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 Legal Articles* MOJ Portal Hearings
In Jaykishan Patel v Fortis Insurance Ltd LTL 11/1/2012 the court held that removing a claim from the RTA MOJ Portal for technical non-compliance was unreasonable. The claimant was restricted to MOJ Portal costs only and was ordered to pay the defendant's additional costs of defending Part 7 proceedings. Clearly there is a need to closely follow the rules and procedural requirements of the MOJ RTA Claims Portal; the cost consequences of not doing so and slipping out of the MOJ Portal are substantial. However, in this case it was clear to the judge that the claimant's solicitors had deliberately seized on an insignificant breach in order to justify removing the matter from the MOJ Portal. This is not unlike RTA cases with premature issue and breaches of the pre-action protocol - where claimant solicitors race to issue proceedings to avoid fixed predictive costs under CPR 44 Part II, making highly unrealistic offers in order to prevent settlement pre-issue, or withhold full information about a claimant's claim to prevent the defendant from being able to make a truly protective Part 36 offer. Here the decision to remove the claim from the MOJ Portal was made the same day the FIR - the Full Insurer Response - was received. Whilst no finding was made on whether that decision was made before or after receipt of the FIR, the judge did note that had an acknowledgment been sent, the claimants would have still have to have waited for the FIR before they could do anything further anyway. He had no difficulty in concluding the claimant's solicitors had acted unreasonably. The judge was invited by both counsel at the start of the hearing to take the opportunity to make some more general comments on MOJ RTA Portal cases in his judgment as there was virtually no case law on MOJ Portal claims. The judge did not disappoint and made a variety of obiter comments. The judge found for example, that the rules of service under CPR 6 do not apply to MOJ Portal claims as these were not 'proceedings' and also because the MOJ Portal was a self-contained code. (Such language reminiscent of Gibbon v Manchester City Council [2010] EWCA Civ when talking there about Part 36 being a self-contained code was clearly deliberate.) The judge also held that a CNF - Claim Notification Form used in the MOJ Portal - is not a 'claim form' within the meaning of CPR 6. He also found that a case 'begins' in the MOJ Portal as soon as the CNF is sent, and that the FIR can satisfy the requirement for an acknowledgment as the greater encompassed the lesser. Of particular interest was the obiter comments on a party deciding a claim was going to leave the MOJ Portal. Of course claims cannot re-enter the MOJ Claims Portal once they have left, but at this time it was not possible for a claimant to physically remove a claim from the MOJ Portal, and so although the claimant had decided to not continue in the Portal it was still physically in the claims Portal. The defendant invited the claimant to continue to follow the MOJ Portal Protocol after the claimant had told them they had elected not to continue in the process. The judge held that it was not possible to continue using the MOJ Claims Portal even where - as in this case - no Part 7 Proceedings had been issued, because as soon as one party communicates their decision not to participate then it ceases to 'continue' and it cannot resume. MOJ Portal Appeal In Dominic v Martin LTLPI 1/9/2011, on appeal HHJ Stewart QC considered the odd position where a medical report gives a range in the prognosis period, and under the portal scheme no witness evidence is possible. What is the correct approach be to this situation? He held that the correct approach is to assess damages on a mid-point, in the same way future loss cases are traditionally assessed. Thus a thorny issue has been resolved and provides welcome certainty for both litigants and practitioners alike. VAT on Medical Disbursements
When you consider that 14% of your car insurance premium is to pay for the cost of whiplash claims, like the emerging spring, the BGT decision should bring cheer! Barratt Goff and Tomlinson v The Commissioners for Her Majesty's Revenue and Customs, was a case brought by a Nottinghamshire Law Firm and in which the Law Society intervened. The hearing was on 1st - 2nd December 2010, and the decision was published at the end of January 2011. Read the full case report here on BGT's website. (Opens in a new window.) Barratt Goff and Tomlinson (BGT) disputed that they had to charge and account for VAT on medical reports obtained for personal injury or clinical negligence litigation. Not so long ago HMRC had accepted medical reports were disbursements and so they were not subject to VAT. However, in 2008 they issued new guidance stating that VAT had to be charged. Most insurance companies cannot recover VAT in the normal way because they are 'exempt institutions' and so this simply added to their costs, which inevitably get passed on to those of us paying for car insurance. Small practitioners were hit hard, with some of their paying clients point blank refusing to pay the VAT, leaving the solicitor to pick up the tab. HMRC argued that as BGT read the medical reports, it obtained them to provide a legal service and therefore VAT should be charged. However, BGT argued that the expense of ‘obtaining’ a medical report was merely a disbursement not subject to VAT because it was a separate service carried out for the claimant as their agent. The tribunal accepted BGT's arguments. What now? Of course the big question on everyone's lips is whether the effect of this is retrospective. The decision is sadly silent on the point. What is clear is that the tribunal accepted that VAT should not be charged, that the HMRC guidance was wrong. It would appear therefore, that this is retrospective in effect, and is always accepted by courts to be so in Sarah's experience. An interesting practitioner note is that judges are more easily persuaded by the article concerning the case in the Law Gazette than they are in the actual judgment. Law Gazette Editors take note! See the Law Society practice note here on the Barratt Gogh and Tomlinson v HMRC case and its implications. (Opens in a new window.) Liability Orders
Prompt Applications As a matter of principle for all challenges to administrative and judicial decisions, an application to set aside should be made promptly. Specifically, in Brighton & Hove (see below) the court held that prompt action should be taken within a matter of days or at most a very few weeks, not months. Time starts to run from the date of the order, or from when a defendant has notice or constructive notice of the order. Constructive notice of a liability order can be deemed from as little as notice of the issue of a summons with no notice of the actual outcome – para 33 Brighton & Hove; “the jurisdiction to reopen a liability order will be unavailable to a defendant who delays in circumstances in which he has notice that an order may have been made, although he had not received a copy or been informed that an order has been made."
Can I Appeal a Liability Order?I am often asked if liability orders can be appealed. The secret to successfully challenging a liability order is to act fast as soon as you receive a summons or think a liability order may have been made. Yes, you can challenge them but you need to act really fast. It is not unlikely applying to set aside a statutory demand when it comes to time running. If you are a member of the general public and wish to challenge a liability order, please complete the contact form on the 'Liability Order' page. Solicitors with enquiries on behalf of their clients can of course contact me through chambers in the usual way. |
R (on the application of Newham London Borough Council) v Stratford Magistrates' Court & Selwyn Dublin (Interested Party)[2008] EWHC 125 (Admin), [2008] RA 108, [2008] All ER (D) 17 (Jan) [2008]. In this case, Mr Dublin claimed he had not been aware of the proceedings. He did not submit nor prove that order was unlawful or made in excess of jurisdiction, or in ignorance of a significant fact concerning their procedure of which the justices should have been aware, as required in Brighton & Hove. The District Judge allowed the application because he had an ‘arguable case’. The council applied to Judicially Review the decision of the District Judge to set aside the liability order. At Judicial Review the council successfully argued that was the wrong test. The test to set aside a liability order was not simply where it would be reasonable and in the interests of justice to do so – such a test would be too wide and vague. A liability order cannot be overturned simply by showing an arguable case. The court must be satisfied: - the order was made as a result of a substantial procedural error, defect or mishap,
- that there was both a genuine and arguable dispute as to that liability, and
- that the application was made promptly. Finding ‘some doubt’ over the original decisions does not satisfy the correct test, neither would allegations as to non-receipt of summonses, etc, even if proved.
Further, at para 34, HHJ Burnton stated the proper consideration was: “whether there had been any procedural defect in the proceedings that led to making of the liability orders, and whether (the defendant) had applied promptly for them to be set aside after learning they had been made.”
In Newham at para 17, Andrew Nicol QC stated: “I agree that mere non-receipt would not by itself necessarily amount to a ground for judicial review.”
However he went on to say: “If non-attendance at a hearing because of a traffic accident would be sufficient to satisfy that criterion, I find it difficult to see why non-receipt of the notice of the hearing might not also qualify.”
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Setting Aside Liability Orders - The Law
Magistrates are creatures of statute and do not have a statutory power to re-open civil cases, even when they know they have made an error! This used to mean that the only way to challenge a liability order was to judicially review the order - a highly expensive process. A common law power to re-open a civil case by magistrates developed in case law. This was set out in Liverpool City Council v Plemora Distribution Ltd [2002] EWHC 2467 (Admin) (“Plemora”) as where there had been a substantial procedural defect, where it has done something which is unlawful and in excess of its jurisdiction. However in R (Brighton and Hove City Council) v Brighton and Hove Justices [2004] EWHC 1980 (Admin) (“Brighton & Hove”), HHJ Burnton said it was important to note that the power Maurice Kay J held to exist in Plemora to set aside a liability order could not be exercised simply where the defendant disputed his liability. There must be a substantial defect, and not on the part of the defendant. Further, in Camberwell, at para 37, LJ Waller expressed disquiet over the Plemora case, saying it was not free from doubt. In Brighton & Hove, HHJ Burnton (at para 31) held that it would be exceptional to set aside a liability order, something to be undertaken cautiously. Further (para 37) he stressed the importance of the need for finality in proceedings for liability orders, and how it is inappropriate to re-open orders simply where it would be reasonable and in the interests of justice to do so – that test was too wide and vague. HHJ Burnton further held that a court should not set aside a liability order unless it is satisfied that there is a genuine and arguable dispute as to the defendant’s liability for the rates in question, AND
a. the order was made as a result of a substantial procedural error, defect or mishap. (The court must be satisfied that the order was unlawful or made in excess of jurisdiction, or in ignorance of a significant fact concerning their procedure of which the justices should have been aware), AND
b. the application to the justices for the order to be set aside is made promptly after the defendant learns that it has been made or has notice that an order may have been made. Prompt action should be taken within a matter of days or at most a very few weeks, not months, and certainly not as much as a year, (para 33).
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Miscellaneous Expenses - A lot of fuss and bother over nothing?
Ghattaorya v Bailey LTLPI 05/10/2009 My case of Ghattaorya v Bailey on miscellaneous expenses is over 3 years old, yet it still attracts vast numbers of hits on my site. One cannot under-estimate its importance when Part 36 offers are close, and literally thousands of pounds in costs can turn on whether this is allowed or disallowed. Do not ignore miscellaneous expenses! Claimant solicitors plead ‘miscellaneous’ expenses as an almost mandatory ‘add-on.’ This is supposedly to cover the cost of subsidiary expenses which have been incurred because of the litigation. Whilst it is trite law that you cannot recover for stress and anguish incurred because of litigation, the miscellaneous claim seems to have slipped through the net as a legitimate expense. This head of claim deserves closer inspection: The miscellaneous claim is for telephone calls, postage and stationary - travel is usually claimed for separately. Miscellaneous claims in your average fast track case typically range from about £10 to £50. There may have been the cost of posting an initial form reporting the incident to the insurer or solicitor, perhaps with a covering letter. However, many insurance companies take a claim over the phone now, rather than requiring the completion of a form, or provide a pre-paid envelope. The postage, therefore, is probably no more than one or two stamps, so less than say, £1. The cost of stationary – a single sheet of writing paper if any, well with a ream costing around the £3 mark for 500 sheets that’s not even a penny. Many insurance companies and solicitors firms provide free-phone numbers or lo-cost call numbers, e.g. 0845. Some solicitors firms now encourage all correspondence with the lay client to be by email. BT now charge 5.25p per minute for geographic day time calls from a landline, and if the claimant is on an all-inclusive package then there is no extra cost to them. All-inclusive phone packages are more common now, and with 19 out of 20 internet users on broadband now, the chances are more claimants will in fact be on some form of ‘TV/Telephone/Broadband’ all inclusive package. Put the claimant to proof and a judge will laugh at you, as there are hardly ever any receipts for these sorts of expenses. Cross-examine at any length, and you risk the wrath of the judge and a stop being placed on cross-examination thus deemed ‘unnecessary’. Most sensible Counsel (with sensible instructions) will get their heads together before trial and agree some compromise figure. However, if you must press ahead and attack the claim in court, zip in with a pin-point question without the usual protection of a pre-attack set up. The most devastating attack, however, is simply to ask the judge to compare the length of time claimed on the cost schedule for telephone attendances on the claimant, with the cost at even 5.25p/min for even every single call. The miscellaneous claim is then often dealt a hefty blow by the judge’s pen. In Ghattaorya v Bailey (2009) LTLPI 05/10/2009 the judge dismissed the entire head of claim for miscellaneous expenses, noting that claiming for miscellaneous expenses was ‘a bad habit claimant solicitors had got into’. The Ghattaorya v Bailey principle was approved by HHJ Harrington in Harwood v Kapek (2010) LTLPI 21/7/2010, again citing the failure to correctly plead the losses under this head as the reason for not allowing a miscellaneous claim, Ghattaorya v Bailey approved. There are a few (easier to spell) other cases on miscellaneous expenses, but Ghattaorya v Bailey is the most well known and often referred to. * This website is intended to provide general guidance only. It does not give legal or professional advice, and is not to be used in providing the same. Whilst all efforts have been made to ensure that the information is accurate, any liability including that arising in negligence, is excluded to the fullest extent lawfully permitted for any loss or damage howsoever arising from the use of this information. Tel: 0800 634 9650 © Sarah Robson
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