A costs judge has ruled that the mother of a claimant did not give informed consent to solicitors deducting £28,000 from her daughter’s damages.

The mother, the claimant’s litigation friend in EVX v Smith, had not objected to the deduction by national firm Irwin Mitchell after settlement had been secured in a clinical negligence claim.

But Cost Judge Brown said there was no informed consent to the hourly rates claimed and therefore no presumption of reasonableness. The rates charged of £235-240 an hour for Grade C fee earners working at the Southampton office were ‘not far off the guideline hourly rates for a Grade A fee earner in 2021’, the judge said, and ‘clearly unreasonably high for the work done’.

The costs judge added: ‘It is not enough for the litigation friend to have been informed of the prospect that there would be a shortfall in the recovery of the costs from the defendants, nor that she was informed of the amount that the solicitors say would be payable by way of shortfall as the case went on, nor indeed that she approved settlement of costs with the defendant.

‘It is clear that the terms of CPR 46.9(3) (c) (i) and (ii) are linked so that the solicitor’s explanation must be directed to the unusual nature of the costs: in this case, the hourly rates.’

Irwin Mitchell had been instructed in 2016 to work on a claim on behalf of a girl whose hip problem was allegedly misdiagnosed as a baby and which will cause her problems for life. The claim was settled, without liability admitted, for £225,000 following a roundtable meeting. Costs were agreed for £130,000 between the parties but the court ordered a detailed assessment before approving any deductions from the damages to cover the shortfall in recoverable costs.

Costs Judge Brown said that while the damages were substantial and the claim was handled with skill and care, it was not highly complex either in terms of liability or quantum.

He said there was ‘no basis’ for saying that the hourly rates could not be assessed and potentially reduced, even if they were not agreed.

He also rejected an argument that such rates were not unusual because, it was submitted by Irwin Mitchell, they were normal for a major provider of personal injury services. Irwin Mitchell did not occupy ‘such a dominant position in the field of personal injury work that whatever rates they charge should be regarded as usual’.

 

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