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England and Wales High Court (Senior Courts Costs Office) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Robinson -Tait & Anor v Cataldo & Anor [2010] EWHC 90166 (Costs) (05 May 2010) URL: http://www.bailii.org/ew/cases/EWHC/Costs/2010/90166.html Cite as: [2010] EWHC 90166 (Costs) |
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HIGH COURT COSTS OFFICE
London, EC4A 1DQ |
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B e f o r e :
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(1) CAROLA ROBINSON-TAIT |
Claimants |
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-and- |
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(2) JULIAN ROBINSON-TAIT (By his Mother and Litigation Friend, Carola Robinson-Tait, the First Claimant) |
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-and- |
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GIOVANNI CATALDO |
Defendants |
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-and- |
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PHAEDRA CATALDO MARKHAM |
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Mr Munro (instructed by Child & Child) for the Defendants
Hearing dates: 24 February 2010 and 26 March 2010
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Crown Copyright ©
Master O'Hare:
"[7] … notice of the CFA in form N251 was served on both Defendants, together with the particulars of claim, on 4 February 2008. I fully intended that the Notice should inform the Defendants, both of the CFA and provide the information required concerning the ATE policy. This information is included in the handwritten draft form N251 that I prepared for engrossment in my office. For reasons that I cannot fully explain, this part of the form was not transcribed and the Notice was served without the ATE information. As far as I can ascertain, the form was typed by a temporary secretary who omitted this part of the form. I was involved in a trial at this time, and consequently extremely busy. As such, I missed the error when signing and submitting the form to the Defendant. I very much regret the omission".
"[3] The Claimant's application dated 4 March 2010 seeks relief from sanctions, should relief be required, for a failure to give notice of the two previous CFAs, ie those with Collyer Bristow and Wallace LLP. … If relief is required, I ask for it primarily on the basis that when serving Notice of the CFA, as I did on both Defendants on 4 February 2008, my understanding of the rules was that I needed to give notice only of the extant CFA, ie that dated 29 November 2006 between the First Claimant and Irvine & Partners. The two previous CFAs with Collyer Bristow and Wallace LLP, having come to an end, I concluded that there was no requirement to give separate notice of them."
"A party who seeks to recover an additional liability must provide information about the funding arrangement to the Court and to the other parties as required by a rule, practice direction or Court order."
"19.4
[1] Unless the Court otherwise orders, a party who is required to supply information about a funding arrangement, must state whether he has –
entered into a conditional fee agreement which provides for a success fee within the meaning of Section 58(2) of the Courts and Legal Services Act 1990;
taken out an insurance policy to which Section 29 of the Access to Justice Act 1990 applies;
made an arrangement with a body which is prescribed for the purposes of Section 30 of that Act;
or, more than one of these.
[2] Where the funding arrangement is a conditional fee agreement, the party must state the date of the agreement and identify the claim or claims to which it relates (including Part 20 claims, if any).
[3] Where the funding arrangement is an insurance policy, the party must state the name and the address of the insurer, the policy number and the date of the policy, and must identify the claim or claims to which it relates (including Part 20 claims, if any).
[4] Where the funding arrangement is by way of an arrangement of a relevant body, the party must state the name of the body and set out the date and terms of the undertaking it as given and must identify the claim or claims to which it relates (including Part 20 claims, if any).
[5] Where a party has entered into more than one funding arrangement in respect of a claim, for example a conditional fee agreement and an insurance policy, a single notice containing the information set out in form N251 may contain the required information about both or all of them."
"[1] A party may not recover as an additional liability –
… (c) any additional liability for any period in the proceedings during which he failed to provide information about a funding arrangement in accordance with a rule, practice direction or Court order; …"
"3.9(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or Court order the Court will consider all the circumstances including –
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules, practice directions, Court orders and any relevant pre-action protocol;
(f) whether the failure to comply was caused by the party or his legal representative;
(g) whether the trial date or the likely trial date can still be met if relief is granted;
(h) the effect which the failure to comply had on each party; and
(i) the effect which the granting of relief would have on each party".
THE DEFENDANTS' CASE
"I agree that relief and sanctions should not be granted lightly and any party who fails to comply with CPR runs a significant risk that he will be refused relief. Thus, if a party does not have a good explanation, or the other side is prejudiced by his failure, relief from sanctions will usually be refused. It is vitally important to the administration of justice that the rules of procedure are observed."
THE CLAIMANTS' CASE
"It is difficult for us to give you an accurate estimate of costs, both because we are not the only firm to advise the Claimant under a CFA, and because preparations for trial are continuing apace, with a result that costs are continuing to increase rapidly. However, as at today's date, the base cost of this firm total approximately £25,000 plus Counsel's fees of £13,800 plus VAT and other disbursements, principally Court fees. Counsel is also acting under a CFA. In addition, there must be added the premium for the ATE policy acquired before the institution of proceedings. The cost of the policy depends largely on the time in the action at which settlement is achieved or judgment obtained."
"As we believe you are aware, our client has the benefit of ATE cover. This policy is effected with QBE Insurance (Europe) Ltd. It is a staged premium policy. One premium was payable after the institution of proceedings, but if the claim settles no more than 60 days before the date listed for the commencement of the trial. A higher premium is payable if the claim is settled 60 days or less before the beginning of the trial."
"Given that we received no pre-action correspondence in this matter, whether from your firm or any other firm instructed by the Claimant, we are surprised to note that other firms have acted on this CFA for the Claimant. Please could you identify the firms and the extent of their costs? …
You give no figure for the premium of the ATE policy, nor even a bracket of figures. …
We raise these points with you to give you a further opportunity to be constructive and to provide answers. If you fail to do so, we shall bring this correspondence to the Court's attention on any cost assessment hearing and explain that your … as such as to preclude the opportunity to make an offer that may be effective as to costs, and that all adverse inferences should be drawn from this in relation to the discretion that may be exercised on matters relating to costs".
"On 5 February 2008 the First Defendant passed to me a letter addressed to him dated 4 February 2008 from Irvine & Partners to which was attached particulars of claim and also a Notice of Funding. … in particular I did not consider that there was any after the event ("ATE") insurance in place, as none of the boxes on the standard N251 Notice of Funding of Case form indicated that that was the position. Naturally therefore, I assumed that there was no ATE insurance, nor therefore any ATE premiums. Nothing in Irvine & Partners' correspondence at that time suggested that there was any ATE insurance in place. Indeed, I gave some immediate advice to the First Defendant … discussing the basic principles of a CFA arrangement, but not giving advice about any ATE insurance, since it seemed plain to me that there was none in place. By email to the clients dated 26 March 2008 (at page 3) I gave more detailed advice, following telephone discussions with Mr Cataldo on these issues, which we both regarded as highly important to the case as we went forward. It can be seen from the email that I referred (at the first paragraph) to just a single CFA agreement being in existence; and also (at the fourth paragraph) to my understanding that there was no ATE insurance policy in place".
"In order for a party suing who has the benefit of a CFA to protect their position in the event that there may in the future be an order for costs made against them, normally that person would take out an insurance policy (called an "After The Event" policy), against the payment by them (or their solicitors) of an insurance premium, so they receive cover against an "adverse costs order", ie an order might be made in the future whereby the costs of their opponents should be paid by that party. In this case it seems that no such insurance policy has been taken out (at least according to the terms of the Notice of CFA served upon you when the proceedings themselves were served). Thus [the First Claimant] does run a risk that in the event (albeit we believe this is not very likely) that she did not obtain any damages or compensation in this case, she would be liable to have to pay your legal costs, because you have won the case".
"Conclusions on the discretion issue;
(a) Legal principles relevant to CPR 3.9.
We have not been shown any authority in which there has been an application under CPR 3.9 to set aside a judgment entered in default of compliance with an order of the Court. However, in Woodhouse v Consignia plc [2002] 1 WLR 2558, Brooke LJ gave the following guidance as to the manner in which a Court should approach the task of applying CPR 3.9 in the context of deciding whether to lift an automatic stay:-
"32. This rule is a good example of the way in which the draftsman of the Civil Procedure Rules has sometimes endeavoured to set out in a codified form the various matters which the Court may have to take into account when deciding how to exercise its discretion in a context with which it will be all too familiar. One of the great demerits of the former procedural regimes was that simple rules got barnacled with case-law. Under the new regime the draftsman has sought to dispense with the need for litigants to be familiar with judge-made case-law by drawing into one place the most common of the considerations a Court must take into account when deciding whether a litigant should be granted relief from a sanction imposed on him.
33. The circumstances in which a Court may be asked to make a decision of this kind are infinitely varied. This is why the rule instructs the Court to consider all the circumstances of the particular case, including the nine listed items. On the other hand, the rule would lose much of its praiseworthy purpose of encouraging structured decision-making if Courts did not consciously go through the exercise of considering all the items on the list when determining how, on balance, it should exercise its discretion. Provided it does so, and in this way ensures that the risk of omitting any material consideration is minimised, it is most unlikely that an Appeal Court will interfere with its decision. If it fails to do so, an Appeal Court may not be able to detect that it has taken all material matters into account, and it may be obliged to exercise its discretion afresh for this reason."
In Flaxmann-Binns v Lincolnshire County Council [2004] EWCA 424, also involving an application to lift an automatic stay, this Court (Lord Phillips MR and Clarke and Jacob LJJ) endorsed that guidance adding only the following dictum of Mance LJ in Hansom and others v Makin and Wright [2003] EWCA Civ 1801 at paragraph 20:-
'… at the end of the day, the right approach is to stand back and assess the significance and weight of all relevant circumstances overall, rather than to engage in some form of 'head-counting' of circumstances."
The dictum of Mance LJ makes it clear that although the Court must go through each of the matters in the list in CPR 3.9 as a separate and distinct exercise the result is not ascertained by adding up the "score" of either side on each point. If that were the right method, there would be a danger of double-counting. The object of CPR 3.9 is to ensure that all the right questions are asked. That produces "structured decision-making". In addition to going through the subparagraph of CPR 3.9, the Court must ask itself if there are any other circumstances that need to be taken into account. However, having done all this, the Court is then also required to stand back and form a judgment to the aggregate of the relevant circumstances that have been identified in going through the list to see whether it is in accordance with the overriding objective in the CPR to lift the sanction. This overall "look see" is simply the overriding objective in action".
MY DECISION
(i) Delay in giving notice: the Claimant's solicitor assumed that the obligation to give notice did not arise until the ATE policy came into effect, some nine days after it was incepted (see Judgment paragraph 23).
(ii) Failure to give to the address of the insurer and the policy number: there was a clear intention to give a correct notice, the failures were caused simply by omission (Judgment paragraph 27).
(iii) Failure to serve by the correct method: the Claimant's solicitor thought that the Defendant would accept service electronically (see again Judgment paragraph 27).
"(38) Mrs Hurst also argued that to allow the Respondent relief from sanctions was to send out the wrong message. It was submitted that unless relief from sanctions was restricted to very strong cases, such as those where an applicant had a cast iron excuse or those where to refuse relief from sanction would be to deny a party a fair trial, the result would be that rules would simply not be complied with. He said in this case there was no explanation and it could not be said that depriving the Respondent of these items of costs was anything other than an appropriate financial penalty for the failure to observe the rules.
(39) I agree that relief from sanctions should not be granted lightly and any party who fails to comply with the CPR runs a significant risk that he will be refused relief. Thus if a party does not have a good explanation, or the other side is prejudiced by his failure, relief from sanctions will usually be refused. It is vitally important to the administration of justice that the rules of procedure are observed.
(40) It is nevertheless inescapable that the rules give the Courts the power to grant relief from sanction. Provided that power is exercised in accordance with the rules and the exercise of the discretion in granting or refusing relief is not flawed in any of the ways that I have indicated then it is not open to challenge the grant of relief by way of appeal.
(41) I therefore dismiss the appeal".