31.10.2014Landau v The Big Bus Co.; Zeital SCCO 1403806
Key areas: Qualified One-Way Costs Shifting; costs of appeal; SCCO
This was a hearing regarding a preliminary issue.
The main action was a personal injury claim that was subsequently appealed. The Claimant was ordered to pay the Defendants’ costs of the appeal, the extent of which was subject to “determination by a Costs Judge of the SCCO”.
The Claimant’s solicitors acted on a CFA at first-instance, which pre-dated the Jackson changes; while on appeal they acted under a separate CFA which post-dated the changes. He also had an ATE policy which only covered the first-instance claim.
The Claimant submitted that the CFAs related to different sets of “proceedings” under CPR 44.17, and so rules relating to Qualified One-Way Costs Shifting (QOWCS) applied in relation to the appeal.
The Defendants submitted that this was not the case, due to the wording of CPR 48.2; or that as there was only one set of damages at stake, the entire case was one set of “proceedings”. Therefore, QOWCS did not apply at all.
The Court noted that the Claimant’s first CFA covered the claim and “an appeal by your opponent”.
The Court held that the use of “matter that is the subject” in CPR 48.2 meant that QOWCS did not apply where there was a pre-existing CFA in a set of proceedings.
As a result, QOWCS did not apply.
29.10.2014CIP Properties (AIPT) Ltd. v Galliford Try Infrastructure Ltd.; EIC Ltd.; Kone plc; DLG Architects LLP; Damond Lock Grabowski & Partners (a firm)  EWHC 3546 (TCC)
Key areas: costs budgets; High Court
This was a ruling on issues arising from a CMC, including whether costs Budgets should be served.
The claim was issued for £18 million in the Technology & Construction Court.
At the CMC the Defendant and the Third to Sixth Parties (“Other Parties”) all submitted that while Costs Budgets were not mandatory in a case of this value, the Court had a discretion which should be used. The Claimant opposed this.
The Claimant submitted that the use of the phrase “or the court otherwise orders” in CPR 3.12(1) exclude Costs Budgets where the case falls under one of the exceptions; while PD 3E only covered non-Multi track cases.
The Defendant and Other Parties submitted that CPR 3.12 gave the Court an “overriding discretion” to order Costs Budgets.
The Court held that the Defendant’s submission was right else parties could issue claims for £1 above the limit and so get out of any “consideration… of the proposed costs, no matter how disproportionate or inflated they were”.
The Claimant then submitted that if the claim was above the relevant limit then there is a presumption that Costs Budgets are not required. The Defendant submitted that the Court’s discretion was not affected by the limit.
The Court held that it had a full discretion to order Costs Budgets.
27.10.2014Scott v Hull And East Yorkshire Hospitals NHS Trust  Ew Misc B53 (CC)
Key areas: CFA; County Court
This case was a preliminary issue in a Detailed Assessment.
The original Assessment was adjourned after it turned out that there were two CFAs and the Receiving Party was given the option to disclose the original and updated CFA, or to provide evidence relating to the success fee.
The original Bill of Costs claimed an hourly rate of £400.00/hour plus a 100% success fee, giving a total claim of £112,000.00. Points of Dispute and Replies were served, and the case was listed for an Assessment.
Shortly before the Assessment took place, an amended Bill was served. This claimed hourly rates of £146.00 plus a 54% success fee, with a total claim of £36,000.00.
The points of Dispute raised an issue of there possibly being two CFAs, but the Replies stated that there was only one CFA, the earlier one. As a result, the Court gave the Receiving Party the option to disclose documentation.
The Receiving Party did not disclose either CFA but instead relied on a witness statement from a fee earner; however, he did not have conduct with the case, and was not involved with the CFA. The fee earner was also unable to say whether the CFA covered a claim against the Defendant and an independent contractor acting on their behalf or simply one against them.
Given the issues with the Witness’s evidence; difference between the amounts being claimed under each Bill; and reasons for the amendment, and as the costs were to be assessed on the Standard Basis, the Court considered that the position over the CFA was “unsatisfactory”. As a result, it could not be certain that the signature on the Bill could be relied upon, and so the CFA was struck-out, with the costs being assessed at disbursements only.
24.10.2014Eurasian Natural Resources Corporation Ltd. v Dechert LLP  EWHC 3389 (Ch)
Key areas: Solicitor/Own client; privilege; High Court
This was an appeal against the rejection of application for a solicitor/client assessment to be held in private. The solicitors had already agreed to have an assessment in relation to bills totalling £5.1 million, but disputed an assessment over a further £6.6 million.
The ex-client issued the application due to potential proceedings being brought against them by the SFO, and the extent of the confidential information that the solicitors had access to during their instruction, and that it was also in the interests of justice.
The application was issued more than 12 months after the Bills had been paid, and so the client had to show “special circumstances” for an order for assessment to be made under s. 70 Solicitors Act 1974.
In its Respondent’s Notice, the solicitors submitted that the original hearing was held in open court.
After considering caselaw on legal privilege, the Court held that the Judge did not consider the possibility of a limited waiver, and so ruled that “his reasoning cannot be upheld”.
The Court also held that the Judge saying that he had considered the confidential documentation did not put it in the public domain.
As a result, the Court held that it was right for the assessment to take place in private.
24.10.2014Virdi v RK Joinery Ltd.  EWHC 3492 (Ch)
Key areas: non-party costs order; High Court
This was an appeal against a ruling against a non-party costs order made in favour of the successful party.
The main action was a dispute between a landlord and a tenant, which was resolved in the landlord’s favour with his costs to be paid. The tenant was the third party’s wife.
At first-instance the Judge held that the wife had been encouraged in her actions by the third party, and so he was held to be liable for the costs. However, she had instructed solicitors to act on her behalf and her defence was prepared by Counsel.
The Claimant/Respondent submitted that this was an exceptional case, and the husband was involved as a solicitor.
On appeal, it was held that the third party was simply acting as a husband, not as a professional advisor, and that throughout he was only a witness.
However, it held that the Judge was entitled to use his discretion the way he did, and that the husband had developed a case that was without merit.
As a result, the appeal was dismissed.
23.10.2014Excalibur Ventures LLC v Texas Keystone Inc.; Gulf Keystone Petroleum Ltd.; Gulf Keystone Petroleum International Ltd.; Gulf Keystone Petroleum (UK) Ltd.; Psari Holdings Ltd.; Lemos; Blackrobe Capital Partners LLC; Blackrobe AEO I Investors LLC; Platinum Partners Value Arbitrage Fund LP; Hamilton Capital LLC; JH Funding LLC; Huron Capital LLC; Platinum Partners Credit Opportunities Master Fund LP (Rev 2)  EWHC 3436 (Comm)
Key areas: third party contribution; Basis of assessment; Indemnity Basis; High Court
This was an application by Texas Keystone and the “Gulf” companies (“the Defendants”) for a third party contribution to their costs.
The Claimant had been ordered to pay £17.5 million for security for the Defendants’ costs, and ultimately lost its claim, with costs on the Indemnity Basis. It had also been ordered to pay a further £5.6 million on account, but had failed to do so. Its case had been funded by the other parties to the case, and the Defendants sought an order that they be held liable for those costs, and that their costs be assessed on the Indemnity Basis.
Psari and Lemos stood to gain from the proceedings, and so had accepted they were liable, but submitted that the costs of the application should only be on the Standard Basis. The “Blackrobe” parties had not taken part in the case, and the remaining parties (“the Platinum parties”) had denied any liability.
The Court held that given their liability and substantial benefit from the claim, it was only just for the Platinum and Blackrobe parties to also contribute to the costs, with the funders only be liable for costs for the duration in which the funded the claim.
It also held that they should be liable for those costs on the Indemnity Basis given the Claimant’s conduct.
22.10.2014Rees; Rees v Gateley Wareing (A Firm); Gateley LLP  EWCA Civ 1351
Key areas: champerty; maintenance; Solicitor/Own client; Court of Appeal
The Defendants’ retainer stated that they would receive “5% of any monies recovered on your behalf”, but were not solicitors on record, and instead had a “behind the scene” role in the Claimants’ case.
The parties agreed that if the solicitors provided litigation services, unless the retainer was a non-contentious business agreement, it was unenforceable; and that if the retainer did contemplate litigation and there was none, then it was enforceable.
The Defendants submitted that the agreement was not a CFA, and so s. 58(2) Courts and Legal Services Act 1990 did not apply.
The Claimants argued that even if the agreement fell outside s. 58, it was classed as “champerty”, and so unenforceable.
After considering the background facts, the Court held that Gateley acted as solicitors, and did acts that were part of litigation. It also noted that their retainer was a CFA, as it stated that fees were only “payable only in specified circumstances”.
As a result, the Court held that the agreement was not enforceable, and the appeal was allowed.
21.10.2014Caliendo; Barnaby Holdings LLP v Mishcon De Reya (A Firm); Mishcon De Reya LLP  EWHC 3414 (Ch)
Key areas: CFA; ATE; relief from sanction; High Court
This was an application for relief from sanction.
In the main action the Claimants did not serve notice of their CFA or ATE policy within the time limit under the Pre-Action Conduct PD. Instead, notice was given on 11 June 2013, which was 3½ months outside the limit in relation to the solicitors’ CFA and the ATE policy, and 2½ months late in relation to Counsel’s CFA.
Proceedings were issued along with an application for relief, with the Claimants accepting that they did not have a “good reason” for the breach.
The Claimants submitted that because the breach happened pre-issue it did not affect the proceedings at all; and there is no evidence that the Defendants were prejudiced by their actions.
The Defendants submitted that an admitted breach of the rules by months was not “insignificant”; and that it would affect the Defendant’s conduct to the ultimate premium they would have to pay.
The Court agreed with the Defendant on the impact of the breach, but that was due to the “nature” of the CFA/ATE, not because of a breach of the rules.
The Court also noted that the parties had attempted to resolve the matter and the Defendant’s position would not have been affected.
As a result, relief from sanction was granted.
14.10.2014GSM Export (UK) Ltd. (in administration); Sprint Cellular Division Ltd. v Revenue And Customs  UKUT 457 (TCC)
Key areas: security for costs; ATE; Upper Tribunal
This was a ruling on an application for security for costs that was issued by HMRC.
HMRC submitted that the Claimant’s ATE policy would not cover the claim based upon its terms and conditions. The Court rejected this saying that it was “fanciful” that an Insurer would hold that an unsuccessful Tribunal appeal was “misconceived” and thereby void the policy.
The Tribunal also held that as the Claimant had to pay a premium, which is not refundable if the policy was cancelled, there was no reason to consider that the Claimant would act in a way to ensure its cancellation.
The Tribunal separately noted that HMRC had been “guilty of an unreasonable delay” in making the application for security for costs.
As a result, the application for security for costs was dismissed.
13.10.2014Lictor Anstalt v Mir Steel UK Ltd.; Libala Ltd.  EWHC 3316 (Ch)
Key areas: relief from sanction; High Court
This was a judgment following a 9-day liability trial, and an application to rely on evidence served out-of-time.
After the end of day 7 of the trial, the Claimant issued an application to rely on a witness statement; or to rely on related documents under the s. 9 Civil Evidence Act 1995; or for relief from sanction.
The evidence related to incorporation within Liechtenstein, and over whether another party in the claim had authority to sign documentation, and the Claimant did not suggest that the new witness had to be cross-examined.
The Court held that the evidence should have been served 19 months ago, and disclosure at this stage was disruptive. It also held that the error was entirely down to the Claimant, but was unintentional.
As a result, the Claimant was unable to rely on the statement.
The Court then turned to the related documentation. It held that the documents were of a Public Register, and so s. 9 was not relevant, but they too should have been served 19 months ago.
However, the Judge did grant relief from sanction, and that the documents could be dealt with in written submissions or on oral closing statements. He ruled this after taking into account all the facts, including efficient conduct and justice to the parties, and that the evidence related to a “very limited” issue.
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