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Costs lawyer writing in Costs Lawyer magazine on the approach the Legal Services Commission takes to allowances for preparing claims for costs:

“Ridiculous, unrealistic, appalling and downright insulting. These are just some of the expletives that came to mind…”

“Expletives”?

I guess some costs lawyers have led more sheltered lives than others.

Costs Practice Direction 10.1 states:

“In a case to which rule 44.3B(1)(c) or (d) applies the party in default may apply for relief from the sanction. He should do so as quickly as possible after he becomes aware of the default. An application, supported by evidence, should be made under Part 23 to a costs judge or district judge of the court which is dealing with the case. (Attention is drawn to rules 3.8 and 3.9 which deal with sanctions and relief from sanctions).”

Why no mention of CPR 44.3B(1)(e) concerning notification of ATE premiums? Something else for the next CPR update given this seems to have been overlooked when CPR 44.3B(1)(e) was introduced?

Practice Direction – Pre-Action Conduct 9.3 makes clear, if there was ever any doubt, that even pre-proceedings:

“Where a party enters into a funding arrangement within the meaning of rule 43.2(1)(k), that party must inform the other parties about this arrangement as soon as possible and in any event either within 7 days of entering into the funding arrangement concerned or, where a claimant enters into a funding arrangement before sending a letter before claim, in the letter before claim.”

Is it sufficient to advise “we have entered into a CFA” or “our client has the benefit of an ATE policy” or does it trigger the full requirements under CPD 19.4? CPD 19.4 states:

“(1) Unless the court otherwise orders, a party who is required to supply information about a funding arrangement must state whether he has –

entered into a conditional fee agreement which provides for a success fee within the meaning of section 58(2) of the Courts and Legal Services Act 1990;
taken out an insurance policy to which section 29 of the Access to Justice Act 1999 applies;

made an arrangement with a body which is prescribed for the purpose of section 30 of that Act;

or more than one of these.

(2) Where the funding arrangement is a conditional fee agreement, the party must state the date of the agreement and identify the claim or claims to which it relates (including Part 20 claims if any).

(3) Where the funding arrangement is an insurance policy, the party must –

(a) state the name and address of the insurer, the policy number and the date of the policy and identify the claim or claims to which it relates (including Part 20 claims if any);

(b) state the level of cover provided by the insurance; and

(c) state whether the insurance premiums are staged and, if so, the points at which an increased premium is payable.

(4) Where the funding arrangement is by way of an arrangement with a relevant body the party must state the name of the body and set out the date and terms of the undertaking it has given and must identify the claim or claims to which it relates (including Part 20 claims if any).

(5) Where a party has entered into more than one funding arrangement in respect of a claim, for example a conditional fee agreement and an insurance policy, a single notice containing the information set out in Form N251 may contain the required information about both or all of them.”

CPD 19.4 is unqualified as to how the requirement arises simply saying “a party who is required to supply information about a funding arrangement must state whether he has…”. On this analysis the Practice Direction – Pre-Action Conduct imposes the requirement to supply information and CPD 19(4) then contains the details of the information to be provided. It is not sufficient to simply advise there is a CFA or ATE policy in place without giving the full information required under CPD 19.4.

Contents of email received on 30th March 2012: “Please can you provide an update on the current position of our clients cost cheque in relation to this matter? Costs were agreed on 23rd March in the amount of £7,000.00 on 14 day payment terms”.

Seriously?

The Costs Law Articles Archive section of Legal Costs Central has been updated with a couple of articles from 2006 dealing with failure to meditate and the Myatt v National Coal Board and Garrett v Halton Borough Council judgments.  Thanks to Kings Chambers.

Click image to enlarge:

 

www.qccartoon.com

One of the problems with CPR 45.23 and the fixed success fee regime for EL disease claims is the Scope and Interpretation section which states it applies where:

“(b) the dispute relates to a disease with which the employee is diagnosed that is alleged to have been contracted as a consequence of the employer’s alleged breach of statutory or common law duties of care in the course of the employee's employment”

The difficulty is that it does not define “disease”. It may not seem like much of a problem for well recognised industrial diseases but it does create difficulties at the margins. For example, what about post traumatic stress disorder following an injury? Disease or not? Arguably assistance can be found in the Pre-Action Protocol for Disease and Illness Claims which states:

“This protocol is intended to apply to all personal injury claims where the injury is not as the result of an accident but takes the form of an illness or disease. … Disease for the purpose of this protocol primarily covers any illness physical or psychological, any disorder, ailment, affliction, complaint, malady, or derangement other than a physical or psychological injury solely caused by an accident or other similar single event.”

It is arguable though that one should not be used as an aid to construction of the other.

Now let’s look at the recent amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill recently voted through by the House of Lords:

“Exception for industrial disease cases

The changes made by sections 46, 48 and 49 of this Act do not apply in relation to proceedings which include a claim for damages for a disease, condition or illness (whether or not resulting in death) resulting from any breach of duty owed by an employer to an employee.”

Firstly, what the hell is a “condition”? A broken finger is a condition. It is rather less obviously a disease. What is intended to fall within the definition of “condition” that is not also a disease or illness? If nothing, why has it been included?

Secondly, what is the significance of proceedings which “include” a claim for damages for a disease, condition or illness? The fixed success fee regime requires the dispute to relate to a disease that has actually been diagnosed. This amendment only requires the proceedings to “include” a “claim” for a disease, condition or illness. What is to stop a Claimant making a claim for a broken finger (assuming this sloppily drafted amendment has not already exempted such claims from non-recoverability) but including a claim for vibration white finger and therefore arguing the success fee remains recoverable? The amendment contains no requirement the disease element succeeds, that it followed any kind of diagnosis or was even realistically arguable.

Fun and games all round if the House of Commons doesn’t knock this amendment on the head.

One of the amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill voted through by the House of Lords is that the proposal to end recovery of success fees should not apply in industrial disease claims:

"Exception for industrial disease cases

The changes made by sections 46, 48 and 49 of this Act do not apply in relation to proceedings which include a claim for damages for a disease, condition or illness (whether or not resulting in death) resulting from any breach of duty owed by an employer to an employee."

So, a reasonably well paid engineer who suffers minor hearing loss at work will be able to keep 100% of his damages but a single mother with young children to support who suffers catastrophic injuries following an RTA may lose 25% of her general damages and past losses.

What is fair or rational about making EL disease claims a special case?

I continue to see, on a virtually daily basis, bills of costs and schedules that continue to wrongly claim VAT at 20% throughout despite the fact that some of the work was done prior to 2011.

How long will it take for all Costs Lawyers and law costs draftsmen to understand how this works? It’s not as though I haven’t written about this often enough.

Hopefully the decision of His Honour Judge Kay QC in Lloyd Fraser (Ply Chain) v Hutton (click for judgment) (13/9/11, Luton County Court) will help to reduce the scope for any argument on this subject.

The District Judge as first instance had allowed 20% throughout on the basis the solicitors were entitled to elect what rate to charge. Allowing the defendant’s appeal, and making reference to Costs Practice Direction 5.8 (which states: “In any case in which an election to charge at the lower rate is not made, such a decision must be justified to the court assessing the costs”) it was held:

“In my judgment the District Judge was obliged to have regard to the Costs Practice Direction. The argument was advanced that it was unreasonable for the receiving party here, the claimant’s solicitors, not to apportion. That decision, in the wording of the Practice Direction, must be justified. There was no attempt to examine what the justification was in this case for not apportioning to the lower rate. It was simply accepted as a right to do so because there was a power to elect.

He was not directed to the provisions of the Costs Practice Direction, and therefore did not direct his mind to that very argument. It is a point that seems to me properly taken on the appeal, and as I have heard Mr Astor, he is not suggesting that the argument itself is incorrect. There is no justification put before the court at the hearing before the District Judge, or now before me today, as to why the receiving party would be justified in not apportioning so that VAT is charged at the lower rate.

I am, therefore, satisfied that the District Judge was wrong in the conclusion the reached, and I allow the appeal.”

[As an aside, the copy of the judgment I have seen, and as linked to above, gives the claimant’s name as “Lloyd Fraser (Ply Chain)”. This doesn’t make much sense as an individual’s name and a quick Google search suggests this is possibly a typographical error and should read “Lloyd Fraser (Supply Chain) Limited”. Although the judgment refers to this being a “personal injuries action”, there was presumably, at least in part, a claim made on behalf of the named company. If that is so, and assuming the company was VAT registered, then no VAT should have been claimed in respect of any work done on behalf of the company in any event. Strange.]

CPR 48.6 allows for a litigant in person to recover “the costs of obtaining expert assistance in assessing the costs claim”.

CPD 52.1 states that those who qualify for the purposes of this rule will include a “Fellow of the Association of Law Costs Draftsmen”.

The problem with this rule is that most Fellows have been converted to Costs Lawyers over the last few years and the category of Fellow ceased to exist entirely as of 31 December 2011. (And there is now no such thing as the Association of Law Costs Draftsmen - now renamed the Association of Costs Lawyers).

Therefore, the rules as currently drafted refer to a category of lawyer that no longer exists and no longer allow for the recovery of costs that would otherwise have been recoverable. (The problem ceases to exist if a Costs Lawyer goes on record as acting for the litigant in person because they then cease to be a litigant in person. However, not all litigants in person may want this to happen and it potentially means that the costs of isolated work, such as a Costs Layer just drafting points of dispute, would not be recoverable by the litigant in person.)

The Civil Procedure Rules Committee are fully aware of this rather embarrassing oversight in failing to update the CPD and I am sure we can expect the words “Costs Lawyer” to be substituted in place of “Fellow of the Association of Law Costs Draftsmen” in the October 2012 CPR amendments even if, inexplicably, this has not made it into the April 2012 update.

Professor Richard Wiseman's book :59 Seconds records the research of Daniel Oppenheimer and his delightfully entitled paper "Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly".

This revealed that using simpler vocabulary in written text produced a higher estimation of the writer's intelligence by readers compared with the use of more complex language.  The unnecessary use of complex language produces a bad impression. 

In this respect I'm lucky when it come to writing the Legal Costs Blog or, for example, drafting Skeleton Argument: I don't know any long words.

Who's the stupid one now?

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