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failure to remove claims - invest in an early strategy, or pay the price…

16 August 2012

If further emphasis was required, this high court decision on costs highlights once again the importance of cost considerations in failure to remove cases.

The case concerned 4 claims against Kent County Council by young sisters, represented by the Official Solicitor. They alleged that Kent social services failed to remove them from the family home, and that as a result they suffered abuse. In 2003, the Official Solicitor instructed Irwin Mitchell to act on behalf of the children. The litigation ran for 7 years, settling 8 weeks before trial in 2010.

Detailed assessment of costs took place in July 2011. Kent appealed against decisions made by Costs Judge Simons - in particular, the decision to allow an uplift on Central London rates. A 50 uplift is already built into the figures. This case merited 75.

In his judgment dated 23 July 2012, Mr Justice Eady considered the appropriate 2 tier test: whether it reasonable to instruct a particular firm of solicitors, bearing in mind the type of litigation, and what was a reasonable amount to be allowed in the broad context of this type of claim.

In finding that the uplifted rates allowed by the Costs Judge were within the bounds of reasonable for this failure to remove claim, he effectively gave the green light for Claimant solicitors to argue for recovery of rates above the local court rate in these cases.

So, what can you do to reduce the impact of the decision?

  1. the claims began before JD v East Berkshire Community Health NHS Trust (2005) 83 BMLR 66. This case established that a duty of care was owed to a child in the investigation of child abuse and the instigation of care proceedings. The circumstances in which a duty is imposed are now largely decided, so you can argue that a level of complexity has been removed from any cases that began after 2005
  2. in a wider context, take control of the litigation at an early stage. The court acknowledged that this case was complex. Most failure to remove claims are. But there are steps that you can take to reduce this complexity - strategic decisions should be made at an early stage to limit the issues between the parties, such as those recommended in our detailed failure to remove strategy paper
  3. claimants can reasonably instruct solicitors who are not local to them, if they are experts in this type of claim. Whilst this may limit some of our arguments on costs, it may also mitigate against significant costs claims - the expertise of these solicitors should allow them to cut through to the key issues

There is no doubt that claimant solicitors will now seek higher rates in failure to remove cases, and we recommend that you alter your reserves to reflect this. But increased costs are not inevitable. Take control of the litigation and adopt a focused strategy from the outset, to reduce its complexity. This will give you a strong platform to argue against higher costs awards, even in the face of increased rates.

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