Bnm v Mgn Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Terence Etherton MR,Lord Justice Longmore,Lord Justice Irwin |
| Judgment Date | 07 November 2017 |
| Neutral Citation | [2017] EWCA Civ 1767 |
| Docket Number | Case No: A2/2016/3832 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 November 2017 |
[2017] EWCA Civ 1767
THE MASTER OF THE ROLLS
Lord Justice Longmore
and
Lord Justice Irwin
Case No: A2/2016/3832
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SENIOR COURTS COSTS OFFICE
MASTER GORDON-SAKER (sitting as the Senior Costs Judge)
Royal Courts of Justice
Strand, London, WC2A 2LL
Simon Browne QC and James Laughland (instructed by Atkins Thomson) for the Appellant
Alexander Hutton QC and Jamie Carpenter (instructed by Reynolds Porter Chamberlain) for the Respondent
Hearing date: 11 October 2017
Judgment Approved
The principal issue of law in this appeal is whether the former proportionality test in the old CPR 44.4(2) or the new proportionality test in the current CPR 44.3(2) and (5) applies on a standard basis of assessment to a pre-commencement funding arrangement as defined in the current CPR 48.
Expressed in less technical language and directed more specifically to the facts of the present proceedings, which are privacy proceedings, the issue is whether the success fee payable under conditional fee agreements between the claimant (who is the appellant) ("BNM") and her solicitors and between her solicitors and her barristers, and the premiums payable under an after the event ("ATE") insurance policy taken out by BNM, are subject to the old or the new proportionality rules under the Civil Procedure Rules on an assessment of her costs on the standard basis.
The appeal is from the final costs certificate dated 21 June 2016 of the Senior Costs Judge Gordon-Saker, in which BNM's costs payable by the defendant (the respondent on this appeal) MGN Limited ("MGN") were assessed in the sum of £83,964.80 plus interest in the sum of £5,375.59.
That certificate followed a detailed assessment on 23 to 24 November 2015 and 29 April 2016. The Senior Costs Judge gave two relevant judgments in the course of the assessment. In the first, which was delivered on 24 November 2015 ("the November 2015 judgment"), he rejected, among other things, MGN's objection that the issue of the proceedings was premature and unnecessary and, had prior notice been given to MGN, the proceedings would have been settled without the need for any proceedings. In the second, handed down on 3 June 2016 ("the June 2016 judgment"), he held that the new proportionality test applied to the success fees and the premiums under the ATE policy.
BNM appealed the Senior Costs Judge's decision that the new proportionality test in CPR 44.3(2) and (5) applies to the success fees and the ATE insurance premium. MGN has cross-appealed the Senior Costs Judge's rejection of its objection that the proceedings were issued prematurely.
The factual background
I gratefully take much of the following summary of the factual background from the November 2015 judgment and the June 2016 judgment.
BNM is a primary school teacher and has no public or media profile. Between 2008 and 2011 she had a relationship with a successful premiership footballer. That relationship was known only to a small circle of friends and family.
In March 2011 BNM lost her mobile phone, which contained private and personal information, including information linking her with the footballer.
MGN publishes a number of newspapers, including the Sunday People. An assistant editor of the Sunday People was approached by a source who was in contact with another person who claimed to have BNM's phone and who revealed the relationship between BNM and the footballer.
On 23 March 2011 Ms Tracey Kandolah, a freelance journalist who undertook work for MGN, was sent by the assistant editor to BNM's home to enquire about the relationship between BNM and the footballer.
This led to a complaint to MGN by BNM's father and, on 3 May 2011, to the return of the phone to BNM. BNM contended that all data, including text messages, personal photographs and videos, had been deleted from the phone before it was returned.
In March 2013 BNM instructed the solicitors Atkins Thomson in relation to a proposed claim against MGN. On 18 April 2013 BNM entered into a conditional fee agreement with Atkins Thomson, which provided for a success fee of 100 per cent of their normal fees but a discounted success fee if the claim concluded before trial. On 7 May 2013 Atkins Thomson entered into a conditional fee agreement with counsel, Mr David Sherborne, which provided for a success fee of 100 per cent but a discounted success fee if the claim concluded before exchange of witness statements. On 25 July 2013 BNM purchased an ATE insurance policy from Temple Legal Protection Limited. That provided indemnity of up to £165,000 against liability for MGN's costs and BNM's own disbursements. On 30 July 2013 Atkins Thomson entered into a conditional fee agreement with another counsel, Mr William Bennett, which similarly provided for a success fee of 100 per cent but a discounted success fee if the claim concluded before exchange of witness statements.
The success fees and the ATE premiums increased substantially if proceedings were commenced. The solicitors' success fee increased from 0 per cent to 40 per cent. Counsel's success fees increased from 25 per cent to 50 per cent. The ATE premium was £3,710 if the claim settled within 62 days of the letter of claim and £7,155 if it settled subsequently but before proceedings were issued. Upon issuing proceedings, the premium immediately went up to £28,090.
Without any prior notice to MGN, BNM commenced proceedings against MGN on 31 July 2013, having obtained an anonymity order from Mann J on an ex parte application the previous day. The order was on terms that BNM would immediately issue a claim form. The order provided that no person should inspect or report the contents of the witness statements deployed in support of the application or the information contained in a confidential schedule to the order without the consent of both parties or the permission of the court. The order permitted BNM to bring these proceedings under initials rather than in her name.
In her claim form BNM claimed an injunction to restrain MGN from using or publishing confidential information taken from her phone, damages and an order for delivery up of any confidential information.
On 2 August 2013 Atkins Thomson wrote to MGN enclosing a copy of the application for the anonymity order, the order made by Mann J and what was described as a draft claim form. That was the first correspondence between the parties or their solicitors in relation to the proposed proceedings.
Particulars of Claim were served on 27 September 2013.
MGN filed and served a Defence on 22 November 2013, in which it admitted that it was liable to BNM to the extent particularised in the Defence. MGN admitted that towards the end of March 2011 an unidentified source had contacted the assistant editor of the Sunday People to say that the source had information about a relationship between the footballer and a girl which another source had obtained from a lost telephone. MGN admitted that, as a result of that contact, the assistant editor asked the freelance journalist Ms Kandolah to approach BNM to discuss her relationship with the footballer; and MGN asserted that, following BNM's father's complaint, there were communications between the assistant editor and the police in which the assistant editor explained that he had asked for the phone to be returned to the claimant.
MGN asserted that it had never handled or had possession of or saw BNM's phone and nor had any individual for whose acts MGN was vicariously liable; that no individual for whose acts MGN was vicariously liable had at any time been provided with or received copies of any materials or documents from the phone or had deleted data from the phone; that neither the assistant editor nor Ms Kandolah believed or understood that the phone had been stolen but rather they believed it had been lost; and that no information from the phone had been published by MGN. It admitted, however, that it had misused confidential information from the phone. MGN pleaded that it was prepared to provide an undertaking to the court not (save in relation to the proceedings) to read, access, communicate, use, disseminate, disclose or process the confidential information it had obtained. It also admitted that it was liable to pay BNM damages for misuse of private information. It also pleaded that it was prepared to deliver up to BNM all documents or copies of documents containing the confidential information, subject to redacting irrelevant matters.
MGN made an open offer to settle the claim by a letter dated 17 December 2013 on terms that it would undertake not to use the confidential information, that it would destroy any relevant documents or deliver them up, that it would pay a sum in damages to be agreed and that it would pay BNM's costs of the action on the standard basis, reserving the right to contend on assessment that the costs of the anonymity application were unreasonably incurred.
On 1 July 2014 MGN made two further offers. One was pursuant to CPR Part 36, in which it offered to pay £20,000 in damages and to give undertakings and to destroy or deliver up the information. A further open offer was made on the same day in similar terms but again, in relation to costs, expressly reserving the right to contend that the costs of the anonymity application were unreasonably incurred. MGN further offered to provide a letter of apology for having used the information contained on the claimant's mobile phone.
A consent order dated 18 July 2014 contained an order for delivery up of documents or copies of documents containing the information obtained from the source, staying all further proceedings, ordering MGN...
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