Tranter v Hansons (Wordsley) Ltd, Court of Appeal - Supreme Court Cost Office, June 18, 2009, [2009] EWHC 90145 (Costs)

Resolution Date:June 18, 2009
Issuing Organization:Supreme Court Cost Office
Actores:Tranter v Hansons (Wordsley) Ltd

Neutral Citation Number: [2009] EWHC 90145 (Costs)

Claim No: 7DD04371



Clifford's Inn, Fetter Lane

London, EC4A 1DQ

Date: 18 June 2009

Before :


(Sitting as a Deputy District Judge of the Stourbridge County Court)

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Between :

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Mr Robert Marven (instructed by Nash & Co) for the Claimant

Mr James Baird (instructed by McCullagh & Co) for the Defendant

Hearing date: 28 April 2009

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Master Wright:

  1. The background to this matter is succinctly described in the narrative to the Claimant's bill of costs. On 23 March 2005 the Claimant was travelling on a bus owned by the Defendant. The driver suddenly reversed and then shot forward causing the Claimant to be thrown forward. The Claimant hit the base of her neck on a post in the bus and also sustained bruising of the right calf.

  2. On 1 April 2005 the Claimant's solicitors took initial instructions and discussed insurance and all other funding options with her and considered that funding by way of a conditional fee agreement (with after the event legal expenses insurance) was appropriate. A conditional fee agreement (with after the event legal expenses insurance) was entered into on 14 April 2005.

  3. A letter of claim was served upon the Defendant on 20 April 2005. Liability was initially denied and eventually conceded on 30 April 2007, outside the personal injury pre-action protocol period.

  4. The Claimant's medical records were obtained and several medical reports were prepared by Mr Reece on 10 November 2005, 5 February 2006 and 4 May 2006.

  5. Further medical reports were obtained from Mr Butt, consultant orthopaedic shoulder specialist on 5 February 2007, 24 April 2007 and 8 May 2007. An interim care schedule and schedule of special damages were then prepared.

  6. Disclosure ensued and the Defendant made a Part 36 offer in the sum of £6,000. Proceedings were issued on 30 October 2007. The Claimant rejected the Defendant's offer and on 14 December 2007 made a counter offer in the sum of £14,000. Negotiations ensued and on 21 December 2007 the Claimant accepted an offer in the sum of £10,000 with costs to be assessed if not agreed. The Consent Order was made on 18 January 2008.

  7. The Claimant commenced detailed assessment proceedings on 30 June 2008. Points of Dispute and Replies were served and the Claimant requested a detailed assessment hearing on 4 August 2008. By a further Consent Order dated 16 December 2008 the detailed assessment was transferred to the Supreme Court Costs Office.

  8. In the Points of Dispute the Defendant says, under the heading ``General Point 1 CFA Enforceability - BTE Cover'':

    ``The receiving party seeks recovery of costs incurred under the terms of a conditional fee agreement.

    The receiving party is requested to provide a copy of the conditional fee agreement upon which she relies in order that the paying party and the court can be satisfied as to the extent of the rights and obligations thereunder.

    The paying party requests confirmation of the identity and the level of qualification of the individual who provided the oral explanation as required by Regulation 4 of the Conditional Fee Agreement Regulations 2000, the date that explanation was given and a copy of the written notification of the explanation as required by the Regulations.

    The paying party understands that legal expenses cover was available to the receiving party under the motor policy of the vehicle in which she was travelling at the time of the accident. The legal expenses cover was provided on the policy with DAS Insurance and it was confirmed by the receiving party in a telephone call on 27 February 2008.

    On the information currently available it appears that the receiving party's solicitors were not aware of this cover, and therefore a genuine issue arises as to whether proper consideration was given to the availability of pre existing legal expenses cover in accordance with Regulation 4-2(c) of the CFA Regulations 2000 before entering into the CFA. The Court will be requested to consider in detail the Conditional Fee Agreement relied upon by the receiving party, together with the oral explanation note/attendance note relied upon by the receiving party's solicitors. Notwithstanding the guidance in Garrett v Halton Borough Council and Myatt and Ors v National Coal Board [2006] EWCA Civ 1017 and also Sarwar v Alam [2001] EWCA Civ 1401 (which is likely to have been in the solicitor's mind at the time of considering these matters), the failure to identify the cover implies that the consideration was insufficient and that there has been a breach of the regulations with a materially adverse effect upon the protection afforded to the Claimant.

    As a consequence the agreement is not enforceable between solicitor and client within the provisions of Section 58 of the Courts & Legal Services Act 1990 (as amended by the Access to Justice Act 1999) and consequently costs are not recoverable between the parties pursuant to the indemnity principle.

    The paying party will refer the Court to the judgments in the following cases:

    The Accident Group Test Cases - Sharratt v London Central Bus Company Ltd

    Samonini v London General Transport Services Ltd (Senior Costs Judge Master Hurst [2005] EWHC 90001 (Costs)

    Sarwar v Alam [2001] EWCA Civ 1401

    Culshaw v Goodliffe [unreported HHJ Stewart QC 24 Nov 2003]

    Adair v Cullen [unreported HHJ Holman 14 Jun 2004]

    Hollins v Russell [2003] EWCA Civ 718

    Garrett v Halton Borough Council and Myatt and Ors v National Coal Board [2006] EWCA Civ 1017''

  9. In the Reply the Claimant says that a copy of the conditional fee agreement had been supplied. The Reply goes on to say that oral advice was undertaken on 1 April 2005 by Sara Aitcheson of Mason & Co (the Claimant's then solicitors) and also by Roberta Mason on 14 April 2005 prior to signing the conditional fee agreement.

  10. In response to the request for a copy of the written notification of the explanation, the Reply says that the Defendant is not entitled to such documentation. The Reply says:

    ``The bill of costs has been certified as being accurate and therefore the paying party must raise a genuine issue in order to look behind the certifications on the bill. Hazlett v Sefton Metropolitan Borough Council. The Defendant has failed to raise a genuine issue.''

  11. The Reply then says:

    ``At the time the CFA was entered into investigations took place into whether the Claimant had any legal expenses insurance which would have covered this claim.

    The Claimant was a passenger on the Defendant's bus when on 23rd [January] 2005 she was injured.

    It is accepted that Mason & Co did not make any enquiries into LEI from the Defendant before executing the CFA dated 14th April 2005.

    Regulation 4(2)(c) required a solicitor to ``inform'' a client ``whether [she] considers that the client's risk of incurring liability for costs ... is insured against under an existing contract of insurance''.

    The Claimant relies on Dole v ECT Recycling Limited (SCCO 17th September 2007) in which Master Rogers held that the CFA was enforceable.

    In Dole the Claimant's uncontradicted evidence was that...

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