Rowley rulings that switches from legal aid to CFAs were unreasonable upheld

Two more decisions by Master Rowley finding that claimant solicitors had acted unreasonably in switching clinical negligence clients from legal aid to conditional fee agreements (CFAs) have been upheld by the High Court.

In both cases, he ruled that the claimant’s success fee and after-the-event (ATE) insurance were not recoverable as a result.

In XDE v North Middlesex University Hospital Trust [2019] EWHC 1482 (QB), Mr Justice Jay – with Master Haworth sitting as an assessor – found that the reason Bolt Burdon Kemp (BBK) switched its client to a CFA was that the legal aid limit had been exceeded, by which time there was no prospect of an extension and the solicitors were “effectively asking for the certificate to be discharged”.

The certificate covered all stages up to mutual exchange of expert evidence, and thereafter part 35 questions and a conference with counsel and experts. BBK ended up instructing more experts than expected.

BBK told the claimant’s litigation friend that they would “be broadly in the same position” under a CFA, and Jay J dismissed the firm’s argument that, in this pre-Simmons v Castle case, the advantages of a CFA were so clear that it did not require further justification. These were security and autonomy of funding, greater costs protection, no statutory charge on damages, the benefits of ATE insurance. an enhanced negotiating position and the ability to fund the litigation without the constraints of the “rule book”.

The judge said the Court of Appeal’s ruling in Surrey v Barnet did not help. “I would hold that there is a difference in principle between a factor such as the Simmons v Castle uplift, which was a certain and indisputable advantage, and the sort of factors prayed in aid by Mr Williams, about which there are differences of opinion. In short, I would reject any suggestion that these advantages are so overwhelming that the failure to mention them may be overcome.”

Further, Jay J said there was no reason to impeach Master Rowley’s finding that BBK “should have attempted to keep this case within budget” and made “timeous and properly constituted applications for additional funding” if it could not.

Master Rowley also said BBK acted unreasonably in failing to make a properly constituted application to extend legal aid funding. Jay J said the real issue was whether it was already too late for such an application to succeed, which BBK thought it was. But he said the claimant failed to discharge the burden of proof: “The onus was on him to show that the lateness of the application made no difference.”

The other case, EPX (A Child) v Milton Keynes University Hospital NHS Trust [2019] EWHC 1508 (QB), was before Mr Justice Stewart, sitting with Master Gordon-Saker as assessor.

Master Rowley found minimal evidence that the claimant’s solicitor had taken into account the possibility that the legal aid certificate could be withdrawn after 1 April 2013 as a reason to switch before then, and rejected the claimant’s case that it was reasonable to change funding before receipt of the defence because the claim would become uninsurable once a defence denying liability was received.

Stewart J said there was no evidence that either of these issues had been raised as risks with the claimant’s litigation friend or that they had been considered in detail by the solicitors, Scrivenger Seabrook.

Master Rowley had also been justified in rejecting the argument that the (or a) principal reason was the concern that legal aid funding might be withdrawn if the defence was filed and served.

Rather, he found the solicitors’ “overwhelming reason” to change funding to be the refusal of the then Legal Services Commission (LSC) to increase the costs which could be spent under the certificate.

The final argument rejected by Stewart J was that the master was wrong to conclude that it was unreasonable of the claimant’s solicitors to obtain quantum reports prior to the issue of proceedings, which were not covered by the legal aid certificate.

Stewart J said: “Experienced personal injury solicitors will have some ‘ball park figure’ understanding of value of a claim once medical evidence, including evidence as to condition and prognosis has been obtained. To suggest otherwise flies in the face of the knowledge acquired over time by such practitioners.

“In summary, it may not be unreasonable to obtain early quantum reports; however, it is not unreasonable not to obtain them. Such reports are commonly not obtained until after a liability/causation trial. This reflects the way LSC funding is outlined in the checklist.

“Of course, there is always a risk that a defendant may make a speculative part 36 offer before any quantum reports have been obtained. However, such an offer is usually made where liability looks very problematical for the claimant and the defendant makes a low offer which the court is asked to approve because of the very substantial danger of total failure.

“It would be rare indeed for either (a) a defendant to make a very substantial offer of a seven-figure lump sum plus periodical payments without any quantum reports and/or (b) a court being asked to (or approving) an offer in a case which was strong on liability and which did not have the benefit of some quantum evidence.

“If such offers became a real problem in large-scale personal injury litigation, such that claimants were being put at serious cost risk when they could not obtain quantum reports because of LSC certificates, then one would have expected it to have surfaced and that either the SG exception would be utilised perhaps more than it is, or there would be other steps taken to counteract the problem.”

For the appellant, Benjamin Williams QC (instructed by Bolton Burdon Kemp) in XDE and Robert Marven QC (instructed by Scrivenger Seabrook) in EPX. Alexander Hutton QC (instructed by Acumension) for the respondent in both cases.


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27 Jun 2019

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