When has a trial commenced pursuant to CPR 45?

When has a trial commenced pursuant to CPR 45?

coins3James Arney, a barrister at Temple Garden Chambers, discusses the High Court judgment in James v Ireland which considers when a trial has commenced, so as to trigger an automatic entitlement to a 100% success fee.

James v Ireland

[2015] EWHC 1259 (QB), [2015] All ER (D) 66 (May)

The Civil Procedure Rules 1998, SI 1998/3132, Pt 45 (CPR) (in force at the relevant time) provided for a fixed percentage by which the amount of a legal representative’s fee could be increased in accordance with a conditional fee agreement (CFA) which provided for a success fee. Section III dealt with road traffic accident claims. The defendant appealed from an order of which held that for the purpose of CPR 45.16 and 45.17 the trial of the action had commenced and accordingly the claimant was entitled to recover a success fee of 100% on base costs. The Queen’s Bench Division, in allowing the appeal, held that the master had erred in treating the start of a hearing related to the liability issue as the start of the contested hearing of that issue.

Briefly, what was the background to this costs dispute?

This costs dispute arose out of a personal injury claim in which the claimant ultimately achieved a seven figure damages award by consent. Prior to that settlement the claim had previously been listed for a three-day trial of liability and quantum issues, at which the parties, their advocates and witnesses were in attendance. After lunch on day one, following a contested application by the claimant, the quantum issues were adjourned to another day. Thereafter the parties sought and were granted more time to investigate matters arising from new liability disclosure. Part way through day two, with more time still required and insufficient court time left to conduct the trial, the claim was stood out. At first instance the costs master found that the trial had commenced once the quantum trial had been adjourned. On appeal, Mrs Justice Slade reversed that decision, and found that at no time did the trial commence, such that there was no automatic entitlement to a 100% success fee.

What issues did the case raise? Why is it significant?

CPR 45.16(1)(a) and 45.17(1)(a) provide that a 100% uplift in solicitors’ and counsel’s fees are allowed where a CFA has been entered into where the claim concludes at trial. The appeal turned on the meaning of a claim ‘concluding at trial’.

The decision is directly applicable to CPR 45 and the fixed uplift regime. It may also assist in determining similar issues arising in respect of additional liabilities falling outside the fixed uplift regime, where CFAs contain similar wording.

The decision will affect the full range of personal injury claims, from cases such as this (where the parties were both represented by silks and the potential success fee element at stake exceeded £300,000), to modest value claims that more frequently go to trial. It may particularly impact on negotiations at the court doors as to the consequence of settlement not being reached and the trial commencing.

To what extent is the judgment helpful in clarifying the law on this issue?

Prior to this decision, there were potentially inconsistent decisions as to what constituted a trial commencing. For example:

In Gandy v King [2010] EWHC 90177 (Costs) (a case concerned with the wording of a CFA rather than CPR 45) the court had held that where the claimant had sought and been granted an adjournment until 2pm on the day of the trial, and the case settled before the parties’ return at 2pm, the trial had not commenced and there was no automatic entitlement to a 100% success fee.

In Loizou v Gordon and another [2012] EWHC 90221 (Costs) the defendant’s advocate unsuccessfully sought an adjournment in circumstances where his client and witnesses had not attended court. During a five minute adjournment after refusing to adjourn the trial to another day, liability was conceded on behalf of the defendant. The court held that the trial had commenced.

In finding for the appellant in James v Ireland, Slade J found the Gandy decision of assistance, dealing as it had with the same wording, even if not expressly concerned with CPR 45. By the same reasoning, this appeal decision ought to be persuasive in non-CPR 45 cases, but where CFAs use similar terminology.

While Slade J emphasised that each case will turn on its own facts, the facts in this appeal were quite striking:

  • this was not a matter of a quick adjournment at the start of day one—it involved attendance by silks and witnesses for more than a day, and included a fully contested application to adjourn lasting more than half a day
  • it concerned both a contested application to adjourn (quantum), and joint/unopposed requests by the parties for more time
  • at all times the judge would have been ready to start the trial, save at the end when there would have been insufficient time to conclude it
  • some significance was attached to the language used by the judge and the advocates—for example, their discussion about whether to reserve the case to the same judge, indicating that they did not consider this to be automatic, was viewed as supportive of the trial not having started

Ultimately Slade J emphasised that calling the case on and counsel entering court, the ‘hearing’ commencing and submissions being made, were not sufficient for the ‘trial’ to have commenced. The nature of the hearing was ultimately procedural and related to case management. The ‘final contested hearing’ had not begun.

What does the case mean for personal injury lawyers and their clients?

On the occasions that such substantial cases come to trial but are not effective, this decision will be instructive as to whether, on the facts, the trial had commenced. It should therefore shape subsequent advice as to the extent of the success fee for the purpose of adopting a realistic stance when quantifying costs.

More interesting is the potential impact on the many lower value claims which reach at least the doors of the courts. Insofar as there may be reluctance by paying parties to step through the doors of the court without a concluded agreement, or where judicial clarification is needed or more time is sought, this decision may provide assistance as to what is and is not likely to trigger the commencement of the trial and automatic entitlement to the 100% uplift. Advocates ought to be familiar with the judgment, and paying party advocates should ideally be armed with a copy, to help resist unmerited claims for a 100% uplift.

While changes to the rules governing inter partes recoverability of additional liabilities mean that some of these issues have a limited shelf life, for so long as old regime cases continue their run off, they will have widespread application. Thereafter the case will remain relevant to any issue which engages the question of whether a trial has commenced. Eventually, under the new costs regime, the focus may shift to disputes between lawyers and clients, where the commencement of the trial may, under the terms of a CFA, entitle the lawyers to an enhanced uplift. In that scenario, this decision may offer protection to the client.

How does this decision fit in with other developments relating to costs?

This decision is consistent with a general downward pressure in respect of litigation costs. The automatic 100% uplift is intended to reflect the risks of commencing a trial. If the first instance decision had stood, the application of an automatic 100% uplift may have been viewed as something of a windfall, thereby bucking the current trend of reducing costs.

Are there any further observations you wish to add?

This case involved a discreet point, where first impressions (that a trial must surely have started if silks and witnesses attend for one and a half days when listed for trial) did not withstand a more forensic analysis. While these cases turn on their particular facts, the decision is likely to offer strong guidance in circumstances where the facts are less favourable to the receiving party.

The case is currently ongoing in respect of the claimant’s application for a discretionary uplift from the fixed 12.5% success fee, although the outcome of this will not affect the principles established in the appeal.

James Arney specialises in personal injury and costs work. In James v Ireland he was counsel for the successful appellant, instructed by Daniel Carnall at Kennedys Law LLP.

Interviewed by Kate Beaumont.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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