Children and Protected Parties

Articles, News | Tue 14th Dec, 2021

A summary of the Practice Note by the Senior Costs Judge: deductions from damages

  1. On 2 December 2021, the Senior Costs Judge, published some helpful guidance on the approval of costs settlements, assessments under CPR 46.4(2) and deductions from damages, as it relates to children and protected parties.
  2. It is helpful because there are a number of different provisions in the CPR as to when and in what circumstances costs should be either summarily assessed or subject to detailed assessment. These provisions had hitherto caused occasional difficulties for practitioners when faced with, in particular, dealing with applications for costs that are to be deducted from the child or protected party’s damages. These difficulties were clearly noticed by the SCCO, hence the publication of this timely guidance.

THE RELEVANT PROVISIONS OF THE CPR

  1. Of course, CPR 21.10 requires any settlement on behalf of the child or a protection party to be approved. In this note children and protected parties are referred to as ‘P’, unless otherwise stated.
  2. CPR 46.4(2)(a) provides that where money is ordered or agreed to be paid to P, there must be a detailed assessment of the costs payable by or out of P’s money. The costs payable from P’s award must be limited to that amount (CPR 46.4(4)). On assessing those costs, the court must also assess in detail the costs payable to P (unless there is a default cost certificate or fixed costs apply); CPR 46.4(2)(b).
  3. If the costs payable by P compromise only of a CFA success fee or the balance under a DBA, the court may direct a summary assessment (CPR 46.4(5)). But note that only in circumstances where the such costs are incurred by a child (and not a protected adult) in a PI claim and where damages do not exceed £25,000, should those costs be summarily assessed (CPR 21.12(1A)).
  4. Note that CPR 21.12(1A) provides that the only recoverable costs in respect of a child are:
  • costs flowing from a detailed assessment under CPR 46.2(2);
  • those summarily assessed costs under CPR 21.12(1A); and
  • those costs incurred where a detailed assessment has been dispensed with under CPR 46.4(3) as provided for by the exceptions listed at CPR PD 46, paragraph 2.1.
  1. Those exceptions to the general rule that costs are to be assessed in detail contained in the PD 46 are as follows:
  • where there is no need to do so to protect the interests of the child or protected party or their estate;
  • where another party has agreed to pay a specified sum in respect of the costs of the child or protected party and the legal representative acting for the child or protected party has waived the right to claim further costs;
  • where the court has decided the costs payable to the child or protected party by way of summary assessment and the legal representative acting for the child or protected party has waived the right to claim further costs;
  • where an insurer or other person is liable to discharge the costs which the child or protected party would otherwise be liable to pay to the legal representative and the court is satisfied that the insurer or other person is financially able to discharge those costs; and
  • where the court has given a direction for summary assessment pursuant to CPR 46.4(5).
  1. CPR 21.12 makes parallel provision for the recovery of costs by a litigation friend of P.
  2. The practice note then sets out some scenarios (not referred to as such in the guidance, but used for ease of reference in this note) and some proposed precedent orders. These should be the starting point (and most possibly also the end point) for all those concerned with drafting orders for such hearings.

SCENARIO ONE

  1. In normal circumstances, the Court approving the settlement of the claim will have a costs provision that any costs will be subject to detailed assessment or that detailed assessment is to be dispensed with on the exceptions referred to above. If there is no provision dispensing detailed assessment on those grounds, the order may refer to detailed assessment being dispensed with if the exceptions are met in due course.

SCENARIO TWO

  1. Where a detailed assessment has been ordered, but those costs have been agreed or waived by P’s legal representatives, the costs settlement can be approved under CPR 21.10 and an application to the SCCO should be made under CPR 23. Note this precedent order for this purpose:

On [ ] before Costs Judge [ ] sitting in Court [] at The Royal Courts of Justice, Strand, London

UPON the settlement of the costs between the parties

AND UPON the Claimant’s solicitors waiving any claim against the Claimant or any other person for costs and disbursements not recovered from the Defendant

IT IS ORDERED THAT:-

  1. The settlement of costs between the parties at £ [ ] inclusive of interest and costs of assessment, is approved under CPR 21.10.
  2. The Claimant’s costs payable by the Defendant are assessed at the agreed figure and assessment between solicitor and client is dispensed with under Practice Direction 46 paragraph 2.1(b).

SCENARIO THREE

  1. Where there is no PD 46 exception and only a CFA success fee or DBA is sought (and summary assessment is not precluded by CPR 21.12(1A), see above), an application to the SCCO may be made again under CPR 23 for summary assessment under CPR 46.4(5) in the following proposed terms:

On [ ] before Costs Judge [ ] sitting in Court [ ] at The Royal Courts of Justice, Strand, London

UPON the application of the solicitors for the Claimant under CPR 46.4(5)

IT IS ORDERED THAT:-

  1. The success fee/balance payable to the Claimant’s solicitors under the Conditional Fee Agreement/Damages Based Agreement dated [ ] is assessed at [£ ].
  2. The Claimant’s costs payable by the Defendant are assessed at [the agreed figure] [(inclusive of interest and the costs of detailed assessment proceedings)].
  3. The costs and disbursements payable by the Claimant to the Claimant’s solicitors are limited to the sums assessed under paragraphs 1 and 2 above.

SCENARIO FOUR

  1. On occasion, parties had sought to ‘approve’ or ‘certify’ payment of costs by P to their legal representatives in a proposed order. This is no longer likely to be deemed appropriate. Either detailed assessment is dispensed with, in the terms reviewed above, or a request for detailed assessment must be filed in form N258 with the appropriate fee.
  2. In such circumstances where inter-partes costs are agreed and therefore (usually) assessed in that agreed sum, the paying party does not need to attend the detailed assessment hearing. The N258 form should clearly state that costs have been agreed and the purpose of the hearing is to assess the costs/disbursements sought by P’s legal representatives. Again the following terms are proposed as a precedent:

On [ ] before Costs Judge [ ] sitting in Court [ ] at The Royal Courts of Justice, Strand, London

UPON the court being notified that the costs payable by the Defendant to the Claimant have been agreed

AND UPON the court’s own initiative

IT IS ORDERED that:

  1. The assessment of the costs payable to the Claimant by the Defendant and payable by, or out of money belonging to, the Claimant pursuant to CPR 46.4(2) is listed for [ ] with a time estimate of [ ] (attendance by the Defendant is not required).
  2. [The hearing is to be held by Microsoft Teams, and the Claimant’s solicitors are to provide the court, at least 7 days before the hearing, with email addresses so that invitations may be sent to all persons attending].
  3. The Claimant’s solicitors shall by 4 pm on [ ] (a) provide a copy of this order to any appointed Deputy and Litigation friend by way of confirmation that they may attend the hearing if they wish, and (b) confirm to the court that that has been done.
  4. The Claimant’s solicitors shall file copies of the first General Order of the Court of Protection (if made) together with any subsequent Orders or Authorities relating to the claim.
  5. The Claimant’s solicitors shall at least 7 days before the hearing (i) file in either paper or electronic form the relevant underlying papers at the SCCO for Costs Judge [ ] to whom the case is allocated; (ii) file a skeleton argument as to the reasonableness of the costs and disbursements sought by the Claimant’s solicitors in excess of those recovered from the Defendant.
  6. Where the payment of a success fee is in issue those papers will include: the conditional fee agreement/s, the risk assessment/s and any attendance notes relevant to the issue of the risk undertaken by the solicitors at the time the CFA was entered into.
  7. Where the cost of an ATE premium is in issue the papers should include the insurance certificate, a copy of the policy, any risk assessment, any relevant attendance notes and the advice given to the litigation friend about the policy and the need to take it out.
  8. The papers should also include (unless already filed) the Bill of Costs or any breakdown of costs which formed the basis of the negotiations between the parties.
  9. This Order has been made on the court’s own initiative and without a hearing. Any party affected by this Order may, within 7 days of its receipt, apply to the Court to set aside, vary or stay its terms.

15. An important feature to this order is the inclusion of a direction in relation to ATE insurance. It is no longer appropriate, as referred to above, to simply certify (or attempt to) that such costs are payable by P in the context of wider agreed inter partes costs. Practice in the SCCO in relation to the ATE insurance premiums (if sought from P) varied. Some Judges required detailed evidence and some required less detailed evidence. The inclusion of this direction in this precedent tends to put any doubt on this issue to bed; those seeking payment of an ATE premium must become armed with detailed evidence on this issue at assessment.

16. The new guidance notes that the costs of such a hearing are unlikely to fall at the feet of P, the hearing being primarily for the benefit of the legal representatives (moreover ‘it is not incumbent upon the child or protected party to bear the attendant costs’). The guidance goes on to state that ‘for that reason, unless the child or protected party’s litigation friend or Court of Protection deputy takes issue with the costs sought by the legal representatives and participates in the detailed assessment of those costs, the court is likely to make no order as to the costs of the detailed assessment process beyond any figure agreed with the paying party’.

17. Helpfully the guidance contains a further precedent to be submitted at the conclusion of such a costs hearing:

On [ ] before Costs Judge [ ] sitting in Court [ ] at The Royal Courts of Justice, Strand, London

UPON hearing [Counsel/Costs Lawyer] for the Claimant’s Solicitors

AND UPON the Court noting that the Claimant and Defendant have agreed the costs payable pursuant to the Order of [ ] dated [ ] in the sum of [ ] [(inclusive of interest and the costs of detailed assessment proceedings)]

AND UPON the Court carrying out a solicitor and own client assessment pursuant to CPR 46.4(2)(a)

AND UPON the Claimant’s Litigation Friend [and Deputy] confirming that [they] do not wish to attend the hearing on [ ]

IT IS ORDERED THAT:-

  1. The costs payable to the Claimant by the Defendant are assessed in the agreed sum.
  2. Pursuant to CPR 46.4(4), the Court certifies the further sum of [ ] as payable by the Claimant (protected party) to his/her Solicitors.
  3. The Claimant’s Deputy [ ] has permission to release, within 28 days, the sum of [ ] for such payment from funds currently held on client account to [ ].
  1. The Practice Note is authoritative and provides a useful road map through the provisions. It is a must read for all those engaged in the preparation for costs issues arising from proceedings involving P. Practitioner must note that the provisions are similar but not identical for children and protected parties. The guidance is found here: https://www.judiciary.uk/announcements/practice-note-by-the-senior-costs-judge-deductions-from-damages/

ECL

09.12.2021

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