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NHSLA wins third additional legal costs liabilities dispute against Irwin Mitchell

Posted by Toby Moreton on Mar 15 - 2016

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For a third time, the NHS Litigation Authority (NHSLA) has defeated a claim for additional legal costs liabilities brought by Irwin Mitchell.

All three cases involved clinical negligence disputes in which Irwin Mitchell advised their clients to switch their claim’s funding from legal aid to a conditional fee arrangement (CFA), supported by after the event (ATE) insurance. In each case, this funding transfer took place shortly before LASPO came into force on 1 April 2013, which rendered such expenses unrecoverable.

In this latest case, Yesil v Doncaster NHS Trust, Regional Costs Judge Besford agreed with the NHSLA that it was unreasonable for the claimant to switch their funding in this way. Consequently, DJ Besford said that the additional costs claimed by the claimant as a result of the switch should be disallowed. Combined, the disallowed costs amounted to more than £105,000 – a success fee of £55,522.56, and an ATE premium of £50,681.78. The total costs claimed in the case were £350,856.

In all three cases in which the NHSLA has successfully defeated Irwin Mitchell’s additional costs liability claims, Surrey v Barnet & Chase Farm Hospitals NHS Trust [2015] EWHC B16 (Costs) (10 August 2015), AH v Lewisham Hospital NHS Trust [2016] EWHC B3 (Costs) (12 January 2016), and now Yesil v Doncaster NHS Trust, the presiding costs judge has criticised the firm regarding the advice it gave to the client prior to their funding switch decision.

In Yesil v Doncaster NHS Trust, Irwin Mitchell justified its advice to its client by arguing that the switch guaranteed the claimant’s case would be funded. However, what the firm failed to advise its client was that, by switching to a CFA-based funding arrangement, the client was also abandoning their right to obtain a 10 per cent uplift in damages if successful – which would have been worth around £28,000.

This advice omission prompted DJ Besford to question the adequacy of the advice given to the claimant by Irwin Mitchell. He went on: “Irwin Mitchell would appear to have been not so much ‘leaning’ one way, as giving advice tailored to a decision they had already made.” The need for transparent advice was particularly important in this type of case, he added, “where one of two or more options available to a client is more financially beneficial to the solicitor”. “Further,” he stated, Irwin Mitchell had "produced no evidence either by way of file notes, copy letters or even a witness statement from the client as to the advice tendered. In my judgment, the decision to switch was not self-evident or transparent."

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