Those involved in the defence of claims will be familiar with applications for pre-action disclosure (PADs). When these applications are made in disease cases, a particular concern is the level of success fee that can form part of the claim for costs.

It is worth remembering that, in accordance with Civil Procedure Rule 48.1, the starting point for costs orders in PADs is that the applicant should bear the costs, not the respondent. The court will then need to consider issues such as reasonableness and conduct of the parties.

Kennedys is finding that the courts are becoming more willing to make an order for costs in accordance with CPR 48.1. County court authorities such as Sattar v Kirklees Council [2010], where the Court made no order as to costs, are being recognised and followed by local district judges. Often we can achieve "no order as to costs" on these applications and sometimes even recover our own costs.

Success fees

There will however remain some cases where the claimant is likely to be successful in obtaining a costs order, and in these cases the defendant will want to minimise the amount paid, including any success fee.

There has been some ambiguity as to whether conditional fee agreements (CFAs) in relation to the main action cover PADs. In Roche v Newbury Homes Ltd [2009] it was held that the CFA in question did not cover pre-action matters, although this decision was essentially overturned by Connaughton v Imperial College Healthcare NHS Trust [2010]. To avoid any potential arguments in this regard, we have noticed that some claimants’ solicitors are adopting a different tactic - entering into a separate CFA purely in relation to the PAD. If the PAD relates to a disease matter, they are then seeking the relevant fixed success fee (if the matter settles without the need for a hearing) and an uplift of up to 100 per cent (if the PAD goes to a hearing).

Issues of proportionality have to be relevant when district judges are considering such applications where "disease" success fees are sought.

However, unfortunately the CPR does not provide much assistance. CPR 44.3A(1) provides that a court may order a success fee payable on conclusion of a claim or part of the claim to which a matter relates. A PAD could, in theory, fall within the latter category.

Tactics

If the defendant is prepared in a particular case to meet the claimant’s costs and success fee, the best argument may be that the CFA taken out in relation to the PAD does not relate to a disease action but purely to a PAD and consequently, if a success fee is payable, it should only be a maximum of 20 per cent.

Arguably, there is very little risk to a claimant on a PAD application, particularly if, as can be the case, numerous letters have gone unanswered, the claimant's solicitors have given plenty of notice of their intentions and the defendant has had ample opportunity to avoid the PAD. Consequently, in our view, a maximum success fee of 20 per cent would be far more representative of the risk.

It is also worth noting that, if the claimant’s contention is that a new CFA is required in order to pursue a PAD, the claimant is required to provide a new N251 notice of funding in relation to their agreement. Failure to do so should negate the claimant’s ability to recover a success fee under CPR 44.3B(1)(c). In addition, the same rule would apply where the claimant fails to provide a statement of reasons when seeking their costs of the application.

Comment

Perhaps it is time for courts to reassess whether it is really in the interests of justice and proportionality for claimants’ solicitors to be seeking in the region of £1,250 for a routine PAD without a hearing and around £2,500 with a hearing, particularly in light of the impending costs reforms. A straightforward fast track matter could be run to trial for a not dissimilar amount.

In the meantime, the best advice to give to defendants and their insurers is to deal with correspondence in a timely matter, to seek extensions where required for providing protocol decisions and thereby seek to avoid PADs in the first place