Manchester Messenger – March 2024
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update, we focus on those cases which we believe are likely to have a practical relevance for its members. We welcome feedback and if there is an area, topic or case you would like us to address, please let us know.
An eclectic mix of cases this month. But first, by the time this goes out, the Supreme Court will have heard Hassam & Anor v Rabot & Anor UKSC 2023/0025 and considered how Courts are to assess damages for PSLA where the claimant suffered a whiplash injury which comes within the scope of the Civil Liability Act 2018 and attracts a tariff award stipulated by the Whiplash Injury Regulations 2021, but also suffers additional injury which falls within the scope of the 2018 Act and does not attract a tariff award. We will write about the outcome as soon as judgment is handed down as we know there is a significant amount of interest in the decision.
In the meantime, we start with the costs in Prince Harry’s action against MGN, albeit that his own costs have yet to be addressed as his action had not ended at the time that the judgment was handed down. For the three other lead claimants in Duke of Sussex v MGN Ltd [2024] EWHC 274 (Ch), Fancourt J’s judgment deals with the complicated incidence of costs where all three had succeeded in their generic claims (Did MGN hack their ‘phones and then deliberately try to conceal that fact?), one claimant won damages of £31,650 in his personal claim but failed to beat a Part 36 offer, whilst the other two claimants lost due to a limitation defence. The costs orders went both ways: MGN was ordered to pay the claimants’ costs of the generic trial issues on the indemnity basis due to its attempts to conceal the extent of the unlawful hacking activity, together with the successful claimant’s costs to the date that the offer should have been accepted. Most other costs (the judgment must be read for full details) were to be paid by the claimants in respect of their personal claims, plus their share of common costs (excluding the generic trial costs and some discrete “authenticity challenge costs”). In rough numbers, that meant that in terms of money actually changing hands, MGN would be paying the claimants around £1.5m in interim payments on account, pending detailed assessment!
Next, security for costs. In Lazarichev v Lyndov [2024] EWHC 8 (Ch) HHJ Keyser KC ordered security where the claimant, a Belarusian national, was living in Poland, a State bound by the Hague Convention on Choice of Court Agreements 2005. “Resident” in CPR 25.13(2)(a) was to be given its ordinary meaning, that a person was resident in the place where they dwelled permanently or for a considerable period where they had their settled or usual abode. The defendant’s appeal against the order below refusing security was, accordingly, dismissed.
Also dealing with security for costs, but this time in the Family Division, see L v O [2024] EWFC 6. Cobb J held that although the husband in 2023 had spent more time in London than elsewhere, on the facts, he was resident out of the jurisdiction for the purposes of the Family Procedure Rules 2020 Part 20 (2)r.20.7(2)(a)(i), so the jurisdictional gateway provision had been satisfied. The wife had sought security in the sum of £637,882. Taking a view which reflected the uncertainties of litigation and any potential reduction on detailed assessment, 75% of that sum was appropriate. That meant security would be ordered for £480,000.
The Solicitors Act never lets us down in terms of regular judgments, but Richie J’s decision in Lone v Petrou [2024] EWHC 153(KB) has an interesting twist, in that it deals in depth with permission to appeal against decisions taken below on a s.70 assessment. In dismissing the former client’s application to appeal on 14 grounds, and in doing so, certifying that the appeal was to be marked “totally without merit,” the judge gave some useful guidance about practical matters on such an assessment, such as charging for incoming letters, whether conceded items should count under the “one-fifth” rule, the correct starting point for working out the amount disallowed and “special circumstances” for departing from the rule. Helpful though they are, it should be noted that on a permission application, the judge’s comments, whilst very helpful and informative, are obiter.
Next reference must be made (space permits only in outline) to the problems created by PACCAR, that litigation funding agreements (“LFAs”) fall within the definition of “damages based agreements” for the purposes of section 58AA Courts and Legal Services Act 1990, and are unenforceable in (1) opt-out proceedings pursuant to section 47C Competition Act 1998 and (2) in any proceedings unless they comply with section 58AA and the Damages Based Agreement Regulations 2013. Thus, in Commercial and Interregional Card Claims 1 Ltd v Mastercard Inc [2024] CAT 3, the CAT was asked to rule on revised funding arrangements to be relied on (if compliant) by the proposed class representatives (PCRs). The Tribunal ruled that the opt-out and opt-in arrangements (including ATE policies) had effectively become aligned and that the submissions advanced by the Proposed Defendants as to what were called the “Proceeds Point” and the “Cap Point” were rejected. The contingency elements in the Priorities Agreements were not contrary to public policy and the funding arrangements for the proposed collective proceedings were enforceable for the purposes of section 58AA. Good news for the PCRs, but the government is looking at the entirety of the problem arising from PACCAR, so it is a case of watch this space.
For helpful guidance about what to order as a payment on account where costs budgeting has taken place, see Lifestyle Equities v Royal County of Berkshire Polo Club Limited [2023] EWHC 2923 (Ch). Mellor J awarded 80% of the receiving parties’ incurred costs and 90% of the budgeted costs. Notably, however, he allowed nothing for the costs of attending a consequentials/form of order (FOO) hearing (claimed at £58,551) because CPR PD3D paragraph 10 and the table beneath it listed out the assumptions as to what was to be included and excluded in each phase, and that the trial phase automatically included ‘Dealing with draft judgment and related applications’. No application had been made to vary the budget under CPR 3.15A. Accordingly, it would be for the costs judge to decide at detailed assessment whether there was “good reason” to depart from the costs budget as regards the FOO costs or some part of them.
As always, these are a selection of the principal recent cases which are likely to be of use to practitioners and if any further information is required, please contact either Nick McDonnell or Colin Campbell at Nick.McDonnell@kain-knight.co.uk or Colin.Campbell@kain-knight.co.uk.
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