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Various Ledward Claimants v Kent & Medway Health Authority & East Kent Hospitals NHS Trust, High Court, 3 November 2003

11 November 2003
The issues

Costs Capping Order – charging rates.

The facts

The Claimants alleged that they were raped or otherwise sexually assaulted by a Consultant Gynaecologist called Rodney Ledward while they were patients in his care and whilst he was in the employment of the Defendant Trust. 59 Claimants had brought actions. A Group Litigation Order was made. Eight lead Claimants were selected and the actions of the other 51 Claimants were stayed. No defences were filed and no evidence served to support the claims. Two of the lead Claimants were represented under a Conditional Fee Agreement and the other had Legal Services Commission funding. The Solicitor acting for the Claimant was based in Launceston in Cornwall. The litigation was large but not particularly complex. The factual and medical issues were relatively straightforward. Expert evidence was to be called in gynaecology, psychiatry, psychology, anaesthetics care and medical disciplinary procedures. Damages sought for the 8 lead Claimants ranged from £100,000.00 to £600,000.00. The Defendants applied to make a Costs Capping Order. A number of issues had been agreed, namely:-

(i) The need for a costs cap on the generic case and the 8 lead cases;
(ii) That the cap should be retrospective, covering costs incurred from 1st August 2003 until the end of Trial;
(iii) That there was no need for a cap on expert fees or other disbursements;
(iv) That the cap should be on base costs only and not on any CFA uplift.

To the Cap figure therefore were to be added disbursements, uplift and VAT. The issues which had not been agreed upon were as follows:-

(i) The consequences of the use of distant Solicitors on recoverable costs;
(ii) The hours to be spent by legal advisors until the end of the Trial;
(iii) The chargeable rates of Solicitors;
(iv) The chargeable rates of Counsel

The decision

1.The CPR granted wide ranging case management powers. Those powers coupled with the over-riding objective enabled a Court to make a Costs Capping Order. This was a classic example of litigation driven by the lawyer acting for the Claimant in which there was a real risk that costs had and would be incurred unnecessarily and unreasonably. It was unfortunate that an Application of this kind had not been brought at an earlier stage. The Claimant’s Solicitor had been over-generous with her time and with the time of her staff in planning the preparation of these actions for Trial. The Court had been invited to apply a broad-brush approach to the Costs Capping exercise which bearing in mind the time available was the only possible way of dealing with this Application. The principles to be applied were contained in Part 44.4(i) and (ii), namely that the Court would not allow costs which had been unreasonably incurred or an unreasonable amount and would only allow costs which were proportionate to the matters in issue, resolving any doubt in favour of the paying party.

2.The Distant Solicitor Issue

The Claimants could instruct any Solicitor they wished. However, the Court had to ensure that a paying party was not required to pay more in costs than would have been the case if local Solicitors had been employed. The guiding principles were contained in the decision of the Court of Appeal in Wraith -v- Sheffield Forge Masters Limited. The matters, which were relevant according to that decision were:-

(a) The importance of the matter to the Claimant;

(b) The legal and factual complexities;

(c) The location of the Claimant’s home, place of work and location of the Court
where the proceedings had been commenced;
(d) The Claimant’s possibly well-founded dissatisfaction with the Solicitors he had originally instructed resulting in a natural desire to instruct Solicitors further afield who would not be inhibited in representing his interests;

(e) The fact he had sought advice as to whom to consult and had been recommended to consult the distant firm;

(f) The location of the distant firm, including their accessibility to him and their readiness to attend at the relevant Court;

(g) What if anything he might reasonably be expected to know of the fees likely to
be charged by the distant firm as compared with the fees of local Solicitors. Not all of these principles were relevant to this case.

3. The Claimant’s Solicitor sought rates £265.00 and £100.00 for Grade A to D Fee Earner. The Defendants claimed rates of £155.00 to £80.00/£70.00. The Guideline rates for Central London were from £263.00 to £105.00 and for Cornwall where the Claimant’s Solicitor practised £150.00 to £85.00. The Defendant argued that there had been a collapse in the Personal Injury market, resulting in a decrease in lawyer’s fees and that lawyers should not be insulated from market forces. They had further argued that a proper comparison was with the rates negotiated by the NHSLA with their Panel Solicitors. That submission was not accepted. There was a large difference between the position in the market of the NHSLA as a large purchase of legal services and an individual Claimant Solicitor.

4. The Defendants had further argued that the Claimant should not be treated as a Specialist in the field of Clinical Negligence, bearing in mind her professional history. She was however a member of the Law Society’s Clinical Negligence Panel and the Court would treat her as a Specialist in Clinical Negligence, albeit not one of National repute.

5. The Defendants had also submitted that the Claimant’s overheads would be less than comparable central London firms. The Claimant’s Solicitor submitted (by fax) that the income of her firm broke down to 44% salary, 43% overhead and 13% profit. The Court proceeded on the basis that the Claimant’s Solicitor’s overheads were within the range for a one principle firm based in Cornwall, although probably substantially lower than firms based in cities around the country and substantially lower than the Defendant’s Solicitors based in Central London.

Both Defendant and Claimant were arguing for unrealistic rates. For work done rates would be allowed at the following, namely:-

Grade A £150.00
Grade B £135.00
Grade D £ 85.00

6. Hours Worked

The Claimant’s Solicitor had grossly over-estimated the amount of work required reasonably to prepare a case of this kind. Her estimates generally should be reduced by about 50%. This was not a straightforward reduction of 50%. The Defendants had argued for no more than 700 hours of further Trial preparation time.

In respect of the whole period to be covered by the Capping Order, the Claimant’s Solicitor had put forward 3,185 hours for her work. This appeared to be based on a 10-hour working day on all available days. A cap of 1,750 hours would be applied, broken down at 740 hours Grade A, 265 hours Grade B and 745 hours Grade D, or a total Cap of £215,000.00. This was a Cap and not a licence to incur costs unnecessarily.

7. Counsel’s Fees

Defendant’s Counsel, John Grace QC had accepted instructions at a rate of £200.00 per hour. Claimant’s Counsel, Ronald Walker had accepted instructions at a rate of £300.00 per hour. An appropriate rate was £250.00 per hour.

8. 75 hours for pre-brief work would be allowed and for the purposes of the Cap or a total of £18,750.00. A brief fee of £50,000.00 on refreshers of £1,750.00 per day would be allowed. Junior Counsel’s fees would be allowed at one half of Leading Counsel’s fees.

9. Although the parties had agreed that the Court would not Cap expert’s fees, the Court expressed some surprise. The Judge therefore requested the parties to submit to the Senior Costs Judge the amount of fees already expended and the estimates for future fees.

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