Nicholas Andrew Manning and Another (Claimants/Appellants) v King's College Hospital Nhs Trust
| Jurisdiction | England & Wales |
| Judge | Mr Justice Spencer |
| Judgment Date | 10 November 2011 |
| Neutral Citation | [2011] EWHC 2954 (QB) |
| Docket Number | Case No: 2010/0766 Claim No: HQ05X01346 |
| Court | Queen's Bench Division |
| Date | 10 November 2011 |
[2011] EWHC 2954 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
On appeal from the Senior Court Costs Office
(Master Gordon-Saker, Costs Judge)
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Spencer
(sitting with Master Campbell and Mr Gregory Cox as assessors)
Case No: 2010/0766
SCCO Ref. AGS 0904590
Claim No: HQ05X01346
Mr Benjamin Williams (instructed by Leigh Day and Co) for the Appellants
Mr Alexander Hutton (instructed by Barlow Lyde and Gilbert) for the Respondent
Hearing dates: 23 rd and 24 th October 2011
The appeal and cross-appeal in this case concern the assessment of costs in connection with conditional fee agreements (CFAs) entered into by solicitors and counsel who represented the claimant, Mr Manning, and subsequently his executors, in a highly complex clinical negligence claim arising from the illness and death of his wife, Jane Louise Manning. The claim succeeded at first instance and in the Court of Appeal, and the defendants were ordered to pay almost the whole of the claimants' costs.
There was a seven day hearing of the detailed assessment of costs before Master Gordon-Saker in October and November 2010. This case concerns three of his decisions within those proceedings. First, in refusing relief from sanctions he deprived the claimants' solicitors and counsel of the uplift in their CFAs for a period of 17 months during which the defendants had not been given proper notice of the CFAs as the rules required. The sum involved was £132,125. Secondly, the Master deprived the claimant of the costs of an after-the-event ("ATE") insurance premium paid during that period, in the sum of £70,875. The claimants appeal against these two decisions, by permission of Burnett J.
At the detailed assessment hearing it was also contended by the defendants that the claimants' solicitors and counsel were not entitled to the 100% success fee in their CFAs. The sum in question was around £286,000. The Master rejected this contention. The defendants cross-appeal against this decision, by permission of Foskett J.
In hearing the appeal and cross-appeal I have sat with and been greatly assisted by Master Campbell, Costs Judge, and Mr Gregory Cox, a solicitor assessor. Although the decisions, and this judgment, are mine and mine alone, I am comforted that both my assessors are in complete agreement with my conclusions.
Factual background and the issues
In order to understand and explain the issues which arise for determination, it is necessary to set out in some detail the highly unusual factual background which, in the experience of all three of us, is quite unique.
Mrs Jane Manning died from cancer on 13 th May 2002. On 11 th May 2005 her husband, Mr Gary Manning, commenced proceedings against the defendant health authority for damages on behalf of her estate under the Law Reform (Miscellaneous Provisions) Act 1934 and for her dependants under the Fatal Accidents Act 1976. In essence it was alleged that there had been failures in diagnosis and treatment, dating back to 1995, which had caused her death.
On 22 nd September 2005 Mr Manning entered into a CFA with his solicitors, Leigh Day and Co. Previously he had enjoyed the benefit of a legal expenses insurance policy but the limit of its cover had been reached. The CFA provides for a success fee of 62.3% of basic charges, unless the claim had not been settled by 28 days prior to trial, when the success fee would rise to 90% (plus a postponement element of 10%). By letter dated 30 th September 2005 Leigh Day and Co effected an amendment to the CFA by which the solicitors accepted the risk of not beating a Part 36 offer.
On 29 th September 2005 Leigh Day and Co entered into a CFA with Mr John Grace QC, a distinguished and very experienced personal injuries Silk who sadly died in July 2011. The agreement provided for staged success fees with 100% payable if the case proceeded to trial on any issue. By a manuscript amendment to the terms of the pro forma agreement, Mr Grace accepted the risk of not beating a Part 36 offer.
On 30 th September 2005 Leigh Day and Co arranged an ATE insurance policy providing cover of £100,000.
On 3 rd October 2005 Leigh Day and Co duly gave notice to the defendants, in form N251, of the existence of the CFA, including the date and the fact that it provided for a success fee. The notice also gave details of the ATE policy.
The assessment of risk, for the purpose of the CFAs, was based upon advice at that stage from Mr Grace QC that there was a 60% prospect of success in establishing that Mrs Manning's death was caused by the negligence of the defendants.
In the defence served in July 2006 there were certain admissions of negligence in relation to the later treatment of Mrs Manning's cancer. There was, and remained throughout the trial, a denial that her death was caused by any negligence on the part of the defendants.
On 21 st December 2006 the defendants' solicitors acknowledged that, in consequence of the limited admissions of breach of duty, a small sum of damages might be recovered for the deceased's extra pain and suffering during the latter stages of her illness. They made a Part 36 offer in the sum of £15,000. That offer was firmly rejected. By letter dated 18 th January 2007 the claimant made a counter-offer that he would accept the sum of £500,000. On 13 th July 2007 the defendants increased their Part 36 offer from £15,000 to £50,000. That increased offer was again firmly rejected.
That is how matters remained until the claim was heard in the autumn of 2007. The battle lines were very clearly drawn. To succeed and be sure of recovering his costs, Mr Manning had to recover more than £50,000. For practical purposes he had to win in full on breach of duty, on causation, and on quantum. It is also quite clear that Mr Manning was determined, as a matter of principle, to pursue the claim in order to establish that his wife's death was caused by the defendants' negligence. The position with counsel and solicitors, under their CFAs, was that if the claimants failed to beat a Part 36 offer at trial they would not be entitled to any fees for the period after the rejection, on their advice, of that Part 36 offer.
The trial of the claim commenced on 4 th October 2007 before Stadlen J. Although estimated to last 10 days, it ran for 30 days. The case was enormously difficult and complex. On 5 th December 2007 Stadlen J reserved judgment. Sadly, by the time of the trial Mr Manning was himself seriously ill and in the last stages of terminal cancer. He was desperate to know the outcome of the case before he died. For this reason, understandably but very exceptionally, the parties attended upon Stadlen J in chambers to ascertain whether he was at least able to indicate whether he would find in the claimant's favour. Stadlen J was unable to give such an indication, making it clear that he still had not made up his mind. That meeting was on 14 th January 2008. Four days later, on 18 th January 2008, Mr Manning died. The cause of action vested in his estate, and his executors were substituted as claimants. One of the executors is Mr Manning's brother, and is himself a solicitor. The other is that executor's brother in law.
It is evident that the reserved judgment was imminently expected in March 2008. In the event the draft judgment was not circulated until the end of July 2008, and judgment was not formally handed down until 29 th September 2008. Because the CFAs which the solicitors and counsel had entered into had come to an end on the death of Mr Manning, who had been the claimant, it was necessary for fresh CFAs to be entered into now that the executors had taken over the claim.
There is no reason to think that either the solicitors or Mr Grace QC would have wished to continue representing Mr Manning's estate on terms any different from the terms on which they had represented Mr Manning himself.
Although there is some uncertainty about the dates, it is clear that sometime between Mr Manning's death on 18 th January 2008 and 19 th March 2008 the fresh CFAs were entered into by Leigh Day and Co and by Mr Grace QC. This time the solicitors' CFA provided for a success fee of 100%. Counsel's CFA again provided for a success fee of 100%. The schedule to the solicitors' fresh CFA detailing the success fee stated that, in view of the judge's inability to give any indication at the meeting in chambers, the risk of losing had now increased to the point that "the prospects of success can no longer be put any higher than 50/50".
In these fresh CFAs neither the solicitors nor counsel stipulated that they remained at risk if the Part 36 was not beaten. It is not suggested that there is any good reason why they should have omitted to do so. The claimants' case is that it was simply an oversight, and that it must have been the common intention of the parties to the fresh CFAs, as before, that the solicitors and counsel would only be entitled to their fees if they beat the previous Part 36 offer when judgment was handed down. The defendants contend that the literal wording of the fresh CFAs must prevail and that, for reasons which will be explained more fully in considering the cross-appeal, this means that a "win" had already been achieved by the concession during the trial (foreshadowed by a limited admission in the defence) that Mr Manning was bound to recover some damages (however modest) for his wife's pain and...
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