Scottish Widows Fund and Life Assurance Society v Bgc International (Formerly Cantor Fitzgerald International)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Patten,Lord Justice Carnwath,Lady Justice Arden,Lord Justice Davis,The President of the Queen's Bench Division |
| Judgment Date | 09 May 2012 |
| Neutral Citation | [2012] EWCA Civ 607,[2012] EWCA Civ 184 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2011/1574,Case No: A2/2011/1258, A2/2011/1637 & A2/2011/0532 |
| Date | 09 May 2012 |
[2012] EWCA Civ 184
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BIRMINGHAM COUNTY COURT
HHJ McKenna
9BM70451 &
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LINCOLN COUNTY COURT
HHJ Owen
0WS00090 &
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BOW COUNTY COURT
HHJ Hornby
9BO90080
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice Carnwath
and
Lord Justice Patten
Case No: A2/2011/1258, A2/2011/1637 & A2/2011/0532
A2/2011/1258
A2/2011/1637
A2/2011/0532
Nicholas Bacon QC (instructed by Sheldon Davidson Solicitors) for the Appellants Dockerill and Healey and (instructed by Lyons Davidson Solicitors) for the Appellant Macefield
Roger Mallalieu (instructed by Taylor Rose Law) for the Respondents Tullett and Bakos
Roger Mallalieu (instructed by Taylor Rose Law) for the Appellant Sarwar
Dickon Edwards (instructed by Donns) for the Respondent Tubridy
Hearing date : 23 rd January 2012
Introduction
The common feature of these appeals is that they all involve claims by minors (by their litigation friends) to recover the costs of proceedings brought by them under CPR 21.10(2) for the approval of the compromise of their claims for damages for personal injuries. In Dockerill v Tullett (" Dockerill") and in Macefield v Bakos (" Macefield") the principal issue is whether those costs are to be calculated in accordance with the fixed costs regime under CPR 45 Part II or whether they are to be subject to a process of detailed assessment in accordance with CPR 44.5. If detailed assessment is the appropriate regime then a further issue arises as to how such an assessment should be carried out where (as in these cases) the claim for damages did not exceed £1,000 and would ordinarily have been allocated to the small claims track.
In Tubridy v Sarwar (" Tubridy") a different issue arises. This is whether the fees of counsel for attending the hearing of the Part 21.10(2) application at which the judge was asked to approve the settlement of the damages claim are properly recoverable as a disbursement under CPR 45.10(2)(c). This depends upon whether they were "necessarily incurred by reason of [the claimant] being a child". Permission was given in this case for what is a second appeal because it raises a point of principle or practice on which a number of circuit and district judges have reached different conclusions.
The relevant rules
CPR 21.10 provides that:
"(1) Where a claim is made—
(a) by or on behalf of a child or protected party; or
(b) against a child or protected party,
no settlement, compromise or payment (including any voluntary interim payment) and no acceptance of money paid into court shall be valid, so far as it relates to the claim by, on behalf of or against the child or protected party, without the approval of the court.
(2) Where—
(a) before proceedings in which a claim is made by or on behalf of, or against a child or protected party (whether alone or with any other person) are begun, an agreement is reached for the settlement of the claim; and
(b) the sole purpose of proceedings is to obtain the approval of the court to a settlement or compromise of the claim,
the claim must—
(i) be made using the procedure set out in Part 8 (alternative procedure for claims); and
(ii) include a request to the court for approval of the settlement or compromise."
The rule is general in its application and therefore applies to the compromise of all actual or potential claims by a child or protected party whether the amount of the claim is large or small. The principal difference between the case where a claim has been commenced and is then compromised and the case (governed by CPR 21.10(2)) where the compromise occurs before the claim is issued is that in the former case the judge will be asked to approve the terms of the settlement in existing proceedings which, depending on the amount at stake and the complexity of the case, is likely to have been already allocated to an appropriate track. In cases where no proceedings have yet been issued, the claim is brought solely for the purpose of obtaining court approval of the settlement. In such cases the Practice Direction to CPR Part 21 ( 21 PD.5) stipulates that:
"5.1 Where a claim by or on behalf of a child or protected party has been dealt with by agreement before the issue of proceedings and only the approval of the court to the agreement is sought, the claim must, in addition to containing the details of the claim and satisfying the requirements of rule 21.10(2), include the following –
(1) subject to paragraph 5.3, the terms of the settlement or compromise or have attached to it a draft consent order in Practice Form N292;
(2) details of whether and to what extent the defendant admits liability;
(3) the age and occupation (if any) of the child or protected party;
(4) the litigation friend's approval of the proposed settlement or compromise,
(5) a copy of any financial advice relating to the proposed settlement; and
(6) in a personal injury case arising from an accident –
(a) details of the circumstances of the accident,
(b) any medical reports,
(c) where appropriate, a schedule of any past and future expenses and losses claimed and any other relevant information relating to the personal injury as set out in Practice Direction 16 (statements of case), and
(d) where considerations of liability are raised –
(i) any evidence or reports in any criminal proceedings or in an inquest, and
(ii) details of any prosecution brought."
5.2 (1) An opinion on the merits of the settlement or compromise given by counsel or solicitor acting for the child or protected party must, except in very clear cases, be obtained.
(2) A copy of the opinion and, unless the instructions on which it was given are sufficiently set out in it, a copy of the instructions, must be supplied to the court.
5.3 Where in any personal injury case a claim for damages for future pecuniary loss is settled, the provisions in paragraphs 5.4 and 5.5 must in addition be complied with.
5.4 The court must be satisfied that the parties have considered whether the damages should wholly or partly take the form of periodical payments.
5.5 Where the settlement includes provision for periodical payments, the claim must –
(1) set out the terms of the settlement or compromise; or
(2) have attached to it a draft consent order,
which must satisfy the requirements of rules 41.8 and 41.9 as appropriate.
5.6 Applications for the approval of a settlement or compromise will normally be heard by –
(1) a Master or a district judge in proceedings involving a child; and
(2) a Master, designated civil judge or his nominee in proceedings involving a protected party."
Proceedings of this kind will therefore generate costs which may include the cost of initial legal advice and work carried out in preparation for the damages claim which in the event was never issued. It is common ground on this appeal that those costs (if otherwise recoverable) do fall to be treated as part of the costs of the Part 8 proceedings. The real issue in cases like the present where the damages would have been less than £1,000 is whether the claimant's litigation friend should be entitled to recover the costs of instructing a solicitor to handle the matter (including the claim for approval) or whether those costs should be limited to or by reference to what might be recoverable for a small claim under CPR Part 27. CPR 27.14 limits such costs to the fixed costs of issuing the claim; court fees; and a sum not exceeding £200 for each expert: see 27PD.7.3.
CPR 27.14 applies in terms only to "claims which have been allocated to the small claim track under Part 26": see CPR 27.1(1)(a). CPR 26.6(1)(a) provides that:
"(1)The small claims track is the normal track for –
(a)any claim for personal injuries where –
(i) the value of the claim is not more than £5,000; and
(ii) the value of any claim for damages for personal injuries is not more than £1,000;
A Part 8 claim issued under CPR 21.10(2) cannot be a small claim. This is because CPR 8.9(c) provides that:
"Where the Part 8 procedure is followed –
(c) the claim shall be treated as allocated to the multi-track and therefore Part 26 does not apply."
In relation to the recovery of costs, the choice of appropriate regime therefore lies between CPR 45 Part II and the general provisions of CPR Part 44.5. The fixed costs regime under CPR 45 Part II applies only in costs-only proceedings under CPR 44.12A or in proceedings for the approval of a compromise under CPR 21.10(2) which fall within the provisions of CPR 45.7(1). Where Part II does apply then CPR 45.8 states that:
"Subject to rule 45.12, the only costs which are to be allowed are –
(a) fixed recoverable costs calculated in accordance with rule 45.9;
(b) disbursements allowed in accordance with rule 45.10; and
(c) a success fee allowed in accordance with rule 45.11."
In relation to fixed recoverable costs, CPR 45.9 provides that:
..."(1) Subject to paragraphs (2) and (3), the amount of fixed recoverable costs is the total of –
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