Successful National Accident Helpline CFA challenge

Readers with a very good memory may recall me writing about a successful challenge I ran as to the unenforceability of a CFA under the, now revoked, Conditional Fee Agreement Regulations 2000, in that the solicitors had failed to advise the client of the interest they had in recommending a particular ATE insurance policy.

The claim concerned the National Accident Helpline scheme.

The Claimant appealed and at the time I wrote that if the appeal was dismissed I would let you know and if it succeeded I would keep quiet about it.

You may therefore have concluded that the silence at my end indicated failure at the appeal. Fear not. It just took a very long time to get around to obtaining the transcript with further delays having it approved by the court.

My opponent on the appeal was Simon Butler of 9 Gough Square. It was the first time I have been against him and although I managed to win on the day it was not due to any shortcomings on his part. He is fantastic advocate. Dominic Regan regularly tips him as a rising star on his blog and I can see why.

What was interesting about this particular case (although, naturally, all costs litigation is fascinating) is how long this case dragged on for. This was a routine RTA claim resulting from an accident on 12 December 2003 which settled for £8,000. The claim settled on 21 February 2008. Detailed assessment proceedings were commenced on 3 March 2009. The initial costs judgment was handed down on 14 April 2011. The appeal was heard on 15 December 2011. The matter then went back to the Senior Courts Costs Office on 3 August 2012 to tie up the loose ends.

So even if new work dries up post-Jackson I am hoping for a few cases like this to see me through to retirement.

Here is the judgment for the appeal: King v Thames Water Utilities and Transport for London.

New Points of Dispute rules

The old CPD 35.6 provided:

“(1) This paragraph applies in cases in which Points of Dispute are capable of being copied onto a computer disk.
(2) If, within 14 days of the receipt of the Points of Dispute, the receiving party requests a disk copy of them, the paying party must supply him with a copy free of charge not more than 7 days after the date on which he received the request.”

I have been unable to locate any corresponding provision in the new rules. This is particularly strange given it is clearly envisaged any replies made (such as are allowed) will be made on the same document as the points of dispute.

Costs Officers

The new Practice Direction 3.1 to CPR 47.3 increases the powers of principal court officers (I believe I’m right in saying there is currently just one) from £75,000 including additional liabilities but excluding VAT to £110,000 base costs excluding VAT.

By my reckoning that means once you add back in success fees, ATE premiums and VAT the size of bill that can now be assessed by a principal court officer jumps to £300,000 or more.

For non-principal court officers, the power jumps from £30,000 including additional liabilities but excluding VAT to £35,000 base costs excluding VAT. That probably equates to covering some bills with a value of up to £100,000.

In the event that makes you a bit uneasy, particularly given the automatic right of appeal, you can still object. If both parties agree, the court will automatically relist before a costs judge or district judge (Practice Direction 3.2 to CPR 47.3). Otherwise, an application is to be made to a costs judge or district judge (Practice Direction 3.3 to CPR 47.3).

Replies to Points of Dispute

Yesterday’s post on the content of replies under the new rules generated plenty of interest in the Comments Section and I therefore thought it appropriate to elaborate on this issue.

In response to the fact the new rules state replies should be limited to points of principle and concessions only one reader commented:

“An item being a matter of principle is surely a matter of interpretation. One mans principle is another mans minor issue”

Another commented:

“Each of those points in the model pods has a space for a reply, including those that are not under the heading ‘points of principle.’ The only change is that you cannot simply say ‘maintained.’”

To start with we need to go to the new Practice Direction 8.2 to CPR 47.9:

“Points of dispute must be short and to the point. They must follow Precedent G in the Schedule of Costs Precedents annexed to this Practice Direction, so far as practicable. They must:

(a) identify any general points or matters of principle which require decision before the individual items in the bill are addressed; and
(b) identify specific points, stating concisely the nature and grounds of dispute.

Once a point has been made it should not be repeated but the item numbers where the point arises should be inserted in the left hand box as shown in Precedent G.”

So, it is clear that “general points or matter of principle” are limited to those that “require decision before the individual items in the bill are addressed”. As such, this is generally not going to be a matter of interpretation. Disputes raised as to the reasonableness of a conference with counsel, or disputes as to document time, or disputes as to the reasonableness of a brief fee are not “matters of principle which require decision before the individual items in the bill are addressed”. They are disputes to individual items within the bill.

The new Practice Direction 12.1 to CPR 47.13 states:

“A reply served by the receiving party under Rule 47.13 must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses.”

Therefore, if a dispute is raised to any of the examples given above the box for the “Receiving Party’s Reply” should either contain a concession or be left blank.

The Practice Direction does not contain any guidance as to the distinction between a “general point” and a “point of principle”. The only assistance we have is the two examples contained within the Model Points of Dispute. This gives an example of a “point of principle” as:

“The claimant was at the time a child/protected person/insolvent and did not have the capacity to authorise the solicitors to bring these proceedings.”

I would therefore suggest examples of other points of principle would include:

  • A challenge to the indemnity principle.
  • A challenge to the enforceability of a CFA.
  • An argument that proceedings were issued prematurely and the costs should be limited to fixed predicable costs.

Those are matters to which a reply is permitted.

The example given of a “general point” is:

“Rates claimed for the assistant solicitor and other fee earners are excessive. Reduce to £158 and £116 respectively plus VAT.”

No reply is permitted, other than a concession.

I would suggest another example would be that the costs were disproportionate. Others might say this is a point of principle. Having said that, the new proportionality test is meant to be applied at the end of the assessment, rather than the beginning, in which case it is neither a general point nor a point of principle.

Interesting issues arise. Are any of the following general points or points of principle:

  • An argument defective notice was given of an additional liability.
  • An argument as to the level of success fee claimed.
  • An argument VAT has not been properly apportioned.

Do any of these issues need to be decided at the outset? If not, no reply is allowed, other than a concession.

I can see many receiving parties bursting if they cannot reply to these disputes.

One reader suggested that if the Points of Dispute were drafted before 1 April 2013 then surely Replies should follow the old format and are not limited to the new Practice Direction. I can see no transitional provision that deals with this. Therefore any Replies served after 1 April 2013 are subject to the new, mandatory, provisions.

Another reader asked if I would apply to have struck out non-compliant replies and another noted there is no sanction for non-compliance. In the first instance I am simply pointing out where replies are non-complaint and therefore saying they must not be lodged with the court when requesting any hearing. Applications will no doubt have to be considered if the other side does not agree. The courts will be keen to ensure the new rules are made to work (so far as possible) and it would entirely defeat the purpose of these changes if receiving parties were allowed to simply ignore the changes. In any event, the costs of non-compliant replies will inevitably be disallowed.

Points of Dispute

Oh dear.

I have been warning that costs practitioners did not appear to be ready for the post-Jackson reforms.

I have so far received two set of Replies prepared after 1 April 2013, prepared by well known costs firms. Both contained detailed responses to the disputes raised as to hourly rates, detailed responses in relation to attendances on the claimants and other parties and detailed responses to the challenges to document time, including general denials that the work claimed was unreasonable.

It appears those responsible for drafting the documents are unaware of the contents of the new Practice Direction 12.1 to CPR 47.13:

“A reply served by the receiving party under Rule 47.13 must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses.”

For those unsure what might be classed as a “point of principle” look at the new Model Points of Dispute. Disputes as to hourly rates, the number of conferences with counsel or the number of fee earners attending, attendances on the claimant, document time or time claimed drafting and checking the bill are not treated as points of principle.

I’ve also received, what purported to be, a Part 36 offer in a matter where detailed assessment proceedings had been commenced before 1 April 2013.

Dear oh dear.

Hourly rates for costs draftsmen

I note the new Model Form of Bill of Costs gives the following example in relation to hourly rates:

“The claimant instructed E F & Co under a retainer which specifies the following hourly rates.

Partner – £217 per hour plus VAT
Assistant Solicitor – £192 per hour plus VAT
Other fee earners – £118 per hour plus VAT”

When it comes to the costs of drafting the Bill it gives:

“Engaged: Costs draftsman – 4 hours (at £110)”

Read what you like into the fact the hourly rate for the costs draftsman is below the “other fee earners” rate set in the retainer (although, by my maths, the total claimed works out at £120 per hour).

Bunny boiler

The other day I found in my email inbox an email from a Svetlana. The subject line read: “Let’s talk more my bunny!”

The contents of the email were:


I have decided to write to you and I think that you will write to me. Please do not hesitate and write to me. I think that we shall find much in common and we can better and closer learn each other. I hope that I shall see your letter soon and mine of straight line E-mail: you can write to me here and I shall necessarily answer you and to send my photo.

I wait with impatience of your letter.


I was naturally very flattered but rather put off by the suggestion we would “find much in common”. If Svetlana really does spend all her spare time poring over the finer details of the costs rules and practice directions she sounds like a bit of a sad weirdo.  

Qualified One-way Costs Shifting

A reader of the Legal Costs Blog contacted me to say one of his solicitor clients had asked the following question:

“If we terminate the client’s CFA today and replace it with a retrospective CFA back to the beginning of the case will the client get the benefit of QOCS?”

The reader is an exceptionally knowledgeable costs specialist solicitor. The fact that his solicitor client asked the question and he asked me for a second opinion is yet a further example of how practitioners are still struggling with the basics of the Jackson costs reforms.

I have no doubt the answer to this question is meant to be: No.

The problem (ambiguity) is caused by the transitional provision and the strange use of the word “has” in:

“44.17. This Section does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement (as defined in rule 48.2).”

I am sure the word “has” is redundant as the rule is intended to cover claimants who entered into such funding arrangements pre-1/4/13 (which ties in with the definition of “pre-commencement funding arrangement”) regardless of whether it is still in place when the claim settles. Nevertheless, “has” creates an ambiguity possibly suggesting “has in place” as opposed to “had”.

Yet a further example of sloppy drafting.