Cooke and others v Woodchurch House Limited  EWHC 3318 (SCCO)
Nicholas Lee of Paragon Costs Solutions and James Wibberley of Guildhall Chambers were instructed to represent the Defendant in these costs proceedings.
This Judgment by Deputy Costs Judge Bedford in the SCCO dealt with a number of preliminary issues, including:
i) Whether a valid retainer, implied or otherwise, existed pre 6 May 2016;
ii) The scope of the Legal Aid retainer entered into on 6 May 2016;
iii) Whether the Claimants could bring themselves within the scope of Reg. 21(1) Civil Legal Aid (Costs) Regulations 2013 for the purpose of the disapplication of the Indemnity Principle;
iv) Whether a conflict of interest invalidated the Claimants’ retainers;
v) Whether a contractual indemnity provided by the Claimants’ former solicitor negated any personal liability on the Claimants to pay the costs of their newly appointed solicitors;
vi) Whether that contractual indemnity operated as a cap on the Inquest costs;
vii) The reasonableness of the First and Second Claimants taking out Legal Aid funding;
viii) The recoverability of an ATE premium taken out by the Third Claimant.
The result of each of these points was as follows:
Whether a valid retainer, implied or otherwise, existed pre 6 May 2016.
The Judge rejected the evidence that an implied retainer existed. On the evidence it was clear that there was no intention to create any form of retainer prior to securing Legal Aid.
The scope of the Legal Aid retainer entered into on 6 May 2016.
The Claimants contended that Legal Help was obtained “for the family” whereas the Defendant contended that only one of the Claimants was the beneficiary of Legal Help.
The Judge ruled in favour of the Defendant on this point.
Whether the Claimants could bring themselves within the scope of Reg. 21(1) Civil Legal Aid (Costs) Regulations 2013 for the purpose of the disapplication of the Indemnity Principle
The Defendant argued that in order to recover the costs claimed in the Bill of Costs, the Claimants must bring themselves within the scope of Reg. 21(1) Civil Legal Aid (Costs) Regulations 2013 which disapplies the indemnity principle. Reg.21(1) of the Regulations prescribe that only a ‘legally aided party’ who has received civil legal services in ‘relevant proceedings’ can benefit from the disapplication of the indemnity principle.
The Claimants argued that as civil proceedings were contemplated at the time of the Inquest, that was sufficient to satisfy the test and thus the Claimants are brought within scope.
The Court looked at the relevant regulations. Both “Legally Aided Party” and “Relevant proceedings” are terms defined by Regulation 2 of the Regulations. “Relevant Proceedings” is specified as being proceedings “before a court”. “Court” is also a defined term. Importantly, it expressly requires a jurisdictional power to make a costs order. Put otherwise, the term is not all encompassing: it does not include all jurisdictions in England and Wales, given that the power to make a cost order is not one vested in all courts and tribunals. That creates a bright line test such that the definition of “court” is therefore the critical factor in determining whether the Claimants are able to rely on Reg 21(1) and the disapplication of the indemnity principle.
As a matter of law, the Coroners Rules 2019 confer wide powers upon a coroner in respect of an Inquest. However, they do not include the power to make a costs order.
The Court rejected the Claimants’ argument that this conclusion requires a narrow interpretation of the Regulation and a gloss on the natural and ordinary meaning of the words. “Court” is defined in the Regulations. The language attributed to that definition is clear and unambiguous: the power to make a costs order must be present within the proceedings in which legal aid has been granted. To find otherwise would be destructive of that clear requirement.
The Court also rejected the argument that this interpretation is starting at the wrong place and that the Regulations require a ‘look back test’ from the vantage point of the civil cost order within the civil proceedings.
The definition requires civil legal services to have been made available in relation to relevant proceedings, not any proceedings. That creates a nexus between the relevant proceedings and the civil legal services that cannot be divorced. As a matter of fact, Legal Help was only made available in respect of the Inquest and it is those services which amount to the civil legal services. Legal Aid was not made available in respect of the civil proceedings and as such that they can amount to the relevant proceedings to which the Legal Help relates.
The Court also considered whether the intention behind the rules lead to a different conclusion. The Judge was driven to the conclusion that intention behind the Regulations was supportive of the natural and ordinary meaning arrived at above. The inescapable conclusion is that the Claimants are unable to bring themselves within the confines of “relevant proceedings” for the purpose of Reg. 21(1).
It followed that the indemnity principle was not disapplied and the Claimant would be limited to the applicable Legal Aid rates.
Whether a conflict of interest invalidated the Claimants’ retainers
A conflict of interest arose meaning that the Claimants had to transfer to an alternative solicitor. That firm provided an indemnity for the subsequent firm which is identified further below.
The Court was not satisfied that the conflict of interest invalidated the retainer.
Whether a contractual indemnity provided by the Claimants’ former solicitor negated any personal liability on the Claimants to pay the costs of their newly appointed solicitors
The Court concluded that the Claimants had a primary contractual liability for the costs which therefore satisfied the indemnity principle.
Whether that contractual indemnity operated as a cap on the Inquest costs
The Court concluded that the parties intended to create an exception to the initially agreed fixed charge. Thus, there was no cap.
The reasonableness of the First and Second Claimants taking out Legal Aid funding;
Given that the Court was not assessing the Inquest costs, but was in fact assessing the Civil costs, the Judge felt that the correct issue was whether there was a retainer for the costs of the civil proceedings. The answer to that was that there were retainers for the civil proceedings.
The Judge identified that the true mischief here arose from the Claimant’s approach adopted during the assessment.
The recoverability of an ATE premium taken out by the Third Claimant.
The ATE premium was disallowed on the basis that it was taken out after April 2013 and that the Third Claimant’s claim was not a claim for clinical negligence, but instead under the Human Rights Act. Therefore, the ATE premium was not recoverable.