Qaisar Mehmood v Harry Mayor

I have to consider as a matter of the overriding objective as to whether or not I should allow an informal application for disclosure to be made in relation to the claimant, who is the sole director and presumably also the controlling shareholder of his company, as to his dealings with accountants during the period since the accident.

The defendant contends that the material is relevant because it will demonstrate that: (1) nobody perceived the claimant to lack capacity as otherwise they and the accountants would have drawn the claimant’s and others’ attention to a provision of the company’s articles to the effect that somebody who lacked capacity should cease to be a director; (2) the claimant engaging with matters of accounting, and which might involve matters of some complexity, which would be inconsistent with a suggestion that he lacked financial capacity and by extension possibly limitation capacity (although that involves a different test); (3) in any event, the claimant was able to deal with complex matters in ways which the defendant would seek to argue was inconsistent with the claimant’s case.

The claimant responds that this is effectively a fishing expedition and outwith the realms of standard disclosure; and that, in any event, a properly formulated application notice with evidence in support to which the claimant’s side could respond would be appropriate.

It seems to me this is the sort of matter which really ought to be dealt with by an application notice and evidence in support. The application notice would give the claimant’s side notice of what was sought; and the draft order attached would make clear as to what categories of document were sought – and where it has not become clear to me today whether merely letters passing between the claimant and accountants are sought or whether board minutes are sought or whether also the accounts and other attachments to those documents are sought.

It is further unclear to me as to whether this is said simply to be potentially relevant to questions of fundamental dishonesty or whether it is said that this material should be produced anyway as part of disclosure relevant to the claimant’s financial claim for financial loss allegedly suffered as a result of the index accident.

I am also unclear as to how this ties in, if at all, with whatever financial information has already been provided; and in circumstances where there are, amongst other things, at least from the defendant’s side, an application for an accountancy expert and accountancy expert evidence to be permitted.

In all the circumstances it does not seem to me to be appropriate in accordance with the overriding objective to deal with the application simply on an informal basis.

For the case to be dealt with fairly, in my view requires for the application to be properly advanced with an Application Notice and evidence in support in accordance with the usual rules. Further, such a method of advancing it might result in some agreement between the parties but would also, in any event, enable both the claimant and the court to consider it on a much more informed basis.

Although there is a potential cost in taking that particular course; any trial will be some substantial time away, and it seems to me that if an application hearing is necessary that will not prejudice the overall process.

For all those reasons I am not prepared to deal with this disclosure application substantively at this hearing.

I now have to consider the question of further cost management.

I have already made one costs management order; but I also bear in mind that CPR 3.15(2) provides that the court makes a cost management order unless it is satisfied that the case can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made. I am not so satisfied as will be evident from the facts that both of the parties budgets have been substantially revised during the course of this hearing and that there are various further revisions which I will be making.

I am conscious that I have previously budgeted for elements of this case by my order of 17 April 2023. It does seem to me, and the parties agree, that the complexities over what money has been spent so far in the light of the previous order justify my simply budgeting for the future in terms of estimated costs; and so that, as far as the past is concerned, the matters are subject to the budgeting which I did carry out, and that those costs which were stated specifically in that order to be treated as estimated costs shall be treated for the purposes of today as if they were incurred costs (albeit that they shall remain as agreed or approved estimated costs in the previous order).

I therefore do have to deal with estimated costs going forwards.

I have borne in mind generally the provisions of Civil Procedure Rules Practice Direction 3D dealing with cost management. In particular paragraph 12 , which provides that when revising budgeted costs the court will not undertake a detailed assessment in advance but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs; and paragraph 5 which provides that in deciding the reasonable and proportionate costs of each phase of the budget the court has regard to the factors set out at CPR 44.3(5) and 44.4(3) including consideration of where in the circumstances in which the work was or is to be done as opposed to where the case is heard.

As well as reminding myself of the practice direction 3D generally; I have reminded myself of CPR 44.3 and 44.4 including in particular the following.

CPR 44.3 provides that costs on a standard basis assessment will not be allowed if they are unreasonably incurred or unreasonable in amount or are not proportionate to the matters in issue. Any doubts as to reasonableness and proportionality are to be resolved in favour of the paying party.

Further, that under CPR 44.3(5), to which the Practice Direction draws my specific regard, costs incurred are proportionate to the matters in issue if they bear a reasonable relationship to a number of matters being: (a) the sums in issue in the proceedings; where I am somewhat unclear as to what the total amount claimed is now, although it is certainly being suggested to be in the region of three to four million pounds, (b) is the value of any non-monetary relief; which does not arise, (c) the complexity of the issues; where, although the trial is listed for 15 days, that is primarily because of the amount of video surveillance evidence which needs to be seen and considered by the judge and gone through with the witnesses. There is a particular complexity owing to the allegations of fundamental dishonesty, and to related matters relating to whether or not the claimant actually has litigation capacity and indeed financial and other capacity, and to whether or not the claimant is making knowingly false statements and otherwise seeking to mislead. That does involve and introduce a degree of complexity; although otherwise this seems to be a relatively straightforward high or substantial value personal injuries quantum case. (d) is any additional work generated by conduct of the paying party where the allegations of fundamental dishonesty, and, as far as the defendant is concerned, what they say is misleading conduct on the claimant’s side will potentially generate some extra work. (e) is any wider factors involved such as reputational or public importance; and which does not really arise, although, where fundamental dishonesty is in issue, that does generate something of a general importance. (f) is any additional work undertaken or expenses incurred due to the vulnerability of a party or any witness; and I bear in mind that the claimant and his litigation friend wife seem to require translation services with English not being their first language; and, further, that in circumstances where the claimant asserts, albeit this is disputed, that he lacks capacity, and, in any event, the claimant has had at some point in time some form of traumatic brain injury, potentially additional work and expense may well be required as a result of those matters.

Under CPR 44.5 the court has regard to all the circumstances when considering reasonableness and proportionality. Under CPR44.5(3), to which again the practice direction draws my specific regard, particular factors are identified being: (a) conduct of all the parties where I have taken that into account already and which specifically directs my attention to what is done in relation to alternative dispute resolution, (b) amount or value of money or property involved which I have already covered, (c) the importance of the matters to all the parties; where, firstly, the claimant asserts that he has suffered life changing injuries and which continue to have life changing effects; and, secondly, that fundamental dishonesty has been raised which renders the matter particularly important to both sides, (d) is the particular complexity and difficulty and novelty of the questions raised which I have already dealt with, (e) is skill, effort, specialised knowledge and responsibility involved where this is a substantial value personal injuries case and where various typical issues arise but where fundamental dishonesty is also in issue, (f) is time spent on the case, and (g) is place, where and circumstances in which work was done. I have regard to all the circumstances but including in particular in relation to those.

There are two general points raised by the defendant’s side. One is with regards to the hourly rates used by the claimant’s Newcastle based solicitors which in the case of the grade A fee earner are something like 30 per cent above the guideline rate and in the case of other fee earners something more like 20 per cent above the guideline rates, in each case looking from top down.

Mr Northrop, costs lawyer for the claimant, points out that the guideline rates are created for the purposes of summary assessment and that cost judges often give uplifts on the guideline rates. He submits that this is very much such a case where millions of pounds are claimed and fundamental dishonesty has been raised. He also points to the defendant’s budget. and to which under the case law I should and do have regard although the weight is for me to consider in all the circumstances, where the defendant’s solicitors are charging similar and in some cases higher rates than the claimant’s solicitors; although Mr Bailey, costs lawyer for the defendant, responds to point out that the defendant’s lawyers are located in London, a matter which is very much reflected in the guideline rates themselves, and submits that if the claimant chooses to use lawyers located elsewhere that should at least been because those lawyers ought to have lower overheads etc and be charging less. I have taken all that into account although it does seem to me that, bearing in mind the claimant lawyers location, their rates are somewhat high; and I factor that into my holistic analysis.

Secondly, it is submitted that it is not reasonable for the claimant to be using leading and experienced junior counsel. Mr Bailey submits either the claimant should not be using leading counsel at all or, alternatively, that senior counsel should be able to deal with the matter on his own. Mr Northrop responds to refer to the fact that this is a 15 day case with many experts and which involves a substantial amount of documentation. He submits, in effect, that it is the defendant’s own choice to use only one counsel but perfectly reasonable and proportionate for the claimant to use two.

It seems to me that, although I am not deciding this finally or indeed anything else apart from simply providing on a holistic basis appropriate reasonable and proportionate figures for each phase of the budge, this is a case where I should proceed on something of the two counsel basis. The case seemingly involves a large amount of documentation including a large amount of surveillance video evidence. I bear in mind that my directions are providing for the various disputes regarding the video evidence to be identified at a stage well before trial. However, the claim is for a substantial figure and, it seems to me, to be an important point that the claim is being resisted on the basis of fundamental dishonesty. I regard this as being a case appropriate for leading counsel with the assistance of a distinctly junior junior who can deal with collation of material and similar tasks. I have therefore approached budgeting on something of that basis albeit that does not produce figures as generous as those for which the claimant contends.

In any event, I have considered the entire matter holistically as to each phase; asking myself as to what is reasonable and proportionate, and looking at the budget as advanced by whichever party is seeking a particular figure but also having regard to the other side’s budget as it seems to me the case law requires.

I then turn to consider the various phases.

As far as pre-action costs are concerned; they are all incurred costs for these purposes.

As far as the issue and statements of case phase is concerned; what still needs to be done is: (a) the final version of the claimant’s schedule of loss has to be created by the claimant and considered by the defendant; although the schedule of loss has gone through a number of iterations and clarifications so far, and so not as much work is left to be done as might be the situation in other cases, and (b) there is also the counter schedule to be created by the defendant; and which has to be carefully considered by the claimant.

The claimant seeks £47,000 including the relevant translation fees. It seems to me that as far as the combined solicitors’ and counsel costs are concerned that the claimant’s budget, which provides for input from both junior and leading counsel, and has a concentration on a distinctly substantial number of hours of grade A fee earner work, and where a total of 66 solicitor hours is proposed, is effectively producing duplication of the amount of work which is required. It seems to me that, although leading counsel should be involved in terms of both considering the counter schedule and overseeing the work of junior counsel in terms of the schedule itself, to build in such a large amount of grade A solicitor fee earner work is simply going too far and into the realm of unreasonableness.

Having considered what I regard as being an appropriate amount for junior counsel to do the basic work and for leading counsel to be involved in both review and considering the counter schedule; and what it seems to me is a proper amount of solicitor work where it seems to me the majority ought to be a grade D fee earner rather than a grade A fee earner; and also the rates used in the budget calculations; I have come to a figure of £27,000 as being reasonable and proportionate in the circumstances. It further seems to me that that figure is not out of line with the £18,000 which has been agreed for the defendant’s budget; although I should make clear to the parties that it is merely a coincidence that the figure which I have arrived at is 50 per cent more than the defendant’s budget (and I have not paid attention to such a mathematical situation when coming to, what is at the end of the day, my holistic decision).

As far as case management conference costs are concerned; they are all incurred for this purpose.

As far as further disclosure is concerned; the defendant’s £10,078 is agreed. The claimant has sought £16,800 going forward with the defendant proposing a figure of £11,600. The defendant says that the overall hours are somewhat high and that counsel would not normally be involved in the disclosure stage. However, I note that the defendants themselves wish to involve counsel at the disclosure stage; and also that, where fundamental dishonesty allegations are involved, it does seem to me that there is more justification for counsel being involved at the disclosure stage than would ordinarily be the case. Nonetheless, it seems to me that the claimant’s proposed solicitors’ hours are somewhat high and there is also the rates point. I am therefore reducing the figure to £13,800.

As far as witness statements is concerned; neither side seeks anything in relation to further witness statements.

As far as experts are concerned; the parties have agreed the relevant figures and therefore it does not seem to me it is a matter for me to review.

As far as pretrial review is concerned; the defendant’s £10,885 is agreed. The claimant has reduced a higher proposed figure to suggest £15,000; pointing out, it seems to me legitimately, firstly, that leading counsel will be involved on the pretrial review and where I am proposing a two hour pretrial review. It does seem to me that that would generate a fair amount of pre-hearing work to be carried out by counsel; and it does also seem to me that what is required for the pretrial review is likely to be considerably more in terms of solicitor work on the claimant’s side than the defendant’s side. Although I would have reduced the figure for reasonable and proportionate costs down from the £19,600 originally sought by the claimant, where Mr Northrop has, it seems to me properly, now proposed a figure of £15,000 as a more realistic figure, I see that lower figure as being reasonable and proportionate and I do approve it.

As far as trial preparation is concerned; the claimant seeks £208,000. The defendant’s figure of £113,533 is agreed. The figures which are sought for leading and junior counsel are £112,000 for leader and £56,000 for junior - there being numerous conferences and elements of pretrial work proposed in the various assumptions giving rise to that figure.

I have considered the amount of work which it will be reasonably required for counsel to engage in; and where this is a 15 day trial but in circumstances where the trial length has been agreed on the basis that there will be a substantial amount of time dealt with the judge, possibly on their own without lawyers, watching videos. It seems to me that the content of the videos is already very well-known; and including because they have already been thoroughly reviewed by counsel in connection with and during the previous aborted trial. Further, it will be very clear indeed, it seems to me already, as to which are the most material elements of the videos which are likely to be relied on in relation to the fundamental dishonesty aspect; and, insofar as there are disputes with regard to the videos, what they show and what has or has not been left out, that is all going to be very much clarified by the directions which I have made with regards to what are said to be deficiencies in the surveillance evidence and video evidence process.

It further seems to me that much of the pretrial conference work will be included within counsels’ general preparation work. Further that counsels’ fees have been calculated very much on the basis of there being a relatively or very experienced junior counsel; rather than what seems to me to be more appropriate, being someone who is very much on the junior end. Further as far as the solicitor’s costs is concerned, although no point has been taken by Mr Bailey on the overall number of hours, the rates point remains.

Having taken all matters into account; it seems to me that the appropriate figure to allow for trial preparation is £150,000.

As far as trial is concerned; the defendant’s figure of £192,225 is agreed. As far as the claimant’s figure, now of £282,000, is concerned; that has been attacked on a number of bases.

Firstly, in relation to the attendant solicitor’s time effectively coming in at something like 10 hours, or slightly longer, for each day. It seems to me that the court normally proceeds on the basis of eight hour days; which does include some time for some work outside court. There is also the rates point.

As far as counsels’ fees is concerned; there are again the points arising from what it seems to me is effectively a proposed incurring of two high overall fees; but where I think that I should be considering a reasonable leading counsel rate and a reasonable rate for distinctly junior counsel.

There has been some attack on the amounts of other disbursements, including particularly the fees of expert witnesses. It does seem to me that there should be some limited reduction in that regard; although various of the costs, such as translation costs, do not seem to me to be really capable of attack.

Taking all matters into account, and asking myself the usual holistic question as to what is reasonable and proportionate, I come to a figure of £244,000.

As far as alternative dispute resolution is concerned; the court bears in mind that it always wishes to encourage alternative dispute resolution, and that only allowing a limited and unreasonably low limited amount does not encourage alternative dispute resolution.

The defendant’s figure is £5,400.

It does seem to me that I should proceed on the basis of there being a one day joint settlement meeting and also an approval hearing. Those it seems to me are realistic assumptions, and can be recited as such in my order, just as there should be a recital of the fact that I have assumed that there will be a 15 day trial and that all experts will be called to give oral expert evidence.

The claimant seeks £98,000 on the basis that £43,000 is solicitors’ time and £55,000 is disbursements which include £46,500 for counsel. Here, as elsewhere, I have borne in mind the defendant’s budget but also looked particularly at what the claimant says are reasonable and proportionate expenditures.

Here it seems to me that the solicitors’ time proposed of 113 hours, even with a JSM and the difficulties in terms of communicating with the claimant and litigation friend, is simply far too high, and that a much much lower number of hours is appropriate. There is the rates point as well.

With regards to counsel, again it seems to me that the figure is simply too high; even allowing for the primary requirements of preparation, which can include a conference in advance of the joint settlement meeting, and the joint settlement meeting itself, and the writing of an approval advice, and the attendance at an approval hearing (although the attendance at the approval hearing, bearing in mind the previous work, would only involve limited preparation above the attendance itself).

I do not wish to in any way discourage alternative dispute resolution by coming to too low a figure; but the court must only allow a figure which is reasonable and proportionate.

A particular point has arisen with regards to whether the ADR might involve an independent financial advisor reporting upon the potential for a periodical payment order and other matters. I am not at all sure that such fees are appropriate where there is a Deputy appointed, and where such fees might well not be incurred in relation to trial in any event. However, I have borne all that in mind, as well as what the defendants have sought and their budget, when standing back and asking myself what is reasonable and proportionate.

It seems to me that I should allow, but should not go above, £52,500 and which is the figure which I am going to approve. That figure is, indeed, considerably in excess of the amount which I would ordinarily allow for ADR in a case of this nature, and it reflects the various difficulties with regards to the claimant’s vulnerability. However, I have considered all the material before me, stood back and asked myself what is reasonable and proportionate, and I have come to the £52,500 figure.