Manchester Messenger – September 2023
In the September 2023 edition of the Manchester Messenger; the monthly magazine of the Manchester Law Society. Nick McDonnell and Colin Campbell provide a legal costs update, focussing on cases that are likely to have practical relevance to members.
The most important of the many cases this month (we have had to be very selective) is R (on the application of PACCAR Inc v Competition Appeal Tribunal [2023] SC 28. Reversing the decision of the Divisional Court, the Supreme Court held that litigation funding agreements (LFAs) were damages-based agreements (DBAs) within the meaning of s.58AA Courts and Legal Services Act 1990, where the funder was entitled to recover a percentage of any damages recovered. As the LFAs had not complied with the statutory requirements for DBAs, they were unenforceable. Senior commentators have said that the judgment will send shockwaves through the litigation funding industry and is a blow for the government as a way of providing access to justice after the removal of public funding for most types of civil case.
With the new fixed costs rules coming into force on 1st October, the regime came under review in Santiago v Motor Insurers’ Bureau [2023] EWCA Civ 838 13, with the court holding that in proceedings for damages for personal injury in a road traffic accident in which the Portuguese claimant had been hurt, the fees of an interpreter were recoverable as a disbursement falling within CPR 45.29I(h). Disallowing the fee would have hindered access to justice by preventing a vulnerable party or witness from participating fully in proceedings and giving their best evidence.
Also in the Court of Appeal, in Menzies v Oakwood Solicitors Ltd [2023] Costs LR 1083 the court held that the claimant’s claim for detailed assessment of a solicitor’s bill was statute barred under s 70(4) Solicitors Act 1974 because payment had been made by deduction of funds over one year earlier. Neither the Act nor the authorities provided any warrant for a requirement that there must be a “settlement of account” contrary to the decision of Bourne J below. Payment was to be construed as including the deduction of fees payable under a statutory bill with the knowledge and consent of the paying client as had been the case.
For another decision on Qualified One-Way Costs Shifting “QOCS” in “mixed” claims, in Afriyie v Commissioner of Police for the City of London (Re Costs) [2023] EWHC 1974 (KB), Hill J refused to permit the Commissioner to enforce her costs order against the losing claimant under CPR 44.14. The Claimant had brought claims for assault, battery, and misfeasance in public office, arising from an act of tasering, which had caused him personal injuries and involved the use of potentially lethal force. In the round, it was an action for personal injury and the claimant was entitled to QOCS protection.
Next Part 36. In CCC v Sheffield Teaching Hospitals NHS Foundation Trust [2023] Costs LR 1071, Ritchie J held that where the successful claimant had beaten the periodical payments part of her offer but had failed to beat her lump sum offer, so the combined Part 36 offer was not beaten, the CPR 36.17(4) rewards and incentives were not appropriate. She had not done better at trial in money terms where one part had been beaten but the other had not. However, in Chapman v MID and South Essex NHS Foundation Trust [2023] EWHC 1871 (KB) Hill J, Hill J held that an offer to settle at 90% of the damages assessed on a 100% liability basis, was a valid Part 36 offer and that it was not unjust for the CPR 36.17(4) benefits to apply.
For a brace of cases on security for costs under CPR 25, see Wright v Coinbase [2023] EWHC 1893(Ch) in which Mellor J ordered security where there was no prospect of the passing off claims being stifled and there ought to be no difficulty for the claimants in putting up the funds if there were to be any truth in their evidence. In Krishna Holdco Ltd v Gowrie Holdings Ltd [2023] EWHC 1943 (Ch,) Adam Johnson J refused to order the return of security after trial of £6.3m where there had been a material change of circumstances, but no change to the threshold for security, namely that there was reason to believe that the Claimant would be unable to pay the Defendant’s costs if ordered to do so.
Finally costs budgeting. For guidance on fixing budgets in high value litigation, see Michael Green J’s judgment in Ras Al Khaimah Investment Authority v Azima [2023] EWHC 1923 (Ch) in relation to disclosure, trial preparation, trial and counsels’ fees including refreshers. For a new case on relief from sanctions, see Henderson and Jones Ltd v Stargunter Ltd [2023] EWHC 1849 (TCC) in which the court granted relief after the defendant had filed a budget that had been “materially incomplete. However, a “replacement” budget served five days later had saved the day.
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
Download here.
