The defendant costs specialists

Posts by Simon Gibbs

Challenges to CFAs

By on May 10, 2019 | 0 comments

My office is in the process of being redecorated and this seemed like a good opportunity to have a general clear out. As part of this, I came across a couple of articles published in Litigation Funding magazine from February and April 2000. These show the dangers of trying to make predictions about the future of litigation. In one article, barrister Gordon Wignall was quoted as saying: “There is no reason now why either clients or unsuccessful defendants should not challenge the validity of their opponents’ lawyers’ retainers.  There are likely to be disputes over new-style funding arrangements for years to come.” In the other article, solicitor Kerry Underwood was quoted as saying: “Satellite litigation [over CFAs] won’t be a cottage industry it will be a palace industry. … Everyone who knows anything about this area knows how complicated it is.  There isn’t a hope in hell of district judges arriving at reasoned decisions.” 19 years later, I bet they both feel pretty...

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Warning issued over proposed new Costs Lawyer training course

By on May 8, 2019 | 0 comments

The Legal Services Board (LSB) is apparently minded to refuse the Cost Lawyer Standards Board’s (CLSB) proposals to introduce a new route of entry into the profession. The LSB chief executive Neil Buckley said: “Having considered the application and responses provided by the CLSB to a number of issues that the LSB has raised, the proposed changes continue to raise significant questions for the LSB and, as a result, we are considering refusing the application under paragraph 25(3) of schedule 4 to the [Legal Services] Act.” Mr Buckley said the proposed approach to granting rights of audience appeared “inadequate” and to contradict the wider outcomes-focused approach of the CLCA: “In particular, the proposal to allow for rights of audience to be gained through attendance at a one day training course, with no assessment, is at odds with the CLSB’s rationale for the CLCA, to shift away from an inputs based model and towards an outcomes-focussed assessment based model. The proposal would appear to set the bar considerably lower than other approved regulators in relation to awarding rights of audience. The CLSB has not presented sufficient evidence to justify this approach.” It is not clear whether the LSB is aware that the majority of current Costs Lawyers gained their rights of audience through no more than attendance at a one or two-day training course with no assessment. I wrote about this in 2011.  At the time, I commented that: “In relation to advocacy, the ACL has not set the bar too low. It never set one in the first place and shows no plans to do so in the future.” The LSB appears to be concerned that the CLSB is now in danger of repeating the same error in relation to its new proposed qualification route. In relation to the old ACL training course, I wrote: “There appear to be one of two ways of viewing this issue: Advocacy, at least in relation to detailed assessment proceedings, is something requiring little or no skill or experience. This includes costs appeals before High Court Judges and Circuit Judges. A level of “competence” can be achieved by those who may have had no previous advocacy experience in a 3 hour training session....

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Careful now

By on Apr 12, 2019 | 0 comments

The Civil Litigation Brief blog contained an interesting post about the dangers of lawyers working on the move and being overheard discussing confidential client matters or allowing confidential information to be read over their shoulders or leaving legal papers behind. The costs profession is not immune.  Of the various examples given on Twitter: “Absolutely correct. I once called to collect some files from a cost draftsman’s office. Manager greets me and says he’ll just get the files …. from his car. I almost had an apoplectic fit!” – Donna Beckett‏@BeckettandCo “I once received a call from a bouncer of a London pub. Our cost draftsman had left one of our files there. Apparently it was a con with Counsel!” – Peter...

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VAT on medical agency fees

By on Apr 10, 2019 | 0 comments

When dealing with high value personal injury litigation, paying parties tend not to lose much sleep over the issue of whether VAT should be paid on the full amount of medical records fees, where the medical records are obtained through a medical reporting organisation (“MRO”), or whether VAT should only apply to the MRO’s administration fee. On the other hand, for volume, lower value claims, the impact of this small amount per case can be significant when insurers are dealing with 10,000s or 100,000s of claims. In Matthew Hoe’s excellent “A Practical Guide to Costs in Personal Injury Cases”, published as far back as April 2016, he writes: “VAT on medical report fees is a doggedly contentious issue that has been producing notable judgments for a decade.  Although very small sums are involved in each case, it arises in so many claims that paying parties take the point.  The basic propositions are generally accepted and the disputes centre on the practices of medical agencies. … The correct VAT treatment of medical fees by medical agencies is an issue in desperate need of a decision by the senior courts to settle the point once and for all.” As if by magic, three years later we have such a decision. In British Airways Plc v Prosser [2019] EWCA Civ 547 the Court of Appeal held: It would normally be appropriate for MRO’s, in circumstances where they were doing more than simply acting as a post-box and where the report/records are being requested by the solicitors to enable them to perform their service to the client (rather than the solicitors acting just as the client’s agent), for VAT to be charged by the MRO on the total cost. In the context of a low value claims, where the amount of any VAT is not substantial, payment of VAT on the full amount was a cost that was “reasonably and proportionately incurred” and “reasonable and proportionate in amount”, so as to satisfy the requirements of CPR 44.3 regardless of whether the MRO was actually obliged to charge VAT as it...

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Automatic 100% success fees banned

By on Apr 4, 2019 | 2 comments

For many years, a large number of personal injury solicitors have automatically charged their clients a 100% success fee regardless of the risks of the case.  This has been a standard business model for many firms, with the reasoning being that this will usually lead to an automatic 25% cut of the client’s general and existing financial damages (as a result of the cap on the level of success fee in personal injury claims) in addition to any costs recovered from the other side. The Court of Appeal has now held, in the case of Herbert v H H Law Ltd [2019] EWCA Civ 527, that this will normally be inappropriate and that any success fee should reflect the actual risks in the case (here held to be 15% for a straightforward RTA) unless the client has given “informed consent”. In terms of CFAs already entered into, this decision is likely to open the floodgates to solicitor/own client challenges. Going forwards, it is likely to be an uphill struggle, when entering into new CFAs, to show that the average lay client has given informed consent to a success fee that does not fairly reflect the risks of the case. For a detailed summary of this decision, see Robin Dunne’s, junior counsel for the respondents in the appeal, article.  This also deals with the important issue of whether an ATE premium is a disbursement that needs to be included within a statute...

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