Costs News

14 March 2019
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Defendant fails in mis-certification claim to reduce £182,000 bill to zero

NHS Resolution has failed in an attempt to argue that mis-certification meant that a bill of £182,000 should be reduced to zero.

Murray v Oxford University Hospitals NHS Trust [2019] EWHC 539 (QB) was a clinical negligence claim that settled pre-issue when the claimant accepted the defendant’s part 36 offer of £175,000.

The defendant argued that there were five points of mis-certification.

The first was that the bill certified that there had been no interim payments on account of costs when interim payments of £90,000 had been made.

It was accepted that the bill should have contained this information. It did not because, when the draft bill was served, the payments had not been made; when the bill was formally served they had, but that had not been noticed when the bill was dispatched.

Deputy Master Campbell ruled at first instance that this was “a trifling error” and Mr Justice Stewart agreed.

The second was that the bill stated that the risk assessment was conducted by Withy King when in fact it was conducted by Marshall and Galpin – the latter firm went through two mergers over the course of the action to become first Withy King and then Royds Withy King.

Again, Stewart J upheld the deputy master’s decision, which said: “What happened was that the original risk assessment should have been disclosed when Marshall and Galpin made the CFA. Instead when the bill was drafted, Withy King's present standard form risk assessment was recited in the bill. Again, in my view, this was an error, nothing deliberate, and I accept that explanation.”

Third was that the bill claimed a 100% success fee when the risk assessment stated that there was a 60% prospect of success, which equated to a 67% success fee by way of the ‘ready reckoner’.

Deputy Master Campbell and Stewart J said that, insofar as the accuracy of the bill was concerned, the risk assessment did not matter – the conditional fee agreement provided for a 100% success fee.

Stewart J said: “The claimant was in fact entitled to seek to recover the success fee which he had agreed and to have it tested on assessment, even if it might be, or almost certainly would be, reduced. The fact that the claimant may have had a dispute with his solicitor on the basis of the document ‘Conditional fee agreement: what you need to know’ is not relevant to any alleged mis-certification.”

The fourth ground was that 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.

This again related to reciting the wrong risk assessment in the bill. Further, the deputy master concluded that this was not a 50/50 case justifying a 100% success fee. He considered the chances of winning were 70%, meaning a success fee of 43%.

He found that the defendant had not been misled; the points of dispute did not rely upon the claimant's statement of reasons. The defendant offered a success fee of 10%. Stewart J agreed that, as a matter of fact, the defendant was not misled such that events would have turned out differently.

The final argument was that 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 said: "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."

The claimant accepted that this was an error which should not have been made and should have been picked up earlier. It is said that it appeared to have followed on from the reliance on the Withy King risk assessment. Stewart J agreed again with Deputy Master Campbell that the defendant was not prejudiced in any way by this.

Going by the principles laid out in Gempride, he concluded 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”.

The judge also rejected the challenge to the £50,000 after-the-event insurance premium, which dated back to 2007. Deputy Master Campbell said he was not persuaded it was unreasonable to take out this policy when the CFA was signed; second, there was no evidence to rebut the proposition that the level of premium was reasonable; and third, it was still the law that costs judges do not have the expertise to deconstruct block rate policies as this was.

Stewart J said the deputy master was not reversing the burden of proof – he “merely found” that the paying party had not advanced any material to support the contention that the premium was unreasonable.

Roger Mallalieu (instructed by Royds Withy King) for the claimant/respondent; Margaret McDonald (instructed by Acumension) for the defendant/appellant.

 

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