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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Plevin v DAS Legal Expenses Insurance Company Ltd [2019] EWHC 1339 (Comm) (24 May 2019) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2019/1339.html Cite as: [2019] Costs LR 883, [2019] EWHC 1339 (Comm) |
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BUSINESS AND PROPERTY COURTS IN MANCHESTER
CIRCUIT COMMERCIAL COURT (QBD)
1 Bridge Street West, Manchester |
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B e f o r e :
____________________
SUSAN ANNE PLEVIN |
Claimant |
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- and - |
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DAS LEGAL EXPENSES INSURANCE COMPANY LIMITED |
Defendant |
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and - |
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MILLER GARDNER LIMITED (in administration) |
Third Party |
____________________
Mr Alexander MacDonald (instructed by Clyde and Co LLP) for the Defendant
Hearing dates: 5th, 6th and 7th March 2019
____________________
Crown Copyright ©
His Honour Judge Pearce:
Introduction
a. By Mrs Plevin against DAS, declarations as to the extent of cover provided under an after the event legal expenses insurance policy issued by the Defendant to the Claimant;
b. By DAS against Miller Gardner[1], the repayment of monies advanced to Miller Gardner under a funding agreement and the repayment of premium received by Miller Gardner.
a. Relief in a counterclaim against Mrs Plevin. In the light of how Mrs Plevin and Miller Gardner put their cases, the counterclaim is not pursued.
b. In the claim against Miller Gardner, relief in respect of a number of other cases (relating to the so-called "Schedule 1 Insureds") insured by DAS. At the beginning of the trial, I struck that claim out for reasons given at the time.
Miller Gardner's original agreement with DAS
a. By Schedule II, the agreement dealt with procedures for the issuing of insurance. The insurance policy that was issued had three stages: stage A, pre-issue; stage B, post-issue; and stage C, trial. Reporting was required as follows:
"The firm[3] shall carry out a continuous risk assessment of each case to ensure that the prospects of success remain at 60% or above and if prospects of success fall below 60% the firm must notify 80e immediately for confirmation that indemnity will remain in force….
On acceptance of each new case, 80e shall issue two copies of the 80e Schedule of Insurance. The firm shall promptly issue the Schedule together with the Policy wording to the Policyholder and a copy of the Schedule to the opponent.
The firm shall advise 80e of each case prior to the issue of proceedings (stage b of the policy). …
The firm must then advise 80e of the level of indemnity required to conclude the case (in multiples of £5,000) and confirm their assessment of prospects. The premium for stage b will then be individually assessed by 80e…
Once proceedings have been issued 80e will send an amended Insurance Schedule to the firm, applicable from the date of service. The firm shall promptly send the amended Schedule to the policyholder and a copy to the opponent….
For each case that reaches stage c of the policy, the firm shall provide an estimate of their disbursements to conclusion of the case together with an estimate of the opponent's costs and disbursements to conclusion. Where possible this estimate should be taken from the opponents listing questionnaire. The premium for stage c will then be individually assessed by 80e. Once assessed, 80e will send an amended insurance Schedule to the firm. The firm shall promptly send the amended Schedule to the policyholder and a copy to the opponent."
Mrs Plevin's engagement of Miller Gardner
"3. Conditional Fee Agreement
In this case we are prepared to act on a conditional fee agreement which is enclosed in duplicate together with an explanatory information document which hopefully makes entirely clear the basis of our charges, both of which you should sign, but do not date, and please return to me in the enclosed freepost envelope.
…
4. Payment Terms
We ask you to provide us with standing instructions, that, as and when we feel it appropriate, we can issue the claim on your behalf and present it to the bank. We only ask you to forward now £15 (if not already done so) so we can apply for a list of charges. We shall not require any more monies whatsoever, other than sums which are payable from recoveries…"
"This agreement is a binding legal contract between you and your solicitor/s. Before you sign, please read everything carefully. This agreement must be read in conjunction with the document enclosed "What We Do Next".
…
What is covered by this agreement
• Your claim against PARAGON PERSONAL FINANCE LIMITED for damages and refunds of unfair, unlawful or improper payments suffered as a result of your loan arrangements or payments for any insurance on related product with Banks or Institutions named above.
• Defending any claim brought against you whether directly or by way of counterclaim for payment of monies under a consumer credit agreement or other loan agreement.
• Any appeal by your opponent.
• Any appeal by you against an interim order.
• Any proceedings you take to enforce a judgment, order or agreement.
• Negotiations about and/or a court assessment of the costs of this claim.
What is not covered by this agreement
• Any counterclaim against you.
• Any appeal you make against the final judgment order.
…
Paying us
If you win your claim, you pay our basic charges, our disbursements and a success fee. You may be entitled to seek recovery from your opponent of part or all of our basic charges, our disbursements, a success fee and insurance premium. "Win" for these purposes, means an agreement or Judgment in your favour and including provision for a costs order or award payable to you by your opponent. Win also includes relieving you of liability in whole or in part from any monies being claimed against you.
…
Work Covered
This agreement covers all work carried out from the date of your initial instructions notwithstanding that this date may well pre-date the date of this agreement and covers steps taken to seek leave to Appeal any final Judgment.
The Success Fee
The success fee is set at 100% of basic charges, where the claim concludes at trial…"
"What we do next
- Once you have signed and returned the terms of Business Letter, Conditional Fee Agreement And documentation in connection with money laundering requirements we shall continue with your case
…
Costs and our Conditional Fee Agreement (CFA) with you.
- As we have explained your liability for costs is pursuant to the terms of the CFA which means that provided you co-operate at all times and provide us with instructions promptly and regularly, there will be no obligation upon to you (sic) meet the costs incurred.
- Should your case not succeed for any reason or the matter is lost at Trial or we deem the prospects of success by reason of a change in law, or upon taking full and more detailed instructions from you as unlikely to succeed, we have the right to discontinue which means that if the claim has been presented to the Court you will be liable for the other side's costs. However, the reason we require you to take out costs insurance is to protect you against such liability and the costs insurance will completely indemnify you for such costs.
- We only get paid if your claim is successful so you understand that we have taken on your case in the expectation that in due course the case will settle or you will succeed at Trial…"
a. The definition of "win" was amended to "succeeding wholly or in part in respect of the appeal and includes any costs order in [Mrs Plevin's] favour"; and
b. The success fee was varied from 100% to 96% under the variation relating to the SC appeal.
After the Event Insurance Policy taken out by Miller Gardner with DAS
"This is your 80e Justice Solutions Business Litigation Legal Protection Policy. Along with your 80e schedule of insurance, your policy sets out the terms of your insurance cover and when your insurance premium is due.
…
Your policy and 80e schedule of insurance attach to your conditional fee agreement and operate for the duration of that agreement
The insurance premium due for your policy is payable at the end of your claim (by court decision or settlement) or if your policy ends for any reason.
The level of your insurance premium depends on the stage at which your claim ends. It is calculated using the formula set out in your 80e schedule of insurance. The three stages are listed below.
a. Before court proceedings are issued.
b. From issue of court proceedings up to stage c.
c. From 14 days before the trial date, or the trial period if applicable."
"What is COVERED
1. We will pay your solicitor's disbursements, barrister's fees and your opponent's legal costs and disbursements (and your opponent's insurance premium if recoverable from you) and we will indemnify you against your liability to pay your insurance premium for your policy:
(a) If you lose; or
(b) If your claim is withdrawn by agreement between us and your solicitor; or
(c) If, after a Part 36 offer, you win but a court awards you damages which are less than the offer to settle.
2. We will pay your solicitor's basic charges, disbursements, barrister's fees and success fee and your opponent's legal costs and disbursements if you win, except in the circumstances set out in 1(c) above, but the court orders that you pay part or all of these costs.
3. We will pay your solicitor's disbursements, barrister's fees and success fee if you win but your opponent cannot pay what the court orders them to pay.
4. The most we will pay under your policy is shown in your 80e schedule of insurance plus the amount, if any, you are liable to pay for your insurance premium.
"We will indemnify you against your liability, if any, to pay your insurance premium for your policy if you win and cannot recover the premium in full or in part."
Further dealings between Miller Gardner and DAS
"all 80e Justice Solutions Legal Protection Insurance Policies sold by the firm on or after 1 March 2012."
Schedule V of the agreement, relating to commission, provides:
"All premiums are deferred until the conclusion of the case and the premium amounts will be shown in the Insurance Schedule. Commissions will be paid on conclusion for Won cases only in the following amounts:
Stage 1[5]: 20%
Stage 2: 20%
Stage 3: 10%
For cases which progress to Stage 3, the commission will be based on the actual premium collected."
"I can also confirm that we have agreed to fund your disbursements on insured cases; disbursements will include counsel's fees, court fees, any necessary expenses, such as agents fees or experts fees and costs drafting fees. 80e will endeavour to arrange for payment of your disbursements within 7 days of receiving the request and I would request that, in successful cases, you refund the disbursements within 7 days of costs recovery by you."
The Issues
a. Whether Mrs Plevin's liability for Miller Gardner's basic charges, disbursements and success fee relating to the claim against Paragon is limited by the terms of CFA to such of those costs as may in fact have been recovered from Paragon in the claim ("issue 1")[6].
b. Whether, on the true construction of the ATE policy, the indemnity cover provided by DAS to Mrs Plevin included:
i. Miller Gardner's basic charges, disbursements and success fee, in so far as Mrs Plevin may be liable for those ("issue 2");
ii. Mrs Plevin's costs of the remitted proceedings ("issue 3");
iii. Mrs Plevin's costs of the detailed assessment proceedings relating to the CC proceedings ("issue 4");
iv. Mrs Plevin's costs of the detailed assessment proceedings relating to the CA appeal ("issue 5");
v. Mrs Plevin's costs of the detailed assessment proceedings relating to the SC appeal (including the SC applications) ("issue 6");
c. If the finding on issue 2 is that, on the true construction of the ATE policy, the indemnity liability of DAS included the basic costs and success fee of Miller Gardner, whether Miller Gardner are nonetheless estopped from recovering such costs and fee ("issue 7");
d. The extent to which, if at all, Miller Gardner is liable to repay monies advanced under the FFA ("issue 8");
e. The amount of monies advanced to Miller Gardner pursuant to the FFA which have not been refunded to DAS ("issue 9");
f. Whether Miller Gardner are entitled to deduct commission from premium recovered in respect of the ATE policy before accounting to DAS ("issue 10").
The Evidence
"DAS provided the ATE insurance to Mrs Plevin and rated both the Stage C premium and premiums for extensions of cover in respect of the Court of Appeal and Supreme Court appeals, on the understanding that the cover did not extend to Miller Gardner's own costs or success fee in any circumstances. Had Miller Gardner stated at the time Mrs Plevin's policy was underwritten, whether in connection with Mrs Plevin's policy or other claimants represented by Miller Gardner, that in fact Miller Gardner or the insureds understood the cover to extend to Miller Gardner's own costs, DAS would have declined to proceed with the risk on those terms. In the unlikely event that DAS would have been prepared to include Miller Gardner's own costs within the indemnity, DAS would have insisted on being given full information about Miller Gardner's own fees (including and success fee) and charging a higher premium accordingly."
a. He was asked about the payment of fees relating to counsel, Mr Robert Marven, in the SC appeal. Mr Brown said that Mr Marven was paid directly rather than as a disbursement to Miller Gardner under the FFA. However he said that they had agreed to pay Mr Marven directly on the basis that the payment would be dealt with in the same way as a payment under the FFA. He agreed that there was no written evidence of such an agreement and said that, although he believed there had been "exchanges" about this issue, he had not been involved in them.
b. In so far as the payment of monies relating to fees in the CA appeal was concerned, he accepted that £60,000 was repaid by Paragon to DAS, the priority of DAS being to get funds in. They had not sought a higher figure.
The Law
"When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to "what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean", to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, para 14. And it does so by focussing on the meaning of the relevant words, in this case clause 3(2) of each of the 25 leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions..."
"[18] Secondly, when it comes to considering the centrally relevant words to be interpreted, I accept that the less clear they are, or, to put it another way, the worse their drafting, the more ready the court can properly be to depart from their natural meaning…
[20] Fourthly, while commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Experience shows that it is by no means unknown for people to enter into arrangements which are ill-advised, even ignoring the benefit of wisdom of hindsight, and it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice."
"[10] The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning…[11]…Interpretation is, as Lord Clarke stated in Rainy Sky (para 21), a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense…[12] This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated…[13] Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements."
"Estoppel by convention may arise where both parties to a transaction 'act on assumed state of facts or law', the assumption being either shared by both or made by one and acquiesced in by the other. The parties are then precluded from denying the truth of that assumption, if it would be unjust or unconscionable (typically because the benefit has been 'materially influenced' by the common assumption) to allow them to go back on it. Such an estoppel differs from estoppel by representation and from promissory estoppel in that it does not depend on any representation or promise."
"(i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly [or implicitly by words or conduct from which the necessary sharing can properly be inferred] shared between them. (ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely on it. (iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter. (iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties. (v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position."
Issue 1 - Was Mrs Plevin's liability for Miller Gardner's basic charges, disbursements and success fee relating to the claim against Paragon limited by the terms of CFA to such of those costs as may in fact have been recovered from Paragon in the claim?
A. The Claimant's case
a. This is the natural meaning of the words in the CFA set out at paragraph 9 above, namely:
"'Win' for these purposes, means an agreement or Judgment in your favour and including provision for a costs order or award payable to you by your opponent."
b. In so far as the word "including" creates some kind of ambiguity, it should be read as meaning "includes", in which case the meaning is clear that either judgment in the Claimant's favour or a costs order in her favour is sufficient to establish liability to meet Miller Gardner's costs.
c. The CA variation, the SC variation and the SC applications variation each define "win" in this manner. The Claimant's suggested interpretation would lead to consistency between agreements.
a. The Defendant's argument that "win" is defined as being both judgment and an order for costs in her favour might have been the natural meaning if the wording of the CFA had been "'Win' for these purposes, means an agreement or Judgment in your favour including (my emphasis) provision for a costs order or award payable to you by your opponent." But the inclusion of the word "and" suggests a disjunctive interpretation.
b. The Defendant's argument as to the definition of "win" would create an inconsistency in that success by a Claimant in defending a counterclaim would render the Claimant liable for Miller Gardner's costs even without an order for costs in her favour because of the later definition of win in that context as including "relieving you of liability in whole or in part from any monies being claimed against you."
c. If the Defendant's interpretation is favoured, the Claimant could win a substantial sum by way of damages or statutory compensation yet have no liability to meet Miller Gardner's costs. It is unlikely that this is what the parties intended.
d. In so far as reliance is placed on the LOE, this relates to the claim against Loan Line and cannot necessarily be read as applying to the claim against Paragon.
e. Even if the LOE is found to govern the relationship between Mrs Plevin and Miller Gardner relating to the Paragon claim, it is not intended to limit Mrs Plevin's liability for costs, merely to define when they may seek payment of those liabilities from her. The mere fact that it is vanishingly unlikely that solicitors will seek to recover their costs from a client does not mean that the client is not liable for such costs – see paragraph 30 of the judgment of Slade J in HMRC v Gardiner [2018] EWHC 1716 (QB).
B. The Defendant's case
a. The definition of "win" in the CFA, namely "an agreement or Judgment in your favour and including provision for a costs order or award payable to you by your opponent" is only consistent with the requirement for an agreement or judgment in the Claimant's favour and an order for costs in the Claimant's favour as being cumulative requirements.
b. This interpretation is consistent with the commercial purpose of the CFA, namely that the Claimant should be able to bring the claim without exposure to costs and that Miller Gardner should be recompensed if and to the extent there is an order for costs in the Claimant's favour.
c. The CFA expressly deals with situations where the Claimant's obligation to pay costs is not triggered by an order for costs in her favour. So for example where the case is allocated to the small claims track and is successful or settles before proceedings are commenced, a fixed figure of 25% of the amount recovered plus VAT is payable. The express provision for payment in such circumstances is inconsistent with there being a more general liability on the Claimant's part for Miller Gardner's costs where costs are not recovered.
d. The wording of WWDN as set out at paragraph 10 above, specifically the phrase "provided you co-operate at all times and provide us with instructions promptly and regularly, there will be no obligation upon to you (sic) meet the costs incurred" is only consistent with there being no circumstances in which the Claimant can be liable for costs beyond those where there is recovery for them.
e. The terms of the LOE indicate the only circumstances in which costs will be payable by the Claimant. They do not cover this situation.
a. The apparent inconsistency between this position and that where, in successfully resisting a counterclaim, the wording of the CFA would potentially make the successful Claimant liable for Miller Gardner's costs even if there were no costs order in her favour is met by reading the words "relieving you of liability in whole or in part from any monies being claimed against you" as a substitute for "an agreement or judgment in your favour" such that there is a cumulative requirement of success in defending the counterclaim and a costs order in the Claimant's favour. This would give consistency between the two situations.
b. The interpretation contended for by the Claimant would have the consequence that a costs order on one issue would trigger a liability for all of Miller Gardner's costs. It is unlikely that the parties would have intended this.
c. Whilst it is true that the Defendant's interpretation leads to the possibility that the Claimant might recover substantial damages but not its costs, that is an unlikely scenario. In any event, it would be the consequence of a bad deal, which is not a reason to depart from the normal meaning of language (see Lord Neuberger in Arnold v Britton at paragraph 20, cited above).
d. The suggestion that the CA variation, SC variation and/or SC applications variation can be used to assist in the proper interpretation of the CFA is contrary to principle, given that these were variations after the CFA was entered into.
C. Discussion
Issue 2 - On the true construction of the ATE policy, did the indemnity cover provided by DAS to Mrs Plevin include Miller Gardner's basic charges and success fee, in so far as Mrs Plevin may be liable for those?
A. Introduction
B. The Claimant's case
"We will pay your solicitor's basic charges, disbursements, barrister's fees and success fee and your opponent's legal costs and disbursements if you win, except in the circumstances set out in 1(c) above, but the court orders that you pay part or all of these costs."
The circumstances set out in clause 1(c), relating to the failure of the Claimant to do better than a Part 36 offer made by the Defendant, do not apply here. Accordingly, the Claimant is entitled to recover the solicitors' basic charges and success fee.
C. The Defendant's case
a. The first is to read clause 2 as setting out not what is covered under the policy, but what may be covered, the schedules setting out the actual cover provided.
b. The second is to excise the words "basic charges" and "success fee" from clause 2 of the policy.
D. Discussion
Issue 3 - On the true construction of the ATE policy, did the indemnity cover provided by DAS to Mrs Plevin include Mrs Plevin's costs of the remitted proceedings?
A. The Claimant's case
B. The Defendant's case
C. Discussion
Issue 4 – On the true construction of the ATE policy, did the indemnity cover provided by DAS to Mrs Plevin include Mrs Plevin's costs of the detailed assessment proceedings relating to the CC proceedings?
A. The Claimant's case
B. The Defendant's case
C. Discussion
Issues 5 and 6 - On the true construction of the ATE policy, did the indemnity cover provided by DAS to Mrs Plevin include Mrs Plevin's costs of the detailed assessment proceedings relating to the CA appeal and to the SC appeal?
A. The Claimant's case
B. The Defendant's case
C. Discussion
Issue 7 - If the finding on issue 2 is that, on the true construction of the ATE policy, the indemnity liability of DAS did include the basic costs and success fee of Miller Gardner, is Mrs Plevin and/or are Miller Gardner nonetheless estopped from recovering such costs and fee?
A. Introduction
B. The Defendant's case
a. Miller Gardner were obliged under the 2008 TOBA to provide an estimate of its opponent's costs as well as disbursements but only its own disbursements. Given that the premium was assessed by DAS from the information that it provided, it is clear that the intention was not to insure in respect of Miller Gardner's own costs.
b. By letter dated 22 December 2010 referred to at paragraph 29 above, the Defendant indicated that they considered that the policy did not cover the Claimant's solicitor's own costs. In response, Miller Gardner provided a schedule setting out details of the Claimant's own disbursements but not their profit costs or success fee.
c. Miller Gardner gave further such limited estimates, excluding their own costs and success fee, in March and May 2011.
d. The Defendant's letter dated 11 May 2011 makes it clear that its calculation of premium for Stage C is based on a potential liability for the Claimant's disbursements and the Defendant's own costs and disbursements.
e. In response to information about an increase in costs, the Defendant, in an email dated 12 September 2012, again expressed interest only in the Defendant's costs and the Claimant's disbursements. This is only consistent with the belief that they were not indemnifying in respect of the Claimant's solicitors' own costs.
f. Following the failure of the case in the first County Court trial, Miller Gardner, in a letter dated 8 October 2012, claimed only their own disbursements from DAS.
g. Cover given by DAS in respect of the CA appeal was based on costs estimates provided by Miller Gardner that did not include their own costs (see Miller Gardner's letter of 1 May 2013).
h. Cover given by DAS in respect of the SC appeal was based on costs estimates provided by Miller Gardner that did not include their own costs (see Miller Gardner's letter of 29 January 2014).
C. The Claimant's case
D. Discussion
Issue 8 – Are Miller Gardner liable to repay monies advanced under the FFA?
A. Miller Gardner's case
a. DAS would provide forward funding of disbursements on behalf of Miller Gardner in respect of cases insured by DAS within 7 days of receipt of a request;
b. Miller Gardner would use the forward funding to pay disbursements as and when required and generally to assist its cash flow and/or working capital requirements;
c. Miller Gardner would repay the forward funding within 7 days of recovery from the relevant opponent;
d. Miller Gardner's obligation to repay the forward funding was limited to the amounts actually recovered from the relevant opponent.
B. The Defendant's case
C. Discussion
a. The written document does not contain any such clause whether expressly or by way of necessary implication;
b. Mr Gardner's evidence is not to the effect that any such clause was agreed whether expressly or by necessary implication.
Issue 9 – What sums have been advanced pursuant to the FFA and not refunded to DAS?
A. Miller Gardner's Case
a. Hodge Malek – it is agreed that the full amount of the forward funding has been repaid.
b. James Strachan – it is agreed that the full amount of the forward funding has been repaid.
c. John Campbell – it is agreed that there is a shortfall between the amount of disbursements recovered by Miller Gardner in respect of Mr Campbell and the amount paid to DAS. The sum of £14,478, which was set off against other liability of DAS to Miller Gardner should be set off against this.
d. Robert Marven – DAS paid £44,986.50 in respect of Mr Marven's fees and has been repaid £19,297.50 (as part of the total figure of £173,482.74 paid to DAS by Miller Gardner in respect of the SC appeal). On the face of it therefore my judgment on the previous issue would leave the sum of £25,689 owing to DAS. However, Miller Gardner contend that the payment to Mr Marven was not in fact pursuant to the FFA but rather was paid to him direct and that therefore there is no obligation on its part to account for the shortfall in any event.
e. Filing fee – it is agreed that the full amount of the forward funding has been repaid.
f. Court of Appeal costs – it is agreed that forward funding of £66,060 was received by Miller Gardner. They contend that their liability to repay any sum relating to the CA Appeal was compromised by the payment from Paragon to DAS of £60,000 in July 2018. This is dealt with further below.
B. The Defendant's case
a. Hodge Malek –This is agreed. No sum is due.
b. James Strachan – This is agreed. No sum is due.
c. John Campbell – This is agreed. The sum of £22,200 paid by way of forward funding less the sum of £14,478 which has been set off against a separate liability from DAS to Miller Gardner, namely £7,722, is due from Miller Gardner to DAS.
d. Robert Marven – The sum of £25,689 is owing to DAS. The payment to Mr Marven was made in the circumstances set out at paragraph 41(a) above, in which Mr Brown asserted the payment was made on the same basis as the payments under the FFA. However it was accepted that there is no evidence of a written agreement to that effect.
e. Filing fee – This is agreed. No sum is due.
f. Court of Appeal costs – The Defendant does not accept that this figure was paid as a compromise of Miller Gardner's liability to DAS, but rather as a compromise of Paragon's liability to Miller Gardner, which the latter was accounting for to DAS.
C. Discussion
a. Given the finding on issue 8, the payment in respect of Mr Campbell's fees is due and owing by Miller Gardner to DAS.
b. As regards the fees of Mr Marven, there is a lack of clear evidence of any agreement along the lines referred to by Mr Brown. Whilst, as Mr Brown said, there may have been exchanges about the terms of payment of Mr Marven, I can see no evidence from which to conclude that Miller Gardner agreed that payment to him be on the same terms as payment under the FFA such that the firm had a liability to account to DAS for any shortfall between that paid and that recovered. Accordingly, I reject the claim of DAS in this regard.
c. As regards the Court of Appel fees, the more natural reading of the email of 10 July 2018 was that the payment of £60,000 was being accepted by DAS in full and final settlement of the monies due to be repaid to it in respect of the FFA funding for the CA Appeal. As Counsel for the Claimant said in closing speeches, why would DAS have agreed the simultaneous payment of monies by Paragon to Miller Gardner in respect of fees that included exactly that which had been funded by DAS? Notwithstanding the unsatisfactory evidence as to the circumstances of an agreement that the payment was in full and final settlement of any liability under the FFA, it is overwhelmingly likely that this was the reason for the parties agreeing the payment and accordingly I reject the argument that Miller Gardner is further liable to DAS in respect of any monies forwarded by DAS under the FFA relating to the CA appeal.
Issue 10 – Are Miller Gardner entitled to deduct commission from premium recovered in respect of Mrs Plevin's ATE policy before accounting to DAS?
A. Miller Gardner's case
a. That the 2012 TOBA applied because the provision of the additional cover for an appeal amounted to a new policy.
b. That there was an oral contract providing for the payment of commission on existing cases if further cover was provided in respect of an appeal hearing, such contract being either an oral variation of the 2008 TOBA, an oral variation of the 2012 TOBA or a collateral contract to the 2012 TOBA.
c. The Claimant was entitled to a reasonable consideration for its services pursuant to Section 15 of the Supply of Goods and Services Act 1982.
B. The Defendant's case
C. Discussion
Conclusion
Date | Event | Ref |
June 2008 | Miller Gardner instructed by Mrs Plevin in respect of PPI mis-selling claim against (1) LL Processing (UK) Ltd trading as Loan Line and (2) Paragon Personal Finance Ltd | 2B/6/221/§4 |
19.06.08 | Letter of engagement from Miller Gardner to Mrs Plevin headed "Re PPI Claim – Loan Line 9398" setting out terms of business | 2C/1 |
19.06.08 | CFA in respect of proposed claim against LLP | 2B/6/247 |
19.06.08 | CFA in respect of proposed claim against Paragon accompanied by document entitled "What we do next" | 2C/6-6a 2C/11-14 |
10.07.08 | Miller Gardner signs Terms of Business Agreement with Ultimate Corporate Solutions Limited | 2C/16/62-77 |
20.07.08 | Mrs Plevin signs letter of engagement | 2C/4 |
25.07.08 | Signed copy of CFA returned to Miller Gardner | 2B/6/221/§5-6 |
18.08.08 | Miller Gardner signs Terms of Business Agreement with DAS with effect from 1 July 2008 (signed by DAS on 01.09.08) | 2C/35-47 |
15.10.08 | Miller Gardner writes to DAS's broker, Financial Claims Service Ltd, to request stage 2 ATE policy for Mrs Plevin | 2B/6/256 |
29.10.08 | DAS writes to Miller Gardner confirming indemnity in place under ATE policy and enclosing copy of policy schedule for Post-issue stage with indemnity limit of £25,000 and premium of £1,575 inclusive of IPT. Schedule 1 referred in error to wording of D's Business Litigation Policy [2C/24-25] rather than its Personal Litigation Policy [2C/31-34] | 2B/6/258-9 2C/17 2B/7/310-11/§5 2B/3/113/§19 |
24.11.08 | FCS sends Miller Gardner copy of policy wording for Business Litigation Policy | 2B/6/262-4 |
07.01.09 | Mrs Plevin's claim issued against LLP (now in liquidation) and Paragon | 2B/6/224/§11 |
15.09.09 | Miller Gardner completes and returns questionnaire with details of prospects of success and estimated costs and disbursements for claim against Paragon | 4E/2-4 |
22.02.10 | Mrs Plevin settles claim against LLP in return for payment of £3,000 as an unsecured claim in the liquidation of LLP; each party bears its own costs | 3D/2/317-318 |
09.12.10 | Miller Gardner provides DAS with latest estimate of Mrs Plevin's costs and disbursements for purposes of Stage 3 premium | 4E/7 |
22.12.10 | DAS asks Miller Gardner to complete Stage 3 questionnaire on behalf of Mrs Plevin. Covering letter states Policy only covers Claimant disbursements and Defendant costs and disbursements. | 4E/15 |
06.01.11 | Miller Gardner returns completed Stage 3 questionnaire which includes estimates of Mrs Plevin's disbursements and Paragon's costs only (not own solicitor costs) | 4E/17-18 |
10.03.11 | Miller Gardner provides updated estimates of Paragon's costs and Mrs Plevin's disbursements | 2B/3/154 |
12.05.11 | Miller Gardner provides further updated estimates of Paragon's costs and Mrs Plevin's disbursements | 2B/3/156 |
18.05.11 | DAS provides Miller Gardner with details of calculation of Stage C premium | 4E/23 |
June 2011 | DAS produces revised version of Personal Litigation Funding policy wording | 2C/34a-f |
19.10.11 | Mrs Plevin receives payment of £3,000 from FSCS in respect of claim against LLP | 2B/6/224/§11 |
27.03.12 | Email from Simon Mayhew of DAS to Miller Gardner attaching copy of revised TOBA and agreeing to forward fund disbursements on insured cases ("FFA") | 4E/26 |
27.03.12 | Miller Gardner and DAS enter into new TOBA ("2012 TOBA") with effect from 1 March 2012 | 2C/48-61 |
26.07.12 | Miller Gardner provides DAS with updated estimates of Mrs Plevin's own costs and disbursements and Paragon's costs and disbursements | 4E/31 |
12.09.12 | DAS email to Miller Gardner expressing concern at increase in estimate of Paragon's costs and Mrs Plevin's disbursements | 4E/39 |
13.09.12 | Miller Gardner letter to DAS explaining increase in estimated costs | 4E/40 |
19.09.12 | DAS extends cover under Policy to cover trial of Mrs Plevin's claim against Paragon and issues policy schedule for Trial Period with indemnity limit of £136,000 and premium (for Stages A-C) of £180,185 including IPT | 4E/46 2C/18 |
04.10.12 | Trial of Mrs Plevin's claim against Paragon. Claim dismissed and Mrs Plevin ordered to pay indemnity costs with an interim payment of £60,000. | 2B/6/225/§12 |
08.10.12 | Miller Gardner writes to DAS claiming an indemnity under Policy for Mrs Plevin's counsel fees and disbursements | E/49-56 |
24.10.12 | Mrs Plevin seeks permission to appeal to Court of Appeal ("CA Appeal") | 2B/6/225/§13 |
05.12.12 | DAS sends email to Miller Gardner purportedly giving 30 days' notice of termination of 2012 TOBA | 4E/58 |
29.01.13 | Miller Gardner writes to DAS repeating claim for an indemnity under Policy for Mrs Plevin's counsel fees and disbursements | 4E/59-60 |
13.03.13 | Miller Gardner writes to DAS seeking cover for CA Appeal and provides estimate of Mrs Plevin's counsel fees and disbursements and Paragon's costs (based on Miller Gardner's assumptions) for CA Appeal | 4E/64-5 |
01.05.13 | Miller Gardner provides estimates of Paragon's costs for CA Appeal and Mrs Plevin's counsel's fees. | 4E/68 |
04.06.13 | Mrs Plevin granted permission for CA Appeal | 2B/6/225/§13 |
07.08.13 | DAS extends cover under Policy to include CA Appeal and issues policy schedule for Appeal stage of case with Top Up Limit of Indemnity of £198,000 and a Total Combined Indemnity limit of £334,000 for a Top up premium of £262,350 inclusive of IPT | 2C/19 |
08.08.13 | Miller Gardner and Mrs Plevin enter into variation of CFA to cover CA Appeal ("CA appeal variation ") | 2C/6b |
16.12.13 | CA allows Mrs Plevin's appeal and sets aside costs order in favour of Paragon. Mrs Plevin's claim remitted to County Court for re-hearing but Paragon granted permission to appeal to Supreme Court ("SC appeal"). Remitted claim stayed pending SC Appeal | 4E/71-73 2B/6/226/§15 |
03.01.14 | Miller Gardner and Mrs Plevin enter into further variation of CFA to cover SC Appeal ("SC appeal variation") | 2C/7 |
27.01.14 | CA orders Paragon to pay Mrs Plevin's costs of CA Appeal but directs costs not to be assessed before conclusion of SC Appeal. Paragon ordered to pay £58,000 on account. Costs of claim in County Court reserved to judge hearing remitted proceedings. | 2B/6/226/§15 |
29.01.14 | Miller Gardner provides DAS with estimates of Mrs Plevin's counsel fees and disbursements and Paragon's costs for SC Appeal and requests cover in sum of £165,000 | 4E/76 |
11.02.14 | Paragon files appeal to SC | 1A/2/16/§30 |
03.04.14 | Miller Gardner provides DAS with Paragon's estimate of counsel fees and solicitors' costs; estimate of Mrs Plevin's disbursements (including counsel fees) | 4E/78-80 |
17.04.14 | D agrees to extend cover under Policy to include SC Appeal and issues policy schedule for Appeal to Supreme Court stage, with Additional Top Up Limit of Indemnity of £602,000 and a Total Combined Indemnity limit of £936,000 for an Additional Top-up premium of £797,650 | 4E/83 2C/20 |
12.11.14 | SC dismisses Paragon's appeal and remits Mrs Plevin's claim to County Court on question of relief | 2B/6/227/§17 |
14.11.14 | DAS emails Miller Gardner asking for copies of any agreements/emails in relation to FFA | 4E/87 |
25.11.14 | Miller Gardner provides copy of email dated 27.3.12 in relation to FFA | 4E/88 |
05.02.15 | SC affirms CA's costs order and orders Paragon to pay Mrs Plevin's costs of SC Appeal with payment on account of £165,000 | 2B/6/228/§17 |
06.02.15 | DAS internal memo stating DAS is contractually obliged to provide forward funding under FFA | 4E/100 |
02.03.15 | Remitted relief hearing in County Court. Mrs Plevin obtains judgment for damages and interest of £4,500. issue of costs reserved to a subsequent hearing | 2B/6/228/§18 |
24.03.15 | Notice from DAS to Miller Gardner purporting to amend FFA to revert to original terms of 2012 TOBA in respect of funding of disbursements | 4E/112-113 |
23.07.15 | Mrs Plevin refused permission to appeal order of HHJ Platts on paper | 3D/357 |
18.11.15 | Mrs Plevin refused permission to appeal order of HHJ Platts on renewed oral hearing | |
02.12.15 | Letter from Miller Gardner to DAS enclosing schedule of forward funding in relation to Mrs Plevin's claim. Schedule shows total forward funding of £288,484.88 of which £168,469.22 had been used to pay disbursements and a balance of £119,835.66 had been retained by Miller Gardner against future disbursements | 4E/118 |
05.02.16 | Email from DAS to Miller Gardner expressing surprise that forward funding had been retained and asking that unused monies be repaid | 4E/123 |
08.02.16 | Letter from A&M Bacon to Miller Gardner stating that they had informed by DAS that the Policy did not cover (1) detailed assessment proceedings or (2) remitted County Court proceedings | 2B/6/285 |
09.02.16 | Hearing in respect of costs in remitted County Court proceedings. Adjourned at Paragon's request. | 2B/6/229/§19 |
11.02.16 | Detailed assessment of Mrs Plevin's costs of SC Appeal concluded. Mrs Plevin's costs assessed at £751,457.84 (including ATE premium of £531,235) and Paragon ordered to pay costs of detailed assessment. | 2B/6/229/§20 |
24.02.16 | Letter from Miller Gardner to DAS setting out Miller Gardner's understanding of FFA | 4E/124 |
29.02.16 | Reply from DAS stating that if DAS had realised there was no pressing need to put Miller Gardner in funds re counsel's fees it would not have agreed to provide forward funding | 4E/126 |
02.03.16 | Letter from Miller Gardner to DAS in response to letter from A&M Bacon disputing lack of cover for detailed assessment proceedings and remitted County Court proceeding | 4E/128 |
16.03.16 | Letter from DAS to Miller Gardner stating that the following are not covered under the Policy (1) Mrs Plevin's own solicitor costs (2) costs of detailed assessment proceedings (3) remitted County Court proceedings | 4E/145 |
30.03.16 | Letter from Miller Gardner to DAS stating that they had relied on DAS "as having full knowledge and understanding of the terms of the indemnity and for those reasons have not had cause previously to consider such terms" and that, contrary to DAS's position, (1) Mrs Plevin's own solicitor costs, (2) the costs of detailed assessment proceedings and (3) the costs of the remitted County Court proceedings are covered under the Policy | 4E/159 |
04.04.16 | Paragon applies to SC to (1) vary or set aside SC costs order (2) review Costs Officers' decisions on detailed assessment (3) stay enforcement of costs award ("SC applications"). Paragon also applied for wasted costs against Miller Gardner. | 2B/6/229/§22 |
01.06.16 | Draft Part 8 proceedings served by Miller Gardner on DAS | 4E/182 |
21.06.16 | Miller Gardner and Mrs Plevin enter into further variation of CFA to cover SC Applications ("SC appeals variation") | 2C/15 |
28.06.16 | D internal email confirming that DAS can continue to consider top-up cover on Miller Gardner's cases provided certain requirements met | 4E/190 |
29.07.16 | Letter from Clyde & Co on behalf of DAS setting out D's position regarding cover under Policy and containing reservation of D's rights | 4E/197-203 |
05.08.16 | Part 8 Claim Form issued. | 1A/1/5 |
08.08.16 | Miller Gardner asks DAS to extend cover under Policy to cover SC Applications | 4E/204 |
25.08.16 | Miller Gardner provides DAS with estimate of Mrs Plevin's costs and Paragon's costs for SC Applications | 4E/206 |
18.10.16 | D offers subject to approval (and without prejudice to its position in dispute) to extend cover to cover SC Applications | 4E/221 |
8.11.16 | D agrees (without prejudice to its position in dispute with C) to extend cover under Policy to cover SC Applications and issues policy schedule for Paragon's applications to Supreme Court with a Further Top Up Limit of Indemnity of £400,000 and a Total Combined Indemnity limit of £1,336,000 and further top up premium of £550,000 inclusive of IPT | 4E/225 2C/22 |
06.02.17 | Hearing in SC. Mrs Plevin confirms on instructions from DAS that by mistake the Business Litigation Policy instead of Personal Litigation Policy was incorporated; and that DAS would not rely on terms of Business Litigation Policy insofar as different and would in effect be bound by clause 4 of Personal Litigation Policy | 2B/7/310/§5 1A/3/60/§14.1 |
15.03.17 29.03.17 |
SC dismisses SC Applications (and wasted costs application against Miller Gardner) and orders Paragon to pay Mrs Plevin's costs of SC Applications | 2B/7/312/§9-10 |
27.04.17 | Letter from Miller Gardner to DAS enclosing cheque for £173,482.74 in respect of forward funding for SC and stating Miller Gardner would not be returning premium recovered at that stage | 4E/232 |
15.05.17 | Email from DAS to Miller Gardner accepting cheque for £173,482.74 in part payment and requesting payment of £50,389 within 7 days and payment of recovered premium | 4E/236 |
15.05.17 | Letter from Clyde & Co stating that any recovered premium is held on trust for DAS and Miller Gardner, and asking Miller Gardner to explain basis on which it declines to return premium | 4E/237 |
15.5.17 | Detailed assessment of Mrs Plevin's costs of CA Appeal concluded. Paragon ordered to pay 80% of Mrs Plevin's costs of detailed assessment | 1A/2/20/§51 |
16.05.17 | Letter from Miller Gardner to DAS stating that "other than for indemnity claims" all monies forward funded for the SC proceeding had been repaid but some monies had been allocated to the CA proceedings | 4E/239 |
19.05.17 | Amended Claim Form | 1A/1/5 |
14.06.17 | Order that Claim proceed as Part 7 Claim | 1A/13/500 |
22.06.17 | Remitted costs hearing in County Court before HHJ Platts who orders Mrs Plevin to pay Paragon's costs of relief hearing on 2.3.15 from 27.1.15[13] to be assessed but otherwise orders no order as to costs in respect of proceedings in County Court | 3D/2/287 |
04.07.17 | Letter from Miller Gardner to DAS enclosing cheque for £362,817.35 in respect of premium recovered in SC proceedings (£531,235 less commission retained by Miller Gardner) | 4E/246 |
04.07.17 | Letter from Miller Gardner to DAS enclosing cheque for £150,182.64 in respect of premium recovered in CA proceedings (£185,108.84 less 20% commission retained by Miller Gardner) | 4E/247 |
July 2018 | Detailed assessment proceedings in respect of Mrs Plevin's costs of SC Applications compromised in sum of £500,000 to be paid by Paragon (of which £200,000 already paid). £235,000 paid to DAS, £65,000 paid to Miller Gardner | 2B/2/50/§5-6 |
Note 1 The Claimant’s solicitors’ firm has in fact had three incarnations during these proceedings: the first was Miller Gardner (a firm); the second, Miller Gardner LLP; and the third, Miller Gardner Limited. The original CFA policy was entered into by the first of these. The benefit of the CFA was subsequently assigned first to Miller Gardner LLP then to Miller Gardner Ltd. No issue arises in these proceedings as to the validity or effect of these assignments and therefore, for the sake of simplicity, the solicitors are simply called Miller Gardner throughout.
[Back] Note 2 A later TOBA was entered into in 2012, as referred to below. To distinguish them, the two agreements will be called the 2008 TOBA and the 2012 TOBA. [Back] Note 3 The solicitors – in this case, Miller Gardner. [Back] Note 4 The variations are referred to as the CA variation, the SC variation and the SC applications variation respectively. [Back] Note 5 At an earlier point in the 2012 TOBA, reference is made to Stages A, B and C, which correspond to the stages referred to above in respect of the 2008 TOBA. Stages 1, 2 and 3 are not separately defined, but it was common ground that they were synonymous with stages A, B and C. [Back] Note 6 Whilst this issue might be thought to raise a conflict of interest between the Claimant on the one hand and the Third Party on the other, Counsel who represented both parties assured me that the matter had been carefully considered and that no conflict arose in reality. [Back] Note 7 See for example paragraph 13 of the statement of 14 September 2018. [Back] Note 8 The date appears at paragraph 45 of his statement of 14 September 2018, although Mr Brown did not appear to have personal knowledge of the date. [Back] Note 9 See HMRC v Gardiner [2018] EWHC 1716 at paragraph 30. [Back] Note 10 The Schedule in respect of the SC applications adds “(excluding any costs and disbursements relating to the wasted costs elements of the applications).” [Back] Note 11 See PD44, paragraph 4.2 – an order that a party pay its own costs appears to be synonymous with an order that a party bear its own costs. [Back] Note 12 See paragraph 4.1 of the SRA Handbook which requires that a firm of solicitors properly account to their client for any pecuniary reward that they receive. [Back] Note 13 Paragon made an offer on 23.1.15 to pay Mrs Plevin £4,500 which Mrs Plevin rejected on 27.2.15. The judge held Mrs Plevin should have accepted Paragon’s offer [1A/3/68/§55.2] [Back]