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Antony Tucker v Aggregates & Minerals Ltd & Victoria Group Ltd, Truro County Court, 25 May 2011

6 June 2011
The issues

Detailed Assessment – CFA – request for risk assessment – conduct – costs.

The facts

The substantive claim arose from an accident in which the Claimant, who was employed by the first Defendant, slipped whilst making a delivery at premises owned and occupied by the second Defendant.

Court proceedings were issued and the matter allocated to the Multi-Track, the Claimant’s Schedule of Special Damages being pleaded in excess of £100,000.

The substantive claim was settled 3 weeks prior to the commencement of the 3 day Trial at a round-table meeting in the gross sum of £28,250, £11,250 net of CRU.

The Defendant made an interim payment on account of the Claimant’s costs in the sum of £30,000.

The Claimant’s Bill of Costs was served which, as against both Defendants, totalled £89,591.97 plus interest.

The Claimant’s substantive costs were settled via negotiation in the global sum of £51,000 inclusive of interest, shortly prior to the detailed assessment hearing. The detailed assessment hearing itself proceeded in order to consider liability for, and the amount of detailed assessment costs.

The Cost Draftsman on behalf of the Claimant complained of the Defendant’s ‘relentless’ badgering for disclosure contending that it was merely fishing and unreasonable arguing that the Claimant’s CFA would have been produced at the detailed assessment hearing. The Claimant’s Cost Draftsman further argued that the Defendants did not make a realistic offer until 7 days prior to the detailed assessment hearing and therefore costs should ‘follow the event’ and be awarded in favour of the Claimant.

The Cost Draftsman on behalf of the two Defendants relied upon CPR 47.18 arguing that the receiving party is entitled to recover reasonable costs of detailed assessment proceedings unless the Court, having considered all the circumstances, decides to make some other order. The Defendant relied upon CPR 47.18 (2) (a) and (b) namely the conduct of the parties and the amount by which the Bill of Costs had been reduced.

In relation to reduction of the Bill of Costs the Claimant’s bill, inclusive of interest calculated to the date of settlement of the substantive costs, and taking into account the interim payment of £30,000, totalled £93,927.89. Substantive costs were agreed in the global sum of £51,000, a reduction of almost 46%. The Defendant therefore argued that the Defendant had won having regard to such a substantial reduction.

Turning to conduct, the Defendant made three key points, namely: –

a) The Claimant had failed to comply with the Cost Practice Direction in three important aspects and it was necessary for the Claimant’s solicitors to remedy those defects;
b) The Claimant’s solicitors had been inconsistent in relation to explaining the circumstances of entering into and signing the CFA;
c) The Claimant’s solicitors had failed to disclose a copy of the CFA, not withstanding guidance given by the Court of Appeal in Hollins v Russell. The Cost Judge in Hollins v Russell was critical of the solicitors for the receiving party for refusing to disclose a copy of the CFA and said that he hoped it would be disclosed ‘without further a do’.

The substantive costs in the index case settled just 7 days after the CFA was reluctantly disclosed by the Claimant’s solicitors. The Defendants were then satisfied that the CFA was enforceable as against both Defendants. The Defendants’ Cost Draftsman argued that it was unrealistic to expect the Defendants to make a significant offer before the CFA was disclosed and clearly the substantive costs would have settled much earlier if the CFA had been disclosed after Points of Dispute. It was contended for the Defendants that the words ‘without further ado’, referred to by the Cost Judge in Hollins v Russell should be interpreted as being at the beginning of detailed assessment proceedings because clearly the intention was to clarify any question as to enforceability early and thus reduce costs. The Cost Practice Direction implies that disclosure should take place at commencement of detailed assessment proceedings.

It was important to the Defendants to have sight of the CFA to clarify issues of enforceability given that the Notice of Funding had indicated the CFA as being dated 12 February 2006 whereas the Bill of Costs indicated that it was dated 16 February 2006. Furthermore the Defendants were concerned that as the CFA was only signed a month or so after the accident it might not cover proceedings against both Defendants and if that were the case and it had not been subsequently rectified, then the Claimant would only, by virtue of the indemnity principal, be entitled to recover costs of the claim against one Defendant.

The decision

The District Judge confirmed that he had taken note of the significant reduction in the substantive costs agreed between the parties and that it was close to a 50% reduction. The District Judge was satisfied that the request for disclosure of the CFA was as a result of a genuine concern and not just a fishing expedition and that by reason of both the amount of reduction and failure to disclose the Conditional Fee Agreement after Points of Dispute the appropriate order was no order as to costs of detailed assessment proceedings including the costs of the detailed assessment hearing itself.

The Claimant’s costs of detailed assessment proceedings themselves were claimed in the base sum of £25,000 and, with the addition of a 100% uplift would have taken the claimed figure up to approximately £49,000.

For further information please do not hesitate to contact Joanne Pruden whose thanks go to John Allen, Cost Draftsman who represented both Defendants at the detailed assessment hearing.

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