Middleton v Vosper Thornecroft (UK) Ltd

I acted in a detailed assessment recently where the Claimant had failed to serve a statement of reasons in respect of the success fee in accordance with CPD 32.5(3) when serving the bill of costs and notice of commencement.   The appropriate statement was subsequently served.  It was argued for the Defendant that the failure to serve with the bill amounted to a breach of the rules which was not rectified simply by serving the document late and the consequence was that the success fee was not recoverable.  The judge questioned where in the rules it stated that the document needed to be served with the actual bill.  Despite my best efforts, I was unable to point to a specific provision that dealt with the time for service.  The judge concluded that it would be sufficient to serve the document in advance of the hearing and therefore allowed the success fee.

In the event, this decision was not decisive to the outcome of the detailed assessment and I still managed to comfortably win on the Defendant’s offer.  However, I was left with the strong feeling that the judge was wrong but unable to identify quite where he had gone wrong.  The best I was able to do was note that the heading to the section listing the documents to be served is worded: “Commencement of detailed assessment proceedings”.  Common sense therefore suggests that the timing for service of the documents is at the same time as commencement of the detailed assessment proceedings (ie when the bill and notice of commencement is served, as per CPR 47.6).

Before travelling to the hearing I had put in my briefcase a copy of a judgment I had come across on Lawtel that looked interesting.  I didn’t have a chance to read this on the day of the hearing.  You can imagine how annoyed I was when, a few days later, I got around to reading the judgment only to discover it was exactly the case I needed.

In Middleton v Vosper Thornecroft (UK) Ltd & Others, CC (Winchester) 2/6/09, the claim was funded under a CFA that pre-dated the revocation of CFA Regulations 2000.  No statement of reasons was served with the Bill but some reasons were subsequently provided in the Claimant’s replies.  His Honour Judge Iain Huges QC, sitting with Regional Costs Judge James, made a number of findings:
1.                  The “statement of reasons” to be served must be “the statement of reasons as included in the CFA.  The paying party is entitled to the whole of that statement and not an abbreviated version.  Further, he is entitled to know that that is what he is being given”.  He concluded: “the statement of reasons set out in the reply did not amount to a compliant statement.  First, because it was neither provided nor identified as being the statement of reasons given in the CFA.  Secondly, it did not have the appearance of being such a statement.  Thirdly, even if it had been identified as the statement of reasons in accordance with the rules, in fact it was not”. 
2.                  The “CPR require the receiving party to serve the statement of reasons and the other documents specified in section 32 at the same time of serving the notice of commencement and that the Claimant in this case failed to do that.  That triggers the sanction imposed by CPR 44.3B(1)(d) which denies recovery of his success fee”.
Another useful case in defendants’ armoury.

3 thoughts on “Middleton v Vosper Thornecroft (UK) Ltd

  1. I have been successfully running this argument for years, and routinely having the success fee claims totally dismissed. The only way to successfully counter the argument in my experience, is an application for Relief from Sanctions. unless you have a particularly lenient DJ however whom will entertain an Oral Application at the Hearing, that can be defeated too with the correct submissions.

    The same argument has worked successfully as regards ATE Premiums, as many Claimant Draftsmen/Solicitors routinely just send a copy of the document showing how much the Premium itself is. If you examine the wording of CPD 32.5(2) however, it is clear that the information to be provided is mandatory and much more than is routinely found on most premium documents issued by ATE Insurers. Again, the net effect is disallowance of the premium. Given the amount of some premiums these days, the loss can be very dramatic. There is an effective counter-arguement regarding the Premium recovery, but I'll keep that to myself thank you very much!

  2. "I have been successfully running this argument for years" – I would be interested to know in which Court exactly. Most Courts in the south allow an oral application at the hearing.

  3. Lets see. Manchester, Liverpool (inc birkenhead), Preston, Burnley, Leeds, York, Newcastle, Birmingham, Leicester, and Medway. Routinely before senior District Judges or Regional Cost Judges. Twice in the SCCO. I have faced Oral Applications, but the Claimant seeking relief still has to satisfy certain grounds, and like I say, such an application can be defeated with the right counter-submissions. The only time really I've seen a Court go against me, was in relation to disallowance of the Premium, because the Court found it would bring hardship to the Claimant whom had paid the premium – the DJ took note of my comment the Claimant could sue his solicitor in that event, and went on to disallow the solicitor any costs of the assessment!

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