Allan Coleman v Medtronic Ltd
| Jurisdiction | England & Wales |
| Judge | Master Leonard |
| Judgment Date | 24 October 2016 |
| Neutral Citation | [2016] EWHC B27 (Costs) |
| Date | 24 October 2016 |
| Court | Senior Court Costs Office |
| Docket Number | Case No: CL1303034 |
[2016] EWHC B27 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building
Royal Courts of Justice
Strand London WC 2A 2LL
Master Leonard
Case No: CL1303034
Benjamin Williams QC (instructed by Leigh Day) for the Claimant
George McDonald (instructed by CMS Cameron McKenna LLP) for the Defendant
Hearing date: 1 August 2016
Judgment Approved
This is the detailed assessment of the costs payable by the Defendant to the Claimant under the terms of an order made on 3 April 2013. The only matters remaining in issue are an After the Event ("ATE") insurance premium incurred by the Claimant, originally quantified at £138,142.91 and now at £144,785.65, and the payment of interest upon the Claimant's costs.
The Defendant takes issue first with the fact that an ATE premium was incurred at all, and second with its amount. The Defendant also seeks disallowance of interest under CPR 47.8(3).
The Background
The Defendant is a UK distributor of medical devices. Those devices include "Sprint Fidelis" cardiac leads designed to be used with an implantable cardioverter defibrillator ("ICD").
In October 2007, the Defendant suspended its UK distribution of Sprint Fidelis leads. On 19 October, the Medicines and Healthcare Products Regulatory Agency announced an official recall of the relevant Sprint Fidelis Defibrillator leads from the UK market.
On the 14 October 2010 the Defendant's US parent announced that it entered into an agreement to settle about 3700 US lawsuits relating to the Sprint Fidelis leads. The total settlement sum was US$268 million, including attorneys' fees and administrative expenses.
The Claimant was one of a number of UK claimants who instructed solicitors Leigh Day & Co to pursue claims for damages against the Defendant. The basis of the claims wasthat the leads had fractured, causing electric shocks and personal injury.
On 8 April 2011, Leigh Day sent a Letter of Claim to the Defendant on behalf of one of those claimants, Mr Christopher Pitt. The letter incorporated notification of the fact that Mr Pitt had entered into a Conditional Fee Agreement ("CFA"), incorporating a success fee, with Leigh Day on 18 June 2009. With regard to ATE insurance, the letter indicated that Mr Pitt had "the benefit of ATE insurance cover with ARAG Legal Services" and referred to an enclosed Notice of Funding in form N251. The Notice of Funding indicated that the ATE policy had been issued on 9 July 2009, that the premium was staged and that the level of cover was £100,000.
Under the heading "Additional Claims" the letter explained that Leigh Day had received instructions from a further 24 potential claimants and attached a list of their names and addresses. That list included the Claimant.
The Letter of Claim, with a view to protecting the potential claimants' position with regard to limitation and avoiding the necessity to issue proceedings at that stage, invited the Defendant to agree to a "limitation holiday" to continue until two months after the receipt of the Defendant's substantive response to their claims.
The proposed effect of the stay was that the Defendant's rights in relation to time that had already passed would be preserved, but that the running of the limitation period would be frozen from the point of agreement. Acceptance of that proposal was requested by 4 p.m. on 18 April 2011, failing which (Leigh Day warned) proceedings would be issued.
With regard to ATE insurance the letter had this to say about the potential claimants:
"Please note that we intend to enter contracts for After the Event insurance to protect our clients in respect of adverse costs and disbursements. In the event that you wish to avoid the additional liability of ATE premiums, this can be avoided if you are willing to provide a guarantee, at this stage, that you will not seek to enforce adverse costs against our clients."
The letter concluded with a proposal that the claims be resolved through a settlement protocol "before further legal costs are generated".
The Defendant responded through its solicitors CMS Cameron McKenna LLP on 18 May 2011. On the basis that a wholesale limitation holiday would be unnecessary and disproportionate, the Defendant proposed a limitation holiday in relation to those claims in which limitation was due to expire within two months (where medical records had already been obtained) or three months (where they had not yet been obtained).
With regard to ATE insurance for potential claimants the Defendant said:
"We note your intention to enter into contracts for after the event insurance in relation to adverse costs and disbursements. Our client is prepared to agree not to enforce adverse costs/disbursements relating to a specific claim against the relevant claimant up to a date 14 days after the date of our substantive response to each claimant's detailed letter of claim in order to give your clients an opportunity to fully consider our client's response in each case. However, we wish to make clear at this stage that in such a case our client will require full supporting medical records and, if these have already been obtained, medical expert reports for each of the prospective claimants in order for it to be in a position to properly investigate the claims. In cases where medical reports have not yet been obtained we would expect the pre-action protocol to apply."
The proposal for a settlement protocol was noted, but the Defendant took the position that it was premature at that point to assess whether such an approach was likely to be appropriate.
The Claimant entered into a CFA with Leigh Day on 13 June 2011. On 15 June 2011, Leigh Day responded to the Defendant's limitation holiday proposals: discussions with regard to the management of limitation issues in particular cases and categories of case were to continue for some time.
The letter enclosed notices of funding in respect of those individuals who had entered into CFAs to that date, including the Claimant.
With regard to adverse costs, Leigh Day said:
"We acknowledge your client's offer not to enforce adverse costs/disbursements relating to a specific claim against the relevant claimant up to a date 14 days after the date of your substantive response to their specific letter of claim.
Whilst we believe that your proposal is reasonable in principle, we do foresee some practical difficulties. It can take time to arrange After the Event insurance cover. As such, we feel that a period of one month, as opposed to 14 days, would be desirable to provide us with sufficient time to consider your client's substantive response and for us to arrange suitable After the Event Insurance, if required.
Further, we also take this opportunity to place you on notice that the After the Event insurance premium is likely to be higher should any of our clients be required to enter into such a policy at that later juncture, due to the increased litigation risk."
The Defendant, through CMS Cameron McKenna, responded on 19 July 2011 to this effect:
"Our client confirms that it will not enforce adverse costs or disbursements relating to any specific claim against the relevant claimant up to a date one month after the date of our substantive response to the claimant's detailed letter of claim."
On 5 October 2011 the Claimant, through Leigh Day, sent a formal Letter of Claim to CMS Cameron McKenna on behalf of the Defendant. The letter set out a history of repeated, severe electric shocks suffered by the Claimant on 31 August 2007, following which his ICD was switched off and (on 3 September 2007) the Sprint Fidelis lead replaced. The Claimant's case was that the shocks had been caused by defects in the Sprint Fidelis lead, in particular a propensity to fracture, and that he had sustained physical and psychiatric injury.
The letter made reference to the strength of the claim, referring to the history of the US litigation and the fact that the Sprint Fidelis device used by the Claimant had been the subject of a product recall, and invited an admission of liability. It referred to costs and disbursements:
"The Claimant is part of a larger group of individuals who are bringing legal action… under similar circumstances. As you know some of these claims have been issued to protect our clients' positions on limitation. Drafting Particulars of Claim and obtaining expert evidence in each case is proving time-consuming and expensive. Given the strength of the claims as to prospects and causation, we invite you to consider whether or not you require us to serve Particulars of Claim and supporting evidence in each case or, in order to save time and costs, whether you have any alternative proposals for disposing of these cases…
Further to your letter dated 19 July 2011, we note you will not enforce adverse cost disbursements relating to Mr Coleman's claim up until one month after the date of your substantive response to this Letter of Claim."
The letter concluded by repeating the proposal for resolving the claims generally by means of a settlement protocol "…before further legal costs are generated".
The admission sought by the Claimant was not forthcoming. On 1 November 2011 the Defendant indicated that, for every claim, the relevant claimant should serve Particulars of Claim and supporting evidence in accordance with the Civil Procedure Rules, without which the Defendant said that it could not decide on the merits of the claim:
"… from our experience in dealing with claims concerning products of this type it is clear that each claim will be markedly different and will need to be investigated and handled as such…"
As to the proposed settlement protocol, the Defendant said:
"… our client is not in any...
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