Surrey v Barnet and Chase Farm Hospitals NHS Trust

Reasonableness of changing from Legal Aid to a CFA is assessed objectively, but in the particular circumstances of the claimant. The court considers the perspective of a reasonable claimant or litigation friend in that position, together with all relevant circumstances. Advice received from solicitors may be relevant, but the adequacy of that advice is not assessed by the law of professional negligence.

Failure to mention the Simmons v Castle 10% uplift does not ordinarily make the change unreasonable. The question is whether the omission would have affected the decision when the uplift is compared with the overall settlement and the benefits of the alternative funding. Costs judges may assess ATE premiums on a broad-brush basis, while exercising caution with block-rated policies.

Three successful clinical negligence claimants had initially proceeded under Legal Aid. Shortly before 1 April 2013, when the recoverability regime was changed by the Legal Aid, Sentencing and Punishment of Offenders Act 2012, their litigation friends moved to CFA-Lite agreements supported by ATE insurance.

The Costs Judges held that the additional liabilities were not reasonably incurred because the litigation friends had not been told that changing funding would forfeit the 10% uplift in general damages identified in Simmons v Castle. The appeals concerned whether the advice omission was determinative and how the reasonableness of the funding change should be assessed. Subsidiary issues concerned the recoverable ATE premiums in two cases.

1. Appeals allowed in principle. The court held that the applicable question was whether the additional liabilities were reasonably incurred. That question was governed by the objective approach in Wraith v Sheffield Forgemasters, as explained in Solutia UK Limited v Griffiths: the assessment is objective, but takes place in the context of the individual claimant and all the circumstances of the particular case.
2. The quality of antecedent advice may be relevant to the reasonableness of the funding decision. However, the issue is not whether the solicitor was negligent. The informed-consent analogy in Montgomery v Lanarkshire Health Board wrongly narrowed the inquiry. A costs judge may decide, without evidence from the claimant or litigation friend, whether the omitted 10% uplift would probably have affected the decision.
3. The relevant comparison is between the uplift and the overall settlement, measured against the benefits and risks of the alternative funding. In the three appeals the uplift represented only a marginal proportion of the overall settlements. A reasonable claimant or litigation friend would not have held out for that marginal increase rather than obtain the perceived security and practical advantages of a CFA-Lite. The additional liabilities were therefore recoverable in principle.
4. For future cases involving a change from Legal Aid to a CFA between 26 July 2012 and 1 April 2013, the solicitor should state in the bill’s narrative whether the uplift was explained. A genuine dispute should ordinarily be resolved through the solicitor’s attendance note or a short witness statement. Evidence from the claimant or litigation friend, and cross-examination, should be required only exceptionally, particularly where impropriety is alleged.
5. Costs judges were entitled to reduce the ATE premiums in Surrey and AH. Rogers v Merthyr Tydfil County Borough Council required caution concerning block-rated premiums but did not prevent broad-brush adjustment. The reductions were therefore left undisturbed.
6. The appeals were allowed, except that the recoverable ATE premiums in Surrey and AH were limited to the sums identified by the respective Costs Judges.

• High Court (Queen’s Bench Division): Appeals by way of review under CPR 52.11 from decisions of Master Rowley, Deputy Master Campbell and District Judge Besford. The appeals were allowed in principle, subject to the ATE premium reductions in Surrey and AH.