This has been an interesting decision to come out of the SCCO in the last week where a post-April 2013 Premium has been heavily reduced for reasons of Proportionality.
This was a Clinical Negligence claim concerning a failure to refer for imaging, as it was alleged that had the Defendant done so, a pituitary tumour would have been found nine months earlier than was the case. A settlement figure of £3,250.00 was agreed.
On 29 October 2015 a Bill of Costs was served in the sum of £72,320.85. Points of Dispute and Replies were served between the Parties and this was followed by a request for Provisional Assessment. The Provisional Assessment was undertaken by Master Simons on 21st July 2016 who Assessed the bill in the sum of £24,604.40.
On 24 August 2016 the Claimant requested an Oral Hearing in accordance with CPR 47.15(7) in respect of Master Simons’ decisions, these included (but weren’t limited to) his findings that the Bill was disproportionate and also the reduction of the ATE Premium from £31,976.49 to £2,120.00. The Oral Hearing took place at the SCCO on 17th February 2017. Witness Statements were provided by DAS and also by the Partner of the Firm involved in support of the Premium. Written submissions were also filed.
Master Simons made specific reference to CPR 44.3(2) in his rulings, together with the fact that all costs claimed were post-April 2013.
In their Points of Dispute the Defendants sought to argue that the costs claimed were disproportionate and that no privately paying client would ever incur this level of expense for a claim worth £3,250. During the Hearing it was submitted that this was always going to be a low value claim and that the Claimant’s solicitors should at the outset have taken steps to deal with the claim in a proportionate manner. In their Replies, the Claimant stated that the costs claimed were reasonable and proportionate on the basis of the following:
- The Defendants’ conduct should be taken into account given that causation was disputed.
- It was conceded that the value of the claim was modest but the Defendant’s negligence had led to the Claimant suffering symptoms for nine months longer than necessary and this had caused his visual field to deteriorate.
- The claim was of considerable importance to the Claimant.
- This was a clinical negligence claim which was by its nature complex.
- The matter required a high degree of skill and specialised knowledge in order to prove the allegations of breach of duty and causation.
- A consultant ophthalmologist, a consultant neurologist, an endocrinologist and a GP were instructed.
- Pre-action investigations were necessary to ascertain the appropriate Defendant.
Master Simons commented that there was no evidence of any planning or any consideration of the costs to be incurred in conducting this low value claim. It was also specifically commented that; “Notwithstanding the solicitors’ knowledge of the low value of the claim, they proceeded to instruct expensive medical experts to prepare Reports the costs of which totalled almost £20,000. The costs of some of those reports were reduced by me on the grounds that their cost was disproportionate. Furthermore, I remained to be convinced as to whether or not some of the reports were indeed necessary as significant fees were being claimed by the medical experts for preparing addendum reports and for amending their reports.”
What is of great importance is that in their Replies, the Claimant submitted that when looking at the question of proportionality profit costs should be considered separately to Additional Liabilities. Master Simon’s commented; “… in my judgment the position is now different. Costs must include those costs that are claimed in the Bill of Costs that are presented to the Court. CPR 44.3(2) does not make any distinction between profit costs, disbursements or additional liabilities. In my judgment this means that any item contained in a Bill of Costs may be disallowed or reduced on the ground that it is disproportionate even if it was reasonably or necessarily incurred.”
The Premium consisted of £30,166.50, plus IPT of £1,809.99. The Defendant submitted that the amount of Premium was disproportionate, and exhibited to their Points of Dispute examples of Premiums charged in other cases between £595.00 and £3,500.00 plus IPT which also provided an indemnity of £100,000. Again, it was submitted by the Claimant that Additional Liabilities including the Insurance Premium should be considered separately from base costs when dealing with proportionality.
Counsel was instructed to deal with the Premium who, during the course of the Hearing submitted that the Premium should have been calculated at £22,255.23; calculated by adding up the costs of all the pre-issue reports relating to breach/liability/causation, multiplying that total by 200% (in accordance with DAS’s witness statement), then adding IPT at 6% making a total Stage A premium of £21,013.44. Stage B was calculated in a similar way with a multiplier of 25%, making a total Stage B premium of £1,242.79, and a total Premium of £22,255.23. Counsel could provide no explanation as to why the certified Bill contained such a substantial error. However, it was submitted that the Court should not interfere with a block-rated ATE premium without the assistance of expert evidence, and that the documentation provided by the Defendant could not amount to that.
Having decided that the amount of the premium was disproportionate Master Simons, as recommended by Lord Jackson, was entitled to stand back and decide what a proportionate premium was. At Provisional Assessment he decided that £2,120, inclusive of IPT, was a reasonable and proportionate premium. This was firstly based upon the comparative premiums that had been submitted, and secondly on the basis of his own judicial knowledge of dealing with detailed assessments in similar cases.
This matter highlights the robust stance being adopted by the Courts to proportionality; if a claim is considered to be low value from the outset, it must be demonstrated that there is evidence of planning and consideration of the costs to be incurred in conducting the matter, particularly with regards to Expert’s fees. The issue being with the “Jackson Adjustment” that as a case progresses the instructed Solicitor will have no idea what the Court will allow as proportionate, whereas there is a fairly clear idea as to what will be allowed as reasonable and necessary.
One of the major difficulties with the Premium was that the amount of the Premium was unknown, and the amount submitted by Counsel was on the basis of his own calculation rather than any evidence. Master Simons indicated that he would be justified to disallow the Premium in its entirety on that basis.
It is interesting that Master Simons has gone against recent findings regarding Additional Liabilities and Proportionality in his Judgement, and has applied the test of proportionality to the Premium. Great weight was also placed upon the evidence provided by the Defendant in support of their reduction to the Premium. This shows the attitude that is now being taken towards Premiums; it is of vital importance that if a Defendant produces valid evidence in support of a reduced Premium that the ATE Provider’s input is obtained at that stage. Unlike the premium is BNM –v- MGN the Judge has provided his reasoning for reducing the Premium.