piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Claims and Counterclaims: RTA uplifts and settling on the day of trial

Slade J handed down judgment this week in an appeal concerning the question of whether the claimant's legal representatives were entitled to a 100% uplift on their costs, in accordance with the fixed uplift regime for conditional fee agreements in road traffic cases, where the case settled on the day of trial, but before the trial commenced.  She also addressed the vexed question of whether the difference in wording between CPR 45.16 and 45.17 means that solicitor's and counsel's uplifts should be treated differently. In Amin (1) Hussain (2) v Mullings (1) Royal Sun Alliance (2) [2011] EWHC 278 (QB) the facts were typical.  The first claimant (A) was involved in an accident with the first defendant (M) when driving the second claimant's car (H).  A and M blamed each other for the accident.  A brought a claim against M and M counter claimed.  One month before trial the quantum of A's claim was agreed, subject to liability.  By the time the matter was heard by the Recorder on the day of trial the parties had agreed to a 50:50 division of liability and all of M's counterclaim was agreed save for the amount he was entitled to for hire of an alternative vehicle, the only issue which the Recorder was asked to determine.  The Recorder ordered each party to pay the costs of the other of pursuing their claim and awarded each party a 100% uplift on the ground that both the claim and the counterclaim had concluded "at trial" within the meaning of CPR 45.15 and therefore both solicitor and counsel for A were entitled to 100% uplifts on their costs under CPR 45.16 and 45.17.  He gave judgment that "at trial" must include the date or time the trial is fixed to take place and include negotiations that take place on the day of trial to settle the claim or narrow the issues before the hearing commences.  It was submitted on behalf of M and M's insurer that the Recorder had erred in failing to distinguish between the hearing of the counterclaim, which related to the trial of M's claim and A's claim, which was wholly compromised before the hearinng commenced. Slade J held that the Recorder erred in concluding that "at trial" is not defined in CPR 45.  She said "it is clear from CPR 45.15(6)(b) that "at trial" means at a contested hearing.  As is clear from CPR 45.17(1)(a) and (b)(i) the rules recognise a distinction between a trial and the date fixed for the commencement of the trial.  Further, the rules recognise a distinction between the conclusion of a claim after and before a trial has commenced.  Settlement before a trial commences and conclusion by settlement after a trial commencese could both occur on the date fixed for the trial.  The trigger for entitlement to a 100% uplift in fees is  not a settlement on a particular date but a settlement or conclusion after a trial, defined as a hearing, has commenced." Slade J was went on to consider whether there should be any difference in the way solicitor's and counsel's uplifts should be approached arising out of differences in the wording of CPR 45.16 and CPR 45.17.  She considered two conflicting decisions concerning counsel's uplift under CPR 45.17 when a case settles on the day of trial but before the hearing commences.  She approved the decision in Sitapuria v Khan, an unreported decisoin of the Liverpool County Court on 10 December 2007 and declined to follow the decision in Dahele v Thomas Bates & Son Ltd an unreported decision of the Supreme Court Costs Office of April 17 2007.  She held that the meaning of CPR r.45.16 was clear. Its language was not to be given a different meaning to accord with a construction of r.45.17 in order to deal with a perceived lacuna in r.45.17 in relation to the uplift in counsel's fees, as had been done in Dahele.   This is an important decision to be aware of because is addresses two commonly encountered issues.  First, Slade J grapples with the knotty problem of uplifts for both parties where there is a claim and counterclaim but only part of one of the claims remains outstanding at the commencement of the hearing.  Secondly, she considers the difficulty of the competing decisions in Sitapuria and Dahele, both first instance decisions that are no more than persuasive and provides helpful guidance on the interpretation of CPR r 45.16(1) and CPR r 45.17(1), bearing in mind the differences in their wording.  The correct uplift to solicitor's fees where the claim settled before commmencement of the hearing, regardless of whether it was on the day of trial, was 12.5 per cent.  She then went on to say that the language of r.45.17(1)(a) was the same as that of r.45.16(1)(a).  There was no reason to distinguish it from the clear meaning of that provision.  If there were any doubt about the construction of r.45.17(1)(a), in the absence of any basis for ascribing a different meaning to the words "the claim concludes at trial", they should be construed consistently with their clear meaning in r.45.16(1)(a).  Although the proper construction of r.45.17(1) as it applied to the conclusion of claims on the day fixed for trial but before trial commenced was not immediately apparent, there was no lacuna in the rule.  On its proper construction such a settlement gave rise to an entitlement to an uplift in counsel's fees of 50 per cent in a fast track road traffic claim.  

Lies, fraud, exaggeration and costs

Laws LJ suggested in Molloy v Shell UK Limited [2001] EWCA Civ 1272 that lying or grossly exaggerating claimants could be guilty of “a cynical and dishonest abuse of the court’s process” and questioned whether, when “faced with manipulation of the civil justice system on so grand a scale, the court once it knows the facts should entertain the claim at all save to make the claimant pay the defendant’s costs”. Since then, the Court of Appeal made clear in Shah v Wassim Ul-Haq [2009] EWCA Civ 542 that there was no general rule of law that the dishonest exaggeration of a genuine claim should necessarily result in the dismissal of the whole claim. Rather, if the claimant still manages to prove some loss, he will receive compensation for that.   But what about costs where a party has lied or exaggerated but been wholly or partly successful?     The starting point is that costs should follow the event. But this is not the end of the matter. The court can make a different order, having regard to all the circumstances. This specifically includes conduct before, as well as during the proceedings. Conduct includes the manner in which a party has pursued or defended his case or a particular allegation or issue, and notably whether there has been exaggeration – see CPR 44.3(4)-(5).   So the court has power to deprive a successful party of part or all of his costs – or even order that party to pay the other side’s costs – for reasons of conduct, including lying or exaggerating. The points that emerge from case law are as follows:-   1)     The court will start by looking at who’s “won”. 2)     In some cases, where a trial is all about exaggeration, the claimant can win “on paper”, and recover some money or beat a Part 36 offer, but the defendant can, in reality, be the winner and recover its costs (See Painting v University of Oxford [2005] EWCA Civ 161). 3)     Thereafter, the court will look at the matter in the round to see whether a different order should be made. 4)     The Court is entitled to mark its disapproval of lies by reducing the costs otherwise recoverable or even in a serious case ordering the successful party to pay the other side’s costs (See Widlake v BAA Ltd [2009] EWCA Civ 1256, v AXA and Direct Line [2009] EWCA Civ 1331). This is so even if the lies have not caused costs to increase. 5)     Often, costs will have increased because of the lies. For example exaggeration may well prevent a case from settling at an early stage, or lies might prolong a trial. Where this has been the effect, the court can make the party at fault pay for these increased costs (Painting, Widlake).