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Written by Nicholas Lee, Managing Director and Costs Lawyer at Paragon Costs Solutions
Malone v Birmingham Community NHS Trust  EWCA Civ 1376
This case is relevant where the identity of the defendant is unknown at the time when a CFA is entered into. More importantly the case is relevant where a defendant is named incorrectly.
The judgment makes clear that where a potential defendant is named, the naming is descriptive and not prescriptive. The critical wording was construed as being that the CFA covered all work on the claimant’s behalf in respect of his claim.
Care should always be taken when preparing a CFA to ensure that it correctly identifies the work that it is intended to cover. Where a potential defendant is named, and there is no obligation to do so, it would remain wise to ensure that appropriate wording along the lines of ‘(or any other defendant)’ is inserted.
The appellant claimant was a prisoner at HMP Birmingham. He claimed that whilst in prison there was a negligent failure to diagnose that he had testicular cancer. The prison was operated by the Ministry of Justice but health care services were provided by two NHS trusts, Birmingham Community NHS Trust (the respondent defendant) and Birmingham and Solihull Mental Health Foundation Trust (BSFT).
The instructed solicitors experienced difficulties in identifying the correct defendant, corresponding with both the prison governor and the NHS Litigation Authority. Proceedings were issued on 16 August 2013 and all three potential defendants were named. On 4 October 2013, the defendant acknowledged that it was responsible for the claimant’s treatment. Proceedings were only served on the defendant and the others were removed from the proceedings by an order dated 28 January 2014. The defendant subsequently settled the claim for £10,000 plus costs.
During the course of detailed assessment proceedings, the defendant asserted that no costs were payable to the claimant because the only potential defendant named in the CFA was the Home Office and therefore it did not cover the claim against the health trust.
In a judgment dated 27 April 2015 District Judge Phillips held that the CFA excluded a claim against the defendant. In the absence of any other retainer, he held that no costs were recoverable because the claimant has no contractual liability to pay for the work done in bringing a claim against the defendant.
Permission to appeal was granted by HHJ Seys Llewelyn QC. The appeal was dismissed by HHJ Curran QC in a judgment dated 25 September 2015. Permission to appeal was then granted by Briggs LJ by an order dated 28 July 2017.
The Court of Appeal considered the provisions of the CFA and, in particular, the construction of the wording in relation to what was covered by the agreement:
All work conducted on your behalf following your instructions provided on [sic] regarding your claim against Home Office for damages for personal injury suffered in 2010.
The Court of Appeal considered numerous authorities including ICS Ltd v West Bromwich Building Society  1 All ER 98; Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd  AC 749,  3 All ER 532; Chartbrook Ltd v Persimmon Homes Ltd  UKHL 38,  AC 1101 and Wood v Capita Insurance Services  UKSC 24,  4 All ER 615.
Despite what was described as ‘poor quality drafting and little attention to detail’, the Court of Appeal found that the most natural reading of the critical wording was that the CFA covered “all work conducted” on the claimant's behalf which followed from the “instructions provided” in respect of his claim “against Home Office”. The Court of Appeal accepted the claimant’s submission that reference to “Home Office” was descriptive of the instructions received rather than the work to be done.
This construction was said to be supported by the contractual context and the wording was said to be descriptive rather than prescriptive. If the intention had been to define and limit the coverage of the CFA to claims against a particular defendant, greater care and precision would be expected and, in particular, one would not expect the named defendant to be an entity which was obviously inappropriate (since the Home Office has not been responsible for operating prisons for some years).
The Court of Appeal also noted broader contextual matters. In particular:
The Court of Appeal distinguished this case from that before HHJ Stewart QC in Law v Liverpool City Council  EWHC 90020 (costs) on the basis that in Law there was no apparent careless drafting, the named (incorrect) Council was an appropriate defendant and remained a defendant up to and including settlement. Furthermore the argument that the wording was meant to be merely descriptive rather than prescriptive did not appear to have been advanced.
Accordingly, the Court of Appeal found that the textual and contextual considerations lead to the conclusion that the CFA was properly to be construed as not being limited to a claim against the Home Office/Ministry of Justice. Accordingly the appeal was allowed.
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