Harmans Costs Brief - December 2016

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Welcome to the final Costs Brief of 2016, just where has the year gone? 

As usual we've covered the latest industry news including a thorough costs update from Partner Gary Knight with a particular focus on ATE as well as a look at the decision of Costs Judge Jennifer James in the matter of Briggs vs First Choice Holidays.

We hope you find this latest instalment of Costs Brief useful. We'll be back in 2017 with all the latest industry news and developments.

Many thanks, Harmans Costs
For even more news and comment visit our website
Is it acceptable to transfer the method of funding from Public to under a CFA? 
Gary Knight considers this and other issues

Whilst the recovery of additional items was abolished for most claims post April 2013 we still see very many matters where the agreements pre-date the shut off point and the issues remain relevant.

The Defendant would argue that it was unreasonable to switch as this meant that additional liabilities would be claimed against them – success fees and often a significant premium for ATE. The Defendant began to argue that by switching the claimant lost out on the 10% uplift on damages.

On three separate occasions Costs Judges found the arguments compelling resulting in the disallowance of the additional liabilities on assessment.

The three cases – Kai Surrey, AH and Yesil – all involved medical negligence victims who were switched from legal aid to conditional fee agreements shortly before 1 April 2013, when LASPO restricted the right to recover success fees and after-the-event (ATE) insurance premiums.

On appeal Mr Justice Foskett, sitting with the Senior Costs Judge Master Gordon-Saker as assessor, was clear that he wanted to avoid a return to the “bad old days” of the costs wars in the early 2000s, and ruled that in each case staying on legal aid and claiming the 10% would only have achieved a marginal gain.

Foskett J ruled that while the 10% issue should have been mentioned to the litigation friends in each case, “the failure to do so should, save in very exceptional cases, be a matter for discussion and consideration between the claimant and/or his litigation friend and the solicitors: it is not a matter that should be of concern to the paying party”.

He said that each of the costs judges involved – Master Rowley, Deputy Master Campbell and District Judge Besford, a regional costs judge – paid too much attention to the  Supreme Court ruling over informed consent to medical treatment, Montgomery v Lanarkshire Health Board, and by analogy the extent to which a reasonable litigation friend would attach significance to the 10% uplift.

Further, he noted that had the claimants signed up to a CFA-lite from the outset, there would have been no complaint from the defendants - so why should "changing to a CFA-lite at some stage down the line be any different?" Also, had Parliament wanted to prevent solicitors from switching in this way, it could have included some kind of 'anti-avoidance' provision in LASPO.

For the conclusion of this case and for other cases considered here.
Helen Briggs & 598 Ors v First Choice Holidays & Flights Ltd (2016)

A very detailed and considered decision of Costs Judge Jennifer James has appeared on Lawtel in the matter Helen Briggs & 598 Ors v First Choice Holidays & Flights Ltd (2016) and merits consideration in full; the highlights however are as follows:

As will be anticipated by the title this was a group action resulting from illness (of varying severity) on holiday.

Base costs were just under £2 million whilst the addition of additional liabilities increased the Defendants’ liability to a shade under £4.5 million – £3,000.00 base costs per claim.

A payment on account of costs was made in the sum of £1.8 million.

The total damages awarded were £1.7 million divided between the Claimants depending on severity of symptoms.

A number of preliminary issues had been raised by the Paying Party following service of the Claimants’ Bills (generic and individual).

The Defendants sought a sanction for the delay in commencing detailed assessment; the Notice of Commencement served was only a few days past the “3 months” specified by CPR r47.7, the Costs Judge considered the same minimal and not justifying any sanction, however the Defendants argued that the application for a detailed assessment had not been made until some 11 months after the order.  There was dispute between the parties as to whether time had been extended by reason of attempts to settle; the Costs Judge considered that some delay was appropriate whilst attempts were made to settle the issue of costs but found that there was some unnecessary delay in the request and finding both sides equally at fault reduced the period for attracting interest by half.

For the rest of the decision click here.

86th Update to the Civil Procedure Rules including the new Bill of Costs
Leeds District Registry trialling 6 month costs budget practice

With the intention of avoiding the expense and inconvenience of costs management and likewise the need to have a Costs and Case Management Conference, the Chancery District Judges at Leeds District Registry with the support of the Vice Chancellor have introduced a new practice.

For details of this new practice just click the read more link below.

Read more

Did you receive a Harmans chocolate advent calendar this year?  They've been going down a storm! 

We still have a few left in the office, just email our Marketing Manager and we'll send you one out before it's too late!

IPT Standard Rate to increase to 12%

The Government will raise IPT from 10% to 12% from June next year, Chancellor Philip Hammond said in his first Autumn Statement address to Parliament last month.

The Government plans to net £4billion using the tax hike between 1 June 2017 when it is introduced through to 2022. On average this will mean an extra £51 per year for families to pay on their household bills.

Read more

Our costs seminar at The Law Society last month featured Partners Mathew Knight, Steve Jones and Matthew Harman talking about Part 36 offers, recent case law and budgeting.  We are already planning our Spring seminar where we will be reverting to a breakfast event, please email to get yourself added to the priority list.


Follow us on Twitter @HarmansCosts for the latest industry comment.  Feel free to tweet or DM our legal costs experts a question.
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