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Wasted costs orders against everyone!

I don’t think I’ve ever seen anything quite like this. It raises some massive points of financial implications for solicitors, particularly when agreeing to take on a case involving medical or police disclosure.  It places on them a financial risk that might very well not be worth taking, given the narrow margins on which businesses are currently operating. The Judge did not, it seems to me, take proper account of the public policy implications of this decision.

A public law case was listed for a 2 day finding of fact hearing. The Local Authority had been ordered to obtain police and medical disclosure. It appeared that some things which clearly by close reading of other documents were known to exist within the police possession had not found their way into police disclosure. When this came to light, the hearing had to be adjourned.

The Court then embarked on an exercise to see who was responsible and considered the making of costs orders.

Re L (Case Management : Wasted Costs) 2016

http://www.bailii.org/ew/cases/EWFC/OJ/2016/B8.html

 

What makes it quite remarkable is that in most wasted costs cases what happens is that one side is assessed to be responsible for the mix-up or failure, and the other parties get their costs paid by them. Here, the Judge determined that whilst the Local Authority was chiefly to blame, all of the parties had to bear some of the blame.

 

Non-compliance with case management directions – who is at fault?

 

  • In this case,[2015] 1 FLR 1092 case management orders were made promptly (on day 14) for the disclosure of medical records and police records. The medical records were disclosed promptly save for the photographs. The failure to disclose the medical photographs was not identified by any party until 20th January 2016.
  • The police responded promptly to the disclosure order but failed to disclose the audio recordings of the parents’ police interviews. The first approach to the police for ‘further disclosure’ was made by the local authority on 14th October. The first time the lack of this material was raised by any other party was in an e-mail from the mother’s solicitor to the local authority on 2nd November.
  • Who is responsible for these failings? Is the failure to disclose the medical photographs the responsibility of the hospital or of the local authority for not going back to the hospital to ask where the photographs were, or of the other parties for not raising this issue either with the local authority or with the court? Is the failure to disclose the audio recordings of the parents’ police interviews the responsibility of Leicestershire Police (who were ordered by the court to disclose ‘witness statements, interviews, photographs and medical reports in respect of the injuries’), or of the local authority (to whom the police were ordered to make disclosure and upon whom was laid the obligation of disclosing the police material to the other parties), or of the other parties for their delay in raising this issue either with the local authority or with the court?
  • Leicestershire police were ordered to make disclosure to the local authority. The local authority was ordered to disclose to the other parties the material received from the police. It was also ordered to obtain and disclose medical records. Is the scope of the local authority’s duty limited to forwarding on to the other parties the material received from the police and the hospital? In my judgment, it is not so limited. The local authority is not providing a postal service. It is under a duty not only to disclose what it receives but also,

 

(a) to consider with care the material received from the police and hospital;

(b) to satisfy itself that the disclosure complies with the terms of the relevant case management direction; if it does not comply then,

(c) to identify any documents or categories of document that appear to have been omitted;

(d) to contact the police/hospital promptly seeking immediate disclosure of the missing documents; and if disclosure of the missing documents is not made promptly then,

(e) to inform the court and seek urgent directions; and

(f) to keep the other parties informed.

 

  • Whilst the primary duty for obtaining and disclosing police and medical records rests with the local authority, it is clear from the rules to which I have referred that the other parties also have a responsibility. They, too, are under a duty to assist the court in the process of active case management and to inform the court of any non-compliance. With respect to police and medical disclosure there is a duty,

 

(a) to consider with care the material disclosed by the local authority;

(b) to satisfy itself that the disclosure complies with the terms of any case management direction relating to that disclosure;

(c) to identify any documents or categories of document that appear to have been omitted;

(d) to inform the local authority promptly with respect to any gaps in the disclosure; and, if the missing documents are not provided promptly,

(e) to inform the court and seek urgent directions.

 

  • In my judgment it is clear from the rules and authorities to which I have referred that these duties exist. They are a necessary part of the process of enabling and assisting the court to comply with its duties to further the overriding objective and to complete care cases within 26 weeks.
  • In the circumstances of this case I am satisfied that the responsibility for the failure identified rests primarily with the local authority. However, I am equally satisfied that the solicitors for the parents and the guardian also bear some responsibility.

 

Well, that’s all lovely in an ideal world, but do solicitors have the time to inspect each and every document with a fine-toothed comb, particularly in a case where counsel are instructed? They certainly don’t get paid for such a task.

So what happens then? Well, one sensible approach would be for the LA to pay some of the costs but not all of them, given that there were failings on the part of the other parties. That’s not what happened here.

 

The Court was actually considering punishing the solicitors involved by disallowing a share of their costs. The Legal Aid Agency were strongly suggesting that this was not a power open to the Court unless they were carrying out their function of assessing the public funding certificates by way of taxation (which would come at the end of the case)

 

Disallowing costs payable to a legally aided solicitor

 

  • Navigating one’s way around the labyrinthine complexities of the current legal aid scheme is a significant challenge. For present purposes it is necessary to have regard to the Legal Aid Agency’s Standard Civil Contract 2013 specification: General Rules (section 1-6) (July 2015 amendment), to the Standard Civil Contract 2013 specification: Family category specific rules (section 7) (July 2015 amendment), to the Civil Legal Aid (Remuneration) Regulations 2013 and to the Civil Legal Aid (Remuneration) (Amendment) (No2) Regulations 2014.
  • The solicitors for the legally aided parties contend that disallowing part of a standard fee payable to a legally aided solicitor pursuant to the provisions of s.51(6) is not simply inappropriate but that it is not possible. The basis of that submission is that the standard fee for legal representation is a fixed fee payable irrespective of the amount of work undertaken (subject to the right to ‘escape’ from the standard fee to which I referred earlier). It follows, therefore, as a matter both of logic and of law, that so far as concerns the costs of any solicitor entitled only to the standard fee there cannot have been any ‘wasted costs’. In this case, even if a solicitor entitled only to the standard fee undertook work on 20th, 21st and 22nd January which would not have been necessary had the failure of police disclosure been identified at the time it arose, that solicitor will receive no extra payment for that work but will simply receive the fixed fee to which he or she would in any event have been entitled. A letter to the court from the LAA supports that argument,
  • The position would appear to be different so far as concerns the costs of a solicitor who ‘escapes’ the standard fee. As I noted earlier, that solicitor is entitled to be paid for the work undertaken on an hourly rate basis (the hourly rate being that prescribed in the Civil Legal Aid (Remuneration) Regulations 2013 as amended). In those circumstances it is clear that the argument set out in the previous paragraph does not apply. Even if the court does not have the power to make a wasted costs order against a solicitor entitled only to the standard fee (a proposition about which I am doubtful) there would seem to be no reason why the court could not make a wasted costs order against a solicitor who ‘escapes’ the standard fee.
  • However, the LAA raises a second issue and that relates to its power to act on an order made by the court under s.51(6) disallowing all or part of a legally aided solicitor’s entitlement to remuneration. In its letter to the court, the LAA asserts that,

 

‘The court could only disallow a solicitor’s costs under their contract with the LAA where the court is performing a detailed assessment pursuant to that contract (see paragraphs 6.37 – 6.38 of the Standard Contract Specification…) However, you could make observations to help the assessing authority (whether that is the LAA or the Court) in its assessment.

‘Where legally aided work falls under one of the Standard Fee Schemes, the LAA usually would have no choice but to pay the standard fees, unless the claim is not true, accurate and reasonable. The nature of the standard fee scheme is that in some circumstances a legal aid provider may receive a relatively high payment for not necessarily doing a large amount of work, whilst in the circumstances of a different case, the same standard fee may be considered to be relatively low. However, if you do make any observations on the amount of costs claimed and suggest that some costs should be disallowed, the possibilities, within the fixed fee scheme would be as follows:

1. Claims can ‘escape’ the fixed fee where, if paid at hourly rates the solicitors would be paid more (i.e. for Legal Representation, where costs on an Hourly Rate basis would exceed twice the Standard Fee, the solicitors would be paid at hourly rates). If in the circumstances of this case the solicitors have escaped the fixed fee and are to be paid at hourly rates, any disallowance (or recommended disallowance) of costs on assessment could reduce the amount payable to the solicitors;

2. The costs of the case can be disallowed in full, which would lead to a nil payment to the provider irrespective of the fixed fee scheme;

3. If the solicitors have breached some term of the contract, such as the requirement to carry out all contract work in a timely manner and with all skill and care, and as a result caused the LAA a loss (for example if a further hearing were required because of the solicitor’s default which has led the LAA to make further payments), then the LAA could set off the loss it has been caused against any payment due to the solicitors (i.e. the fixed fee they would be due to receive)’

 

  • Paragraphs 6.37 and 6.38 of the Standard Contact Specification provide that:

 

Court assessment

6.37 Except where:

(a) it is or may be necessary for the court to carry out a detailed assessment of costs payable to the Client by another party to the proceedings; or

(b) having regard to interests of the Client and public funds, the weight or complexity of the case and all the other circumstances, we consider it appropriate to direct that the costs be subject to detailed assessment,

your Claim for payment for Licensed Work will be assessed by us.

6.38 A direction under Paragraph 6.37(b) may relate to an individual case or to any class of case, identified by the level of costs to be assessed or otherwise. In cases where costs are to be subject to assessment by the court, detailed assessment proceedings must be commenced within the time specified in the Civil Procedure Rules.

 

  • If the LAA’s submissions are correct then that would seem to represent a significant narrowing of the scope of s.51(6) in a case involving a legally aided solicitor. It would mean that although under s.51(6) the court could order a legally aided party’s solicitor to pay another party’s wasted costs, the court would have no power to disallow any wasted costs incurred by that same solicitor.
  • I note that neither the Standard Civil Contract 2013 specification: General Rules (section 1-6) (July 2015 amendment), or the Standard Civil Contract 2013 specification: Family category specific rules (section 7) (July 2015 amendment) refer to the court’s powers under s.51(6). With all due respect to the LAA, it seems to me that the key to understanding paragraphs 6.37 and 6.38 of the Standard Contract Specification is to be found in the heading: ‘Court assessment’. Those paragraphs deal with the question ‘who should assess my costs’. Section 51(6) addresses a completely different issue. Section 51(6) provides a power to penalise a solicitor as a result of whose conduct ‘wasted costs’ are incurred (whether another party’s costs or his/her own costs).
  • It is my preliminary view that the court’s power to make a wasted costs order is not confined in the way suggested by the legally aided solicitors and by the LAA. However, I am satisfied that in this case it is possible to dispose of the wasted costs issue without determining those points. That said, in my judgment the LAA’s arguments do raise important issues which need to be authoritatively addressed.

 

This disallowing of costs to a publicly funded solicitor can easily move a case from barely profitable to making a loss for the firm. Not to mention the absolute headache with the Legal Aid Agency in recovering the money. Does anyone actually benefit from this at all? Haven’t we just spent a huge amount of money arguing about this issue? Not to mention any costs of a potential appeal, given the wider implications for solicitors across the country?

In a concluding paragraph, the Judge bemoans the increase in demand by additional care proceedings on the Court service and that no additional resources have been provided, whilst ignoring that the very same thing applies to all of the other parties to the case.

 

Conclusion

 

  • Statistics show that in recent months, nationally there has been a significant increase in the number of new care proceedings issued. Cafcass statistics show that over the ten months from 1st April 2015 to 31st January 2016 the number of new care proceedings issued was up by almost 13% on the previous year. During that same period The Family Court in Leicester experienced a 39% increase in new care cases – three times the national average. That increase in workload has not been matched by any increase in court resources. I make that point simply to underline the fact that court time is a precious resource. The court can ill-afford contested hearings being vacated because of the failure of one or more of the parties to comply adequately with the obligations placed upon them by the rules and by case management orders made by the court.
  • In this case I am satisfied that the solicitors for all four parties are responsible for the errors identified. All four were responsible for the wasting of court time and for the wasting of costs. I have identified wasted advocacy costs incurred by the legally aided parties amounting to £5000. I shall make a wasted costs order against the local authority requiring it to pay 50% of that sum, £2,500. I have also identified that the local authority has incurred wasted advocacy costs of £1950. I shall make wasted costs orders against the solicitors for the legally aided parties jointly to pay 50% of those costs (£975 i.e. £325 per solicitor).

 

Of course there were failings here, and it would have been markedly better had the Local Authority involved raised with the Court and the parties their concerns that the police disclosure was incomplete and missing important documents. Was this, however, a proportionate response to the difficulty? I am sure that all lawyers have experience of arriving at Court for a final hearing with time and money spent in preparing a case only to find that the case is double-listed or insufficient time is available – the parties in those cases – of which there were very very many, did not attempt to demand that the Court Service pay their wasted costs.

 

I note that the Judge here refers to the Norgrove report on Family Justice.  Perhaps it is useful to bear in mind this passage of the report.

 

Our recommendations are intended to restore the respective responsibilities of courts and local authorities. But to change the law does not tackle the root cause
of the difficulties. This stems we believe from a deep rooted distrust of local authorities and unbalanced criticism of public care, as discussed in paragraphs
3.21 – 3.26 above. This in turn fuels dissatisfaction on the part of local authorities with the courts, further damaging relationships.
3.46.The result is that the relationship between local authorities and courts can verge on the dysfunctional. For the system to work better it is not acceptable for each
group to sit on the sidelines and criticise the other. A failure in one part of the system must be seen to be a failure of all. Courts and local authorities, and other
professionals, should work together to tackle this at a national and local level.
The report was published in 2011.  When one reads the judgments over the last few years, 2011 starts to look like a golden era of co-operation and trust between the different stakeholders in Family Justice. I would gladly roll the clock back to 2011 in that regard.

[I would also deprecate the habit in this judgment of the use of (sic) for what are clearly utterly minor typographical errors in emails sent by the Local Authority – emails are documents which are typed in haste, particularly when trying urgently and desperately to resolve a pressing problem and (sic) is an uncalled for dig. I also note that the Judge did not apply the same (sic) standard to emails received from counsel, which had similar minor typographical errors.  I also note that this case was listed for a fact finding hearing despite the allegations being substantially short of the Court of Appeal guidance as to when a separate fact finding hearing should be heard…]

 

 

 

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About suesspiciousminds

Law geek, local authority care hack, fascinated by words and quirky information; deeply committed to cheesecake and beer.

16 responses

  1. Medical notes,an all data on prescription medicines ,an this is relevant to ,should come in order by date,an time.
    If a request has been made to disclose to court,from this point ,it is important to note handlers get very dirty with tactics of getting rid of evidence .
    in my case a blatant lie was the notes were missing for the father.
    Then my notes were not paginated ???
    Really ??
    The list goes on.
    What is needed is for Forensic medical evidence to be sealed ,signed,an stored permanently on a secure database.
    Let’s drop the payments of thousands for it to be trashed by so called expert witnesses.
    If I was dead on a slab in a morgue, I criminal court ,it is a true account of pathology.
    Instead what I got was stitched up in a closed court, with the case bounced from one court to the other,barred out of court for 4 years, judge retained the case,an what else?
    Oh yes, Cafcass destroyed the file.
    Conspiracy ranting again?
    No
    I have paperwork to document that this happened.
    I have a blog to
    I have posted the supporting evidence on a US hosting.
    Time wasted ?
    Lessons learnt?
    Can’t trust legals or police in a closed court.
    Famous enough example of corruption name the person in the Sally Clark case,for non disclosure of medial evidence .
    Lives destroyed, while people simply write about it,but,that’s how you lot earn your money,by setting people up,isn’t it?
    Time to drop the academic drivel ,nobody is buyers no it

    • At least one case (were evidence actually exists) stopped in its tracks, whilst in our case even the court of appeal joining a split case together in the name of a child that has never existed, did not stop Redcar & Cleveland LA from splitting the case, changing the name of the child on Orders back to birth certified name for Adoption

  2. ashamedtobebritish

    The bad news is that parents are denied full disclosure over and over, the ico don’t really see that as a problem, the worst news is that judges steam ahead without it.
    The good news is that the parents who seek guidance, go straight to the COA after having their art 6 so brutally breached, but, they are in a litigant in person position, which is sometimes ideal, other times not so, depending on their confidence levels.
    There’s a simple solution to this, a hefty fine (in an open court) for any party who refuses to reveal evidence that may be relied on in court, costs paid for the parents to continue to the COA with legal representation and a retrial.

    I have heard many parents complaining that records have been destroyed, once by a nursery, yet somehow the parent accidentally managed to obtain these destroyed records, more recently the records of Jonas Stadden have reportedly been destroyed … I don’t believe this to be possible, when you have a multi agency involvement, at least one of the parties will have a copy.
    Tin foil hats on folks … It’s only the evidence that helps the parent that tends to go missing, the damning stuff seems to evade the shredder

    • Cases would be heard in Criminal Courts if the establishments actually had EVIDENCE
      What we have to be grateful for is the ending of SPLIT court cases, possibility & probability cases where no actual evidence exists, and the only course for parents is to
      ADMIT to something or you will not get your baby back, then damned if they do, damned if they do not, job done, baby gone

  3. Pingback: Wasted costs orders against everyone! | Childre...

  4. I don’t think HHJ Bellamy had power to make an order for wasted costs on this one – wasted costs are only ordered on application of one party against another (Senior Courts Act 1981 s 51(7): eg his order at [84] doesn’t make sense). Costs can be disallowed (s 51(6)); but not where a lawyer has been ‘negligent’ (CPR 1998 r 44.11(1)(a)).

    • As ever David, I’m grateful for your chapter and verse. I thought it was interesting that his analysis really ended with almost a concession that he might not have power to do this, but going ahead and doing it anyway. I can’t really conceive of a wasted costs application where everyone has to pay, makes far more sense to say that the LA were at fault, but the costs are reduced due to contributory behaviour from the other parties.

      I dread to think how much it cost to get counsel who were ready for a fact finding hearing to instead research and make submissions on the costs issue, particularly the disallowing aspect.

  5. Provincial Solicitor

    Good Grief.

    I shall leave the technical aspects to others, but I suspect that the Learned Judge did not have the power to make such an order.

    I was curious as to what the actual effect of this is. The Local Authority receive £975 but have to fork out £2,500 so they are £1,525 down. Except, of course, that ultimately the money comes from the tax payer, so no real ‘punishment’ for them,

    The ‘Private’ firms have to hand over £325 each, but receive £833.33 each. Except, of course, they don’t. Presumably the statutory charge will apply to recovered costs, so that £833.33 will go straight into the Legal Aid Pot i.e. the taxpayer. A little circuit of money from one taxpayer pot to another.

    So the only ones actually losing out are the private firms. Hardly seems fair does it? And they will also have the administrative burden of sorting out the mess with the LAA.

    Perhaps we should also factor in the time this debacle has taken. I would like to wager that the time spent arguing about this amounted to, say, a double Unit 2 payment on the FAS scheme so one might imagine that the private firms (or perhaps their counsel) were up £400 – £500 on that. The Local Authority would have to splash out taxpayers money for counsel or have their own advocate there.

    Overall possibly cost neutral (ish) to the private firms, and the LA a few hundred down (but taxpayers pay).

    Can someone explain how this is in any way cost effective or proportionate?

    • Yes, this is largely pushing money about between various taxpayers pots and losing a bit of it to friction with each push, not to mention the costs to the taxpayer of everyone researching this, arguing it and the Judge deciding it. As you rightly say, the only people who get penalised are the solicitors firms, who are on such slight margins that it probably means they ran this case at a loss. How is it possibly fair to make someone represent a parent in care proceedings at a loss?

      I think this was a dreadful decision, and like you and David say, I think flawed in law as well as sense.

      • My Gransons case was to be made up of his Full medical file evidence from the then South Cleveland Hospital now James Cook University Hospital, Yet I have in my possession a letter from the same hospital that they were not involved in any way due to the fact whilst they do have medical records in the name of a child RJB the order stated the name (Initials) RBM the hospital did not hold medical records in that name and were not party to the Local Authority Case
        So where was all the medical obtained from for the LAs case?

      • ashamedtobebritish

        You’ve requested a full SAR right?

  6. Icanuseacalculator

    HHJ appears to have summarily assessed the costs that the Local Authority will pay the four legally aided parties; however, this is contrary to CPR, (Practice Direction 44 9.8 states that “the court will not make a summary assessment of the costs of a receiving party who is an assisted person or LSC funded client”).

  7. What is a full SAR, whom do I request if from?

    • Hi ashamedtobebritish
      Help Appreciated, Subject Access Request, Not applied for, All we have is what my grandsons mother was given from hospital via family doctor request which includes a Matchstick drawing, knees on chest hanging by cord, written extended breech presentation, other medical and a Dr K.M Toop
      Not allowed ti be entered into court

      • ashamedtobebritish

        Your first port of call is to make a SAR, at least go into this armed with full information

  8. Thanks again for your concerns
    Our case stands at the moment back in the court of appeal, the court in which the case stands to date split case joined in a childs name contrary to my grandsons birth certified name, with no further appeal allowed, thus making it obvious to any legal the only legal action available was for my grandson to be returned to his family home, this was not the case RCLA changed my grandson name back to his birth certified name, after a bit of illegal lower court hopping finally ending up in Newcastle court with an illegal Full Care Order and had him adopted
    The case has been aired in Middlesbrough OPEN court case in which a Judge Gillian Matthews has stated my grandsons name could not have been changed until after adoption, which makes the whole of the court case from start to finish illegal
    We are now suing Middlesbrough Court, illegally changing of childs name is not allowed as ‘CAUSE OF ACTION’ we have to state a legal term ie perverting the coarse of justice, or such like

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