logo

Date  Headline

  • 27.05.2011
    C v D [2011] EWCA Civ 646
    • Key areas: acceptance of offers; time-limited offers; Part 36 offer; Court of Appeal

      This was an Appeal of a case mentioned in our 2010 section.

      The Appeal was over whether the Claimant’s offer which was stated as being “open for 21 days” is “not open after 21 days” or whether it means that it will not be withdrawn for this time.

      The Defendant “accepted” the offer outside of the 21 days, but at first instance it was held that there was no Part 36 offer and it had lapsed even though there was no express withdrawal and even if there had been a Part 36 offer it was not withdrawn.

      The Defendant appealed on the grounds that the Judge was wrong to say that it was not a Part 36 offer while the Claimant appealed on the grounds that the Judge was wrong to say that a Part 36 offer could not be a time-limited offer.

      The Claimant also appealed the ruling that the offer was not withdrawn, either by the terms of the offers itself or by subsequent correspondence.

      There were 3 main issues:

      1. Can a Part 36 offer be a time limited offer? No
      2. As a matter of construction, what does “open for 21 days” mean in context? The offer was stated as being an “Offer to Settle under CPR Part 36” and “intended to have the consequences set out in Part 36 of the Civil Procedure Rules”.  The Court held that the phrase meant that the offer would not be withdrawn within 21 days
      3. Do the terms of the offer itself, or the subsequent emails, amount to a withdrawal of the offer? On the facts, the Judge held that the emails did not specifically withdraw the offer.

      Overall, the Court held that the Defendant had accepted the Claimant’s Part 36 offer and so the appeal was allowed.

  • 26.05.2011
    Naylor v Monahan & Anor [2011] EWHC 1412 (QB)
    • Key areas: summary assessment; High Court

      The Claimant won a quantum trial in a case in which liability had been conceded.  He was awarded £3,000.00 and claimed costs of £8,614.64, which on summary assessment, were deduced to £5,024.00.

      The Claimant sought permission to appeal on the grounds that the Judge did not give any reasons for significantly reducing the time claimed for documents, and was effectively a “judicial tariff”.

      The Application was dismissed because from the transcript it was clear that the Judge did look through the Bill.

  • 26.05.2011
    Re Protege Services Ltd. [2011] EWHC 3679 (Ch)
    • Key areas: Wasted Costs Order; High Court

      This was a hearing concerning costs relating to an application by minority shareholders under s. 994 Companies Act 2006.

      An injunction hearing was due for 19th April 2011, and the Respondents were notified.

      As the hearing of 26th May 2011, it was agreed to maintain it until trial.

      The hearing was concerning the background to that agreement.

      On 17th May 2011, the Petitioners’ solicitors wrote to the Respondents requesting information as to their position on the Application.  On 19th May they enclosed a draft Consent Order that the injunction remain in place and costs be reserved.

      On 20th May, the Petitioners’ solicitors advised that they had instructed Counsel for the hearing, which led to the Respondents stating that they had instructions to set-aside the injunction.

      On 23rd May, the Respondents stated that they agreed to the Consent Order, but stated that if the hearing was not vacated, they reserve their position over costs.

      On 24th May the Petitioners’ solicitors stated that they had incurred costs as a result of the initial refusal of £9,269 + VAT, which the Respondents should pay, and sent a revised Consent Order including this term.

      The Respondents rejected this and returned a signed copy of the original draft Consent Order.  On 25th May, the Respondents stated that they would be seeking costs against the Petitioners’ solicitors due to their actions.

      At trial, however, the Respondents stated that costs should be reserved as per the original draft Consent Order.

      The Court held that the Petitioners’ solicitors were correct to ask for the Respondents’ position, and the Respondents’ response was wrong.

      The Court therefore awarded the Petitioners their wasted costs, but reduced by £1,000.00 + VAT as some were not entirely thrown away, with the injunction itself to remain in place and costs of the injunction reserved.

  • 25.05.2011
    Millburn-Snell & Others v Evans [2011] EWCA Civ 577
    • Key issues: Application to strike-out, Court of Appeal, CPR 19.8, Probate, Wasted Costs Order

      This was an appeal over a decision to strike-out a probate claim brought by the children of the Deceased who died intestate.

      In the Particulars of Claim, the Claimants stated that they were able to take proceedings and the Defendant put them to proof over this issue

      The Claimants had submitted witness statements in support.  However, the Grant was not disclosed.

      Two days before trial, the Defendant issued an Application to strike-out the claim on the grounds that the Claimants did not have title to sue because they were the Personal Representatives but did not have a Grant of Letters of Administration.

      The Court at first instance, allowed the Application on the grounds that the claim was a nullity and because the Grant of Administration is not retrospective, unlike a Grant of Probate.  It also dismissed an argument that CPR 19.8(1) gave it the power to allow the claim to proceed “in the absence of a person representing the estate” as well as giving the power to appoint someone to represent the Estate.

      The Court also dismissed the argument that the Defendant had acquiesced to the claim.  The Court therefore awarded the Defendant costs of the Application, but only some of their costs of the action itself because of the lateness of the Application.

      On Appeal the Claimants conceded that the Defendant would not be aware that they were unable to bring a claim.

      The Defendant cross-appealed relation to the costs of the main action on the grounds that the Judge had ignored that the claim was a nullity; that the Claimants had asserted that they were able to bring a claim and that until just before trial, the Defendant had no reason to dispute this.

      The Court allowed the cross-appeal, awarding the Defendant her wasted costs on the grounds there was a good chance that fresh proceedings would be issued because a Grant had now been obtained.  However, the Court gave a time limit of two months to issue a fresh claim, else the Claimants would have to pay the Defendant’s costs of the original action.

  • 25.05.2011
    Fiona Trust & Holding Corp. & Others v Privalov & Others [2011] EWHC 1312 (Comm)
    • Key issues: High Court, interest on costs, interim costs orders

      The Defendants in the main action successfully defended a claim and on 24th March 2011 were awarded costs with interest awarded at 8% under s. 17 Judgments Act 1838 and CPR 40.8.

      The Claimants issued an application to defer interest for a period of 6 months due to the large difference between the commercial and statutory rates of interest.

      The Court stated that interest should not be deferred simply because of such a large difference; any deferral must be justified.

      The Claimants submitted that the deferral should be granted due to the large amount of costs claimed and difficulties in determining which costs would actually be payable to which Defendant.

      Both arguments were, however, dismissed.

      The Defendant also issued an application for a payment on account.  The Claimant resisted this on the grounds that an Application for Permission to Appeal was pending.  However, the Court declined to make such an award.

  • 25.05.2011
    KGM v News Group Newspapers Ltd. & Ors [2011] EWCA Civ 933
    • Key areas: basis of assessment; Court of Appeal

      The Appellant in this matter lost a privacy claim on appeal.

      The First Respondent accepted that their costs were to be assessed on the Standard Basis; the Second and Third Respondents submitted that they should be awarded Indemnity Basis costs.

      The Second and Third Respondents submitted that there was no need for them to be involved in the claim at all, but the Appellant refused to let them out of the appeal.

      However, the Court held that events in a related case suggested that they should have been involved, and that they had not provided any reason why they could not have been jointly represented.  The Court noted that based on the Appellant’s case they should have been represented separately, while their own case justified the joint use of Counsel.

      In the circumstances, the Court held that Standard Basis costs should be awarded.

  • 24.05.2011
    Modi; International Management Group (UK) Ltd. v Clarke [2011] EWHC 1324 (QB)
    • Key areas: costs budgets; Indemnity Costs; High Court

      This was an interim hearing in a libel case, which amongst other things, dealt with a costs budget.

      The hearing dealt with an apparent conflict between Part 51, PD 51D and CPR 44.4(3).

      The Second Claimant was raised that proportionality should be tested in a costs budget by referring to CPR 44.5(3).  The Claimants also submitted that the Court should – when determining a costs budget – should look at correspondence between the parties and also at any existing Part 36 offers.

      The Court held that it was not for the Court determining the costs budgets to also determine whether a party is being unreasonable.  Instead that should be left to costs assessments.  It was also held that PD 51D and CPR 44.4(3) did not conflict.

      The Court also noted that if Indemnity costs are awarded, it would appear to be “irrelevant” if costs exceeded a previously-approved budget due to PD51, para. 5.6 referring to “reasonable and proportionate” costs only being allowed under the budget.

  • 23.05.2011
    Harrison v HM Revenue & Customs [2011] UKFTT 345 (TC)
    • Key areas: r. 29 VAT Tribunal Rules 1986; transitional arrangements; First-Tier Tribunal.

      The Appellant in this case, won a case which started in the then-VAT & Duties Tribunal before passing to the First-Tier Tribunal (Tax) on 1st April 2009.

      The Appellant applied for their pre-1st April costs under r. 29 Value Added Tax Tribunals Rules 1986 and requested that the Tribunal should hold that it could use its powers under para. 7, Sch. 3 Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 to do so.

      In the main action, the Appellant also submitted further Appeals to HMRC decisions after 1st April 2009, which were described as “parasitic” upon the original appeal.

      The Tribunal held that it could use its powers because the Appeal was lodged before proceedings were transferred.

      The Tribunal also held that the further Appeals were covered by r. 29 because they were dependant on the original appeal and so should be classed as “current proceedings”.

  • 20.05.2011
    Collet v Smith & Middlesbrough Football & Athletic Co. (1986) Ltd. [2011] EWHC 90208 (Costs)
    • Key areas: success fee; human rights; SCCO

      This was a case concerning the success fee claimed by both Solicitors and Counsel.

      The Claimant was an ex-footballer whose career was ended by a tackle of the First Defendant who played for the Second Defendant on 1st May 2003.

      In the main proceedings, a split liability trial was listed, and was conceded by the Defendants on 1st February 2007, 3 weeks before it was due.  Damages were then assessed at £4,350,147.00 on 11th August 2008, with a further hearing concerning pension issues held on 3rd October 2008.  In total, the damages exceeded £4.5 million.

      Costs were awarded on the Standard Basis up to 26th June 2008 and on the Indemnity Basis afterwards.

      The Defendants appealed the quantum assessment, but it was rejected on 17th June 2009.  The Claimant was awarded his costs of the appeal on the Standard Basis up to 30th April 2009 and on the Indemnity Basis afterwards.

      The Bill of Costs totalled £1,609,517.44; of which success fees totalled £581,834.75 for the solicitors and £12,365.00 for Counsel, excluding VAT.

      The CFA with the Solicitors is dated 8th November 2005, and claimed a 100% success fee should it reach trial, else 90%.  First Counsel’s CFA is dated 24th April 2006 and assessed the prospects of success at 50%, which gave a 100% success fee.  Second Counsel’s CFA is dated 2nd April 2008 and claimed a 15% success fee on the basis of quantum issues.  Third Counsel’s CFA is dated 20th June 2008 and also claimed a 15% success fee, also due to quantum issues.

      In their Points of Dispute, the Defendants offered 40% success fee for Solicitors; 80% for First Counsel; and reserved their position for the other two Counsel, but considered them to be excessive.

      The Claimants submitted that in sports injury cases, “volenti” arguments usually applied and so it was rare to succeed, and also referred to the Defendants disputing liability until shortly before a liability trial was due.  The Claimant also submitted that the high-value of the claim increased the risks.  He also submitted that there were issues over the enforceability of any judgment: the Second Defendant had been in administration twice; and their insurance excluded coverage of individual players.  The Claimant also referred to the big difference in the success fee offered to the Solicitors and the First Counsel, when their CFA was only taken out a few months before Counsel did, and submitted that it was reasonable for Solicitors to consider the case to be as risky as Counsel did.

      The Defendants submitted that the Solicitors CFA showed that they would be paid their base costs even if a Defendant’s Part 36 offer was not beat at trial.  As a result there was no quantum risk.  They also submitted that the Claimant was liable for the costs in any event, and so enforceability issues did not apply to the Solicitors.  They also referred to the Claimant’s correspondence and evidence they had to hand when the CFA was taken out.  They also submitted that in a two-stage CFA there was too small a difference in the claimable success fee.  They also submitted that as the Second and Third Counsels’ CFAs both post-dated the liability judgment, there were no issues as they would be guaranteed base fees.

      The Parties also made written submissions in light of the ECtHR case of MGN v UK.  The Claimant submitted that as it was inconsistent with existing House of Lords cases, it did not apply.

      The Defendants submitted that there were art. 6 ECHR issues in that too high a success fee would deny them a fair trial.

      The Court accepted that when the CFA was entered into, there was only one witness in support and it would be determined by expert evidence, which had not yet been obtained, nor had medical evidence which would establish causation.

      The Court also accepted that the Claimant’s correspondence inviting the Defendants to concede liability was unlikely to have been taken up at that time.

      The Court also accepted that the high value of the claim was a risk; as was the type of claim; and the Solicitor who dealt with the claim had a lot of experience in dealing with this sort of case.

      The Court also accepted the Defendants submission regarding payment of base fees should the Claimant fail to beat a Part 36 offer, and enforceability.

      Overall, the Court held that the success fee in the CFA was correct in the circumstances, and so 90% was awarded for the Solicitors.  A success fee of 90% was also allowed for the First Counsel.

      In relation to the Second and Third Counsel, given that liability had been agreed long before they entered into the CFA, the Court held that there was no risk of them receiving any fees, and so a 0% success fee was allowed.

      In relation to the further submissions, the Defendant submitted that the success fees should be reduced to “a level that is not a bar to access to the court”.  The Claimant submitted that a CFA was necessary due to his lack of means; that the level of damages meant there was no issue over proportionality, unlike in MGN; that MGN concerned freedom of expression, which did not apply here; and in any event, proportionality was not raised in the Points of Dispute and could only apply to the Standard Basis costs, if at all.  The Court agreed with the Claimant.

  • 20.05.2011
    R v Reeves & Co. Solicitors [2011] EWCA Crim 819
    • Key issues: Court of Appeal, Wasted Costs Order

      The Solicitors in this case had been subjected to a Wasted Costs Order.

      The order resulted from their defence in a fraud case in which they disclosed documentation on the first day of trial, which resulted in the trial collapsing.  The Order was made on the grounds that the disclosure should have been made at an earlier time.

      However, the Solicitors had not been given notice of the Order and Counsel at trial stated that the documents were not disclosed due to concerns about them and in any event, their main defence was that there was insufficient evidence against the Defendant to convict him.

      The Recorder stated that the Solicitors had been negligent in not disclosing the documentation with Wasted Costs being stated as £250.00, but there was no justification as to what costs had been wasted or how the figure was calculated.

      The Solicitors appealed.

      The Court of Appeal held that there had been major breaches of the Rules and that the figure of £250.00 had apparently been chosen at random.

      The Appeal was therefore allowed with the Order being quashed.

Thomas Legal Costs

Token House
12 Token House Yard
London
EC2R 7AS
DX 138752 CHEAPSIDE

Thames House
18 Park Street
London
SE1 9EQ

T: 020 7073 2600
F: 020 7073 2955
E: info@thomas-legal.com