News in brief – 20.09.2018

Council calling

Members should have received an email seeking nominations for an upcoming vacancy on the ACL Council – two have been received so far. This is your chance to help steer the direction of the Association. The closing date for nominations is 4pm on Friday 28 September. Contact enquiries@costslawyer.co.uk with any queries.

 

Unsuccessful counterclaim wins QOCS protection for whole case

An unsuccessful defendant in a road traffic claim for financial losses who made an unsuccessful counterclaim for personal injury was entitled to the protection of qualified one-way costs shifting (QOCS) for the whole case, a circuit judge has ruled.

His Honour Judge Freedman in Newcastle found that July’s Court of Appeal ruling on QOCS in Cartwright v Venduct Engineering Ltd had given a wide meaning the word “proceedings” in rule 44.13(1). It was no longer arguable that a claim and part 20 claim could be seen as two sets of proceedings, he said.

“While, on one view, it may seem unjust that the defendant can avoid payment of costs in the main action, purely as a result of bringing part 20 proceedings for damages for personal injuries, it seems to me that that is an inevitable result of the wording of CPR 44.13 and 44.14…

“If the intention was to limit a part 20 claimant’s protection in costs, such would have been expressly set out in the rules.”

He agreed with the defendant’s counsel, Andrew Lyons of Ropewalk Chambers, who argued that if a claim was totally devoid of merit or was being used as a vehicle in order to give a defendant QOCS protection, “then the part 20 claim would be struck out as being an abuse of a process or disclosing no reasonable grounds”.

Mr Lyons was instructed by Shakespeare Martineau. Morgan Brien of Trinity Chambers in Middlesbrough represented the claimant.

 

Solicitor disciplined for clinical negligence “overcharging”

A solicitor who instituted a practice of “gross overcharging” in clinical negligence cases so as to maximise profits has been fined £30,000 by the Solicitors Disciplinary Tribunal (SDT).

Andrew Mark Cyril Good, who ran Hull-based Rapid Response Solicitors, set as standard charge-out rates in its conditional fee agreements of £400 an hour – even for unqualified staff – with a 100% success fee.

The SDT said he “deliberately insulated” the costs department from the rest of the firm so as to prevent it from seeking information from fee-earners that might have led to questions.

“He had created guidance documents that were designed to restrict independent thought and to maintain a charging process he knew to be producing inflated and unjustifiable bills of costs,” it said.

“He had demonstrated a calculated disregard for practice directions so as to create a lack of transparency intended to obscure from the paying party the true level of experience and ability of fee-earners in order to attempt to charge wholly unwarranted excessive and preposterous costs.”

Rapid was acquired by Neil Hudgell Solicitors in 2014. The conduct under scrutiny was before the sale.

The Solicitors Regulation Authority (SRA) began investigating Rapid Response after a complaint by NHS Resolution.

Figures provided to the tribunal by Acumension, a costs firm that works with NHS Resolution, showed that Rapid only recovered £1.5m of the £6.5m in costs that it had claimed. It reached the stage where Acumension instituted a ‘no offer policy’ in claims involving Rapid because it “could not trust any of the bills” being submitted.

Mr Good told the SRA that he decided on an hourly rate of £400 – nearly four times the guideline rate for unqualified fee-earners – after reading online that this level was being charged by others, although he had no evidence to back this up. He charged a 100% success fee on the basis that all clinical negligence claims were complex. There were no risk assessments carried out beyond the initial decision on whether to take a case.

The bills were designed “simply to maximise profits which he was the direct beneficiary of receiving”, the tribunal held. “The hourly rates charged at his direction were entirely unfounded and, in the circumstances, excessive and often grossly excessive per se. That position was made all the more egregious when the unmeritorious 100% success fee was applied.”

This conduct plainly lacked integrity, the SDT said, but it was not dishonest, because Mr Good “believed that he was entitled to ‘test the rate’, and that the bills would be subject to the scrutiny of the courts/costs experts”.

Ultimately, due to the court process, there was no suggestion that Rapid ever received costs that were otherwise than reasonable and proportionate, and the tribunal commended Mr Good for eventually reducing the rate to £250 an hour and applying the principles laid down in a case the firm brought about the applicability of summary guideline rates to multi-track cases.

Among the witnesses were three Costs Lawyers: Sue Corbin, a Costs Lawyer at Costsdragon, who reviewed Rapid’s cases for the SRA, Acumension director John Brown, and Kain Knight’s Richard Banks, who gave evidence for Mr Good.

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Costs News
Published date
19 Sep 2018

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