CPR UPDATE 2018

1. CPR UPDATE 2018 Chris Webb-Jenkins - chris.webb-jenkins@weightmans.com John Riddell- john.riddell@weightmans.com Weightmans LLP

2. Form of the Day • 100th amendment of CPR comes into force between 1st October 2018 and 1st January 2019 • No major changes, apart from disclosure. • Recent amendments have not introduced major changes. • Most productive to look at developing case law and how that impacts on CPR. • Costs and how to avoid them the major concern

3. CPR themes in the age of Jackson. Part 36 - JR Fundamental dishonesty - CWJ QOCs - JR Service, and Litigants in person - JR Disclosure - CWJ Detailed assessment and points of dispute - JR

4. Civil liability and emerging themes Civil Liability Bill - JR Vicarious liability - CWJ New areas of liability - CWJ Highways claims - JR Care claims - CWJ Case study - JR

5. Part 36 The present regime was introduced by the 78th update which came into force on 6th April 2015. Slightly different rules under CPR 36x for offers to settle made before 6th April 2015. CPR 36.17 – if a Claimant fails to obtain a judgement ‘more advantageous’ than a Defendant’s Part 36 offer Defendant entitled to costs and interest on costs from date relevant period expired.

6. Part 36 If judgement for a claimant is at least as advantageous to the Claimant as their proposal then claimant entitled to:- a) Interest at a rate not exceeding 10% above the base rate on sum awarded from date relevant period expired b) Costs on indemnity basis from date relevant period expired

7. Part 36 c) Interest on costs at a rate not exceeding 10% above the base rate. d) An additional amount not exceeding £75,000 being 10% of the first £500,000 awarded and 5% beyond that.

8. The rationale of Part 36. The 2015 reforms resulted from Lord Jackson’s recommendations and reforms. Costs shifted to Defendants to give access to justice and encourage early settlement. Court of Appeal in OMV Petrom v Glencore International (2017 EWCA Civ) ‘the culture of litigation has changed…..Part 36 is a regime of sanctions and rewards’ which are not entirely compensatory.

9. Costs consequences Holmes V West London Mental Health NHS Trust The Defendant was ordered to pay indemnity costs The Claimant made an offer of 95% liability in February 2017 that was accepted in May 2018. The case dawdled with procedural delays The Defendant's dilatory approach took the case, ‘out of the norm.’

10. Costs consequences continued Normally the costs awarded to the Defendant will be on the standard basis but where the circumstances justify can be on an indemnity basis – see Excelsior Commercial and Industrial Holdings v Salisbury Hammer Aspden and Johnson (2002 EWCA Civ 879.) Unreasonable refusal to enter into ADR.

11. Part 36 offer stands until withdrawn Hogg v Newton (Middlesbrough County Court 18th May 2018.) A claimant made a part 36 offer of £1,600 for the whole claim. The personal injury element was settled for £650, leaving the remaining offer open at £950. They changed Solicitors and put in a credit hire claim of £122,000. The Defendant successfully accepted the previous offer.

12. Fundamental dishonesty The CPR costs regime is heavily slanted in favour of Claimants with QOCs and the Part 36 rules. It is essential to think of ways of addressing fundamental dishonesty and other means of displacing QOCs. Fundamental dishonesty ranges from exaggerating claims to criminal cash for crash scams. A few examples follow.

13. Robert Barber v Liverpool City Council (Liverpool County Court 29th September 2017) The claimant tripped and fell on a public highway and claimed £100,000 for loss of earnings as a taxi driver. He had infact been disqualified as a driver for three years. He claimed it would be unjust to remove the QOCs protection because he had not dishonestly f

14. Robert Barber v Liverpool City Council fabricated the claim. The court disagreed, the dishonesty did not have to go to the root of liability or quantum, it merely should be fundamental to the claim overall. The Clamant was liable for the Defendant's costs of £14,500. See Gosling v Screwfix [2014].

15. Stacey Walker v West Midlands Police – Coventry County Court 19 February 2018 A claimant was found to be fundamentally dishonest when they discontinued shortly before trial. The Defendant was awarded their costs on the standard basis and given leave to enforce them. The claim arose from an RTA. The Defendant had admitted liability but disputed quantum as the impact was at 3 mph.

16. Stacey Walker v West Mids Police The Claimant, a hairdresser, complained of neck and back pain that effected her ability to lift her arms and her employment. Three days post medical assessment the claimant completed a “reaper run” which is a 10k run with 40 obstacles (at midnight)

17. Stacey Walker v West Mids Police In the week prior to the exchange of witness statements she removed posts of the reaper run from her social media account. She failed to mention it at her medical assessment or in her witness statement. The effect of fundamental dishonesty was the loss of the QOCS protection for the claimant and costs being awarded to the defendant

18. Aviva Insurance Ltd v Ahmed QBD Criminal as well as costs penalties can arise. The Claimant had clearly contrived and caused the accident and could not have believed his version of events was true. Caught by CCTV He did not respond to the costs order made against him and was given a nine month prison sentence.

19. Displacing the personal injury rule in QOCs. The Commissioner of the Metropolitan Police v Brown 31 July 2018 QOCs apply to personal injury claims. This claim was, however, a mixed claim which also included claims for misuse of data, misfeasance in a public office and misuse of confidential information.

20. The Commissioner of the Metropolitan Police v Brown The Judge therefore had the discretion to enforce the Defendant’s costs order to the extent that they considered it just. This follows the judgement in Jeffreys v Commissioner (8 May 2017.)

21. Displacing QOCs under CPR 44.15. Costs can be enforced to the full extent where - No reasonable grounds for brining the proceedings Proceedings are an abuse of court’s process The claimant’s conduct likely to obstruct the just disposal of proceedings. Also seek a civil restraint order pursuant to PD 3C

22. Taking service points. Viner v VW [2018 EWHC 2016] There was a failure to serve a claim form within the period of service. This was deliberate but in view of the court incompetent. The better approach would be to serve and seek a stay The court wold not exercise discretion to extend under CPR 7.6(2)

23. McDonald and Anor v D and F Contracts 2018 EWHC 1600. A Defendant failed to serve an Acknowledgement of Service. They did lodge a defence, albeit after the Claimant had applied for default judgement, but the Claimant successfully applied for default judgement. It was however open for the Defendant to apply to have judgement set aside.

24. Service and litigants in person Barton v Wright Hassall LLP [2018] UKSC 12. The Supreme Court refused to allow an appeal to make e-mail service by a litigant in person good service, The courts, ‘will not usually justify applying to litigants in person a lower standard of compliance with the rules.’ A former client brought a professional negligence claim. They served it by e-mail and by the time

25. Barton v Wright Hassall LLP they received notice saying the firm did not accept service by e-mail were out of time. The Supreme Court also commented that, ‘unless the rules and practice directions are particularly inaccessible or obscure, it is reasonable to expect a litigant in person to familiarise himself with the rules which apply to any step which he is about to take….’

26. Disclosure – 3 recent cases • ED&F Man Capital Markets LLP v Obex Securities LLC [2017] • Court has jurisdiction to serve application for pre-action disclosure outside the jurisdiction • Ennis Property Finance Ltd v Thompson [2017 • Permissible to redact irrelevant material from disclosed documents

27. Disclosure – 3 recent cases • Minera Las Bambas SA v Glencore Queensland Ltd [2018] • Litigation privilege only applies in favour of a party to specific litigation • Non-party cannot assert privilege over a party over which it has control

28. Disclosure Pilot • Practice Direction 51U • Consultation period, Roadshows, Civil Procedure Rules Committee • With effect from 1.1.19, for 2 years • Applies to existing and new proceedings in Business and Property Courts in: • Birmingham; Bristol; Cardiff; Leeds; Liverpool; London; Manchester; Newcastle • Not apply to County Court (at the moment)

29. Disclosure Pilot “A wholesale cultural change is required and that can only be achieved by the widespread promulgation of a completely new rule and guidelines. There will need to be a change in professional attitudes and a shift towards more pro-active case management by judges.” Disclosure Working Group, 2017

30. Disclosure Pilot • The problem is excessive cost, complexity and scale • The solution: • A 56 page practice direction • 6 different disclosure models • A new form – Disclosure Review Document (DRD) • Exhortation to parties to play nicely, and try to agree • Give key directions at first Case Management Conference

31. Disclosure Pilot • Document • email, texts, webmail, social media, voicemail, audio and visual recordings. And paper. • information that has been “deleted”, metadata, and “other embedded data which is not typically visible on screen or a print out”. • on computer systems, electronic devices, servers, back-up systems.

32. Disclosure Pilot – Initial Disclosure “Each party must provide to all other parties at the same time as its statement of case an Initial Disclosure List of Documents…accompanied by copies” Documents the party relies on Documents necessary to enable the other parties to understand the claim/defence they have to meet Do not have to search for documents

33. Disclosure Pilot – Initial Disclosure You do not have to give Initial Disclosure if: Parties agree Court orders ID will exceed the larger of 1,000 pages, or 200 documents

34. Disclosure Pilot – Extended Disclosure Within 28 days of final statement of case, parties to state in writing whether they want Extended Disclosure If any party wants ED, Claimant must serve on all parties a draft List of Issues for Disclosure within 42 days of final statement of Case Before first CMC, parties to discuss LoI and try to reach agreement. At CMC, court orders ED to follow a specific Disclosure Model.

35. Disclosure Pilot – ED Models Model A – Known adverse documents Model B – Limited Disclosure Model C – Request-led search-based disclosure Model D – Narrow search-based disclosure, with or without Narrative Documents Model E – Wide search-based disclosure Or would you prefer something bespoke?

36. Disclosure Pilot – Disclosure Review Document Document used where parties seek ED following Models C, D or E. Parties have continuing obligation to complete, seek to agree and update the DRD. Finalised DRD filed by Claimant at least 5 days before CMC. All other parties file signed Certificate of Compliance.

37. Disclosure Pilot – Disclosure Guidance Hearings Can apply for a DGH before the CMC. 30 minutes max. Court will expect “legal representative with direct responsibility for the conduct of disclosure” to attend.

38. Disclosure Pilot – ED Compliance 3 steps: • Service of a Disclosure Certificate • Identify person signing on behalf of organisation • Explain why signatory is appropriate • Service of ED List of Documents • Production of documents

39. Disclosure Pilot – acronym heaven So, if some wants ED instead of ID, before your CMC, prepare your LoI and DRD, and seek guidance at your DGH. After your CMC, serve your DC, and your EDLoD, and produce your documents.

40. Detailed assessment and points of dispute. PD 47 Commencement of detailed assessment proceedings 5.2 (a) notice of commencement N252 (b) bill of costs (c) fee notes of counsel and experts (d) written evidence of other disbursements exceeding £500

41. Detailed assessment and points of dispute (e) Statement of parties (f) if a costs management order has been made, a breakdown of the costs claimed for each phase of the proceedings – Precedent Q

42. Form and content of bill of costs PD 47 sec 5.8 (8) Where a costs management order has been made, the costs are to be assessed on the standard basis and the receiving party’s budget has been agreed by the paying party or approved by the court, the bill must be divided into separate parts so as to distinguish between the costs claimed for each phase of the last approved or agreed budget, and within each such

43. Form and content of bill of costs part the bill must distinguish between the costs shown as incurred in the last agreed or approved budget and the costs shown as estimated Bill in Parts – Part 1 being a non-phased bill showing all the incurred (pre CMO) work, Part 2 being a phased bill showing al budgeted costs (post CMO)

44. Assessing incurred costs The court can not approve incurred costs but may record it’s comments on those costs and will take those costs into account when considering reasonableness and proportionality of budgeted costs Unless the incurred costs have specifically been agreed by the paying party all incurred costs are ‘up for grabs’

45. Assessing incurred costs Look at the CMO to see if there has been any recording about hourly rates or proportionality and specifically refer to such recording in the PODs (if it assists)

46. Assessing Budgeted Costs Read the CMO and approved budget (also read your file note of the CCMC for any assistance) Whilst court may only be interested in the total figure for the phase, for negotiation purposes breakdown phase between profit costs, counsel etc.

47. Assessing Budgeted Costs The court should not depart from the CMO when dealing with detailed assessment unless there is good reason. Good reason includes Hourly rates Proportionality Phases not reached Steps not taken in a particular phase Conduct

48. Assessing budgeted costs If there are no good reasons to depart from the budgeted costs then that is the amount that you should allow If the receiving party has exceeded any phase of the budgeted costs and did not seek to revise th4e budget during the life of the matter then argue that that the appropriate time to seek departure from the CMO was when it was considered that the CMO was likely to be exceeded. PD3E 7.6

49. Points to consider Incurred costs easier to attack than budgeted costs CMO can restrict Claimant's costs Hourly rates and levels of fee earner points to attack Length of time taken – proportionality.

50. Proportionality CPR 44.3(5), According to CPR 44.3(5), costs incurred are proportionate if they bear a reasonable relationship to: (a) the sums in issue in the proceedings; (b) the value of any non-monetary relief in issue in the proceedings; (c) the complexity of the litigation;