This article was published in BLM's healthcare update, click here to see the full edition.
This case provides helpful judicial guidance as to how the courts will address proportionality and it will particularly resonate in low value claims.
- The damages sum in issue will be relevant in the assessment of costs. This judgment will hopefully send the message that wholly disproportionate bills of costs will no longer be tolerated by the courts.
- Costs must be proportionate and, even if costs are necessary (i.e. the claimant stating that work was necessary by virtue of complexity or a defendant unreasonably not settling a claim), the proportionality test will still be applied.
- It is important for claimant's representatives to understand that clinical negligence cases will not be considered complex just by virtue of their clinical setting.
Summary of issues
Mr. Hobbs was 80 years old when he discovered a lump near his ear. He attended his GP who requested an urgent appointment at the hospital clinic. According to the expert evidence in the case (all obtained by the claimant) there was a delay in this appointment being arranged and this caused a five week delay in the surgical removal of a lump.
The claimant retained Simpson Millar solicitors on 25 September 2012 who obtained legal aid to pursue his claim but he passed away on 29 April 2014. His wife continued to bring the claim on behalf of his estate under a (post April 2013) CFA.
The claimant’s solicitors engaged three experts (oncology, plastic surgery and anaesthetics) and organised a conference with counsel before serving a letter of claim on 23 January 2014. In their letter of response, the defendant admitted a 2-3 week delay and made a part 36 offer of £1,500 on 13 May 2014.
The case ultimately settled for £3,500 and the claimant submitted a bill of £32,329.12 (the bill was nine times as much as the damages).
Master O’Hare carried out a provisional assessment and found that the reasonable costs of the claim amounted to £11,000, but made a further deduction on the basis of proportionality to £9,879.34. The claimant requested a post-provisional assessment.
Master O’Hare made the following findings (applicable to the post April 2013 costs):
- He maintained that a deduction had to be made on the original bill for costs unreasonably incurred, specifically disallowing:
- The Grade A rate (£300PH) – this was a claim that had “no complexity worthy of mention and no public importance” and in submissions the claimant’s representative had “greatly over-estimated the complexity and importance of this case and substantially under-estimated the abilities of an average middle range Grade B fee earner.” A grade B rate (£200-210PH) was allowed.
- The costs associated with the conference as this was “at best, premature” and “On the basis of experts' reports received, a conference is NOT a reasonable step for a Grade B fee earner to take”.
- The test to be applied to these costs was set out in CPR 44.3 (2) and (5) which state:
(2): "Where the amount of costs is to be assessed on the standard basis …Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred…"
(5): "Costs incurred are proportionate if they bear a reasonable relationship to—
(a) the sums in issue in the proceedings;
In applying this test, Master O’Hare stated that proportionality was not the lowest amount which the claimant could reasonably have been expected to spend in order to have this case conducted and presented proficiently but involved consideration of “the amount of sums in issue” and that “proportionality trumps necessity”.
In addition, whilst it was true that the claim would have been avoided if the defendant had accepted liability “the ordinary steps taken by the defendant in these years did not…amount to conduct which put the solicitors to "additional" work in this case”.