17.08.2015BP v Cardiff & Vale University Local Health Board  EWHC B13 (Costs)
Key areas: costs budgets; proportionality; Bill of Costs; SCCO
This was a ruling on preliminary issues arising from a Detailed Assessment.
The main action was a clinical negligence claim which had a substantial liability and causation dispute, with numerous experts, and settled less than 2 weeks before trial. Originally it was funded by legal aid and then through a CFA with a 100% success fee.
The Claimant had an approved Costs Budget of £218,400; however, the Bill of Costs totalled £586,500 while the claim settled for £205,000.
At the hearing, given the facts, costs incurred before April 2013 were held to not be disproportionate. In relation to the post-April 2013 work, the Defendant conceded that it was would not be appropriate to take into account additional liabilities when considering proportionality. Again, the Court held that these costs too were not disproportionate.
The Court then turned to the format of the Bill itself.
As the costs covered both pre- and post-April 2013 work, it was held that it was “convenient and necessary” for the Bill to be split into these phases.
It also held that where a Costs Management Order has been made, it is “and necessary convenient” for the Bill to be split into the different Phases, and to indentify the costs relating to costs-management, and that these costs include additional liabilities, but not VAT.
14.08.2015A; M v Royal Mail Group  EW Misc B24 (CC)
Key areas: ATE; CFA; success fee; minors; County Court
This was a ruling concerning additional liabilities in minor claims.
The main actions settled for a total of £4,100 plus predictive costs under CPR 45. However, the claims occurred after the Jackson Report reforms came into effect, and there were claims for success fees and ATE premium, which were not claimable inter partes.
As a result, an application was made to allow for payment of these from the damages.
The Litigation Friend served a statement showing that he was under the impression that the additional liability would be automatically taken from the damages, not that he would be personally liable and the Court’s permission would be needed to pay them out of the damages.
The Court held that the Solicitors had not provided a copy of their risk assessment, and that because Qualified One-Way Costs Shifting applied, there was no risk. As a result the Court refused to allow the ATE premiums to be paid from the damages, on the grounds that it was unreasonable to incur it.
The Court also held that if the solicitors wanted payment of their success fees, these would need to be subject to a Detailed Assessment.
14.08.2015JSC Mezhdunarodniy Promyshlenniy Bank & Anor v Pugachev & Ors  EWCA Civ 906
Key areas: Freezing Orders; Court of Appeal
This was an appeal against the refusal to grant a freezing order against numerous corporate bodies that were claimed to be owned by the First Defendant.
At first instance, the Order was sought on the basis that assets held under a trust, were still beneficially owned by the First Defendant; that the Claimant had claims under the Insolvency Act 1986 in relation to assets; and that the Trustees were subject to the Claimant’s control. This was rejected on the basis of a lack of risk; undue delay; that the Claimants had used the wrong procedure; and that an injunction was not necessary because the bank had agreed to freeze all accounts held by the companies.
On appeal, it was held that the Defendant’s actions, including by changing the trustees, had led to an assumption that he was trying to remove assets, so as to prevent enforcement; that there was no real delay, due to the Defendant’s actions; that the actions of previous trustees gave the impression that there was an attempt to dissipate assets; and that the Claimants had been expedient.
As a result, the appeal was allowed and the freezing order was granted.
14.08.2015Sarpd Oil International Ltd. v Addax Energy S.A.; Glencore Energy UK Ltd.  EWHC 2426 (Comm)
Key areas: security for costs; High Court
This was an application for security for costs.
The Claimant sought damages totalling £1 million. The First Defendant issued an application for security in the sum of £896,000, on the grounds that it considered the Claimant would be unable to pay if the claim failed.
The Claimant was based in the British Virgin Islands and its accounts were not publically available. The First Defendant had sought information but it had been refused.
The Court refused the application on the basis that the Claimant complied the BVI requirements, and that as the parties’ Costs Budgets were greater than the amount at stake, a commercial settlement was likely.
06.08.2015Erlam v Rahman  EWHC 2370 (QB)
Key areas: Freezing Orders; enforcement of costs; High Court
This was a ruling on an application against the Defendant.
The Defendant had lost a dispute over the result of an election and was forced to stand-down as the Mayor of Tower Hamlets, in east London. He also had to pay the Claimant’s costs, with an interim payment of £250,000 to be made by 7th May 2015. This had not been complied with, and so the Claimant applied for a Freezing Order against his assets in relation to three properties.
In the main action, the Defendant had stated that he was the sole beneficial owner of two of the properties, but now claimed that he only had a 26% interest in one and no interest in the other, and that his wife was the actual beneficial owner.
As a result, the Claimant sought a Freezing Order to prevent dissipation of his other assets.
The Court noted that the defendant had not acted in a way to remove any suspicion against him, and that his existing payments may be contempt of court, and that payments in large round figures “justifies an inference” that the Defendant was trying to dissipate his assets. The Judge noted that the Defendant’s explanations were not supported by evidence or oath.
The Court held that the Claimant was entitled to a Freezing Order against the Defendant, but due to a separate set of judicial review proceedings, which may lead to the costs order being overturned or varied, it was time-limited to 31st January 2016.
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