Norris v Revenue & Customs

I have been asked to provide a written Judgment with regard to my finding at detailed assessment on 25 May 2010, that a 100% success fee is justified by the Claimant’s solicitors in respect of their profit costs in this case.

The Claimant was employed by the Defendant as a receptionist at their Gravesend office. That post was disbanded, and she was moved, first part-time and then full time to the Defendant’s Medway office from December 2005. Prior to the move, the Claimant had expressed her concerns of the potential impact on her existing medical conditions. The Claimant suffers from rheumatoid arthritis, and in May 2005 had had an operation on her right elbow. She complained from the outset with regard to the amount of writing she had to do. The equipment which had been available to her at Gravesend was not moved with her to Medway and her job became more involved. She made complaints regarding the lack of equipment and the fact that the change in her working pattern aggravated the pains in her hand, and also her elbow which had been previously operated upon.

By February/March 2006 she began to experience pains in her neck, and following x-rays in March 2006, she informed her employers that she had been diagnosed with rheumatoid arthritis. By February 2007 her condition had deteriorated and she experienced neck pains. It was not until November 2007 that she was provided with the equipment which had been recommended for her some two years before. In June 2007 the Claimant sought advice from the Public and Commercial Services union, who instructed solicitors to act on her behalf. A letter of claim was written on 7 October 2008, and liability was admitted on 4 December 2008. Proceedings were issued on 31 December 2008.

The Claimant was examined by Dr Michael Webley on 21 January 2009. His medical report was disclosed to the Defendants on 27 March 2009. Thereafter an offer of settlement in the sum of £3,000 was made by letter on 30 March 2009, and the matter was concluded by agreement on 3 April 2009, when the Claimant accepted an offer of £3,750 in full and final settlement of her claim for damages, together with her reasonable costs.

The Claimant’s served Notice of Commencement of assessment of her costs on 7 September 2009. The cost claim totalled £22,067.49, and included a 100% success fee in respect of the Claimant’s solicitors’ profit costs. A request for detailed assessment was made on 26 January 2010, and the detailed assessment of the Claimant’s costs took place on 25 May 2010. The Claimant’s costs were assessed at £9,415.42.

The Claimant’s action was funded by a Collective Conditional Fee Agreement between her union, PCS, and her solicitors, dated November 2000. At numbered point 5 of the Points of Dispute, the Defendants sought disclosure of the Collective Conditional Fee Agreement. It was conceded that the CCFA had been disclosed and that no point was taken as to its enforceability, merely the success fee payable there under. The main terms of the Agreement are as follows:

“4.

Success

4.1

If the Member wins a claim, counter-claim or interim dispute, the Union is liable to pay Thomsons charges for work done on that claim, counter-claim or interim dispute.

5.

Success Fees

5.1

The success fee will be 100% or such lesser percentage as is determined in accordance with this part of the Agreement.

5.2

When accepting instructions in relation to any specific proceedings, Thomsons must prepare and retain a written statement containing:

5.2.1

Their assessment of the probability of the circumstances arising in which the success fee will become payable in relation to those proceedings (the risk assessment)

5.2.2

Their assessment of the amount of success fee in relation to those proceedings having regard to the risk assessment; and

5.2.3

The reasons, by reference to the risk assessment, for setting the success fee at that level. ”

On 2 August 2007, the Claimant’s solicitors prepared a success fee assessment “form”. This form states the following:

“State the percentage at risk of losing on liability 25%

Subtotal assessment of risk converted to success fee using Napier Bawdon calculation (ie chances of failure divided by chances of success, multiplied by 100 = success fee) then add additional risk factors 33%

•

Add percentage for risk on quantum 10%

•

Add percentage for added risk of multiple defendants 0%

Total success fee before unrecoverable disbursements applied 43%

Additional percentage for responsibility for unrecoverable disbursements for PCS (union is not self-insured) 0%

Override for fixed success fee (employment RSI cases have a fixed success fee) 100%

Total success fee if case settles more than 24 hours prior to trial 100%

Total success fee if case settles on day of trial 100%”

The form continues:

“The success fee is a two-stage success fee. If the case proceeds to trial, a success fee of 100% applies and will be recoverable. If the case settles more than 24 hours before the trial date, the success fee will be based on the individual risk assessment of the circumstances of the case as set out above. This assessment includes an analysis of the factors that may effect the prospects of wholly recovering the costs of the action. This risk assessment takes into account the circumstances of the claim, the quality of the evidence that the client and any witnesses are likely to give, the availability of any documentary evidence in support, any delaying instructions having been received, an additional relevant risk factors that may apply such as medical issues or the likelihood of multiple defendants. This risk assessment does not contain a percentage increase relating to the costs to this firm of the postponement of our fees and expenses.”

Our assessment of probability of the case succeeding and the success fee therefore becoming payable is as follows:

“100% less the prospects of losing the case listed above.”

Dr Michael Webley examined the Claimant on 21 January 2009, and prepared a report dated 17 February 2009. In that report he found the following:

“Irene Norris has rheumatoid arthritis affecting a number of her peripheral joints, in particular her left wrist and right elbow. She also has degenerative changes in her cervical spine, and x-rays and MRI scan confirmed that she has moderately advanced cervical spondylosis. This is not associated with her rheumatoid arthritis, but is a separate clinical condition.

Her rheumatoid arthritis has been present for many years and the symptoms that she has had from it have varied.

She has had significant difficulty with her right elbow, and in May 2005 had excision of the radial head with arthroscopy and synovectomy of the elbow joint.

On the balance of probabilities, a significant component of her elbow pain was arising from the main humero-ulnar joint prior to surgery. The relief of pain that she had following surgery was because of excision of the radial head, and also because she had an arthroscopy and removal of some of the inflamed tissue within the elbow joint. It would not be expected that this would have relieved all her pain, and on the balance of probability over a period of time, she would have developed increasing pain and stiffness in the elbow.

Working in an ergonomically unsatisfactory position has also caused an aggravation of her underlying cervical spondylosis. She has reported symptoms of this previously, but she had not had persistent pain at the time of relocating to Medway.

Since working in an ergonomically unsatisfactory position, she has had more constant pain in her cervical spine and on the balance of probably, there has been an advancement of these more persistent symptoms by a period of some 12-18 months, and during that period of 12-18 months, there has been an aggravation of symptoms by a factor of 50%.

There is no evidence that her cervical spondylosis will now progress at an accelerated rate or that she will be more disabled in the future as a consequence of working in an ergonomically unsatisfactory position.”

This case involves the interpretation of Part 45, IV and V CPR relating to the fixed percentage increase in Employer’s Liability claims, and the fixed recoverable success fees in Employer’s Liability Disease claims. The relevant provisions being:

“Scope and interpretation: 45.20

(1)

Subject to paragraph 2, this Section applies where:

(a)

The dispute is between an employee and his employer arising from a bodily injury sustained by the employee in the course of his employment; and

(b)

The Claimant has entered into a funding arrangement of a type specified in Rule 43.2(1)(k)(i).

(2)

This Section does not apply:

(a)

Where the dispute:

(i)

Relates to a disease.

Scope and interpretation: 45.23

(1)

Subject to paragraph (2), this Section applies where:

(a)

The dispute is between an employee … ; and

(b)

The dispute relates to a disease with which the employee is diagnosed that is alleged to have been contracted as a consequence of the employer’s alleged breach of statutory or common law duties of care in the course of the employee’s employment;

(3)

For the purposes of this Section;

(a), (b), (c)

(d)

“Type B claim” means a claim relating to

(i)

a psychiatric injury alleged to have been caused by work related psychological stress;

(ii)

a work related upper limb disorder, which is alleged to have been caused by physical stress or strain, excluding hand/arm vibration injuries.”

The practice direction for Part 45 states at Section 25B as follows:

“25B.1 The following table is a non exclusive list of the conditions that will fall within Type A and Type B claims for the purpose of Rule 45.23

Claim Type	Description
A	Asbestosis Mesothelioma bilateral plural thickening. Plural plaques.
B	Repetitive strain injury/WRULD Carpel Tunnel Syndrome caused by repetitive strain injury. Occupational stress.

The pre-action protocol for disease and illness claims, paragraph 2.2 states as follows:

“Disease for the purpose of this protocol primarily covers any illness, physical or psychological, any disorder, ailment, affliction, complaint, malady, or derangement other than a physical or psychological injury solely caused by an accident or other similar single event.”

Counsel for the Claimant argued that the fixed success fees for employer’s liability claims pursuant to Section IV of Part 45 CPR did not apply in this case. Part IV does not apply where a dispute “relates to a disease” or where the dispute “relates to an injury to which Section V of this Part apply”. Counsel for the Claimant submitted that “disease” is not defined in Part 45. The only definition of “disease” within CPR is to be found in the pre-action protocol for disease and illness claims, at paragraph 2.2. Counsel for the Claimant went on to submit that the aggravation or exacerbation of a disease comes within Section V of Part 45, and it was not accepted by the Claimant that the use of the word “contracted” in Rule 45.23(1)(b) meant that this type of case was excluded from the Section. He also contended that Rule 45.23(1)(b) CPR should be interpreted purposively in accordance with Kilby –v- Gawith[2008] EWCA Civ 812. As an alternative to its primary contention, Counsel for the Claimant submitted that were I to find that this type of case namely an exacerbation or acceleration of pre-existing symptoms did not come within Section V, Part 45 CPR would mean that these claims would not come within Part 45 at all. It was submitted that such a conclusion would be contrary to the intention of the Rules.

The Defendant submitted that the letter of claim setting out the injuries to the Claimant pointed to an aggravation of her pre-existing condition. The medical evidence of Dr Webley pointed to two distinct causes of action, namely an aggravation of the cervical spondylosis, and secondly, rheumatoid arthritis affecting a number of peripheral joints, in particular her left wrist and right elbow. The two being separate and not associated. That being the case, the Defendant submitted that on the basis of the medical evidence, no disease was contracted in this case. The Claimant’s condition was already present at the time of her employment. Whilst there had been an exacerbation of pre-existing injuries, these injuries were not “contracted as a consequence of the employer’s alleged breach of statutory or common law duties or care in the course of the employee’s employment”. In those circumstances, the Defendants submitted that the appropriate success fee in the context of this case was 27.5%.

I accept the medical evidence of Dr Webley in this case. The Claimant suffers from rheumatoid arthritis which has been present for many years. She also has changes in her cervical spine due to degeneration. I also accept Dr Webley’s conclusions that:

The question I have to decide is whether the symptoms described by the Claimant to Dr Webley and whether his conclusions fit the definition of “disease”, for the purposes of a Part 45, V CPR, and in particular Rule 45.23(1)(b). The Defendant relies heavily on the word “contracted” and submits that the symptoms suffered by the Claimant are not as a consequence of the employer’s alleged breach of statute or common law duties. District Judge Bedford in Law –v- Balfour Beatty said this:

“4.

I am satisfied that this was not a one-off injury incident and that the resulting condition falls within the definition of disease as contemplated in the provisions of CPR 45.23, which itself comes into existence to deal with claims which have been dealt with in accordance with the pre-action protocol on disease claims. That pre-action protocol has with it a non–exclusive list of what can be considered to be a disease, and I now turn to that list, which is to be found at pages 1276 to 1277 of the 2009 edition of the White Book. Before doing that, however, I remind myself that CPR 43.23 speaks of a disease having been “contracted as a consequence of the employer’s alleged breach of statute or common law duties,” and I have considered whether the word “contracted” could include a situation where an individual already has a condition which is then exacerbated by the working conditions in which he or she finds themselves.

5.

I am satisfied that when I consider that rule in accordance with the overriding objective, which is to deal with matters justly, that the rule is there to assist people whose position has been made worse. Whether it is being made worse from a starting point of nil is, I am satisfied, not relevant, and that I can, in considering the word “contracted”, include cases where the lot of the employee, which has been made worse by the conduct of the employer, and therefore a disease which has been significantly and substantially added to as has been recognised by the paying party in agreeing damages, is I am satisfied within the definition of 45.23(1)(b).”

I agree with District Judge Bedford that the word “contracted” includes cases where the medical condition of an employee has been made worse by the conduct of the employer, and therefore a disease which has been significantly and substantially added to falls within the definition of CPR Rule 45.23(1)(b). On the basis of the medical evidence in this case, I am satisfied that the Claimant’s symptoms have been made worse by the conduct of her employer. Her symptoms, both in relation to her rheumatoid arthritis and in respect of her cervical spondylosis, have been exacerbated by the working conditions in which she found herself.

The next question to be determined is whether the condition suffered by the Claimant comes within the list of diseases included in Type B of Rule 45.23(3)(d)(ii). These are the relevant diseases defined at Section 25B.1 of the Practice Direction to Part 45 as being “repetitive strain injury/WRULD”, which means “work related upper limb disorder”. I remind myself that this is a non-exclusive list of the conditions that fall within Type B claims for the purposes of Rule 45.23. I am satisfied that the symptoms described in the medical report of Dr Webley relating both to the rheumatoid arthritis and the cervical spondylosis fall within that definition.

That being the case, the percentage increase in Type B claims are pursuant to Rule 45.24(2)(b), which conclude before a trial has commenced, is 100%, and I allow that figure in this case.

The Defendant submitted that an exacerbation of an pre-existing condition did not come within Part 45 CPR Section V. In other words, exacerbation or acceleration claim do not fall to be determined in accordance with the fixed cost regime at all. In my judgment, such a conclusion would be contrary to the intention of the rules.

Dyson LJ (as he then was) in Lamont –v- Burton [2007] 4 Costs LR 574, said:

“26.

Section III of Part 45 contains a carefully balanced scheme for the award of success fees in road traffic accident cases. The object of the scheme is to provide certainty and avoid litigation over the amount of success fees to be allowed to successful parties … It is inherent in the scheme that in some individual cases, the success fee will be unreasonably high and in others unreasonably low. But that is the price that has to be paid for achieving certainty and avoid litigation over the amount of success fees.”

In Kilby –v- Gawith[2008] EWCA Civ 812, Sir Anthony Clarke MR (as he then was) said at paragraph 18:

“The answer to the question in this appeal is essentially one of construction of CPR Part 45. Like any provision of the CPR, the relevant rules in Part 45 must be construed by reference to their ordinary meaning when viewed in their context. That is, in the context of Section II of Part 45, which must in its turn be construed in the context of the CPR as a whole. Consistently with the principle summarised by Lord Stein, this involves a consideration of the statutory purpose of the relevant rules.”

In my Judgment, following Kilby in relation to Part 45 V CPR, a purposive approach should be taken to the interpretation of its provisions. It cannot have been the intention of the rule makers to exclude symptoms, such as an exacerbation or acceleration of a pre-existing condition from the fixed cost regime. In my Judgment, it cannot be right that a party can pick and choose as to which element of Part 45 V applies in these circumstances. The Judgment of Dyson LJ in Lamont, at paragraph 26, applies equally as well to Part 45 Section V as it does to Part 45 Section III in respect of road traffic accident claims. My decision to allow a 100% success fee in this case is consistent with a purposive interpretation of Part 45 construed in its context and consistent with the overriding objective.

Finally, the permission to appeal in relation to this issue is extended to 14 days from receipt by the Defendant of this Judgment.