Kai Surrey (a Child and Protected Party by his Litigation Friend Amy Surrey) v Barnet and Chase Farm Hospitals NHS Trust

JurisdictionEngland & Wales
JudgeMr Justice Foskett
Judgment Date01 July 2016
Neutral Citation[2016] EWHC 1598 (QB)
CourtQueen's Bench Division
Date01 July 2016

[2016] EWHC 1598 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Foskett

with

Senior Costs Judge Gordon-Saker

(as assessor)

On Appeal from the Senior Courts Costs Office Master Rowley

Appeal Ref QB/2015/0487

Betwee:
Kai Surrey (a Child and Protected Party by his Litigation Friend Amy Surrey)
Claimant
and
Barnet and Chase Farm Hospitals NHS Trust
Defendant

On Appeal from the Senior Courts Costs Office Deputy Master Campbell

Appeal Ref QB/2016/0028

Between:
AH (a protected party by her litigation friend XXX)
Claimant
and
Lewisham Healthcare NHS Trust
Defendant

On Appeal from the Kingston-Upon-Hull District Registry District Judge Besford

Appeal Ref QB/2016/0113

Between:
Mehmet Yesil (a child and protected party by his litigation friend Alisan Yesil)
Claimant
and
Doncaster and Bassetlaw Hospitals NHS Foundation Trust
Defendant

Benjamin Williams QC and Robert Marven (instructed by Irwin Mitchell LLP) for the Claimants

Alexander Hutton QC (instructed by Acumension) for the Defendant

Hearing dates: 25 and 26 May 2016

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.

Mr Justice Foskett

Introduction

1

There are three appeals before the court from different Costs Judges, each proceeding with the leave of each Costs Judge. The principal point in each appeal concerns the costs payable to a claimant in clinical negligence litigation by the defendant. It is potentially an important point and the outcome of these appeals may have an impact on other cases.

2

The substantive litigation in each case had been proceeding for several years prior to 1 April 2013 and the claim of each claimant had been advanced with the benefit of Legal Aid. 1 April 2013 was the date from which it would no longer be possible for claimants proceeding under a Conditional Fee Agreement ('CFA') to recover success fees and After the Event ('ATE') premiums from the defendant if successful in the litigation. In the month or so prior to 1 April 2013 the solicitors acting for each claimant (Irwin Mitchell LLP), with the agreement of the Litigation Friend of each claimant, arranged for the Legal Aid Certificates to be discharged in each case and for the funding for each claimant henceforth to be funded by a CFA. In fact, the CFA was what is known generally as a 'CFA Lite' – in other words, a CFA by virtue of which the client's liability to pay his lawyers' costs is limited to the amount of costs recoverable from the other party. Any shortfall is absorbed by the solicitors.

3

Each case was finalised in a way that was successful from each claimant's point of view resulting in a liability upon each defendant for costs. However, in due course, recovery of the success fee and the ATE premium in each case was challenged by the defendant (in reality, by the National Health Service Litigation Authority – 'the NHSLA') and the Costs Judge upheld the challenge in each case, holding that the changed funding arrangements were not reasonable.

4

There are nuances surrounding that conclusion in each case, but the principal question in each appeal (which is by way of review: CPR 52.11) is whether that conclusion was wrong in each case. Mr Benjamin Williams QC and Mr Robert Marven, for each of the claimants, argue that it was. Mr Alexander Hutton QC, for each defendant, argues that it was not. There is a subsidiary issue in two of the cases that will only arise if the appeals on the principal issue succeed.

5

Before going to the substance of the arguments, it is necessary to set out briefly the legislative and other relevant history that underlies the issues that have arisen.

The history of the statutory scheme

6

The background to the introduction of CFAs is summarised in Chapter 16 of Sir Rupert Jackson's Preliminary Report concerning his 'Review of Civil Litigation Costs' (May 2009). It is unnecessary to repeat or summarise it here save to record the obvious proposition that CFAs were introduced and encouraged as a means of funding civil litigation at a time when there was diminishing availability of public funding for such litigation. This proposition finds a reflection in Lawrence and another v Fen Tigers Ltd and others (No 3) (Secretary of State for Justice and others intervening) [2015] 1 WLR 3485, where Lord Neuberger PSC at [27] said this:

"In MGN v United Kingdom (2011) 53 EHRR 195, para 197 of the majority judgment of the European Court of Human Rights … acknowledged that the CFA with recoverable success fees "sought to achieve the legitimate aim of the widest public access to legal services for civil litigation funded by the private sector". A deliberate policy of the 1999 Act regime was to impose the cost of all CFA litigation on unsuccessful respondents as a class: see per Lord Hoffmann in Campbell v MGN Ltd (No 2) [2005] 1 WLR 3394, para 16. There was to be a fundamental rebalancing of the means of access to justice by resort to the private sector rather than by the use of public (legal aid) funds. Instead of placing a burden on the legal aid fund, legal proceedings were to be funded in the first instance by a party's lawyers (who would undertake the work "on risk" in exchange for a potential success fee) and then, if the proceedings were successful, the success fee would be transferred to the losing party."

7

The history of the CFA scheme is set out in some detail in Lord Neuberger's judgment at [12] – [25].

8

The recoverability of success fees and ATE premiums was provided for respectively by sections 27 and 29 of the Access to Justice Act 1999.

9

Section 27 inserted a new section 58A(6) into the Courts and Legal Services Act 1990 which provided as follows:

"A costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of any fees payable under a conditional fee agreement which provides for a success fee."

10

Section 29 provided as follows:

"Where in any proceedings a costs order is made in favour of any party who has taken out an insurance policy against the risk of incurring a liability in these proceedings, the costs payable to him may, subject in the case of court proceedings to rules of court, include costs in respect of the premium of the policy."

11

Both provisions came into effect on 1 April 2000. The recoverability of both was seen as a way in which those acting for claimants could recover in successful cases the costs associated with funding unsuccessful cases: see Callery v Gray [2001] 1 WLR 2112 (CA), para 61.

12

The provisions in the 1999 Act provided for recovery in principle of the success fees and the ATE premiums and enabled the setting in place of a "recoverability regime". The provisions governing the way in which the court would decide on any contested issue about recovery in any particular case prior to 1 April 2013 were CPR Part 44.4 and the Costs Practice Direction then in existence. Part 44.4 was, so far as material, in the following terms:

"(1) Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs —

(a) on the standard basis; or

(b) on the indemnity basis,

but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount.

(2) Where the amount of costs is to be assessed on the standard basis, the court will—

(a) only allow costs which are proportionate to the matters in issue; and

(b) resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party …."

13

Part 44.5(1) was, so far as material, in the following terms:

"The court is to have regard to all the circumstances in deciding whether costs were … [proportionately] and reasonably incurred …."

14

The Costs Practice Direction, which dealt with the way in which a success fee was assessed and whether the level of insurance cover was reasonable, was as follows:

"11.7 Subject to paragraph 17.8(2), when the court is considering the factors to be taken into account in assessing an additional liability, it will have regard to the facts and circumstances as they reasonably appeared to the solicitor or counsel when the funding arrangement was entered into and at the time of any variation of the arrangement.

11.8(1) In deciding whether a percentage increase is reasonable relevant factors to be taken into account may include:

(a) the risk the circumstances in which the costs, fees or expenses would be payable might or might not occur;

(b) the legal representative's liability for any disbursements;

(c) what other methods of financing the costs were available to the receiving party.

11.10 In deciding whether the cost of insurance cover is reasonable relevant factors to be taken into account include:

(1) where the insurance cover is not purchased in support of a conditional fee agreement with a success fee, how its cost compares with the likely cost of funding the case with a conditional fee agreement with a success fee and supporting insurance cover;

(2) the level and extent of the cover provided;

(3) the availability of any pre-existing insurance cover;

(4) whether any part of the premium would be rebated in the event of early settlement;

(5) the amount of commission payable to the receiving party or his legal representatives or other agents."

15

That was the regime applicable prior to 1 April 2013 and, as will appear below (paragraphs 20 and 21), that regime was expressly retained in respect of CFAs entered into before that date.

16

The "recoverability issue" was reflected upon in Sir Rupert's Final...

To continue reading

Request your trial
10 cases
  • Suzanne West v Stockport NHS Foundation Trust
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 17 Julio 2019
    ...paragraph 56 above, they should not be followed. 59 In particular, we do not agree with the suggestion of Foskett J in Surrey v Barnet and Chase Farm Hospitals NHS Trust [2016] EWHC 1598 (QB), [2018] 1 WLR 499, at paragraph 116, that Rogers is in some way out of date, and that costs judge......
  • AH (a Protected Party Proceeding by her Litigation Friend, XXX) v Lewisham Hospital NHS Trust
    • United Kingdom
    • Senior Court Costs Office
    • 12 Enero 2016
    ... ... In this context, Mr Hutton also relies on Surrey v Barnet & Chase Farm Hospitals NHS Trust (2015) ... ...
  • Rebecca Louise Mitchell v Dr Carole Gilling-Smith
    • United Kingdom
    • Senior Court Costs Office
    • 21 Agosto 2017
    ...way since 1 April 2013, the argument seems to me to run directly contrary to the conclusions drawn by Foskett J in Kai Surrey v Barnet And Chase Farm Hospitals NHS Trust [2016] EWHC 1598 (QB) (at paragraph 105): "… Rogers is very clear authority that the court should be slow to adjust block......
  • Kai Surrey (A Child and Protected Party, by his Litigation Friend, Amy Surrey) v Barnet and Chase Farm Hospitals NHS Trust
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 16 Marzo 2018
    ...fee agreement (a “CFA”) supplemented by a self-funding after the event insurance policy (“ATE insurance”). The judge's judgment is at [2016] EWHC 1598 (QB); [2018] 1 WLR 499. Since all these appeals are second appeals, our primary focus must be on the decisions at first instance. 3 Each o......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT