The Supreme Court Costs Office
No. 22 of 2005
McGovern v Swan Group Plc
1 July 2005
His Honour Judge Collins CBE Sitting with an Assessor
This appeal, heard in the Central London County Court, decided an important point which affects thousands of cases brought by trade union solicitors where the trade union in question entered into a collective conditional fee agreement (CCFA) during the course of the proceedings. The decision deals with the claimant's entitlement to claim costs on the conventional basis up to the date of the CCFA and costs plus success fee thereafter. No claim was made for a success fee for the period of instructions before the CCFA was entered into.
In this case the claimant suffered injuries at work and obtained legal assistance from his trade union who nominated solicitors to act for him. They commenced proceedings against his employer and, ultimately, his claim was settled for a sum in the region of £15,000 plus costs. At first the trade union solicitors acted for the claimant on conventional terms. However, after entering into a CCFA with the trade union, the solicitors wrote to the claimant stating that the CCFA now applied to this case and they enclosed a risk assessment. The claimant's bill of costs claimed a success fee for work done after the date after the date of the letter just referred to.
The defendants accepted that it was lawful for the claimant and the solicitors to alter their relationship to CCFA terms but contended that it was not reasonable to expect the paying party to pay the success fee claimed. It was argued that once the solicitors had been nominated for the claimant neither the trade union nor the solicitor had any right to depart from the original terms of retainer without the claimant's consent. It was submitted that the claimant had never so consented or, alternatively, if he had, that it was not reasonable for him to give up the benefits which the original retainer provided for him. They argued that the change of terms from the conventional basis to CCFA terms mid case conferred no worthwhile benefits upon the claimant but was done solely for the advantage of the trade union (and, perhaps, their solicitors). On detailed assessment, the costs officer allowed the success fee as did the Costs Judge to whom the first appeal was taken. On the second appeal the learned Judge upheld the decisions of the Costs Judge.
The learned Judge held that the contractual rights as between the claimant and his trade union were set out in the Union Rules on the matter. These expressly provided for the trade union to make any arrangements it thought fit for the conduct of the proceedings and to vary any such arrangements at any time provided only that such variations did not affect the assistance granted to the claimant. The assistance in this context was the provision of an indemnity in respect of all legal costs. From the point of view of the claimant the financial arrangements by which that indemnity was achieved was of no concern to him and it was not open to him to object to any changes in the arrangements which the union wished to make.
The appeal also covered a second point concerning the effect of the evidence before the Costs Judge as to whether the claimant had before the event insurance cover. (Being a CCFA rather than an ordinary CFA the claimant's solicitors were not required to demonstrate that they had "considered" the availability of BTE cover). The defendants contended that the evidence before the Costs Judge did not prove that no BTE cover had been available. Alternatively, it was argued that the claimant had left the matter in doubt as to whether he had relevant BTE cover and this doubt should be exercised in favour of the defendants. The claimant by his costs draftsman had given incorrect information as to the insurance policies held by the claimant at the relevant time. On the defendants requiring the matter to be proved in evidence, the claimant had prepared a witness statement which dealt only with his home contents insurance policy. At the hearing before the Costs Judge the claimant had admitted in cross examination that he had also had buildings insurance cover and that he had not checked whether that buildings insurance policy provided BTE cover for this claim.
The Costs Judge made a finding that adequate enquiries as to BTE cover had been made but did not make any finding on whether in fact the claimant did have such cover.
On this appeal the learned Judge held that the correct question for decision was whether the claimant did have BTE cover. Since the Costs Judge had not addressed that question, the matter came to him for decision on the basis of the evidence available before the Costs Judge. On that evidence the learned Judge drew the inference that the claimant had not had relevant BTE cover. Although the exact terms of the buildings insurance cover had not been revealed at the hearing before the Costs Judge neither party had sought an adjournment even though the Costs Judge had indicated that he would give judgment in writing on a later occasion. On the appeal the learned Judge felt it right to infer that no adjournment was sought because neither side thought an adjournment would prove the existence of BTE cover. It is uncommon for such cover to be included in buildings insurance policies, as opposed to contents insurance policies. Also, not being a low value claim, BTE cover may not have been appropriate in any event. Finally it was accepted by both sides that it is common to find in BTE insurance policies a requirement to give prompt notice to the insurer shortly after the occurrence of events which might give rise to a claim. In this case it was reasonable for the claimant not to resort to any BTE cover he may have had at the outset since, at the outset, he was instructing trade union solicitors on conventional terms. The need to consider alternative forms of funding did not arise for him until the CCFA was later made and that did not occur until some two years after the events giving rise to this claim. Accordingly the learned Judge came to the view that in this case there was no BTE policy available.