YZ (a protected party proceeding by way of her litigation friend) v Gloucestershire Hospitals NHS Foundation Trust [2019] EWHC B4 (Costs) (11 April 2019).
The question of whether or not it was reasonable for the Claimant to have moved from Legal Aid funding to CFA funding came before Master Gordon Saker in the matter of YZ (a protected party proceeding by way of her litigation friend) v Gloucestershire Hospitals NHS Foundation Trust [2019] EWHC B4 (Costs) (11 April 2019).
The Claimant, via her litigation friend, had initially funded the claim by way of legal aid but changed to a CFA in February 2013. The CFA attracted a 100% success fee and on the same day the Claimant took out an ATE policy of £50,000. The parties had been able to agree the costs save for the additional liabilities as a dispute arose as to whether the additional liabilities were reasonably incurred. The additional liabilities amounted to £292,298 plus VAT and were accordingly a significant sum. The Defendant pressed the Claimant for disclosure of documents they considered to be relevant but the Claimant declined to disclose the same, instead choosing to rely on two witness statements served on behalf of the Claimant’s Solicitor.
The Defendant argued that the litigation friend’s decision to enter into a conditional fee agreement was based on advice that funding of only £15,000 had been authorised to mutual exchange, that the solicitors had already incurred over £19,000 and that the litigation friend therefore had no option other than to switch funding and that this advice subsequently transpired to be incorrect. The Defendant also argued that there had been a lack of advice as to the certainty of losing the Simmons v Castle uplift.
The Claimant, however, submitted that the decision to move to a conditional fee agreement was reasonable given that legal aid funding had been exhausted and, given the Defendant’s denial of liability, that there remained a considerable amount of work to do. The Claimant also argued that the Legal Aid Agency were being difficult about authorising the experts’ fees and that the contributions the Claimant’s litigation friend was required to pay under the certificate were becoming a concern to her.
The question then fell to Master Gordon-Saker to determine whether or not the Claimant had discharged the burden in proving that the decision to change funding was a reasonable:
“56. Based on the evidence that has been produced I cannot conclude that the litigation friend was advised properly as to the change in funding. The meeting on 18 th September 2012 was nearly 5 months before the conditional fee agreement was entered into. The change in funding was then only a possibility. An explanation of “the advantages and disadvantages of a CFA”, even if comprehensive, is unlikely to be recalled 5 months later. The telephone conversation with the litigation friend on 15 th January 2013 was recorded as 30 minutes long. I have difficulty in accepting that detailed advice could have been given on everything that would have been required in that time. The result of that conversation was that the litigation friend was persuaded that “we do not have any [other] option”. But, it seems to me, that was not correct.
- The telling point is that there is no record at all of the litigation friend being advised that the Claimant would lose the chance of recovering the 10 per cent uplift in general damages or of any advantages that may outweigh that disadvantage. I cannot be satisfied that had the litigation friend been advised properly, not only as to the Simmons v Castle uplift but also as to the true legal aid position, that her decision to relinquish legal aid and to enter into a conditional fee agreement and purchase an after the event insurance policy would have been the same.
- On the evidence that has been produced I cannot be satisfied that the litigation friend’s decision to change from legal aid funding to a conditional fee agreement and thereby to incur the additional liabilities now claimed was a reasonable one or was to the advantage of the Claimant.”
It is therefore clear that when taking such an important step the pros and cons ought to be carefully considered and thorough advice must be provided to the client (both verbally and in writing) if you are to have a chance of discharging the burden of establishing that the decision to change funding was reasonable. A lack of evidence as to the advice given may well be fatal to the recovery of the additional liabilities.
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