook a breach of the rules. Relief from Sanctions Talking about breaches or rules and court orders, CPR 3.9 is to be revised taking out the familiar checklist. Instead, the court will consider all the circumstances, including specifically the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and court orders. As above, this does represent a significant shift in approach. Costs Management The amendments will introduce a comprehensive set of rules on cost management for multi-track cases, including costs budgets. These merit detailed consideration. There are some sanctions in the event that these rules are not complied with – for example, failure to file a costs budget will mean the litigant is treated as having filed a budget comprising only the applicable court fees (unless the court orders otherwise – see above). Increased Small Claims Track limit The Small Claims Track limit is raised to £10,000: but low value personal injury claims for general damages over £1,000 will continue to be Fast Track cases. The current rules regarding harassment; unlawful eviction relating to residential premises; and disrepair will remain. New Provisions relating to Disclosure These will include a requirement for parties to discuss and seek to agree a proposal in relation to disclosure meeting the overriding objective. Bonus for Claimants beating Part 36 offers In addition to interest on damages; costs on the indemnity basis; and interest on those costs, Claimants who beat their own Part 36 offers will be entitled to an “additional amount”, 10% of the sum awarded to the Claimant (where the claim is a money claim) up to £500,000 and 5% of the sum above that, up to a maximum £75,000. For non-money claims, the bonus applies to the sum awarded to the Claimant in respect of costs. Costs CPR 43 is revoked, and Parts 44 – 48 are replaced in full. That’s to say, all the existing sections of the CPR relating to costs are to be changed. Below are some of the key points from the new provisions:- Assessment of Costs When assessing costs, the court will “only allow costs which are proportionate to the matters in issue”. Costs that are disproportionate may be disallowed even if they were reasonably or necessarily incurred. Costs are proportionate if they bear a “reasonable relationship” to the sums in issue; the value of non-monetary relief; the complexity of the litigation; additional work caused by the paying party’s conduct; any wider factors such as reputation or public importance. This rule only applies to cases commenced after 1st April 2013. Qualified One-Way Costs Shifting This applies in personal injuries and Fatal Accident claims. It does not apply to pre-action disclosure. There is no means test: this is of general application. Qualified one-way costs shifting means that costs orders may be enforced against a claimant only to the extent that the aggregate sum of such orders does not exceed the aggregate sum of damages and interest made in favour of the Claimant. In practice, this will work as follows:-   a) Where a claim is dismissed, the Claimant receives no damages or interest. A costs order will be made in the Defendant's favour, but the Defendant will not be able to enforce the costs order against the Claimant to any extent.   b) The Claimant recovers damages, but fails to beat the Defendant's Part 36 offer. A costs order will be made in the Defendant's favour pursuant to Part 36. But this can only be enforced up to the total of the damages and interest payable to the Claimant. So if the Claimant is awarded £20,000 damages and interest, this figure provides a cap on the costs that can be enforced against the Claimant.   c) Interim costs orders have been made in the Defendant's favour, but the Claimant untimately succeeds. As above, the Defendant will be able to enforce its costs orders, but only up to the total of the Claimant's damages and interest. There are some exceptions, though:- Where proceedings have been struck out on the basis that a) they disclose no reasonable grounds for bringing the proceedings; b) the proceedings are an abuse of process; or c) where the Claimant’s conduct is likely to obstruct the just disposal of proceedings, there is no qualified one-way costs shifting. Where the claim has been found to be “fundamentally dishonest” the court may grant permission for the Defendant fully to enforce the costs order. Claimant’s Costs where there is a Damages-Based Agreement The Court will make the same costs order in the Claimant’s favour as if there were no damages-based agreement.

Claimant’s solicitors pay wasted costs in RTA case

  The defendant insurers in the case of Rasoul v Linkevicius (5th October 2012, Unreported), successfully obtained a wasted costs order against claimant solicitors in an RTA claim. The case is a warning to claimant solicitors in RTA claims where there is an allegation of fraud and parties/witnesses who do not speak English. For defendants it is a lesson in how clear allegations set out from early on can have devastating consequences.  The background facts are similar to those commonly encountered in practice. Following the RTA correspondence ensued between the claimant’s solicitors and the defendant insurers. A modest PI claim was made and the insurers questioned the bona fides of the claim. The Defence pleaded fraud clearly against the claimant. He served a witness statement which did not have an integral statement of truth – the statement appeared on a separate sheet of paper rather than being part of the body of the statement itself. Two witnesses provided statements with statements of truth. At trial the claimant gave no evidence as only spoke Kurdish and was illiterate. His statement had been in English and not translated. The husband and wife witnesses were Kurdish. The husband spoke reasonable English but had given his statement over the phone to a solicitor he had not met and at trial he said that his statement was a substantial expansion of what he told the solicitor. The other witness (his wife) spoke no English – her husband translated for her whilst the solicitor took the statement over the phone. She gave evidence that she had never spoken to the solicitor before the statement arrived. Unsurprisingly the case was dismissed and the judge referred to either the extreme incompetence on the part of the solicitors or an attempt to establish a case on fabricated evidence. The insurer made an application for a waste costs order against the solicitors. The judge made an order on the basis that there was no evidence of a proper signed statement from the claimant or the witness taken before proceedings were issued. Although an interpreter turned up at trial he was not allowed to be used as there had been no order relating to his attendance. The judge was critical that the witnesses were not seen face to face by the solicitors given the allegations of fraud. He concluded that proper competent work by the solicitors would have ensured that the case collapsed long before the trial took place. Defendants will be alert to the possibility of pursuing claimant solicitors where fraud has been alleged, there has been incompetence on the part of claimant solicitors which, had it not taken place, would have been likely to have meant the case would not have gone ahead. Claimants will want to see witnesses and take statements face to face where there are allegations of fraud. They must ensure that a proper ‘integral’ statement of truth is signed on the witness statement. If someone is unable to speak English it is essential that a translator is involved in the process of taking the statement, that the statement is translated, the translator makes an appropriate statement (see Practice Direction to Part 32) and the presence of a translator at trial is anticipated by a court order. Careful preparation needs to be undertaken so that solicitors can protect themselves by showing that a witness did give the evidence set out in the statement – even if they deny it at trial and seek to blame it on the solicitors.  

Should the solicitor pay up?

Can a solicitor be liable for costs if he or she takes on a case for an impecunious claimant under a CFA where there is no ATE insurance policy in place and where he or she funds the disbursements necessary to allow the case to proceed?   Neil Hamilton famously sued Mohammed Al-Fayed for defamation over ‘cash for questions’, lost and was ordered to pay £1.3m in costs. Mr Al-Fayed then pursued Mr Hamilton’s financial backers (not parties to the litigation) for costs, lost and was ordered to pay their costs. Unsurprisingly there has not been as much media attention and public interest in the case of Tinseltime v Eryl Roberts [2012] EWHC 2628 which was a case in the technology and construction court. There was no personal injury involved: the claimant claimed that the defendant had created dust whilst demolishing a building and the dust had damaged machinery and caused a loss of profit. The claim was unsuccessful and the claimant was ordered to pay the defendant’s costs. The defendants applied for an order under section 51(3) of the Senior Courts Act 1981 and/or CPR 48.2 that the claimant’s solicitor pay the costs as a non-party funder. The claimant’s solicitor had entered into a CFA. He had been unduly optimistic about how straightforward the issue of liability would be. It was clear that he was aware that if the claimant lost it would not be able to pay costs. He estimated the overall costs likely to be incurred to be £20,000 and disbursements, £10,000. In the event disbursements amounted to £22,270 and so burnt a sizeable hole in his pocket. He had expected to recover the disbursements from the defendant (if successful). The judge concluded that the following were the correct legal principles to apply. The first question was whether it just in all the circumstances to make an order. Secondly, when considering a solicitor, had he acted beyond or outside his role as a solicitor conducting litigation? Thirdly, the fact that a solicitor is acting under a CFA and stands to benefit financial from the outcome does not mean he has acted beyond or outside his role as a solicitor. Fourthly, the starting point is that the position of a solicitor funding disbursements is no different from one who is not as both positions are legitimate and meet a legitimate public policy aim. The judge was of the view that, in order to be successful in applying for a non-party costs order there would have to be present either some financial benefit to the solicitor over and above the benefit which he could expect to receive from the CFA or some exercise of control of the litigation over and above that which would be expected from a solicitor acting on behalf of a client (or a combination of both). By way of example the judge suggested that a solicitor’s desire to achieve a successful outcome might cause him to take over the running of the litigation for his own ends. Another example was of a case where the damages claimed were modest in comparison to costs incurred so that the client had lost interest in the proceedings but the solicitor was wedded to them in order to recover his costs. The circumstances of a case might justify the conclusion that a solicitor was making all the decisions for his own benefit. The defendants argued that the claimant’s solicitor had acted improperly, unreasonably or negligently in his conduct of the case. The judge said this was the province of wasted costs (which were not awarded - although pursued in the alternative). He said courts should be astute to keep wasted costs and non-party costs separate. The claimant’s solicitor may have misjudged the case but he came out of the judgment rather well. The judge commented that he was not motivated solely by financial self-interest but with the laudable aim of providing access to justice to the claimant. He thought the claim was genuine and had written a file note stating “the company has been crippled by the defendant tortfeasors and needs assistance.” The judgment draws to a close effectively with a warning against letting financial self-interest get the better of you and an encouragement from a judge to practitioners to be motivated not solely by financial self-interest but by a concern for justice and access to justice. Such a consideration (and file-note for the record!) might well prove worthwhile… Photograph courtesy of freefoto.com

The addition of a late expert: case note

Van Niekerk v Carnival Plc & Anor. [2012] LTL 13/6/12 (QB, HHJ Seymour QC)   This claim concerned further directions for a High Court trial that was listed a little over 2 months after a Pre-trial review in which further permissions for expert evidence were sought. The Claimant’s husband had died on holiday while he had been taking part in a diving excursion arranged by or through the Defendant cruise line operator. Liability, causation and quantum were all in issue. The Claimant brought a substantial claim for damages. The Claimant’s schedule of loss included, among other things, a claim for loss of financial dependency based on pension income. In correspondence, the Defendant had queried the calculation of this head of loss. Approximately, two months before the date fixed for trial of liability and quantum the Claimant applied for permission to obtain and rely on a report from an expert forensic accountant on the investment growth rates relating to the financial dependency claim. Each party had also obtained a medico-legal report on the cause of death. The Claimant's expert was a histopathologist. The Defendant's expert was a cardiologist with experience in the cardiological aspects associated with diving. The issues considered at the Pre-trial review concerned: (i) whether permission should be granted to adduce expert accounting evidence; (ii) whether directions should be given for a joint statement by the cause of death experts; (iii) the appropriate order for costs.HELD: (1) Permission was granted to obtain expert accounting evidence limited to the issue of investment growth rates - while this evidence was being sought at a late stage, it would likely assist in the accurate calculation of loss and would be helpful to the Trial Judge. (2) There was potential value in the cause of death experts producing a joint statement, despite the risk that it would simply repeat their individual reports (and in spite of the fact that they were experts in different disciplines). (3) Although the Claimant had succeeded on her application to admit accounting evidence, it had been necessary because there was a deficiency in her case which the Defendant had pointed out some months earlier, and she had sought to adduce additional evidence close to the trial and in circumstances where it raised serious questions about whether the trial could proceed in the event that permission were granted. The issue about a joint experts' report had been a serious issue. Taking those issues into account, the proximity to trial and the matters on which the parties had argued, it was appropriate to consider the hearing as a pre-trial review. In those circumstances, the appropriate order for costs was costs in the case.

Mind the Gap!

At least you know where you are with the NHSLA. The same is true of the various medical defence organisations. Can the same be said for the new regime proposed under the Health and Social Care Bill (HSCB)? If there are gaps in the indemnity arrangements for NHS care, what does this mean for claimants and defendants? On Friday (24 February 2012) the Department of Health (DOH) issued a short guide for providers of NHS-funded services outlining the proposals in the HSCB. Guide for Providers According to the guide the HSCB “establishes a comprehensive, proportionate and robust legal framework for sector regulation to protect patients’ interests”. NHS services will continue to be delivered by a “mixed economy of public, independent and voluntary sector providers”. A joint licensing regime, applicable to “all providers of NHS services” will come into effect for foundation trusts in January 2013 and other providers from April 2013. The guide also refers to the basis of pricing and payments for “independent sector providers, charities and social enterprises”. What is not clear from the guide is how it is proposed to ensure that these new “providers” have and in keep in place adequate insurance for the care which they provide to NHS patients. If, as the current draft of the HSCB would suggest, there are gaps in the indemnity arrangements for NHS care, claimants may face difficulties in obtaining compensation for substandard care and defendants will be operating with uncertainty over who is liable for what under the proposed new regime. The recent problems with PIP breast implants illustrate what happens when responsibilities become blurred. The danger is that with the HSCB encouraging numerous new “providers” of health care services across both the private and voluntary sectors, there will be confusion when things go wrong. Even if a potential defendant can be identified the HSCB does not at present require new “providers” to meet pre-set indemnity levels. What is to happen if a “provider” is under-insured or goes out of business as some clinics have threatened to do in relation to PIP breast implants? Is there then a claim in negligence against “the commissioning consortia” which may be an individual general practitioner arising out of the original referral? The HSCB still has some way to go to provide the certainty that both claimant and defendants will require if the proposed new regime is to gain the confidence of both. For lawyers faced with increasingly shrill demands to reduce both time and costs, any additional delay in establishing who is responsible and whether adequate indemnity or insurance arrangements are in place will be equally unwelcome. The legal advice from the outset on both sides must be to “mind the gap”.