EPX (A Child) v Milton Keynes University Hospital NHS Trust

Where a claimant changes from legal aid to a conditional fee agreement with after-the-event insurance, the receiving party must justify the choice and explain the reasons for it. A costs judge may examine the contemporaneous documents and the client’s reasons, rather than relying solely on later witness recollection. Legal aid funding is limited by the authority actually granted; expenditure on unauthorised quantum experts cannot be treated as expenditure within the certificate. Early quantum evidence may be reasonable, but it is not invariably necessary. An appellate court should interfere with an evaluative costs decision only where the judge applied the wrong principles, considered irrelevant matters, omitted relevant matters, or reached a decision outside the range reasonably open on the evidence.

The claimant, a child, succeeded in a clinical negligence claim against the defendant and agreed base costs. The Senior Courts Costs Office Master disallowed the claimant’s success fee and after-the-event insurance premium, finding that the switch from legal aid to CFA funding was not reasonably justified and that expenditure on quantum evidence had contributed to the funding problem.

The claimant appealed to the High Court. The appeal concerned the reasons for changing funding, the relevance of the April 2013 changes to recoverability of additional liabilities, the availability of ATE insurance after a defence, the scope of the legal aid certificate, and whether early quantum reports were reasonably incurred.

1. Appeal dismissed. The Master correctly applied the principles in Surrey v Barnet and Chase Hospitals NHS Trust [2018] EWCA Civ 451. Where there is a choice between funding routes, the receiving party bears the burden of justifying the choice, including the reasons for making it. The contemporaneous documents supported the finding that the overwhelming reason for the switch was the refusal to increase the legal aid costs limitation.
2. The possibility that recoverability of additional liabilities would change on 1 April 2013 was not shown to have formed part of the decision-making process. Nor was there sufficient evidence that the claimant or her litigation friend had been told that ATE insurance would become unavailable if legal aid were withdrawn after a defence denying liability.
3. The new argument that switching funding before service of a defence was objectively the only reasonable course was not admitted on appeal. It had not been raised below, and permitting it could have caused prejudice, including by depriving the defendant of the opportunity to cross-examine the solicitor on the factual premise. The approach in Crane v Sky In-Home Ltd [2008] EWCA Civ 978 supported that conclusion.
4. The legal aid certificate authorised work concerning liability and causation. It did not authorise the instruction of quantum experts. Expenditure on those reports therefore could not be treated as expenditure within the certificate. This independently justified the Master’s decision.
5. The Master’s alternative reasoning concerning the need for early quantum reports was open to criticism. Early quantum reports may be reasonable, but it is also reasonable not to obtain them before a liability and causation trial. That alternative issue did not affect the result because the certificate-scope finding was independently sufficient.
6. The appellate test was whether the Master had applied the correct principles, considered relevant matters, avoided irrelevant matters, and reached a decision within the ambit of reasonable decisions open to him, as stated in Solutia UK Ltd v Griffiths [2002] P.I.Q.R. P16. That test was satisfied.

• High Court (Queen’s Bench Division): appeal from the order of Master Rowley, Costs Judge, dated 28 October 2018. Permission to appeal had been granted by Martin Spencer J on 18 February 2019. The appeal was dismissed.