EVX (A Minor by her Mother and Litigation Friend XYZ) v Julie Smith (Personal Representative of the Estate of Dr Peter Smith, Deceased)
| Jurisdiction | England & Wales |
| Judgment Date | 24 June 2022 |
| Neutral Citation | [2022] EWHC 1607 (SCCO) |
| Docket Number | Case No: SC-2022-BTP-000057 |
| Year | 2022 |
| Court | Senior Courts |
[2022] EWHC 1607 (SCCO)
Costs Judge Brown
Case No: SC-2022-BTP-000057
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
LondonWC2A 2LL
Erica Bedford instructed by and for Irwin Mitchell LLP
Hearing date: 5 April 2022
(first handed out in draft on 15 June 2022)
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is my decision in a claim by the Claimant's solicitors, Irwin Mitchell LLP, (‘IM’) against the Claimant, a child. It is a claim for payment by way of deduction from her damages of IM's fees and disbursements in respect of what they say is the shortfall in the recovery of base costs from the opposing party to the litigation, the Defendant. Overall, it is for the sum of about £28,113. The claim was made, in effect, by application to the court dated 27 May 2021 when I was asked to approve the deduction sought.
In this decision I am concerned to address the hourly rates of the fee earners whose work is claimed at Grade ‘C’ by reference to the grades as they appear in the Guide to the Summary Assessment of Costs 2021 1 and the earlier versions. The rates claimed are £235–£240 per hour. The information provided as to qualifications of the fee earners are set out in the Appendix; two are now solicitors (one qualified as solicitor on 1 March 2019), another qualified as a Chartered Legal Executive on 21 October 2019, others appear to be wholly unqualified but are claimed at Grade C rates by reason of what is said to be their experience, albeit that experience is largely unspecified.
A number of issues of principle arose at the hearing and I gave Ms Bedford the opportunity to put in further written submissions which she did on 27 April 2022, and for which I am grateful.
Background
The Claimant was around five weeks old in early 2015 when it was alleged her GP, now deceased, failed to diagnose and appropriately treat a condition (referred to as developmental dysplasia — a condition whereby the ball and socket hip joint fail to develop normally) in her left hip. The allegation focused on an examination on 23 April 2015 and as to whether any abnormality had then been detected. A diagnosis of dysplasia in the Claimant's left hip was however made on 17 December 2015 when the Claimant underwent a left open hip reduction on 15 February 2012. She has been left with scarring on her left hip and was left with a worse prognosis than would otherwise have been the case. It was anticipated by the expert instructed by the Claimant that she will require a pelvic osteotomy before the age 10 and will develop arthritis, requiring a hip replacement at age 50–60 and a revision at 75 (with a 20% chance of a second revision at age 85).
IM were first instructed under a conditional fee agreement dated 29 March 2016 although the work for which a claim is made includes work in February 2016 (the CFA having retrospective effect).
Proceedings were issued in the High Court on 22 October 2018. Liability was denied and the matter was timetabled through to trial to commence on 14 January 2021. Expert evidence was obtained from four experts on each side and it appears that the joint statements were favourable to the Claimant. The claim ultimately settled at a round table meeting on 10 November 2020, without admission of liability, in the sum of £225,000 subject to court approval.
The settlement sum was approved by Master Eastman on 9 March 2021. He allowed the sum of £16,420.00 to be paid to IM in respect of the success fee (£12,500.00) and ATE insurance premium (£3,920.00). The Master's order also included the following provision:
There shall be a detailed assessment of remaining costs payable by the Claimant to her solicitors in relation to the shortfall of costs on the indemnity basis pursuant to CPR 46.9 with permission to dispense with such an assessment upon the agreement of the Claimant.
On or about 28 April 2021 the parties to the underlying claim agreed the sum of £130,000 in respect of costs and interest (a sum, I should perhaps say, that I am asked to approve as part of this process).
I did not, at the outset, dispense with a detailed assessment of the solicitor's claim. It seemed to me that a detailed assessment of the costs claimed was in the interests of the Claimant. I set out my reasons for forming this view in various orders.
The Claimant's litigation friend, her mother, does not object to the deduction and Ms. Bedford argued at the hearing on 5 April 2022 that I should simply approve the deduction on the basis of this agreement. This was a matter that I considered had previously been dealt with and I had refused. I was not satisfied that the Litigation Friend would have had explained to her, and would have understood, on what basis the amount of the deduction was reasonable and appropriate; it is not enough in these circumstances that a Litigation Friend should be warned that a deduction would be made from damages (not least because such advice would, to my mind, be inaccurate or incomplete insofar as it did not also refer to the process of assessment which any claim for a deduction would generally involve). In any event it seems to me that the rules provide, in effect, that there must be a detailed assessment. Further, I was concerned that the Litigation Friend might be said to have a liability to the solicitors independent of the Claimant which produced a potential conflict such that I should be wary of any reliance on her consent (this was not, I should emphasise, conflict that that she would necessarily have appreciated and it may be that she understood that the costs sought by IM simply had to be paid from the Claimant's damages).
The instruction of the solicitors proceeded on the basis that the costs arising in this matter would be subject to detailed assessment under CPR 21 and 46.4 (unless it was not in the interests of the Claimant to have such an assessment) and, despite substantial and persistent opposition by IM and Ms. Bedford, I considered that there remained good reasons relating to the amount of the claim why there should be such an assessment of this claim.
I might add that a litigation friend, as here, is very often a member of the protected party/child's family and volunteers for the role. The rules, to my mind, require the court to consider the liability of the Claimant and the litigation friend for costs (as it would in respect of the claim for damages, as to which see Dunhill v Burgin [2014] UKSC 180). This benefits the claimant and the litigation friend, relieving the litigation friend of the need to make binding decisions as to costs on which they might have little understanding. Far from discouraging people to come forward to act as litigation friends (as it has been put to be me in other cases), the protection afforded to the claimant and to the litigation friend appear to me to encourage their involvement.
The CFA which was entered into with litigation friend provides as follows:
The hourly rates which currently apply to your claim are:
Grade 1 — Partners, associate directors, solicitors and legal executives with over 8 years post qualification experience and other fee earners of equivalent experience: £360 per hour.
Grade 2 — Solicitors and legal executives with over 4 years post qualification experience and other fee earners of equivalent experience: £295 per hour.
Grade 3 — Other solicitors, legal executives and other fee-earners of equivalent experience: £240 per hour.
Grade 4 — Trainee solicitors, litigation assistants and other fee-earners of equivalent experience: £145 per hour
The above hourly rates will apply to your claim until the review date on 1 May each year when we will notify you of any increase in our hourly rates. In the absence of any notification all of our hourly rates will automatically increase by a percentage equivalent to the increase in the RPI over the previous 12 months ending on 1 May. If a different percentage increase is to apply, we will advise you in writing as soon as possible after the review date.
Various letters, I should say, were sent providing revisions to these hourly rates. IM have a number of offices around the country but the branch that dealt with the claim is in Southampton.
I should make clear that I considered the hourly rate which was claimed for the Grade A fee earner at £315–320 per hour to be reasonable. The main fee earner in a claim such as this plainly bears significant responsibility and the rate seemed to me to reasonable in this context and having regard to the other factors under CPR 44.4 (3). My concerns arise with the junior fee earners who, with the exception of Ms. Causey for a limited period, were acting effectively, under, close supervision.
At the outset I was concerned that I had little or no information about the fee earners for whom the rates were claimed. I recorded in an earlier order my request that information as to the fee earners be provided with a Bill particularised in accordance with the decision of Steyn J in Barking, Havering & Redbridge University Hospitals NHS Trust v AKC [2021] EWHC 2607 (QB), 2021 2 (setting out their identity, status and litigation experience). Without this information it is plainly difficult, if not impossible, to tell what rate is payable for each individual under the terms of the CFA (the solicitors could not, of course, claim a higher rate that the litigation friend had agreed to pay). Although I did not order IM to provide this information, in a recital to an earlier order I...
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