The John M Hayes Partnership have proven to be professional, effective and knowledgeable Costs Draftsmen. The quality and speed of their drafting is excellent and the advice received has been detailed and pragmatic.
The High Court has recently ruled in relation to payments on account of costs in CFA funded matters.
XYZ –v- Various  EWHC 1151 (QB) is a group action made by almost 1,000 women against private hospitals in relation to the supply of the defective PIP breast implants. Trial was originally listed in October 2014, but this was adjourned following an application in September 2014, to await the outcome of a Part 20 claim between one of the Defendants, Transform, and its insurers, Travelers. Transform and Travelers were ordered to pay the costs of the application and the costs occasioned by the adjournment, as was agreed between themselves and the Claimants. Mrs Justice Thirlwall also ordered that a payment on account of those costs be made to the Claimants, the amount to be assessed on paper if not agreed.
The Claimants served a costs schedule totalling over £700,000. There was no negotiation or agreement and therefore written submissions were requested.
The Defendants’ submissions included that a payment on account of costs would amount to a breach of the indemnity principle under the CFA, as the Claimants had not yet won the claim and therefore had no current liability for costs.
In her judgment, this argument was quickly rejected by Thirlwall J.
“In my judgment a payment on account of costs here would not involve a breach of the indemnity principle”. The Solicitor for the Claimants highlighted the relevant paragraphs from the Conditional Fee Agreements, which read "Where a summary assessment of costs or payment on account is made in your favour, you are immediately liable to pay your share of Hugh James's charges to the extent of the relevant summary assessment or payment on account" and "if on the way to winning or losing you win an interim hearing, then we are entitled to payment of our basic charges and disbursements related to that hearing together with a success fee on those charges if you win overall".
The Defendants subsequently attempted to argue that no order should be made and that the matter should be left to the Costs Judge. This was also rejected, with Thirlwall J saying “There is no good reason not to order that Transform and Travelers pay a reasonable sum on account of costs”.
The question of what was a reasonable sum was thereafter considered, focusing on Counsel’s fees, Solicitors fees and the costs of a pre-trial conference.
It was noted, but no issue was taken, with the fact that the Claimants had two leading Counsel and two junior Counsel instructed, given the number of parties represented and involved. However, disparity was noted between the brief fees for the barristers for each party, with the Claimants’ brief fees being £150,000/£125,000 and £150,000/£110,000 for the two Leading and two Junior Counsel respectively (excluding success fees), compared to £80,000 and £40,000 total fees respectively for Transform. Therefore half of the brief fees as agreed were allowed on account. No issue was taken with the principle of full brief fees being payable, given timing of the adjournment of the trial. Thirlwall J said “The Defendant and its insurers knew for months about the difficulties between them. The Claimants' team did not. In those circumstances there can be no legitimate complaint about the delivery of the briefs with full fees”.
In relation to the Solicitor’s fee’s the sum claimed of £20,000 was said to be “plainly reasonable” and there was thought to be “an overwhelming likelihood… that this sum will be awarded in full”. On that basis but “out of an abundance of caution”, Thirlwall J awarded 80% of the Solicitor’s costs claimed.
No payment on account of costs was allowed in relation to a pre-trial conference that went ahead despite the adjournment. It was argued that the conference would be necessary in any event and so the costs were not thrown away. The Claimants therefore argued that they should recover the costs on account, but Thirlwall J found that “This overlooks the fact that if… the Defendants succeed at trial they will have paid costs which were not truly thrown away and for which they were not liable. That is not to say that the Claimants may not, in the end, be entitled to these costs, but at this stage I am not prepared to order an interim payment under that head”.
Overall, an interim payment was awarded to the Claimants in the sum of £283,500.