Legal Watch: Personal Injury 2nd September 2015 Issue: 075
Civil procedure/expert evidence Although it is a commercial action, the case of British Airways plc v Spencer and others (2015) EWHC 2477 (Ch) contains some important guidance that is of general application.
In a pension’s dispute with the trustees of its pension fund,
the appellant employer sought to adduce actuarial evidence
In this issue: • Civil procedure/expert evidence • Costs
covering a number of issues. The trustees were concerned that the admission of allegedly irrelevant expert evidence
would further delay the resolution of the dispute and deprive individuals of payments to which they were entitled. The
deputy Master case managing the claim concluded that the expert evidence was not necessary.
The employer appealed and contended that the deputy Master
had applied the wrong test by considering that, in order for the expert evidence to be admitted, it had to be reasonably
required in order to determine a specific issue in dispute. The
employer also contended that the deputy Master’s decision was vitiated by his failure to refer in his judgment to Appendix
Events
the reliance on the expert evidence.
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1 of the appellant’s skeleton argument which sought to justify
Allowing the appeal, a High Court judge held that appellate
courts would not lightly interfere with case management decisions. However, any exercise of a case management power had to accord with the overriding objective, which
informed what was reasonably required in terms of expert evidence. The court should not be over-zealous in excluding evidence in order to save time and cost. Evidence could be helpful even if it was not determinative of any issue.
‘The court should not be over-zealous in excluding evidence in order to save time and cost’
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However, it was also necessary to be mindful of CPR 35.1, which required that the evidence had to be reasonably
required to resolve the proceedings. Therefore, it had to
be considered in each case whether the evidence was necessary - in the sense that a decision could not be made without it - or whether it was of marginal relevance, in which
case a balance had to be struck and the proportionality of its admission assessed. In striking that balance, the court
had to take into account such factors as the value of the
claim, the effect of a judgment either way on the parties, how the commissioning of the evidence was to be paid for,
and any delay likely to be entailed by the production of the evidence.
The deputy Master had not dealt with the content of Appendix 1 in his judgment but had instead moved away from the specific pleaded issues to the larger picture and
asked himself whether the evidence would be reasonably required for the court to decide the issues. As he had not
addressed the relevance of the expert evidence to each
separate pleaded issue, it was not possible to conclude that he had properly considered the pleadings in a way which
it was necessary for him to do in order to judge whether the evidence should be admitted. The deputy Master’s
wholesale decision to reject any expert evidence was therefore flawed.
There were many areas where expert actuarial evidence might be relevant and would assist the court, and some areas where it would not only assist but be necessary.
Factors in favour of admitting evidence which would be of assistance, but not necessary, to the resolution of an
issue included: the very large sum of money turning on the outcome of the case for the employer; the undesirability
of tying the hands of the trial judge if that could sensibly be avoided; and the fact that the trustees would be at no financial risk because the costs of obtaining the evidence
would be borne by the employer in any event, even if none of it was adduced or relied on in court. Those factors in
favour of admission were not displaced by the time and energy required by the court in considering the evidence or the pressure on trial preparation.
02
Costs We report two cases under this heading. The case of Kerins v Heart of England NHS Foundation
Trust [Lawtel 26/08/2015] has already received considerable media attention because of the cost judge’s decision to
penalise the claimant’s solicitor in costs for what the judge perceived to be misconduct during the costs process.
The claimant had brought a claim for damages for clinical
negligence which had settled shortly after proceedings were served. The defendant agreed to pay his costs on the standard basis.
The claimant had instructed solicitors in February 2012 and
they entered into a conditional fee agreement (CFA) in April
2012. The claimant had the benefit of a before the event (BTE) insurance policy with an insurer which would have provided him with some indemnity in respect of bringing
a claim for the injury suffered. However, he decided to
proceed without making use of that cover. He contracted with the solicitors without reference to the policy with the
BTE insurer. The BTE insurer would not have sanctioned the
use of the solicitor, which was not one of its panel firms. The claimant was only able to insist on his choice of solicitor when proceedings came to be issued. At that point, he entered into a second CFA with the solicitor, dated March
2013, the terms of which were in accordance with the BTE insurer’s requirements.
The notice of funding served with the proceedings referred
only to the first CFA, despite the fact that the second CFA was already in place by then, and was intended to
replace the first. The bill of costs, with signed certifications,
did not refer to the second CFA or the BTE insurance. The defendant raised points of dispute challenging the
solicitor’s retainer, stating that there appeared to have been BTE funding, or legal aid, and that that was an important factor in terms of arguing about the success fee. In reply,
the solicitor stated that the reasonable investigation which it undertook concluded that the claimant did not have
suitable BTE cover for funding a clinical negligence claim
prior to the issue of court proceedings, so that a success fee should be applicable. The existence of the second CFA
and the BTE cover was only disclosed four days prior to the instant hearing, and the claimant then conceded the whole
of the success fee. The solicitor acknowledged that it had erroneously failed to mention the second CFA, but offered no explanation for that failure.
The defendant submitted that the claimant’s costs should
be disallowed entirely because of abuse of process and misconduct under CPR 44.11. The claimant submitted that
the court should not exercise its discretion to disallow all
or part of the costs, since there had been sufficient penalty already in the sense that he had conceded the success fee in full.
The district judge held that it was clear that there were not
two simultaneous retainers in the instant case. Although the claimant had had the benefit of BTE insurance, he decided
not to avail himself of it, and therefore there was no contract
between the solicitor and the BTE insurer until the second CFA was entered into. Although a claimant was not obliged
to avail himself of such insurance, if he failed to do so,
he was likely to face a serious challenge to the additional liabilities. Such vulnerability as to additional liabilities did not mean that the retainer itself was invalid. Both CFAs were virtually identical in key respects. There was a valid retainer in respect of both CFAs.
‘Although a claimant was not obliged to avail himself of (BTE) insurance, if he failed to do so, he was likely to face a serious challenge to the additional liabilities’ 03
It was a reasonable inference that the omission of any
In 2012 he entered into a conditional fee agreement with a
been deliberate. The court speculated that the inaccurate
He issued proceedings in June 2013 seeking total damages
mention of the second CFA and the BTE insurance had
portrayal of the funding position would serve to strengthen the claimant’s arguments in justifying the success fee, and
would weaken the defendant’s arguments. The claimant and the solicitor could be criticised with regard to the way
that the real situation was intentionally kept secret from the defendant. The word “improper” in CPR 44.11 was not limited to situations where there would be a significant breach
of professional conduct, but encompassed conduct which
could be regarded as improper according to a consensus
of professional or judicial opinion. It would be surprising if the solicitor’s conduct had not fallen foul of some provision
of the rules which governed solicitors. Misrepresenting the
position in a bill of costs intended for consideration by an
firm of solicitors which provided for a success fee of 100%.
of £440,000. The defendant denied liability and causation.
In September 2014 the court approved the claimant’s costs budget. The claim was settled in January 2015, two weeks before the trial date. The defendant was to pay £205,000 damages with costs on the standard basis.
Following the detailed assessment, the claimant’s costs were assessed in the sum of £340,000. Of the sum allowed,
the total base costs were £159,000, of which the base costs incurred after the amendment to CPR 44 on 1 April 2013 were £138,000. The bill was not divided into parts to reflect
work done before and after 1 April 2013, the phases of the budget, and the costs of costs budgeting.
opponent in litigation and use at a court hearing in order
The Master in the Senior Costs Office held that the approach
conduct. It was, in any event, likely to be so regarded by
The old test of proportionality applied to work done before
conduct fell within the meaning of “unreasonable” in CPR.
had to be taken and the costs were to be assessed on
to gain practical advantage could be regarded as improper
to proportionality under CPR 44 had changed on 1 April 2013.
a consensus of solicitors or judges. It was clear that the
that date. In cases where both approaches to proportionality
44.11.
the standard basis, it was convenient and necessary to
The claimant had only conceded what he was likely to
lose in any event, once the true facts were known. The court very much disapproved of the type of conduct that
had occurred, in these days of openness between the parties. There was an obligation on legal representatives
to assist the court and present their client’s case fairly and
without misrepresentation. It was appropriate to exercise the discretion to make an order disallowing 50% of the claimant’s costs as assessed.
The second case under this heading deals with the issue of how to apportion costs between the old and new rules as to proportionality and how a bill of costs should be prepared to address the situation.
In BP v Cardiff Vale University Local Health Board [Lawtel 27/08/2015] the claimant had alleged that clinical negligence
at the defendant health board’s hospital had caused his mother injury and death.
divide the bill into parts so as to distinguish between the
two periods. In applying CPR 3.18 (the rule relating to the assessment of costs on the standard basis), the court would need to know which costs were claimed in relation to each
phase of the proceedings and would need to know which costs claimed within each phase were incurred before the
budget was agreed or approved, as those costs would
have to be assessed, and which costs were incurred after. Because the bill had not been drawn in parts corresponding
with the phases of the budget, the court had been unable to comply with CPR 3.18. Applying CPR PD 3E - 7.2, on detailed assessment it would be necessary to identify the
costs of initially completing Precedent H and all other costs of the budgeting and costs management process. Where a
costs management order had been made and the receiving party’s budget had been agreed or approved, it would be necessary and convenient to divide the bill so as to identify the costs of initially completing Precedent H and the other costs of the costs management process, unless those costs could be clearly identified some other way.
04
Because the bill had not been divided appropriately, it was difficult to identify the work done before 1 April 2013. The
master assumed that the total base costs claimed before that date were about £45,000. Those costs were not
disproportionate. The case was complex and liability and causation had been disputed throughout. Considerable evidence had had to be obtained and significant amounts
of work done. The case was of significant importance to the deceased’s family and to those who had treated her. The
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costs of £138,000 allowed for work done after 1 April 2013
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were also proportionate.
Quarterly:
Considerable further work had been done and evidence
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sums in issue and to the complexity of the litigation. The
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obtained. The costs bore a reasonable relationship to the costs allowed were likely to be within the amount of the
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budget approved by the court.
The caps imposed by PD 3E - 7.2 included additional liabilities but not VAT. In practice, the only relevant additional liability
would be a success fee. Any success fee claimed on work done in relation to the budgeting and costs management
process was part of the recoverable costs under paragraph 7.2. VAT also fell within the expression “recoverable costs”.
As between the paying party and the receiving party, VAT was not a tax but a sum recoverable by the receiving party under the indemnity provided by the costs order. On that basis, the capped recoverable costs would include both
success fees and VAT. However, it seemed unlikely that
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the intention had been not to follow the only other example where a cap was imposed, namely CPR 47.15(5). The cap on
the costs of provisional assessment was £1,500, including additional liabilities, but excluding VAT and any court fees.
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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 12 Dingwall Road, Croydon, CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.