Costs News

12 October 2017
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News in brief

Planning officers’ time recoverable, High Court rules

The High Court has ruled that costs representing the time spent by a local authority’s planning officers in assisting with the preparation of an acknowledgement of service in response to an application for permission to apply for judicial review can be recovered, according to London chambers Francis Taylor Buildings.

It said the issue arose in R (Ayres) v. Cotswold District Council (CO/2353/2017), in which the unsuccessful claimant sought to challenge the quantum of the costs awarded in favour of the local planning authority at the paper application stage. John Howell QC, sitting as a deputy judge of the High Court, upheld the earlier decision and made clear that recoverable costs were not limited to those incurred by solicitors and counsel.

 

Besford “changes mind” over Sutherland ruling

Regional Costs Judge Besford, an honorary ACL vice-president, has concluded that his earlier widely reported decision in Sutherland v Khan “is unsupported and can no longer stand”, according to a report by leading defendant firm BLM, which acted in the latest case of Whalley v Advantage Insurance.

The judgment deals with the costs consequences of late acceptance of a claimant’s part 36 offer in a fixed costs case subject to part 45.

In Sutherland, it was held that the late acceptance of a part 36 offer automatically entitled the claimant to an award of indemnity costs, and provided an escape route out of fixed costs. The basis of the decision applied the Broadhurst principle that a claimant beating a part 36 offer that proceeded to trial, was entitled to escape fixed costs, to cases that did not proceed to trial but were settled by accepting part 36 offers outside the 21 day period for acceptance.

BLM, which said Sutherland has been the subject of “many” conflicting circuit judge appeals, explained: “The central issue is whether fixed, standard or indemnity basis costs apply in fixed costs cases where there has been late acceptance when the court is determining the liability for costs under CPR 36.13(5). Part 36 is silent on this issue save that references are made to CPR 36.17. The defendant should be encouraged to settle before trial without unfair costs penalties, whereas a claimant does not want to be put to additional work without appropriate costs reimbursement.

“In Whalley, it has been confirmed that unless there are ‘exceptional circumstances’ or conduct justifying indemnity costs, the fixed costs regime applies to acceptance of part 36 offers out of time. This provides welcome certainty to a contentious issue. The claimant conceded that late acceptance does not automatically trigger an entitlement to indemnity costs.”

 

Diamond warns of NHS disaster if damages and costs are not curbed

Costs Lawyer Jim Diamond has warned that the NHS is facing “a disaster of titanic proportions” unless the level of damages and costs in clinical negligence cases is addressed.

In a report published last week, Mr Diamond – known particularly for his hourly rate surveys of City firms – highlighted the recent annual report of NHS Resolution, which showed that it would need £65bn to cover existing and anticipated liabilities, or half of the NHS’s annual budget.

He found the US, with five times the population of England and Wales, only paid out double the amount the NHS does.

“In a decade or two, we will be walking past derelict hospitals which we will tell our children and grandchildren are the mausoleums of what was the National Health Service,” he concluded.

“One of the UK’s greatest achievements. A free service that each and everyone of us use/used directly or indirectly. We can tell them we were constantly humbled by the sheer professionalism, hard work, and dedication of the majority who work within the NHS.

“But we will have to tell them that part of the ‘iceberg’ problem was the damages and legal costs of clinical negligence cases. We are all to blame if we do not change this up-and-coming disaster. We are approaching the situation of ‘last lifeboat’ status, so whatever needs to be done needs to be done now.”

Comments

Sue Nash   25/09/2017 at 20:56

It appears that RNB is set for a HC appeal - watch this space! Meanwhile, RIP Solicitors Journal which - sadly - has just ceased publication after 180 years

News Flash   28/09/2017 at 12:18

Another pointless case, why resist a payment on account when your paying the opponents costs in the end anyway? these types of disputes should be a thing of the past!

MB   05/10/2017 at 13:18

Why has the focus returned to the SCCO "going completely digital". Was the electronic bill not extended to all Courts!

Dragon   12/10/2017 at 13:40

Well said Jim. Too often we see clinical negligence claims settle for say £2k only to be followed by a bill for say £50k. Thankfully there are some excellent costs lawyers out there who battle those costs down, but the situation remains outrageous.

Simon Mccarthy   13/10/2017 at 13:56

Dragon - your comment overlooks the fact that it is almost invariably your clients - the Defendants - who cause those scandalous costs by intransigently, and inexplicably, refusing to come to the negotiating table until too late, when the costs have already been racked up; it is their failure to take a realistic view to claims at the outset which necessitates the costs. This faux horror is therefore hard to stomach, especially when one considers the equivalent costs being incurred by government bodies (funded by us tax payers of course) often to the tune of 4-5 times the sums you mention, and the many Defendant costs draftsmen shelling peas for their piece of the pie. Sadly, it is the same old story of 'pay peanuts get monkeys' and, unless and until government wake up and start paying competent people to deal with claims pragmatically, the UK public purse will continue to haemorrhage billions of pounds that we can ill afford. Still, as long as it keeps Defendant costs draftsmen/lawyers in business?....

Northern Costs Monkey   13/10/2017 at 14:31

Just shows how ridiculous the whole budgeting process is. The reason firms generally don’t make applications to revise their budgets is because the bar set for varying them is absurdly high. No one even knows what a “significant development” is. A load of nonsense in my opinion. The situation we have now is that firms just don’t bother revising the budgets because in all likelihood it won’t be accepted. Meaning firms can be stuck with an “approved” budget that is a couple of years out of date, was drafted before the directions were even agreed, and is no longer fit for purpose. What should happen is that budgets should be drafted after the first CMC, and there should be a rule put in place that parties are able to freely revise a previously agreed or approved budget every six months, regardless of significant developments, with the updated budget to be considered at a costs management conference listed for a later date. That after all was the whole point of budgeting, was it not? Pragmatic costs management?

Simon   16/10/2017 at 16:47

I find this whole issue completely unnecessarily. Independent Midwives had commercial insurance suitable for their needs, however to try and save money they chose to try and become self-funding and cancelled their insurance without fully understanding the risks and exposures. I cannot see why it is in the public interest to bring a JR (and why the costs should be capped) when commercial solutions were available, however the issue is that as a group they didn't want to pay the costs of commercial insurance.

Dragon 2   18/10/2017 at 08:07

Great points Simon. Fully agree. Courts are fully aware of how these matters are conducted by those representing defendant. Surely though the money for damages and costs comes out of the medical suppliers' insurers' account, not tax pot nor nursing fund. Maybe that's why there is such a drive to extend the fixed costs regime to clin neg claims. Just a thought......

Mel B   19/10/2017 at 12:05

'Like' Simon McCarthy's comment

Cath Hart   21/10/2017 at 09:32

In reply to Simon's comment (which I thought at first meant this situation could be resolved) my understanding is that professional indemnity insurance for independent midwives has been withdrawn, but even if available the premium would be in the region of 20-30k annually (reference https://www.aims.org.uk/Submissions/nmc.htm) so I would disagree that it was cancelled to "save money" - these premiums exceed many of the midwives salaries so it was simply unworkable without government assistance. When professional indemnity insurance became mandatory under the EU directive in 2014 the independent midwives did appeal to the government for funding but this was rejected due to the low number of women involved so was not thought to represent value for money for the taxpayer. (reference: https://www.gov.uk/government/news/independent-midwives-insurance-options-outlined).

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