ALLEGED “MISCONDUCT” DURING ASSESSMENT PROCESS DID NOT LEAD TO COSTS BEING DISALLOWED OR REDUCED: ATE PREMIUM WAS REASONABLE

In  Murray v Oxford University Hospitals NHS Trust [2019] EWHC 539 (QB) Mr Justice Stewart rejected an argument that mistakes made by a claimant during the assessment of costs process should have led to costs being disallowed or reduced. The judge also upheld a premium of £50,000.

THE CASE

The claimant was entitled to costs following a successful clinical negligence claim.    On assessment the defendant argued that the claimant had made numerous errors during the drawing up of the bills and that these should lead to no costs being awarded, or costs being reduced. The Master rejected the defendant’s arguments. The defendant appealed to the High Court judge.

THE APPEAL

The defendant was equally unsuccessful on appeal. Mr Justice Stewart upheld the Master’s decision.

THE DEFENDANT’S ARGUMENTS

The defendant relies on a number of points of mis-certification.

 

Ground One – Mis-Certification and Lack of Proper Sanction under CPR 44.11

    1. Five points of mis-certification are relied upon by the Defendant. These are:
i) the Bill certified that there had been no interim payments on account of costs when interim payments of £90,000 had been made. It is accepted that the Bill should have contained this information.
ii) The Bill stated that the risk assessment was conducted by Withy King when in fact it was conducted by Marshall and Galpin.
iii) The Bill claimed a 100% success fee. The risk assessment stated that there was a 60% prospect of success which it is said equates to a 67% success fee.
iv) The statement of reasons for the percentage increase in the Bill narrative was inaccurate and bore no resemblance whatsoever to the true statement of reasons.
v) The Bill narrative inaccurately stated the Part 36 risk as: “if this happens we will not claim any costs for the work done after the last day for acceptance of the offer or payment”. The CFA actually states: “if this happens we will not add our success fee to the basic charge for the work done after we receive notice of the offer or payment.”
  1. In addition, the Defendant says that every error was in the Claimant’s favour, the errors in the Bill were confirmed as accurate and were repeated and reinforced in the points of reply. Profit costs in the Bill were claimed at £55,935.11, so the difference between a 100% success fee and a 67% success fee is £18,458.59 plus VAT, a total of £22,150.30.

THE JUDGMENT ON APPEAL

On appeal the Judge rejected the defendant’s argument that the Master had erred.

    1. Standing back and looking at the matters before the lower court:
    2. 1 The Defendant submitted that there were 5 mis-certifications and, particularly when considered cumulatively, these amounted to unreasonable or improper conduct. As to this:
i) in fact there were only 4 mis-certifications. The 100% success fee was not such.
ii) the mis-certification on interim payment of costs was “trifling.”
iii) the other 3 mis-certifications were likely to have been based in the same error of using the standard Withy King risk assessment terms.
iv) although the error e.g. as to a 50/50 risk was repeated in the points of reply, the tension between the 2007 CFA already disclosed and the risk assessment referred to in the Bill had not been expressly pointed out.
v) the Deputy Master, who heard the matter, accepted that the risk assessment was an error which was not deliberate. He was entitled to do so. Indeed, the way matters unfolded, especially the disclosure of the 2007 CFA, indicates that he was entirely correct. There was nothing to suggest that the Claimant’s solicitors realised their errors prior to the hearing.
vi) as a matter of fact, the Defendant was not misled such that events would have turned out differently. The Defendant spotted a problem, though did not specifically raise it until the hearing.
    1. 2 I remind myself of all the principles set out in paragraph 26 of Gempride, in particular:
i) certification of a Bill is very important. The court places trust in the solicitor’s certification.
ii) conduct does not have to be in breach of any professional rule nor dishonest so as to amount to “improper” or “unreasonable”.
iii) mistake or negligence, without more, is insufficient.
iv) even when the threshold criteria are established, the court still has a discretion whether to make an order.
  1. The net result of going through the detail of the arguments is that, the experienced Deputy Master was fully entitled to find that this was not a case of improper or unreasonable conduct within the terms of CPR 44.11. Therefore, the first ground of appeal is dismissed.

THE PREMIUM

The judge also rejected the defendant’s appeal against the level of ATE premium (£50,000).  The essential basis of this was the lack of any evidence from the defendant to establish its argument.

  1. Later at paragraph 46, the judge said in relation to challenges to ATE premiums: “… such challenges must be resolved on the basis of evidence and analysis, rather than by assertion and counter-assertion.”
  2. However, as the Master pointed out, there was no evidence before him, only, as he said, “surmise” on the point. He was not reversing the burden of proof. He merely found that the paying party had not advanced “at least some material in support of the contention that the premium is unreasonable.” The Defendant says that on the factual matrix of the present case it was not possible for the Defendant to produce comparators due to the antiquity of the premium and the fact that RAC are not a mainstream ATE provider. However, there was no evidence of this: Ms McDonald said the lay client (essentially NHS Resolution) had no data captured prior to 2010[1]. If this is the case, then it proves the point that there was no evidential basis before the Master for him to depart from the premium charged. Nevertheless, it is perhaps surprising that NHS Resolution have no comparator evidence for ATE premiums prior to 2010, since much litigation on such agreements would be later than that date. The fact that RAC are not a mainstream ATE provider does not of itself inhibit a paying party from obtaining evidence that a lesser premium could have been obtained elsewhere.