Legal Cost Specialists

Posts made in January, 2011

MGN v United Kingdom – Update

By on Jan 31, 2011 | 6 comments

Specialist costs counsel Dr Mark Friston has put together an invaluable guide to the recent decision in MGN v United Kingdom, concerning success fees. He has been kind enough to allow the Legal Costs Blog to host a copy. It can be read: here. One Blog reader, when thanking Mark in advance for this, commented that they did have a copy of Civil Costs: Law and Practice and this briefing note should perhaps be treated as “excellent after sales service”. It may be that there is less of a delay than previously expected before we see the approach that the English courts may adopt to the MGN v UK decision. Many readers will be familiar with the case of Sousa v London Borough of Waltham Forest [2010] EW Misc 1 (EWCC). That case concerned a claimant who suffered subsidence damage to his property caused by tree roots of a tree owned by the defendant. The claimant’s damage was insured under an insurance policy between the claimant and an insurer. The claimant made a claim upon the policy. The insurer satisfied the claim and exercised its rights of subrogation to bring proceedings against the defendant in the name of the claimant. The claim was brought under the terms of a Collective Conditional Fee Agreement between the solicitors for the claimant and the insurer. The defendant objected to payment of the success fee. The judge as first instance disallowed the success fee on the basis that as the claimant was never at risk of having to pay costs, because he had the benefit of an insurance policy for the loss, it was unreasonable for a CFA to be entered into. The claimant successfully appealed that decision and the success fee was reinstated. The local authority appealed and the hearing recently took place before the Court of Appeal, with judgment reserved. And then there was the decision in MGN v UK. The Court of Appeal has invited written representations (due by last Friday apparently). It appears that the Court of Appeal wants to take the opportunity to take MGN v UK into account when giving judgment. It is quite possible that they might decide they have little scope to “change” English law...

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VAT on medical reports and medical records

By on Jan 28, 2011 | 6 comments

Judgment was recently handed down in an important decision concerning the correct treatment of VAT for medical records and medical reports. In Barratt Goff & Tomlinson v HMRC (see judgment) it was held where medical reports or medical records were obtained by solicitors, for the purpose of personal injury claims, the solicitors did not need to charge VAT on the fee as they were to be treated as being disbursements, as opposed to being part of the legal services being provided. Although the impact of this decision is less than it might have been as most medical reports already have VAT added by the medical expert, for the small number of cases where the medical expert is not VAT registered or for the large number of cases where the medical records are obtained direct from the holder of the records, VAT does not need to be added by the solicitor.  A decision in the other direction would have added significant costs for defendants.  Law Society Gazette article: here. (A different conclusion had been reached on this issue in Makuwatsine v Trathens Travel Services...

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CFA (Cherry Fee Agrement)

By on Jan 27, 2011 | 3 comments

We are now into the final frantic lobbying in relation to implementation of the Jackson Report (much good it will do claimant lawyers post-MGN Ltd v United Kingdom). Here are some entirely random quotes from some claimant solicitors: “Despite what is suggested in the [Ministry of Justice’s] consultation paper, solicitors do not cherry pick and only run winning cases.” – Malcolm Underhill, partner at IBB Solicitors, writing in Solicitors Journal – 14 December 2010 “We succeed in 98% of our accident claims.” – Claims For You solicitors’ website “Mr firm only takes on cases on a CFA if they have a very good chance of winning. Some would call this ‘cherry picking’.” – Amanda Stevens, partner with Charles Russell, past president of APIL, speaking at CLT’s Annual Solicitors Costs Conference – 26 January...

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MGN Limited v United Kingdom – The end of success fees?

By on Jan 24, 2011 | 10 comments

I pop out of the office for a few days to deal with a small detailed assessment hearing (£1.6 million costs claim for personal injury matter involving single claimant) and I miss, arguably, the most important costs decision of the past decade. Last week the European Court of Human Rights (ECHR) handed down judgment in a decision that may turn out to be the most important costs case of the last decade. Commentators and costs experts are furiously trying to determine the precise significance of the case. One thing, however, is clear beyond doubt: defendants and insurers need to make an immediate decision as to how to respond. The case of MGN Limited v United Kingdom (Application No. 39401/04) was a case involving the supermodel Naomi Campbell’s right to privacy versus a newspaper’s right to freedom of expression. The House of Lords, as it then was, approved Campbell’s claim for damages. The claim had been funded, in the House of Lords, by Conditional Fee Agreements (CFAs) with 95% and 100% success fees. MGN argued before the House of Lords that it should not be liable to pay the success fees as it was so disproportionate as to amount to a breach of its right to freedom of expression under Article 10 of the European Convention on Human Rights. Article 10 provides, so far as relevant: “1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers… 2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, … for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence,…” The House of Lords held that the recoverable success fees were compatible with Article 10 and that passing the cost of successful litigation onto unsuccessful defendants was a proportionate measure to provide litigants with access to justice. Further, such a funding scheme was equally open to wealthy litigants such as Campbell. MGN took the...

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