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PI and Civil Litigation

Law - practice - procedure

Anthony Gold Solicitors , 29 JUL 2016

Kai Surrey (a child & protected party by his litigation friend Amy Surrey) v Barnet & Chase Farm Hospitals NHS Trust [2016] EWHC 1598 (QB)

Kai Surrey (a child & protected party by his litigation friend Amy Surrey) v  Barnet & Chase Farm Hospitals NHS Trust [2016] EWHC 1598 (QB)

Kai Surrey (a child & protected party by his litigation friend Amy Surrey) v  Barnet & Chase Farm Hospitals NHS Trust: AH (a protected party by her  litigation friend xxx) v Lewisham Healthcare NHS Trust: Mehmet Yesil (a child  & protected party by his litigation friend Alisan Yesil) v Doncaster &  Bassetlaw Hospitals NHS Foundation Trust 

 [2016] EWHC 1508 (QB)

Foskett J, Costs Judge Gordon-Saker

1 July 2016

Summary

 The claimants were entitled to recover success fees and After the Event insurance premiums from the defendant where they had been advised to change from Legal Aid to Conditional Fee Agreements before 1 April 2013, notwithstanding that they had not been advised as to the loss of the 10% Simmons v Castle uplift. The decision to change funding arrangement was an objectively reasonable choice at the time with regard to the circumstances of each claimant.

Detail

The substantive litigation in each case had been proceeding for several years before 1 April 2013 and each claimant had been funded by Legal Aid.

As a result of LASPO, from 1 April 2013 it was no longer possible for claimants proceeding under a Conditional Fee Agreement (CFA) to recover success fees and After the Event (ATE) insurance premiums from the defendant if successful in the litigation.

In the month or so prior to 1 April 2013 the solicitors acting for each claimant, Irwin Mitchell LLP, arranged for the Legal Aid certificates to be discharged in each case and CFAs entered into, with the agreement of the Litigation Friend of each claimant. Each CFA entered into was a ‘CFA Lite’, meaning that the client’s liability to pay their lawyer’s costs is limited to the amount of costs recoverable from the other side. In each of the cases the changed funding arrangements had been agreed to by the Litigation Friends without having been told that the consequence would be the ‘loss’ of the 10% Simmons v Castle uplift.

Each claimant succeeded in their claims, resulting in a liability upon each defendant for costs. However, the defendant challenged the recovery of the success fee and ATE premium in each case on the basis that the Litigations Friend’s decision in each case was based upon materially unreasonable advice by reason of the omission to mention the 10% uplift. The defendant argued that a reasonable person in the position of the relevant Litigation Friend would have been likely, when making their decision as to whether to change funding, to attach significance to information that the claimant would lose the 10% uplift if there was a change of funding. This was upheld by the Costs Judges who found that the changed funding arrangements were not reasonable.

The Costs Judges at first instance had relied by analogy on the case of Montgomery  v Lanarkshire Health Board [2015] in which the Supreme Court reviewed the law on informed consent in the context of a medical practitioner’s duty to inform a patient as to the risks involved in proposed treatment. The Costs Judges held accordingly that the loss of the 10% uplift was a material factor to have been mentioned to the Litigation Friends.

On appeal, the court held that the central issue was whether the assessment of the reasonableness of the decision to change funding was to be measured by reference to a test of objective reasonableness. The court relied as a starting point on Wraith v Sheffield Forgemasters [1998], which represented a common sense approach: that the analysis is conducted within the context of the particular case where the issue arises, but on the basis of an objective analysis of what was reasonable in the particular circumstances.


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Further, the court held that the Costs Judges at first instance had placed too much weight on the suggested analogy with the informed consent issue in the context of medical treatment. This over-complicated the issue, which the court held was simply whether the additional liabilities were reasonably or unreasonably incurred, to be judged with a focus upon what a reasonable person standing in the shoes of the individual claimant would do. This test would enable a costs judge to make a decision as to whether the failure to mention the 10% uplift would have been likely to have made any difference to the decision to change funding arrangement without any direct evidence from the claimant or Litigation Friend.

In the court’s judgment this approach would more likely lead to a common sense result in which the vast majority of cases the failure to mention the 10% uplift would have made no difference in applying the Wraith test.

The court also set out guidance on the procedural framework for the way in which the 10% uplift should be dealt with in future.

The court, however, upheld the Costs Judges’ decision that the cover of £500,000 was too much in Surrey and AH and that it would not interfere with their decision to reduce the sums allowed by way of recovery in respect of the ATE premiums in these cases, as an experienced Costs Judge would have a much better ‘feel’ for these matters’.

Comment

 The outcomes of these appeals set a clear authority and show the court’s common sense approach in rejecting the reliance on Montgomery and advocating an objective analysis of what was reasonable in the particular circumstances of each individual claimant. In addition, the guidance provided on the “Simmons v Castle 10% issue” will be very useful for practitioners faced with the same issue in the future.

Kim Pryce and Victoria Brown, Anthony Gold

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