Gavin Edmonson Solicitors v Haven Insurance Co Ltd: Supreme Court holds that claimants' solicitors have an equitable lien for their costs where an insurer settled directly with those claimants under the RTA portal
Solicitors are entitled, under common law, to an equitable lien for payment of their costs and disbursements. Accordingly, where a judgment, award or settlement is paid by the defendant's solicitor to the claimant's solicitor, the claimant's solicitor will be entitled to deduct his charges before accounting to his client for the balance. However, equity would only enforce that remedy where there has been a direct payment to the claimant if there has been collusion between the claimant and the payer to deprive the solicitor of his charges.
No collusion was alleged in this case. However, the payer (a motor insurer) settled directly with the claimants after it was notified of the claimants' claims on the RTA Portal. That settlement did not include an amount for the claimants' solicitors' costs or disbursements. The Court of Appeal held that, although the Conditional Fee Agreement ("CFA") entered into between the claimants' solicitors and the claimants had created no contractual liability of the claimants for the solicitors' charges, the court could use its equitable jurisdiction to intervene and order the insurers to pay the charges allowable under the RTA Protocol to the solicitors.
The Supreme Court has now unanimously dismissed the appeal from that decision, although its reasoning differed from that of the Court of Appeal. It held that the claimants did have a contractual liability to pay their solicitors' charges. It then went on to hold that "Once a defendant or his insurer is notified that a claimant in an RTA case has retained solicitors under a CFA, and that the solicitors are proceeding under the RTA Protocol, they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable, as an interference with the solicitor’s interest in the fruits of the litigation. The very essence of a CFA is that the solicitor and client have agreed that the solicitor will be entitled to charges if the case is won. Recovery of those charges from the fruits of the litigation is a central feature of the RTA Protocol".
AMT Futures v Boural: Judge decides when limitation period runs in a breach of a jurisdiction clause case
The contract between the parties contained a clause which provided that the defendants "irrevocably submit to the exclusive jurisdiction of the English courts" in relation to disputes. The defendants commenced a claim in Germany in May 2008, in breach of this clause (trial having taken place in 2014 and an appeal having been brought thereafter). The issue in this case was when a cause of action for the breach of an exclusive jurisdiction clause becomes time-barred: Is the cause of action complete when proceedings in another country are first commenced (in breach of the clause) or is there a continuing cause of action, which arises from day to day, for so long as the wrongful proceedings continue?
The judge held that the exclusive jurisdiction clause in this case obliged the defendants "not only not to begin any relevant proceedings elsewhere, but also not to continue any such proceedings, and instead to bring them to an end". That was because the English courts could not be said to have exclusive jurisdiction (ie sole jurisdiction to the exclusion of all others) for as long as proceedings are taking place in some other forum.
Accordingly, the claim was not time-barred and the claimant was entitled to claim for the whole of the period beginning six years prior to the commencement of the English proceedings.
RG Carter v Kier Business Services: Court determines whether a contribution claim was time barred after the main proceedings were settled
The Civil Liability (Contribution) Act 1978 provides that any person liable in respect of any damage can recover contribution from any other person liable in respect of the same damage. Section 1(4) of the Act provides that "A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage … shall be entitled to recover contribution in accordance with this section …"
Section 10(1) of the Limitation Act 1980 provides that no action to recover a contribution under the 1978 Act shall be brought after the expiry of a period of two years from the date on which such right accrued. The right to a contribution is treated, for the purpose of limitation, as accruing on the date of any judgment or award or "upon agreement to pay compensation in the case of a settlement" (s.10(4)). Section 10(4) provides that "If… the person in question makes or agrees to make any payment to one or more persons in compensation for that damage (whether he admits any liability in respect of the damage or not), the relevant date shall be the earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made."
The issue in this case was what is meant by an agreement to pay. The claimant contactor had settled with the property owner and then sought a contribution from the defendant designer, who argued that the contribution claim was now time-barred.
Prior caselaw has established that under section 10(4) there must be agreement as to the amount of the payment and not merely as to liability. Also, the court should seek to identify the "earliest date" of the underlying agreement and not the subsequent date when any consent order was sealed by the court or made by the arbitrator. The issue in this case was whether section 10(4) requires the parties to have entered into a binding agreement, or whether an agreement in principle, with the final details still to be worked through, is sufficient to make time start running under the section.
The judge held that a binding agreement is required: "Since there can only be one trigger event, it follows that time cannot start to run where the parties reach an unenforceable agreement as to payment. In such a case, the litigation or arbitration remains on foot and time will only start to run under section 10(4) from the date of the subsequent formal agreement or, if the matter cannot be agreed, under section 10(3) from the date of the judgment or award".
It is open to the parties to reach an immediately binding agreement as to the settlement payment, but leave for later agreement details as to payment terms or any liability for costs, in which case time will start to run from the date of the agreement as to the amount of the payment. Equally, it is open to the parties to agree that nothing is agreed until everything is agreed, and so time will not start to run until the date of the subsequent binding agreement (or, should agreement prove impossible, the judgment or award).
Here, binding terms as to the payment were only agreed upon the execution of the settlement agreement and accordingly these proceedings were not time barred.
JMX v Norfolk and Norwich Hospitals: Judge decides not to award additional amount after claimant beat his Part 36 offer at trial
At trial, Foskett J found in favour of the claimant on the issue of liability and that the claimant had bettered his Part 36 offer at trial. Of issue in this case was whether the claimant was entitled to the additional 10% uplift on all damages under CPR r36.17(4)(d). That was in dispute because that section provides, in relevant part, that "provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount…calculated by applying the prescribed percentage…to an amount which is (i) the sum awarded to the claimant, or (ii) where there is no monetary award, the sum awarded to the claimant in respect of costs" shall be awarded (unless it is unjust to do so).
The defendant argued that the case had not "been decided" because according to CPR r36.3(e), a case is "decided" only when "all the issues have been determined, whether at one or more trials". Foskett J agreed that a claim for damages has not been "decided" until both liability and quantum has been determined by the court.
However, the judge went on to note that it is possible to make separate Part 36 offers covering different issues in a case. So if an offer is made in relation to liability, and beaten at trial, the additional amount can be awarded (even though damages will have to be assessed later on). However, the effect of CPR r36.17(4)(d) is that the "additional amount" can only be awarded once, no matter how many claimant Part 36 offers end up being beaten by the claimant. The judge declined to exercise his discretion to deal now with the costs of the proceedings to date in this case though. The additional amount could be awarded after damages had been decided or, if the case settles, the claimant can ask the court to deal with the additional amount at that stage.
COMMENT: Where there is a split trial (with issues of liability and quantum being decided separately), certain judge have held in the past that they could not be told about the position as to Part 36 offers, and so could not deal with costs, after deciding liability but before deciding quantum issues. However, from 6th April 2015 it has been possible to tell a judge about the existence of, and the terms of, a Part 36 offer where it relates solely to any part of, or issue in, a case which has been decided (even though the case itself has not been decided). The judge can also be told about Part 36 offers which did not relate solely to the issue which has been decided, but not the terms of those offers. This case confirms that the judge can award the additional amount after liability has been decided, but before quantum has been assessed (although it cannot then be awarded again if other Part 36 offers are beaten later on).
JSC BTA Bank v Tyrkiye Vakiflar Bankasi: Judge considers a jurisdiction clause in favour of the courts in one part of a country
Dicey, Morris and Collins on the Conflict of Laws (15th edn) provides that: "If a contract provides that all disputes between the parties shall be referred to the exclusive jurisdiction of a foreign tribunal, not only will proceedings brought in England in breach of such agreement usually be stayed, but also the foreign court is deemed to have jurisdiction over the parties. A contractual submission to a particular court is not of itself a submission generally to the jurisdiction of all courts of that country; the question is one of construction of the contract."
In this case, the relevant contract contained a clause providing for Turkish law and "place of jurisdiction is Ankara". One of the issues in this case was therefore whether one of the parties could challenge the jurisdiction of the Istanbul Court. Butcher J held that there could be well be a submission to all the courts of a country if the place of jurisdiction was a city in a particular country (especially if it is the capital city): "This would depend in part, as it seems to me, on the extent to which the courts in that country operated independently of each other; whether there might be transfers between courts; and whether, in view of such matters, it was plausible that parties might have wished to choose only the courts of a particular city or place within the country rather than the courts of the country".
As the judge lacked material as to whether there was any factual matrix regarding the drafting of the contract, he was only able to conclude that the claimants (who were arguing that there had only been a submission to the courts of Ankara and not Istanbul) had shown a serious issue to be tried and a good arguable case.