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Legal Watch:Property Risks & CoverageApril 2014 - Issue 004
Events
Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:
MBIG Seminar | 22.05.14 | Royal College of Physicians
In This Issue:
• National Property Risks and Coverage Conference
• Welcome new colleague
• Mitchell– so where are we now?
• Permission to withdraw or substantially amend
admissions refused
• Net contribution clause effective limitation on
liability
• Minor trespass did not justify a mandatory
injunction
• Changes to court fees
This month thanks go to Keith Gaston for his article Mitchell
– so where are we now?, to Alison Heard for her article on
Co-Operative Group Ltd v Carillion & Vibropiling Ltd and
to Christopher MacQueen for his article on StephenWest,
CaroleWestvIanFinlay&Associates.
Introduction
Contact Us
If you would like any further information on the cases or
articles featured in this edition, please contact:
Keith Gaston
T: 0844 245 4956
Alison Heard
T: 0207 469 6236
Christopher MacQueen
T: 0207 469 6267
Marise Gellert
T: 0207 469 6249
03
National Property Risks and Coverage Conference A final thanks to all those who supported our first National
Property Risks and Coverage Conference held at the
London Stock Exchange in April. The very positive feedback
both on the day and subsequently, has been tremendous
and demonstrates that there is a real appetite for this kind of
high-level symposium in our sector. So, we are confidently
looking forward to the second such event next year! The
best way to assure an early allocation of space is to watch
out for further announcements in this newsletter early in
2015.
Richard Houseago
Head of Property Risks and Coverage
Nathan RehbockNathan was admitted as a solicitor in Australia in 2006.
In Australia, Nathan worked in a general insurance
litigation practice and represented the interests of global
insurers, Lloyd’s of London syndicates, large Australasian
insurers, self-insured publicly-listed companies and local
authorities across a number of sectors including building
and construction, mining, claims against professionals,
sporting and recreational claims, and claims resulting from
catastrophic weather events. Nathan moved to London in
February 2013 and has joined us after some time spent
working in-house for an insurance services provider.
Welcome new colleague
04
Everybody has heard about, and understands, the effect of
theJacksonreforms but what about the Mitchelldecision in
particular? Let us see.
It is widely known that the Jackson reforms became
effective on 1st April 2013 but one aspect of this is the new
rules for costs budgeting. These are not an entirely alien
concept after a widespread pilot scheme. However under
the new rules it is a requirement under CPR 26.3(1) that a
costs budget is filed at least seven days prior to a CMC or
(if earlier) by the date specified on the notice of allocation
(N149C). In Mitchell v News Group International [2013]
EWCACiv1526theclaimant’ssolicitors’ failure to achieve
this led to the automatic sanction that costs were disallowed
save for court fees, an effective penalty of c.£0.5m.
However, the impact of the Mitchelldecision has gone far
wider than this.
For those who still hanker for practice pre-1999 the present
climate must indeed be unsettling. Back then one could
issue a Writ of Summons for £60, which could be served
up to a year later. Quaint rules existed going back 200 years
as to whether throwing a writ over a wall or at a defendant’s
feet constituted good service. How things have changed –
whether entirely for the good is strictly speaking outside the
scope of this article. What must be understood is that the
effect of the new approach is to place new demands most
immediately upon not just lawyers, but also witnesses and
especially expert witnesses.
The impact of this dramatic change of culture – ‘procedural
compliance’ – may ultimately impact most of all upon clients.
Many institutional and corporate clients have some inkling
that things have changed, but perhaps the extent to
which this will impact upon them directly has not yet been
sufficiently realised.
“The impact of this dramatic change of culture – ‘procedural compliance’ – may ultimately impact most of all upon clients.”
Golden rules for lawyers and clients 1. The meaning of ‘justice’ has changed. Justice is no
longer between the parties - any impact upon the
courts and hence other court users will be regarded as
being of the utmost seriousness once you are under
the relief from sanctions jurisdiction (CPRPart3.9(1)).
Strict compliance with rules is now to be regarded as
the paramount feature of the “overriding objective”.
2. Take rules seriously – gone are the days when directions
were regarded as mere guidelines, and rightly so.
3. Know when ‘sanctions’ for the purposes of CPR 3.9(1)
are applicable – this is not restricted to orders which
provide for a specific penalty such as ‘unless orders’.
The dramatic effect of this was seen in recent costs
decisions – LongvValueProperties&Another[Master
RowleySCCO13thJanuary2014]andWilliams&
GeorgiouvWayneHardyt/aHardyBuilders[Master
HurstSCCO2014]. In the Hardy case the Senior Costs
Judge, Master Hurst assessed the receiving party’s
costs at nil following a failure to serve a Statement of
Costs on time in advance of a Detailed Assessment
hearing. What would previously have been regarded as
insignificant breaches were held not to be ‘minor’ and
resulted in severe sanctions being enforced.
Mitchell – so where are we now?
05
“this subject will remain an active feature of the litigation landscape”
4. Relief from sanctions is likely to be granted sparingly
and certainly not routinely - generally only for causes
outside the law firm’s control. But where such a cause
is the client or an expert how will the jurisdiction be
operated? Little authority yet exists, but it would be
best to presume that such behaviour is unlikely to be
regarded favourably.
5. Even when there is no specified sanction, ensure that
offices have systems with mutual cross checking.
6. Plan ahead – major directions such as disclosure,
witness statements and experts’ reports require
significant forward planning, often weeks and even
months, even in relatively routine cases.
7. Communication to and from clients and experts at the
right stage is critical. Lawyers must give clients clear
notice and an explanation of what is needed and when,
and understand that they will have other pressures and
priorities. Equally clients cannot hand litigation cases
over to lawyers and expect to take no further notice.
Clients must appreciate that it is in their own interests
to provide necessary assistance, whether documents,
witnesses or instructions in a timely manner.
8. Instructions to experts and counsel should now specify
the criticality of compliance. This must be understood
and agreed, and experts especially must immediately
make clear immediately if they are aware of any reasons
whereby they cannot provide a report in time, or if
instructions are in any way deficient.
Where next?There is no doubt that courts have been overwhelmed in
some instances by the numbers of applications made fol-
lowing the decision in Mitchell.
Certain judges have railed against the strictest of views,
imploring parties to take a ‘reasonable’ stance rather than
seeking tactical benefit. Regretfully this has often been
a forlorn hope and appears unlikely to change soon. In
SummitNavigationvGeneraliRomania[2014]EWHC398
(Comm)a party was criticised for having taken an unduly
aggressive stance following another party’s non-compli-
ance. This decision appears to have been widely favoured
from both “claimant” and “defendant” standpoints.
Most significantly, the Civil Procedure Rules Committee
has approved a Statutory Instrument due to come into
force by early May 2014 enabling parties to agree a 28-
day extension of time in most situations. This will provide
some greater flexibility and, it is hoped, primarily will assist
hard-pressed court offices and judges at first instance. It
does not amount to a wholesale rewriting of the principles
arising from Mitchell.
The right approach to all parties will be to tighten up
systems to ensure compliance and talk to your witnesses.
To parties in default, the sooner you apply the better but if
you receive a request for an extension of time it would be
wise to appreciate the risks of taking an inflexible stance.
Nevertheless, this subject will remain an active feature
of the litigation landscape and further decisions will
continue to be published. One might ask “if in 1977 it
was wrong that a party could act with complete disregard
for discretion, be struck out and restart an action, is it
not equally wrong that inKaneriavKaneria&Ors[2014]
EWHC1165(Ch)a discrete application for an extension of
time incurred costs of £80,000?”.
06
Permission to withdraw or substantially amend admissions refusedWhat matters does a court take into account when
considering an application to withdraw or substantially
amend admissions which have been previously made on
expert advice and support by a statement of truth? That
was the issue considered by the Technology & Construction
Court (TCC) in Co-OperativeGroupLtdvCarillionJMLtd
(formerlyJohnMowlem&CoLtd)andPennineVibropiling
Ltd(ThirdParty)[2014]EWHC837(TCC).
BackgroundThe dispute arose out of the development of a supermarket
site for the claimant (the Co-Op). The site had been
developed by Cliveden Estates Limited who had engaged
John Allen Associates Limited (John Allen) as civil and
structural engineering consultants for the development.
John Allen employed Carillion JM Limited (Carillion) as the
main contractor to carry out the works. Carillion engaged
Pennine Vibropiling Limited (Pennine) as sub-contractor to
undertake specialist work known as “vibro replacement”, to
stabilise what were considered to be poor ground conditions
at the site. Trading at the supermarket started within a few
weeks of the practical completion certificate being issued.
The Co-Op alleged that the supermarket floor slab suffered
from excessive settlement and the ground improvement
works carried out had been ineffective.
Procedural positionIn August 2007 the Co-Op issued a claim form against John
Allen. John Allen brought a Part 20 claim against Carillion
who, in turn, brought a claim against Pennine.
In March 2009 Carillion and Pennine reached a compromise
agreement whereby Pennine agreed to:
“indemnify Carillion and hold Carillion harmless against
JohnAllen’sclaimintheseproceedingsforanyclaimwhich
... Co-Op ... might bring against Carillion arising out of,
or in relation to, the vibroworkswhich are the subject of
theseproceedings,whether such claim is for damages/or
contributionsand/orcostsorotherwise,save thatnothing
in this indemnitywillmakePennine liablewherePennine’s
breachofcontractand/ornegligenceand/orbreachofduty
isnotthecauseofthelossinrespectofwhichtheclaimis
made.”
The Co-Op’s claim against John Allen was dismissed in
September 2010.
The Co-Op served particulars of claim against Carillion in
January 2012, alleging breach of duty in that Carillion failed
to exercise reasonable skill and care in the performance of
the works and was otherwise in breach of contract, including
failing to check Pennine’s work was properly carried out,
and in April that year Carillion issued Part 20 proceedings
against Pennine. Pennine served its defence in the Part
20 proceedings in December 2012 and in February 2013
Carillion served its defence in the main proceedings. In
summary, in spite of the 2009 compromise agreement,
Carillion and Pennine were unable to agree that Pennine
should take over conduct of the defence so each party went
their own way and appointed separate engineering experts
and the litigation continued. It was not until early February
2014 that settlement and a stay of the Part 20 proceedings
was reached by way of a further compromise agreement,
the terms of which have not been disclosed, but Pennine
have now taken over the conduct of the defence of Carillion
in the main action.
The pre-trial review, at which the defendant’s application
was heard, took place on 7 March 2014 and the trial is listed
to start on 19 May 2014.
Defendant’s applicationThe defendant’s application was issued on 3 March 2014
and was supported by a witness statement from its new
07
solicitor (who previously acted for Pennine) explaining
that the defendant’s original expert had recently become
ill and would have to be replaced and that steps had
been taken to involve another expert from the same firm
as the original expert. However, following the second
compromise agreement it was now proposed that Pennine’s
engineering expert should replace Carillion’s expert and that
amendments were being sought in order “tofleshout the
defencetoreflecttheviewsofPennine’sexpert”. The point
was made by the defendant that “many of the proposed
amendments would be familiar to the claimant from the
statementsofcaseinthePart20proceedings”. It was also
said by the defendant that the application was being made
in good faith.
The lawBefore considering the application in detail, the court
reminded itself of CPR Part 1, that the court always needs
to keep only in mind the overriding objective.
Insofar as the withdrawal of admissions and amendments
are concerned, CPR Part 14 states that “permissionofthe
courtisrequiredtoamendorwithdrawanadmission”. The
court therefore, has a discretion in considering whether to
allow the withdrawal of admissions.
Guidance as to the exercise of such discretion was given in
SowerbyvCharlton[2005]EWHCCiv1610 when the Court
of Appeal approved the comments of Mr Justice Sumner in
BraybrookvBasildonThurrockUniversityNHSTrust[2004]
EWHC 3352, which set out some of the matters to be
considered as:
(a) The reasons and justification for the application which
must be made in good faith
(b) The balance of prejudice to the parties
(c) Whether any party has been the author of any prejudice
they may suffer
(d) The prospects of success of any issue arising from the
withdrawal of an admission
(e) The public interest in avoiding, where possible, satellite
litigation, disproportionate use of court resources and the
impact of any strategic manoeuvring.
Discussion on amendmentThe following observations were made by the TCC judge,
Mr Justice Akenhead:
• The application had been made at a relatively late stage
of the proceedings, within 8-9 working weeks before the
trial
• The application was unsupported by evidence
• This sort of exercise is disruptive at this stage of a case
• The application related to the withdrawal or qualification
of admissions. One stark example being “It is admitted
denied that...”
The judge noted:
“There can be no doubt that some important original
admissions made by the Defendant are withdrawn and
othersseriouslymodifiedandre-written”.
A pertinent point made in his judgment was that:
“AlthoughPenninehas,astheresultof itssettlementwith
theDefendant,takenovertheDefendant’sdefenceofthese
proceedings, Pennine must and must be taken to have
known at that time that the Defence contained important
admissions in effect against the interests of Pennine and
that there was at the very least a real risk that, unless
permission to amend was given so that such admissions
could be withdrawn or seriously modified, it would have
to live with the consequences of those admissions. The
proceedings to date have been conducted as between
ClaimantandDefendanton thebasisof thecurrently,un-
amendedDefence.”
“permission of the court is required to amend or withdraw an admission”
08
Noting that it is an understandable requirement that this type
of application must be made in good faith by the applicant,
the judge was not satisfied that the application was so
made. In particular, it was in Pennine’s interests to alter
Carillion’s defence so that Pennine could try to avoid having
to indemnify Carillion. An example was a clear pleading in
the defence that Pennine’s design errors were a material
cause of the cracking which Pennine were now seeking to
delete. The judge said this was:
“aclearcaseoncausationbytheDefendantandnogood
reasonisputforwardfordrasticallyalteringthatcaseother
thanthatthenewPenninebroomisbeingdeployed.”
As to the proposed amendment to the defence to advance a
new case on causation, it was held that it was much too late
with the trial such a short time away, witness statements
having already been exchanged and the expert evidence
substantially advanced and to seek to introduce a new
cause of action at this late stage was “highlydisruptiveand
prejudicial.”
CommentThis decision provides a clear warning that applications to
withdraw or substantially amend admissions must be made
in good faith and in sufficient time, so that the amended
pleading can be addressed by both/all parties’ witnesses
and experts.
“no good reason is put forward for drastically altering that case other than that the new Pennine broom is being deployed.”
09
Net contribution clause effective limitation on liability Business projects require different specialist skills as they
travel from the planning stage through to implementation.
While some companies have the resources to implement
every part, the more common position is for a company
to rely on specialist contractors. So, what happens when
damage occurs as a result of more than one contractor’s
failure? Well, the usual position is that both contractors are
‘jointly and severally’ liable for all of the damage regardless
of each contractors’ relative ‘blameworthiness’, but is this
fair?
This is the question the Court of Appeal had to answer in
the case of (1)StephenWest (2)CaroleWest v IanFinlay
& Associates [2014] EWCA Civ 316 when considering
the validity of a net contribution clause (NCC) within a
construction contract. An NCC is a clause which seeks to
limit a contractor’s liability to the proportion of the damage
which was caused by its own failure. In other words, if they
are liable for 50% of the damage, it seeks to limit their
liability to 50% of the damages.
FactsThe Wests purchased a property which required significant
renovation. They engaged Ian Finlay & Associates (IFA)
as their architect. IFA, in addition to its design duties,
was responsible for instructing and managing the main
contractor, Maurice Armour (Contractors) Limited (Armour).
The Wests also engaged a number of other contractors to
do specialist works within the property (other contractors).
IFA had no responsibility or interaction with the other
contractors.
Shortly after the works were completed the Wests discovered
that there was serious damp ingress on the ground floor.
Significant repair work was required, including the removal
and reinstallation of the new kitchen.
Prior to the issue of proceedings Armour became insolvent.
The Wests brought a claim against IFA, who was found
at first instance to be liable for the whole amount of the
damages. IFA appealed the decision on the grounds that
the NCC contained within the agreement should have
limited its liability to only that part which was caused by its
own ‘blameworthiness’.
The appealAt first instance, the judge held that the NCC did not limit
F’s liability to the Wests for its own breach of duty where the
other party liable was Armour.
The Court of Appeal rejected this construction of the NCC
and found that it also included Amour. Therefore, it should
have been considered by the judge at first instance.
The Wests argued that the NCC was not enforceable
because they were consumers and this was an unfair term
in a consumer contract and it was inherently unreasonable.
The Court of Appeal rejected this argument, after careful
consideration of the Unfair Terms in Consumer Contract
Regulations 1999 (UTCC) and the Unfair Contract Terms
Act 1977 (UCTA).
Under UTCC there is a two stage test. This is:
1. Whether the clause would cause a significant imbalance
between the parties; and if so
2. Whether the clause was included in good faith.
Significant imbalanceThe true effect of the NCC was to pass the risk of a
contractor’s insolvency onto the Wests and away from IFA.
This created a significant imbalance in the parties’ rights
under the contract to the detriment of the Wests. The
question was whether this imbalance was unfair?
010
In this case the Court of Appeal considered that there were
two types of contractors: the other contractors and Amour.
It had no hesitation in finding that it was reasonable for
the Wests to bear the risk of the insolvency of the other
contractors and that any other result would be unreasonable
and unexpected. However, in the case of Armour there was a
weighing exercise to be undertaken between, on one hand,
the fact that the NCC was a usual clause in construction
and commercial contracts and, on the other, the fact that it
was common practice for an architect to protect his position
with insurance, but uncommon for a consumer client to
obtain credit default insurance or a performance bond from
the contractor.
Nonetheless, the Court of Appeal found in favour of IFA and,
in so doing, placed significant weight on the fact that Mr
West was an investment banker who should have been alive
to the fact that a contractor’s financial stability was a matter
of importance.
Good faithWhile technically not needing to consider whether the clause
had been placed in the contract in good faith (i.e. whether it
was presented openly and fairly), as it had not found that the
NCC caused a significant imbalance between the parties,
the Court of Appeal considered that given:
a) The openness and clear presentation of the clause (it was
prominent on the third page of the agreement)
b) IFA’s fair dealing in relation to it; and
c) The reasonable equality of bargaining power between the
parties
IFA was not guilty of any lack of good faith. This was despite
the NCC and its effect not being expressly drawn to the
Wests’ attention, something which the Court of Appeal
considered (and the RIBA guidelines suggested) would have
been good practice.
Effect of the clauseThe Court of Appeal held that, in this instance the NCC was
valid and binding. The judge at first instance should have
gone on to evaluate the apportionment of liability between
IFA and Armour in a like manner to a contribution under s.
2(1) of the Civil Liability (Contribution) Act 1978. This section
states that the court should order a contribution ‘suchas
maybefoundbythecourttobejustandequitablehaving
regard to that persons responsibility for the damage in
question.’
This exercise does not take into account the financial ability
of the person from whom the contribution might be claimed
to satisfy any claim against them. This may result in the
successful claimant being left unable to recover from an
insolvent contractor. The claim was remitted to the judge at
first instance to undertake the apportionment.
CommentNCCs are more likely to be valid in business to business
transactions, where there is less argument about relative
bargaining positions. There is likely to be a stronger
argument that an NCC is an unfair term in most consumer
contracts but each individual case will turn on its own facts.
In this case, the court placed significant weight on Mr
West’s own commercial expertise (as a successful banker)
and on the relative inexperience of his architect (who was a
sole principal). However, in most consumer contracts that
position will be reversed.
NCCs are common in construction and other commercial
contracts but it remains to be seen whether the outcome
of this case will encourage their increased use in consumer
contracts. In future, NCCs may become the subject of
significant debate as more contractors seek to incorporate
and rely on them to limit their potential liability. At first blush
this may seem unfair on the claimant who may be left unable
to recover against an insolvent contractor who shares
liability but, as the court has pointed out, there are options
available to limit risk in these situations, such as credit
default insurance and performance bonds and if there is to
be an increase in the use of NCCs in consumer contracts,
these financial instruments will undoubtedly become more
commonly used.
011
Minor trespass did not justify a mandatory injunctionBoundary disputes are almost always disproportionately
expensive, both financially and emotionally and often arise
out of something relatively trivial, at least to the outsider
looking in.
The Court of Appeal case of (1) Abdul Rashid(2) Parveen
Akhtarv (1)NadeemAhmenSharif (2)GulzarSharif [2014]
EWCACiv377 is a perfect example of that.
BackgroundThe appellants, Mr Sharif and his mother, Mrs Sharif (the
Sharifs) appealed against a decision in a boundary dispute
in favour of the respondents Mr Rashid & Mrs Akhtar (R&A).
The historical and geographical background to the claim is
somewhat convoluted but, in simple terms the Sharifs and
R&A had gardens at the rear of their properties which met
at the end. Many years in the past, a wooden fence had run
along the boundary line between the rear of the properties,
but R&A’s predecessor, Mr Hussain had taken down the
fence and replaced it with a brick wall (referred to throughout
the case as “the historic brick wall”). R&A subsequently built
a shed up against the historic brick wall. The Sharifs also
decided to build a shed. They demolished the historic brick
wall and built the back line of their breeze block shed along
the line of the historic brick wall, so that their shed was then
up against R&A’s shed.
R&A brought proceedings for trespass. Mr Hussain’s
evidence (given only by a written statement, due to ill-health)
was that he had built the historic brick wall on the boundary
between his back garden and the Sharifs’ back garden, and
he had maintained it.
The Sharifs maintained that R&A had consented to the
building of the shed and that the historic brick wall stood
on their land, both of which were denied by R&A. Their
alternative case was that the historic brick wall was actually
built on the boundary, thus constituting a party wall. They
brought a counterclaim seeking declarations confirming
their ownership of all of the land on which their shed stood.
They also sought, if necessary, rectification of the land
registry plans or a declaration that they had an irrevocable
licence to occupy the disputed land.
The judge at first instance formed the view that the crucial
question was who owned the (now demolished) historic
brick wall.
First instance judgmentNotwithstanding his evidence, the judge at first instance
concluded that Mr Hussain had built the historic brick wall
on his land, which was now owned by R&A. Therefore, by
building the shed on the wall’s foundations, the Sharifs had
indeed trespassed onto R&A’s land, by 225mm.
She made an alternative finding to the same effect based
on adverse possession, on the basis that the position of the
historic brick wall had remained, unchallenged, for 19 years.
A mandatory injunction was granted, requiring the Sharifs
to reinstate the brick wall and remove the rear wall of their
shed. It was implicit in the order that the Sharifs could then
“Boundary disputes are almost always disproportionately expensive, both financially and emotionally”
012
rebuild their shed but with the north wall up against the
restored historic brick wall. As the historic brick wall was
225mm wide, the effect would be to reduce the depth of the
Sharifs’ shed by 225mm.
The appealThe Sharifs appealed and the Court of Appeal held:
1. The judge at first instance was mistaken because Mr
Hussain’s evidence was not that he built the historic
brick wall on his own land. He had been R&A’s witness
and if he had been willing to say that he had built the
entire width of the historic brick wall on his own garden,
his statement would surely have said so. The fact that he
had had maintained it did not mean that it was built on
his own land. Since the historic brick wall was 225mm
thick and it went along the line of the former fence, the
natural inference was that it was a party wall. Since it
was a party wall dividing two gardens, rather than two
parts of a single building, it was a party fence wall. The
judge at first instance’s reference to adverse possession
could also not assist R&A because the fact that a party
fence wall had stood for many years partly on each
party’s land did not give rise to a claim of adverse
possession.
2. The consequences of this were that the Sharifs had
actually demolished the party fence wall between their
garden and R&A’s garden. They built a new and taller
wall along the line of the demolished historic brick wall,
meaning that they had effectively constructed a new
party fence wall which formed part of the structure
of their new shed. R&A had objected and the Sharifs
were therefore not entitled to carry out such substantial
works without serving the appropriate notices under
the Party Wall etc. Act 1996 and following the statutory
procedures to secure permission. The Sharifs had not
done that and on that basis their execution of the works
to the party fence wall did constitute a trespass.
Nevertheless, the Court of Appeal did not consider that it
was as serious or as extensive a trespass as that which
the judge at first instance had found. The Court of Appeal
formed the view that if the appropriate notices had been
served and the procedures under the 1996 Act followed, the
rear of the Sharifs’ shed might well have ended up where
it currently stood. On that basis, the mandatory injunction
could not stand and the appropriate order was for damages
in lieu of an injunction.
In light of the minor nature of the trespass, damages were
assessed at £300.
The costs orderR&A succeeded in their claim but only to a very modest
extent. The Sharifs had failed on their counterclaim but
succeeded in part on their appeal, in that they remained
liable for trespass but the remedy was damages (and
minimal damages, at that) rather than an injunction.
In those circumstances, the Court of Appeal took the view
that the parties should bear their own costs of the action
and of the appeal.
CommentSettlement proposals made by both parties were described
by the Court of Appeal as “wildlyunrealistic”. The costs order
made by the Court of Appeal will, effectively have rendered
both partial victories entirely pyrrhic and, once again, this
demonstrates why parties engaged in boundary disputes of
this nature should be discouraged from litigating.
“if the appropriate notices had been served and the procedures under the 1996 Act followed, the rear of the Sharifs’ shed might well have ended up where it currently stood”
013
Changes to court fees
The Ministry of Justice is required to reduce its annual
spending by over £2.5 billion by 2014/15 and it proposes
to fund at least some of that reduction by recouping more
of the cost of running the courts directly from court users,
through increased court fees.
Following the recent publication of the Ministry of Justice
consultation paper “Court Fees: Proposals for Reform” with
effect from 22 April 2014 there have, in some instances,
been quite substantial increases in court fees.
The full consultation paper can be found at:
https://consult.justice.gov.uk/digital-communications/
court-fees-proposals-for-reform
The consultation, which was in two parts, opened on 3
December 2013 and closed on 21 January 2014, which
bearing in mind that period straddled Christmas and
the New Year, was a very short consultation period. That
might go some way to explaining why there were only 162
respondents but it does not explain why, despite the fact
that many of the respondents to the consultation did not
agree with the proposals for reform, the Ministry of Justice
has pressed ahead anyway.
Part one of the consultation, entitled “Cost Recovery” set
out proposals to recover close to the full cost of the civil
court system through fees, transferring more of the cost
to the user and reducing the cost to the general taxpayer.
Part two “Enhanced Charging” proposed setting some fees
above cost to better reflect the value of those proceedings
to the court user.
Although the Court of Appeal fee changes will not be
implemented on 22 April 2014 (due to the need for procedural
rule change requirements) fees in the lower courts have now
changed.
By way of two examples:
• The fee for the issue of proceedings online for a claim
between £15,000 – £50,000 has increased from £395 to
£610, unless the claim is a money claim issued online,
in which case it has increased to £550
• The fee for the issue of an application on notice has
increased from £80 to £155
On the face of it, there is some good news, which is that
consent order fees have only gone up by £5 and allocation
and listing fees in the High Court and County Court have
been abolished but the overall trend is upwards, yet further
increasing the cost of litigation.
“many of the respondents to the consultation did not agree with the proposals for reform”
The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.
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