Oliver Davis (A child and protected party by Lisa Marie Davis, his Litigation Friend) v Wiltshire Primary Care Trust
| Jurisdiction | England & Wales |
| Judge | Master Leonard |
| Judgment Date | 11 January 2016 |
| Neutral Citation | [2016] EWHC B6 (Costs) |
| Court | Senior Court Costs Office |
| Docket Number | Case No: HQ11X01737 |
| Date | 11 January 2016 |
[2016] EWHC B6 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building,
Royal Courts of Justice, Strand,
London, WC2A 2LL
Master Leonard
Case No: HQ11X01737
SCCO Reference: CL1405288
Benjamin Williams QC (instructed by Wolferstans) for Oliver
Joshua Munro (instructed by Acumension) for the Defendant
Hearing dates: 21 August and 30 September 2015
This is the assessment of the costs awarded to Oliver Davis, the Claimant represented by his mother and Litigation Friend Mrs Lisa Marie Davis, under an order of 20 March 2013. The issue I must address is the Defendant's objection to Oliver's decision (through his mother and Litigation Friend) to arrange, in November 2009, for the discharge of a CLS funding certificate and to enter instead into a conditional fee agreement with his solicitors, backed by an ATE policy. The Defendant characterises that decision as unreasonable and seeks disallowance of the additional liabilities. Alternatively the Defendant takes issue with the retrospective effect of the success fee.
I have been reminded of the relevant pre-April 2013 rules, applicable to this case under transitional provisions.
CPR 44.4 provided (insofar as relevant):
"(1) Where the court is to assess the amounts of costs …the court will not …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 incurred or reasonable and proportionate in amount in favour of the paying party…."
CPR 44.5 provided (insofar as relevant):
"…The court is to have regard to all the circumstances in deciding whether costs are –
If it is assessing on the standard basis –
Proportionately and reasonably incurred;
Were proportionate and reasonable in amount…"
The then Costs Practice Direction provided at paragraph 11.7:
"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 paragraph 11.8:
"In deciding whether a percentage increase is reasonable, relevant factors to be taken into account may include:
(a) The risk that 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;
What other methods of financing the costs were available to the receiving party."
The success fee sought by Oliver's solicitors is 67% and by counsel 25%. The ATE premium for a FirstAssist "pursuit" policy claimed in the bill is (at 93% of opponent's costs plus IPT) £108,673.26. That has been agreed at (I understand) £93,938.51 following a correction to an error in calculation. The total additional liabilities claimed exceed £200,000 plus VAT generated, as the points of dispute put it, "only by virtue of the abandonment of public funding".
The CFA and the ATE Policy
The CFA between Oliver (represented by Mrs Davis) and Wolferstans is dated 26 November 2009. It covers Oliver's claim for clinical negligence "including any work done by us prior to the date on which the Conditional Fee Agreement was made."
These are the pertinent provisions of the CFA for the purposes of this decision. It incorporates the Law Society's standard conditions, including the solicitor's responsibility to act in the client's best interests. It applies to all work done on Oliver's claim including work done prior to the date of signing. The success fee, applicable to all charges, is set at 67% or 100% if the claim concludes within 3 months of trial. If Oliver wins he will be liable to pay basic charges, disbursements and success fee but only to the extent that they are agreed with the opponent or allowed by the court: "…there will be no deduction from your damages or a bill for you to pay if any of our own charges and expenses are unrecovered".
If Oliver loses he will not pay any Wolferstans' charges or disbursements save to the extent that they are recoverable under an insurance policy. (The same provision is made for any period over which Oliver fails to beat a Part 36 offer rejected on Wolferstans' advice). Losing is defined in this way: "The court has dismissed your claim or you have stopped it on our advice". If Oliver ends the agreement, he must pay Wolferstans' basic costs and disbursements, plus a success fee if he wins. Wolferstans can end the agreement if they believe that Oliver is unlikely to win, in which case Oliver will be liable to pay disbursements, or if he rejects their advice on settlement, in which case he must pay Wolferstans' basic costs and disbursements, plus a success fee if he wins. Oliver is entitled to a second opinion, for which he must pay.
The ATE policy is dated 15 January 2010. It is a FirstAssist Legal Protection "Pursuit" policy under which the premium is calculated at 93% of insured "Expenses" (expenses and disbursements "reasonably and properly incurred by the solicitor" but excluding the fees of counsel acting under a CFA) and opponent's costs. It is a direct contract with Oliver as the insured (it is not in issue that the ATE premium is not a "disbursement" under the terms of the CFA). Oliver pays the whole premium as long as the "outcome of the Legal Proceedings is a Success."
Success is defined in the Policy Schedule as: "The claim for damages is finally resolved in favour of the Insured whether by a court decision or where an offer is received which the Insured's solicitor advises should be accepted or any other offer accepted." The Part 36 risk is met by provisions for partial success.
Among the conditions on the policy schedule are that the premium is payable by the insured even if the opponent delays or defaults in payment of any judgment or settlement. The insurer has a lien over any monies received up to the value of the premium and the solicitor may not pay to the insured any money subject to that lien until the premium has been paid. The Policy will terminate if either the insured or the solicitor terminates the CFA of 26 November 2009. The policy may also be cancelled in certain circumstances, notably where the insured does not follow Wolferstans' advice on progressing the case, settlement or discontinuance or does not follow the insurer's recommendations with regard to settlement. In the event that the policy is terminated or cancelled, the insurer "is under no obligation to make any payment".
Among the "General Exclusions", at paragraph 7 the insurer excludes cover for opponent's costs "arising during a period when, for the purposes of the claim, a CLS public funding certificate was in force", at paragraph 9 "Expenses incurred outside the period of insurance", at paragraph 16 "Expenses that, in Our opinion, have been incurred unreasonably or unnecessarily" and at paragraph 17 "Adverse costs or expenses relating to the assessment proceedings or any other disputes regarding costs".
The Background: Mr Parford's account
Mr Simon Parford is the solicitor acting for Oliver on the instructions of Mrs Davis. Mr Parford is a partner in the firm of Wolferstans and head of its Clinical Negligence department. He has undertaken exclusively claimant clinical negligence work since 1991. The following account of events is Mr Parford's, supplemented by me by reference to the documentary record.
Oliver was born on 7 November 2005. He was in a poor condition at birth and required resuscitation, after which he was transferred to a neonatal unit where he required a period of intensive care with ventilation. Most regrettably he suffered from hypoxic ischaemic ncephalopathy and convulsions, sustained brain damage and developed severe quadriplegic cerebral palsy.
Oliver's case was that the Defendant's care of Mrs Davis and Oliver during the latter stages of her labour and at the time of his delivery was negligent, as a result of which Oliver suffered an avoidable period of hypoxic ischaemia which caused his brain damage.
A CLS Funding Certificate was granted to Oliver on 24 April 2006. This provided for an initial investigation to be undertaken in relation to liability and for all steps to be taken up to the end of the Pre-Action Protocol. Notice of the investigation of a potential claim was first given to the Defendant by letter of 22 May 2006 requesting disclosure of medical records. A number of reports were obtained from independent medical experts. Following a conference with leading counsel on 8 September 2009 a letter of claim dated 6 October 2009 was sent to Beachcroft LLP, solicitors for the Defendant.
The reports available in September 2009 included a report on condition and prognosis dated April 2009 from Dr Richard Miles, a consultant paediatrician. Dr Miles reported that Oliver's physical problems were so severe as to make it difficult to assess his cognitive abilities but that he was likely to have severe learning difficulties. Even receiving support (as he was) from physiotherapists, occupational and speech and language therapists he was going to make only limited progress. He would always be totally dependent and in need of 24 hour care. He would never be able to walk, talk or feed himself. The family currently had some specialist equipment but as Oliver grew older two carers and a hoist would be needed. His life expectancy would be reduced, but it would not be possible to say to what extent for 2 or 3 years.
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