Posts made in April, 2019

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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