Solicitors right to throw off “shackles” of legal aid for CFA

Herbertson: Decision vindicated

The High Court has described as “reasonable” a decision by claimant lawyers that they needed the “freedom” of a conditional fee agreement (CFA) and shake off “the shackles” of legal aid to properly conduct a medical negligence claim.

In the latest case about the pre-LASPO transfer of a claim from legal aid to a CFA, the court heard evidence from Lesley Herbertson, a partner at Potter Rees Dolan in Manchester, that the firm started to have “difficulties” in instructing its preferred medical experts because of restrictions on fees imposed by the then Legal Services Commission (LSC).

Sitting in Liverpool, Mr Justice Dingemans said the Community Legal Service (Funding) (Amendment Number 2) Order 2011 came into force on in October 2011, and set out a schedule of fixed hourly rates allowed by the LSC for medical experts in and around London.

Dingemans J said that although the order did not apply to this claimant, referred to as AB, because legal aid had been granted in December 2010, the evidence from Ms Herbertson was that the order had an impact on this case as well as others.

“Ms Herbertson exhibited correspondence from other cases, details of which had been redacted, to which the 2011 order also did not apply showing that the LSC referred to the rates under the 2011 order to justify restricting the hourly rates paid to experts.

“There was also evidence showing that a request for funding a neurosurgeon at £345 per hour in another case was refused and the LSC reported that they had not authorised payment of more than £200 per hour for an expert since 2006.”

The court heard in AB v Mid Cheshire Hospitals NHS Foundation Trust [2019] EWHC 1889 (QB) that AB was a motorcyclist injured in a traffic accident in 2000. He was operated on for broken legs and an arm during which he suffered catastrophic brain injuries and is now a tetraplegic.

His mother instructed Potter Rees Dolan to investigate his claim against the NHS trust in 2010, and reports were obtained from three experts, but Ms Herbertson said that, at a conference in 2012, they were in “complete disagreement” about the cause and timing of the brain injuries.

However, the trust accepted liability in 2014 and a settlement was agreed in 2017, consisting of a lump sum of £3.8m with annual periodical payments of £245,000. By the end of the process, a total of 12 experts had been instructed on the claimant’s behalf.

Dingemans J said one of the three original experts agreed to cut his fee to £200 per hour, after the LSC said it would not pay any more than that. The other two were paid at the same rate.

AB’s mother and litigation friend decided to discharge the legal aid certificate and sign a pre-LASPO CFA in February 2013. The final bill was for just over £1m, nearly a third of which was success fees. The after-the-event insurance premium was £29,250.

The trust argued that the switch from legal aid to a CFA was unreasonable and so the additional liabilities should not be recoverable.

“AB contended that the change was reasonable because numerous experts would be required in circumstances where the LSC was limiting the field of available witnesses through the imposition of unattractive hourly rates.”

Deputy District Judge Harris, sitting as a regional costs judge, ruled in favour of the claimant, saying he was “just about” persuaded that is solicitors “decided they needed the freedom of a CFA and to be free of the shackles of the LSC, in order to properly conduct the litigation”.

Dingemans J agreed that the decision was reasonable because of the need to instruct another expert in place of one already instructed as a result of the dispute on the issue of causation.

The judge said causation was “critical” to the success of the claim.

“In circumstances where experts had already been instructed and hourly rates had already been an issue for one of them (although he had reduced his rate) and given the problems with other experts being caused by the approach of the LSC to hourly rates, a new funding arrangement was reasonably considered necessary to be made,” he ruled.

A key issue that has tripped up claimant solicitors in similar cases has been a failure to advise on the impact of losing the 10% Simmons v Castle uplift as a result of switching to a CFA. Here that would have amounted to £18,000.

Ms Herbertson argued that the failure to advise on it was not important given that the central reason for changing funding was to instruct the right experts to prove the claim.

Dingemans J agreed with the regional costs judge that, with the prospects of success assessed at 51%, unless the issue of causation was resolved there would not be any recovery by AB, let alone a 10% uplift.

“In these circumstances the regional costs judge was entitled to find that the reasonableness of the decision to change funding was not affected by the failure to advise on this point.”

DDJ Harris had also accepted the evidence of the mother that advice on this point would not have made any difference to her decision.

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