26
Oct
20
Articles, Travel & Cross Border Claims
The Weekly Roundup: The Boris Karloff Edition

Did you know that Boris Karloff made over 200 films in the course of his distinguished career? Nearly as many films as the team at 1CL has done webinars. This week in preparation for Halloween the Weekly Roundup is an homage to one of the greats of the horror genre.

Mindful of our promise not to crow about our various successes, we will remain as silent as The Devil’s Chaplain about our rankings in the latest edition of Chambers. We won’t draw to your attention our reputation as ‘one of the leading chambers for cross-border personal injury work’, with ‘a strong group of highly regarded practitioners’, including ‘great advocate’ Matthew Chapman, ‘realistic and pragmatic’ Sarah Prager, ‘extremely diligent’ Jack Harding, and ‘very persuasive’ Andrew Spencer. Wouldn’t dream of mentioning it. Mummy’s the word.

Vultures of the Sea

Regular readers will recall that we are keeping half an eye on the American litigation against Princess Cruise Lines and its parent, Carnival Corporation, arising out of the outbreak of Covid 19 aboard the Grand Princess during her Hawaii cruise in February of this year. The claims centre around the allegation that Princess was aware that a number of passengers on the vessel’s previous cruise had contracted Covid 19, but did not do enough to protect holidaymakers on the Hawaii trip, allowing them to continue to gather in numbers even after some of them had begun to show symptoms of the virus.

Last month a Californian judge in a class action against both Princess and Carnival dismissed the claim against the latter on the basis that it had not been properly pleaded as the alter ego of the former; and also dismissed the claims in negligence and gross negligence for lack of causation (cf Archer v Carnival Corporation 2:20-cv-04203, USDC, CDCA). He allowed a claim for intentional infliction of emotional distress to go forward, however.

Now the court has refused to allow the class action to go ahead as such, with the effect that each individual plaintiff will now need to bring proceedings in his or her own name. The judge refused certification as a class action on the basis that the Defendant’s standard terms and conditions contain a clause to this effect:

“This Passage Contract provides for the exclusive resolution of disputes through individual legal action on your behalf instead of through any class or representative action. Even if the applicable law provides otherwise, you agree that any arbitration or lawsuit whatsoever shall be litigated by you individually and not as a member of any class or as part of a class or representative action …”

The court held that this clause was not unfair or unconscionable, noting that it does not remove the passenger’s right to sue as an individual, but only as a member of a class of Claimants.

Would an English court uphold such a clause though? It might fall foul of the Unfair Terms in Consumer Contracts Regulations 1999, Schedule 2(1)(q) of which expressly states that a term may be regarded as unfair if it has the effect of:

“excluding or hindering the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.”

The Californian court found that the clause did not exclude the passenger’s right to bring proceedings; but does it hinder that right, or does the inability to participate in a group action hinder the exercise of a legal remedy? And do the Regulations apply at all, where the claim is governed by the Athens Convention (the USA, it will be remembered, is not a signatory to the Convention and so its provisions were not relevant in the Grand Princess case)? The answers to these questions are far from clear, but they will no doubt be provided in due course when the English group actions against cruise operators get under way (parenthetically, it does seem that other countries’ civil justice systems are managing to deal with Covid 19 related claims with rather more expedition than our own system).

About the Author

Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at 1 Chancery Lane, Matthew Chapman QC and Jack Harding, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She was recently named Best Lawyers’ Travel Lawyer of the Year 2020/2021 and the Lawyer Monthly Women in Law Awards 2020: Personal Injury.


Targets; or, How the Grinch Stole Christmas

Guideline hourly rates. It would be fair to say, I believe, that at their current levels they are loathed rather than loved by most solicitors. At least those solicitors who find themselves on the receiving end of a costs order.

For a judge summarily assessing the costs one party must pay to another in civil litigation, these figures suggest what a reasonable hourly rate would be for the particular litigator. The key word there being suggest, as they are not binding (hence the word “guideline”). The numbers vary depending on the experience and role of the fee earner (“pay bands”) and where in the country they are located (“grades”). For example at the top end a solicitor or legal executive with over eight years’ experience working in the city of London (“London Grade 1”) has a rate of £409, whereas a trainee or paralegal working in Cumbria (“national grade 3”) has a rate of £111.

They were originally created by the Supreme Courts Costs Office (“SCCO”) in the early 2000s to assist judges who, following the Woolf reforms and implementation of the Civil Procedural Rules, newly found themselves being expected to assess costs summarily at the conclusion of a fast track trial or other hearing lasting less than a day.

So far so good.

The problem in today’s world, indeed the source of a bubbling furore, is not a question of principle but rather one of amount. The rates were last updated in 2010, and many complain that they are now too low to provide a fair level of recompense reflecting the work and risk involved in litigation, particularly in complicated or sensitive cases. These protests are starting to find traction, for example with Court of Protection work; a month ago in the case of PLK [2020] 9 WLUK 364 Master Whalan directed costs officers in the SCCO handling Court of Protection assessments to allow as reasonable rates 20% higher than the GHR. Similarly, Master Rowley in Shulman v Kolomoisky [2020] 6 WLUK 620 (not concerning the Court of Protection) – in allowing a grade A rate of £750 – described the guideline rates as “barely even a starting point” in high-value litigation conducted by City law firms.

The powers that be are not immune to practitioners’ and judges’ concerns either, and there is currently a Civil Justice Council Group headed by Mr Justice Stewart which has been tasked by the Master of the Rolls with reviewing the guideline rates. The group includes prominent costs lawyers, judges and economists, including a number of those who were involved with Lord Justice Jackson’s two fixed costs reviews; the latter of which this writer has some knowledge of, having been Judicial Assistant to Sir Rupert in 2016-2017. Despite originally having hoped to report by the end of the year, there have been disruptions caused by Covid 19, and Master Whalan said recently that this timeline may be optimistic. Moreover the Senior Costs Judge Andrew Gordon-Saker warned earlier this month that the rates may not change unless lawyers provide the Group with more evidence, principally relating to agreements as to rates they have reached on hourly rates whether or not there has been an assessment.

Those practitioners dissatisfied with the hourly rates currently set out in the guidelines will have only themselves to blame if they do not provide the Group with the information it requires in order to increase them.

About the Author

One of the more junior members of the team, Richard Collier was called to the Bar in 2016. Before that, he had worked as a Judicial Assistant to Lord Justice Jackson in the Court of Appeal. He is now instructed by solicitors for both Claimants and Defendants in cross border disputes, package travel and other related claims.

 

Lured (into paying more in costs than she had anticipated)

The recent decision of Lavender J in Belsner v Cam Legal Services Limited [2020] 10 WLUK 170 will be of interest to all solicitors undertaking work on behalf of Claimants. In that case the underlying claim was a straightforward one; the Claimant had been involved in a road traffic accident for which she made a claim under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents, and which was settled at Stage 2 in the sum of £1,916.98, together with fixed costs of £1,783.19.

The Claimant and her solicitors, however, had entered into a fairly standard conditional fee agreement by virtue of which they were able to recover costs as against the Claimant in excess of recoverable fixed costs, with no cap on their costs recoverable against her. Ms Belsner had signed that agreement, but contended that she had not given informed consent to it, having never received an explanation of what she was agreeing to.

At first instance the District Judge assessed the Claimant’s solicitors’ costs in the sum of £3,104.15, a sum almost twice as high as the costs recoverable against the original Defendant, with the shortfall practically obliterating Ms Belsner’s damages settlement. Her solicitors did not claim this sum against her though; they voluntarily capped their costs at 25% of relevant damages, or, in this case, £385.50, in addition to fixed recoverable costs – a total of (£385.50 + £1,783.19 =) £2,168.89, of which the Defendant to the original claim would pay £1,783.19. So Lavender J’s decision related to the recoverability of the sum of £385.50 from the successful Claimant by her solicitors.

The District Judge considered whether pursuant to CPR Part 46.9(2) the phrase ‘written agreement’ imported an element of explanation to the paying client, so as to engage concepts of informed consent. He found that it did not; it was sufficient that the terms of the agreement were clear and certain, and the Claimant’s solicitors were not required to explain them to her. He did, however, give permission to appeal so that a higher court could examine the issue.

On appeal Lavender J placed great emphasis on the nature of the duty owed by a solicitor to his or her client, which is a fiduciary one, with the effect that a solicitor may not profit from his or her client without the client’s fully informed consent. He held that this is precisely what Ms Belsner’s solicitors were attempting to do:

“A solicitor who wishes to rely on CPR 46.9(2) must not only point to a written agreement which meets the requirements of the rule, as the Defendant did, but must also show that his client gave informed consent to that agreement insofar as it permitted payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings. For this purpose, the solicitor must show that he made sufficient disclosure to the client.

…If it had been pointed out to the Claimant that, while the Defendant’s estimate of costs was £2,500 plus VAT, she might recover only £500 or £550 plus VAT from the Insurers, then that may have affected the Claimant’s consent to the agreement between them insofar as it permitted payment to the Defendant of an amount of costs greater than that which the Claimant could have recovered from the Insurers. It may, for instance, have led the Claimant to ask whether her liability could be capped, or to approach a different firm of solicitors, who would cap her liability. Prima facie, therefore, it ought to have been disclosed…”

It was irrelevant that the solicitors had voluntarily chosen to cap the costs recoverable from the Claimant; what was important was that they were contractually entitled to claim from their client costs of or in excess of her damages, but had never explained to her that this might be so.

Ms Belsner was represented on the appeal by Clear Legal Limited (trading as CheckMyLegalFees.com), who have referred to the issue of overcharging as ‘the new PPI’ and predicted that ‘millions of overcharging claims’ will be brought. The parties to the appeal were both represented by QCs, and the combined costs of it amounted to almost £90,000, but this is dwarfed by the £5billion in potentially recoverable fees anticipated by Clear Legal.

Could this be The Fatal Hour for solicitors representing Claimants under this type of agreement? Are they Doomed to Die? You’ll Find Out, we predict.

About the Author

Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at 1 Chancery Lane, Matthew Chapman QC and Jack Harding, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She was recently named Best Lawyers’ Travel Lawyer of the Year 2020/2021 and the Lawyer Monthly Women in Law Awards 2020: Personal Injury.

…And Finally…

We were concerned to read this week that a leading expert in artificial intelligence believes that within the next fifty years HMCTS will be employing robot judges, which, he says, will be able to determine whether a witness is telling the truth with 99.9% accuracy, by reference to speech patterns, body temperature and eye movements (apparently the Estonians and Chinese are way ahead of us on this, having already introduced cyberjudges to their court systems). Obviously our first thought was a panic stricken ‘have these people never heard of Skynet? Or Judge Dredd? Or have they not seen Minority Report?’, followed by a swift mental calculation of our likely retirement date, but now that we have had a chance to reflect on the assertion at our leisure, we find it difficult to credit. First, it is well known that you can’t tell whether someone is telling the truth or not by reference to the classic ‘he looks a bit shifty’ test; some people when giving evidence do display all the hallmarks of dishonesty, even when answering questions about their name and address, whereas others are able to maintain a patently incredible account with the greatest possible sang froid. Secondly, the mind boggles at the level of investment and expertise that would be required, in particular in the context of decades of underfunding on court infrastructure and staffing. Lastly, it occurs to us to wonder whether any politician would really want to unleash on the world a robot able to identify liars with such a high degree of accuracy. It’s all a bit Frankenstein for our liking.

Written by or involving: Sarah Prager, Richard Collier

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