8 September 2015Print This Post

Client did not give informed consent to move from legal aid to CFA, costs judge rules

Rowley: the Simmons damages were of significance

Rowley: the Simmons damages were of significance

A client who was not told of the 10% Simmons uplift to damages that would be introduced post-LASPO did not provide informed consent when agreeing to move from legal aid funding to a ‘CFA Lite’ ahead of the LASPO reforms, a costs judge has decided.

Master Rowley ruled that “the failure to give advice regarding the post LASPO landscape and in particular the Simmons damages, in my view rendered the advice to be insufficient on which to found any proper or reasonable conclusion”.

He was ruling in Surrey v Barnet & Chase Farm Hospitals NHS Trust [2015] EWHC B16 (Costs), a clinical negligence case which was funded under legal aid for seven years, during which time liability was agreed.

With quantum still at issue, the client – a minor represented by his mother as litigation friend – was then moved to a conditional fee agreement and after-the-event insurance before the Legal Aid, Sentencing and Punishment of Offenders Act 2012 was implemented on 1 April 2013.

The court heard that the claimant’s solicitors, Irwin Mitchell, had asked all case-handlers to review their legally aided cases ahead of the reforms and decide whether the client would be in a better position with a CFA and ATE funding. Here the fee-earner decided that he would for multiple reasons.

After damages were agreed in November 2013, detailed assessment proceedings were begun and within the total costs claimed was a success fee of £57,000 and ATE premium of £51,000. The defendant argued that the decision to switch funding was not reasonable.

Of the various reasons given for the switch, Master Rowley considered the strongest to be the inevitability of the claimant having to pay a costs shortfall under legal aid, which would not happen with a CFA Lite.

He also said there was no objection to advice being provided to a client on the basis of a particular outcome being preferable, or “nudging” the client in a particular direction, while “there can be no criticism of a solicitor who gives cautious advice on a voyage into unchartered waters”.

But this was all predicated on the solicitor setting out the various options “fully and properly”, especially given that here the Simmons uplift would have meant up to £20,000 extra in damages.

He said: “There is no evidence before me to indicate whether the claimant or his litigation friend would have considered the abandoning of up to £20,000, which was more or less guaranteed, in return for peace of mind regarding future funding.

“They may have decided that the system that had apparently worked for seven years was unlikely to break down in the final stages and they would rather have the money and risk the funding issues. They may have taken the view that QOCS protected them sufficiently not to incur an ATE premium. The possibilities for speculation are endless.

“What is certain, however, is that the Simmons damages were of significance and so should have been explained to the claimant’s litigation friend so that informed consent to a change in funding could be given. The absence of any evidence from the litigation friend on this point, to my mind, speaks volumes.

“In the absence of being informed of these issues it seems to me impossible to say that the claimant can have made a reasonable choice to change funding arrangements. Consequently, I find that the additional liabilities flowing from the new arrangements are unreasonably incurred and as such are not recoverable from the defendant.”

By Neil Rose


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