Catherine King v Basildon & Thurrock University Hospitals NHS Foundation Trust
| Jurisdiction | England & Wales |
| Judge | Master Rowley |
| Judgment Date | 30 November 2016 |
| Neutral Citation | [2016] EWHC B32 (Costs) |
| Court | Senior Court Costs Office |
| Docket Number | Case No: JR 1505789 |
| Date | 30 November 2016 |
[2016] EWHC B32 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building
Royal Courts of Justice
London, WC2A 2LL
Master Rowley
Case No: JR 1505789
Oliver Jones of Just Costs for the Claimant
Michael Brown of Acumension for the Defendant
Hearing dates: 30 and 31 August 2016
Judgment Approved
Introduction
On 31 August 2016 I concluded the assessment of the claimant's bill of costs. Having calculated the relevant amounts, the parties were agreed that of the £326,404.57 claimed, I had allowed £249,889.83 as being reasonably incurred and reasonable in amount.
The parties then addressed me on whether or not the reasonable amount was also proportionate given the factors set out in CPR 44.3(5). Having heard both parties' submissions, I concluded that the sum was indeed also proportionate and informed the parties of my decision. Other than expressing the general view that I did not think that I should follow the decision of Master Gordon-Saker in BNM v MGN Ltd [2016] EWHC B13 (Costs) in this case, I did not give reasons for my decision to the parties but indicated that they would follow in writing. This judgment sets out those reasons.
Submissions
The claimant's bill of costs arises out of a clinical negligence claim which went to a three-day trial before Mr Justice Jay in May 2015. Jay J found that the injuries sustained by the claimant were caused by the negligence of the surgeon and judgment in the sum of £35,000 together with costs was entered in the claimant's favour.
The claimant's bill was drawn in 5 parts. Mr Brown for the defendant said that the first 2 parts – which related to costs incurred prior to 1 April 2013 – should be ignored for the purposes of the proportionality test under 44.3(5). In any event, they only amounted to £13,401.20 of the £326,404.57 originally claimed. Parts 3 to 5 of the bill, as assessed, amounted to £213,495.17 plus VAT and that was the figure on which Mr Brown concentrated.
He referred to the new test of proportionality as being a sea change from the Lownds test promulgated by the Court of Appeal in Lownds v Home Office [2002] EWCA Civ 365 Whilst the costs should still be looked at on a global basis (albeit now at the end rather than the beginning), they should now include the additional liabilities i.e. the success fee and After The Event premium, rather than, to all intents and purposes, excluding them as had previously been the case. Mr Brown's submissions very much relied upon paragraphs 25 to 32 of Master Gordon-Saker's decision in BNM which are as follows:
25. CPR 48 .1(1), in force after 1st April 2013, provides:
The provisions of CPR Parts 43 to 48 relating to funding arrangements, and the attendant provisions of the Costs Practice Direction, will apply in relation to a pre-commencement funding arrangement as they were in force immediately before 1 April 2013, with such modifications (if any) as may be made by a practice direction on or after that date.
26. CPR 43 .2(1)(a), as it was in force before 1st April 2013, defined "costs" as including "any additional liability incurred under a funding arrangement". CPR 44.1, in force after 1st April 2013, defines "costs" with no reference to additional liabilities.
27. A number of rules relating to funding arrangements in the CPR in force prior to 1st April 2013 are identified in paragraph 1.4 of Practice Direction 48, in force after 1st April 2013. They include CPR 43.2(1)(a) but do not include CPR 44.4(2) – the old test of proportionality.
28. It seems to me that the intention was that the rules as to the recoverability of additional liabilities would be preserved in relation to those additional liabilities which remain recoverable after 1st April 2013. However the old test of proportionality was not preserved in relation to those additional liabilities. Had that been intended it could have been achieved quite easily by a further exception in CPR 44.3(7).
29. CPR 44 .4(2), the test of proportionality in force before 1st April 2013, was not a provision "in relation to funding arrangements". CPR 43.2(1)(k), in force before 1st April 2013, defined funding arrangements as conditional fee agreements, after the event insurance premiums and arrangements with membership organisations for the purposes of s.30 Access to Justice Act 1999. CPR 44.4(2) does not therefore survive beyond 1st April 2013 by virtue of CPR 48.1(1), as in force after that date. It survives only in the circumstances set out in CPR 44.3(7).
30. The old test of proportionality applied to additional liabilities but rarely had an impact on assessment. If the base costs were reasonable and necessary the reasonable success fee would also be necessary. An after the event insurance premium, if reasonable, would rarely not be necessary; although greater enthusiasm developed for disallowing disproportionate or unreasonable premiums: Redwing Construction Ltd v Wishart [2011] EWHC 19 (TCC) (Akenhead J); Kelly v Black Horse Limited [2013] EWHC B17 (Costs) (Master Hurst); and my decision in ( Banks v London Borough of Hillingdon unrep., 3rd November 2014).
31. A consequence of the reduction of the base costs to a proportionate figure will be that the success fee, a percentage of those base costs, also reduces. It would be absurd and unworkable to apply the new test of proportionality to the base costs, but the old test of proportionality to the success fee.
32. Ring fencing and excluding additional liabilities from the new test of proportionality would be a significant hindrance on the court's ability to comply with its obligation under CPR 44.3(2)(a) to allow only those costs which are proportionate.
In BNM, the claimant brought privacy proceedings against Mirror Group Newspapers Ltd for what is colloquially known as "phone hacking." The claimant instructed solicitors in March 2013 i.e. prior to the change in costs regime, but did not enter into a CFA or an ATE policy until after the change (18 April 2013 and 25 July 2013 respectively). Nevertheless, such proceedings can continue to be brought by claimants and their solicitors using CFAs with recoverable success fees because an exception for such cases was carved out of the general ending of recoverability caused by the enactment of the Legal Aid Sentencing and Punishment of Offenders Act 2012.
Following BNM, Mr Brown used the figure of £234,251.08 (i.e. the total of the reasonable costs including VAT) when comparing the costs claimed here with the sum in issue. This is the first of the 5 factors described by rule 44.3(5) which says:
(5) Costs incurred are proportionate if they bear a reasonable relationship to –
(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.
Mr Brown was clear in his view that costs of six times more than the damages could not be proportionate. If the case was worth more than the £35,000 awarded, it could not be any more than £50,000 and which would mean that the costs were still more than four times the potential damages. That could not be a reasonable relationship between costs and damages.
Mr Brown submitted that there was no monetary relief claimed. He accepted that the case went to trial with 2 experts on each side and that the case fought on breach of duty. As such he accepted that there was a degree of complexity on the issue of breach of duty but he did not think so in relation to quantum. In any event it was not an overly complex case: it was just a defended one.
In respect of conduct, whilst the case got into a third day rather than the two days expected, the budgets were amended to reflect that fact. Nevertheless, Mr Brown quite properly accepted that it was an extra cost of this case. Mr Brown concluded that there was no issue of reputation to the claimant or any issues of wider public importance. Consequently, the reasonable amount of costs claimed could not be said to be proportionate.
Mr Brown also referred to the case of May v Wavell Group [2016] EWHC B16 (Costs) where the claim settled for £25,000 in damages and was limited to £35,000 plus VAT for costs on the ground of proportionality. In this case proceedings had reached trial (unlike May) and consequently the defendant said the proportionate figure would be £70,000 i.e. twice the value of the claim plus the sums allowed for Parts 1 and 2 which made a total of £82,323.60.
Mr Jones, for the claimant, said there were four reasons to distinguish the case of BNM from the case before me. Two of those reasons related to the status of BNM and as such in my view were not...
To continue reading
Request your trial
-
Rebecca Louise Mitchell v Dr Carole Gilling-Smith
...the Claimant's ATE premium on a standard basis assessment. 47 As to proportionality, the Claimant relies upon King v Basildon & Thurrock University Hospitals NHS Foundation Trust [2016] EWHC B32 (Costs), Savings Advice Ltd & Anor v EDF Energy Customers Plc [2017] EWHC B1 (Costs) and Murrell......
-
Bernard Murrells (Executor of the Estate of Jill Murrells deceased) v Cambridge University NHS Foundation Trust
...to deal with the outstanding issues. 17 In the event, Master Rowley handed down judgment in the case of King v Basildon & Thurrock University Hospitals NHS Foundation Trust on 30 November 2016. In this decision, which also concerned funding arrangements entered into before 1 April 2013, Mas......