spring issue 2006 MRN NEWSLETTER NATIONAL PRESENCE NEW SERVICES MRN S PLACE IN THE MARKET FEES CASE LAW THE FUTURE

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1 MRN NEWSLETTER spring issue 2006 In this issue CHANGES IN CULTURE NATIONAL PRESENCE NEW SERVICES MRN S PLACE IN THE MARKET FEES CASE LAW THE FUTURE MANCHESTER OFFICE International House Deansgate Manchester M3 2ER DX Manchester 2 Please contact Michael Joseph Direct Dial: mj@costexperts.co.uk LEEDS OFFICE Aspect Court 47 Park Square East Leeds LS1 2NL Please contact Lynsie Whyke Direct Dial: lw.leeds@costexperts.co.uk

2 CHANGES IN CULTURE We have implemented a number of changes in our organization in order to reflect not only our clients needs but also our standing in the costs world. Historically, MRN has had two teams to supply all costs services: a Negotiation team, handling pre-litigation costs issues, and a Drafting team, dealing with litigated cases and any appropriate costs hearings. Our increasing role within the costs environment has led to these two teams increasing their roles, and we saw that the titles they had were not a reflection of the work they did. MRN prides itself on its proactive approach to costs. We don t consider the service we provide to be merely a negotiation and drafting facility, and as such, we have altered the names of our teams. The Negotiation Team has been converted into our Dispute Resolution Team, responsible for achieving settlements on costs issues without the need for Court intervention. In the Dispute Resolution Team, we have trained and experienced fee earners working towards constructive settlements without resorting to formal litigation. This is a valuable asset in ensuring that a cost effective service is provided and maintained. Similarly, our Drafting Team now becomes our Litigation Team. The reason for this change of title is as simple as it sounds. The team deals with litigation. We are prepared to litigate, on those cases which require it, and our services include all aspect of the costs litigation process, extending far beyond drafting bills and replies to points of dispute. We offer the full range of costs services from preparation of bills of costs, attendance at interim applications, complying with Court directions, to the final advocacy at detailed assessment hearings. We do not consider ourselves a costs drafting firm we are an all-encompassing costs litigation service, who are regularly involved with associated applications and costs appeals. We felt it vital that our departments reflected those services in an accurate way.

3 NATIONAL PRESENCE We think it is important to bear in mind the fact that MRN is a national firm. We act for a large number of clients throughout the country, and we are proud of the fact that they can take advantage of our policy that we will attend client offices regardless of their location in order to provide the most efficient service. Most of our clients take advantage of the free courier service which we offer, though we are happy to come to their offices wherever it may be thereby allowing the solicitor concerned to retain control of the file whilst we carry out those costs duties required. In terms of the growth of our offices, in February 2005, MRN opened its first satellite office in Leeds, a centre for legal excellence. The Team Leader in our Leeds office is Lynsie Whyke, who recently became an Associate not only of the Association of Law Costs Draftsmen but also of MRN itself. The Litigation Team in Manchester has also recently recruited Matthew Booth, an experienced costs draftsman, who came to us from DLA Piper Rudnick. Matt s background is in defendant costs, and he has been arguing points of dispute strenuously for over five years. Matt began to see MRN as an excellent opportunity to develop his skills, and simultaneously MRN identified Matt as a fee earner who could help the business to grow. Having a defendant s viewpoint, particularly coming from a firm such as DLA, was an understandable asset which allowed MRN to further develop a fully rounded view of the costs procedure, enhancing that experience and quality which we have striven for in the past. Matt is also aiming to cultivate those existing clients we have whilst seeking new opportunities to grow. A further addition to the Dispute Resolution Team in Manchester is Nicola Stuart, who joins us from Platinum Costs. Like Matt, Nicola saw in MRN a firm which could offer clear objectives, whilst simultaneously maintaining a reputation for professionalism. Nicola recognised in MRN an opportunity for a career path, with opportunities being opened for her in all avenues of costs work, with the knowledge that she was working for a firm which would be dedicated to her development and expertise. We are proud to confirm that Catherine Warlow, a senior member of our Litigation Team and Associate of MRN, has recently become a Fellow of the Association of Law Costs Draftsmen. UK

4 NEW SERVICES A service which our clients are increasingly using is that of drafting Costs Estimates, a factor which is increasingly important in litigation. By virtue of CPR 44.3, a party is required to provide costs estimates when serving both an allocation questionnaire and a listing questionnaire (pretrial checklist). Many clients find this an arduous task, which they are happy to delegate to our expertise. Given the impact of costs decision such as Leigh v- Michelin Tyres, as well as the recent amendments to the CPR, it is vital that these estimates are accurate. Indeed, under those amendments, there is a requirement to justify any substantial difference between the ultimate claim for costs and the amount previously estimated. Our clients know that we understand the importance of getting the estimates right, and completing the task speedily. MRN knows that costs issues do not simply arise at the conclusion of a case, but that they should be borne in mind from the outset of the claim, and our clients know that MRN can be trusted to meet that need. This is reflected in the fact that a large number of our clients took advantage of the free training seminars which we provide for them at their offices. Should you wish to take advantage of these free seminars then please contact us. MRN S PLACE IN THE MARKET We currently work for 22 of the top 500 firms in the country, covering costs issues in claims arising out of Personal Injury, Clinical Negligence, and Commercial Disputes. In those major areas of litigation, we represent a number of clients on a nationwide scale, dealing with anything from complex Clinical Negligence claims and Commercial Disputes to RTA cases attracting predictive costs. Whilst we continue to strive to provide the best service possible in the Personal Injury environment, handling multi million pound damages claims, we continue to develop our costs service in other areas. We routinely receive a number of instructions from major clients in Commercial Litigation, recovering an excellent success rate, including recovering costs of almost 200,000, on a widely reported patent and licensing claim in the High Court last year. In addition, we are currently instructed on a highly complex property matter, the costs of which are also likely to exceed 200K. MRN s Clinical Negligence Team continues to grow, acting for some of the largest, top 5 firms in the North West and on the West Coast, to the small niche firms who specialise in this field, successfully recovering only recently for one client costs in the sum of 220k for a 2.5m damages claim. These claims do not overshadow any other cases referred to us for consideration. We have recently been involved in a dispute over medical report fees on a predictive costs matter. Upon our instruction, Part 8 proceedings were issued and the point over the level of medical fees taken to detailed assessment. We were successful not only in recovering the report and agency fees in full, but also in obtaining a substantial costs order in relation to the assessment procedure itself. Similarly, another routine RTA case was recently referred to us, and we successfully defeated the defendant at detailed assessment, recovering the costs of the process. Part of those costs included those incurred in the assessment process, and our opponents argued that a success fee should not be applied to any

5 costs drafting fees. We felt out client was entitled to that uplift, and so argued against the point made by the defendant. We were upheld and the success fee was awarded accordingly, prompting the defendant to appeal. Having sought the appropriate instructions, our client is happy for us to defend the appeal. Many of our clients act for claimants who have suffered catastrophic injuries, and as a result of our involvement with those cases, we became involved with the Spinal Injury Association. Our work with the charity led to us cosponsoring their annual Charity Ball. This year the Ball was held in March at the Midland Hotel in Manchester, and our involvement with is something of which we are extremely proud. We continue to play a vital role in the Connect2Law scheme, in which Pannone LLP play a pivotal role, and we are proud to be the leading costs firm involved in the scheme itself. On June this year, MRN will be exhibiting at the Birmingham NEC as part of the Law 2006 scheme, in association with The Times. The event is co-ordinated by the Solicitors Group, and involves over 100 exhibitors over a 2 day period. Around 2000 visitors are expected to attend the occasion, with firms from across the country being represented. FEES We consider ourselves a competitive and leading force on the costs market. We want to remain so, and we are always seeking new ways to ensure that our clients receive the service they both expect and deserve. One way in which other costs firms may seek to promote themselves is by acting on a Collective Conditional fee Agreement basis a No Win, No Fee clause. In principle, we are in agreement with the idea, and would be more than willing to enter into such an agreement with both our existing clients, and those new clients who wish to instruct us on their behalf. However, the simple truth of the matter is that we cannot act in this way. It is not a decision we have taken lightly. In fact, we have taken advice from leading costs Counsel, Mr Nicholas Bacon, of 1 Temple Gardens in London. Counsel has categorically advised us that such an agreement would contravene the Regulations and accordingly would be rendered unlawful. We have taken both the time and the trouble to ensure that any agreement we enter into with our clients is legitimate. It is not a case of us not being competitive it is a case of us safeguarding clients interests and getting the facts right. CASE LAW In what will be a regular feature of this newsletter, we aim to provide updates on relevant case law in relation to the changing face of the costs world, as well as those cases which we are personally involved in.

6 CFAs unenforceable by virtue of Regulation 4 breach In the case of Myatt & Others v- National Coal Board, Master Wright, sitting in the SCCO on 12 August 2005, found that the solicitors had not complied with reg.4(2)(c) of the CFA regulations because they had asked the Claimants the wrong questions with regard to alternative funding of the claim. Whilst they had asked each Claimant whether they had credit cards, insurance policies or trade union membership, which would have entitled them to legal expenses insurance, that question had focused upon whether any such insurance had been in respect of the contemplated claim, namely a claim for noise-induced hearing loss against the Defendant. Such an inquiry had required the Claimants to interpret what could have been a complex document to establish whether any such insurance had existed, and, being unsophisticated clients, it was an inadequate inquiry and would not have satisfied reg.4(2)(c). Further, whilst it was unlikely that any credit card, household or motor policy or trade union membership would have assisted in a case of industrial disease, there was no evidence produced to establish that point. The solicitors should have made more thorough enquiries about the possibility of there being BTE insurance which might have made ATE insurance and CFA success fees unnecessary. Accordingly it was found that the CFAs were unenforceable by reason of a breach of reg.4(2)(c). The judgment itself is being appealed, and it is understood to be listed in June. Medical Agency Fees in Predictive Costs Cases Master Seager Berry, sitting in the SCCO in December last year, heard the case of Wollard v- Fowler (SCCO ref: ), which was concerned with the recoverability or otherwise of medical agency fees under the predictive costs regime. It was argued that the work carried out by the agency was in lieu of work carried out by solicitors, and that had the agency not been instructed the solicitors would have had to carry out the work themselves, thereby increasing the fixed profit costs allowed under the predictable costs scheme. Reluctantly, therefore, the agency fees were disallowed in the scope of the scheme. Where fixed or predictable costs do not apply, however, the agency fees were to be allowed if it could be shown that the agency charges themselves were reasonable and in line with what the solicitor himself would have charged. The appeal in this case has recently been heard and the judgement has been handed down, overruling the defendant s argument, upheld at first instance, thereby finding that where a medical report was obtained through an agency, none of the fees charged were precluded from recovery under the terms of the Fixed Recovery Regime, subject to the usual test of reasonableness and proportionality. At the time of print, it is understood that the Defendants are seeking to appeal this decision.

7 MRN s Case Law MRN itself has a number of cases which highlight our dedication to ensuring that Claimants and our clients recover the maximum costs to which they are entitled. We have a case in which a regulation 4 point has been argued at detailed assessment and where we have shown that the advice given by our client was full and compliant. The decision has been appealed. It is our intention to defend our previous arguments by representing our client at the appeal. However, we have our ear to the ground, and we have an indication that the Myatt appeal may well be successful, and may lead to a change in the tide, reversing various technical arguments which Defendants have seen fit to raise. Accordingly, having taken Counsel s advice upon the point, we aim to act in our client s best interest: we are therefore requesting a stay on the appeal in our case, pending the outcome of Myatt, which is due to be heard in June of this year. THE FUTURE MRN continues to develop its culture, resources, and scope within the costs world. We aim to grow, so that clients needs and expectations can be met and realised. Whether you are in the North, the Midlands, the South, or London, MRN is there to make sure that your costs position is secure. Our newsletter is a forum for us to give information to you about what steps we are taking to ensure that every step of your costs claim is accounted for. If you have any queries, or if you wish to discuss any aspect of our services, please do not hesitate to contact us on