Neutral Citation Number: [2003] EWHC 9002 (Costs)
SCCO Ref: 0300741
Application No: 03/A/328
IN THE HIGH COURT OF JUSTICE
SUPREME COURTS COST OFFICE
Supreme Courts Cost Office
Clifford Inn
Fetter Lane
London
EC4A 1DQ
Date: 30 May 2003
Before :
MASTER WRIGHT, COSTS JUDGE
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Between :
 	TARA LEE SMITH	Claimant	
 	- and -	 	
 	HAVERING HOSPITALS NHS TRUST	Defendant	
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Miss Sarah Lambert (instructed by Gadsby Wicks) for the Claimant
Mr Michael Monaghan (instructed by Kennedys) for the Defendant
Hearing date : 29 April 2003
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JUDGMENT ON THE DEFENDANT’S APPLICATION
NO.03/A/328 DATED 10 APRIL 2003
 
Approved Judgment

Master Wright

1.	The Claimant suffered personal injuries when her child Amber was delivered stillborn on 18 September 1997 at Harold Wood Hospital. She instructed her solicitors Gadsby Wicks and had her first meeting with them on 28 November 1997. Thereafter she applied for legal aid but her application was refused on financial grounds. Then the possibilities of CFA funding and ATE insurance were considered. She eventually signed a CFA with Gadsby Wicks on 19 June 2000 and her ATE insurance policy was received on 5 July 2000. 
2.	Gadsby Wicks then obtained her GP records and approached a consultant paediatric neurologist, a consultant psychiatrist and a consultant gynaecologist for reports. These were received by Gadsby Wicks on 20 October 2000, 13 December 2000 and 15 December 2000 respectively. 
3.	Meanwhile Gadsby Wicks issued proceedings against the Defendant in the Mayor’s & City of London County Court on 4 September 2000 claiming damages for personal injury caused by the negligence of the Defendant’s servants or agents during the course of the Claimant’s labour and delivery of a stillborn baby. The proceedings were accordingly issued only 14 days before the expiry of the limitation period. 
4.	On 19 December 2000 Gadsby Wicks sent a Letter of Claim to the Defendant which appears to comply with the Pre-Action Protocol for the Resolution of Clinical Disputes except that the proceedings had already been issued. Paragraph 3.21 of the Protocol provides that proceedings should not be issued until after three months from the Letter of Claim unless there is a limitation problem and/or the patient’s position needs to be protected by early issue. 
5.	In the Letter of Claim Gadsby Wicks stated: 
"We have issued protective proceedings in order to protect our client’s position. These have to be served by 3 January 2001. We are prepared to make a joint application to the court to agree a three month extension of time for service of your defence."
6.	The Claim Form, Particulars of Claim, Schedule of Special Damages, Notice of Funding and experts’ reports were served on the Defendant on 21 December 2000. A complete copy of the GP records was sent to the Defendant’s solicitors on 16 January 2001. By letter dated 26 February 2001 Gadsby Wicks wrote to the Defendant’s solicitors: 
"Further to our telephone conversation today, we confirm that as we were not able to comply with the pre-action protocol in this case, we are prepared to agree to a further extension of 28 days for service of the Defence."
7.	On 23 March 2001 Gadsby Wicks agreed to a further extension of time for service of the Defence to 3 April 2001. 
8.	On 28 March 2001 Gadsby Wicks agreed to a further extension of time for service of the Defence to 18 April 2001. 
9.	The Defendant then changed solicitors and their new solicitors wrote on 5 April 2001 to say: 
"(because) you failed to serve a Letter of Claim under the Clinical Negligence Pre-Action Protocol, the Trust has been deprived of time to properly consider the allegations that are levelled against them. In those circumstances, we put you on notice that we will be making an application to the court to extend time for service of our Defence for a further 3 months from today’s date."
10.	Gadsby Wicks did not agree to this further extension of time and the Defendant applied to the court. On 17 April 2001 District Judge Samuels ordered that the Defendant file and serve a full and proper Defence by 2 May 2001 and in default the Claimant be at liberty to enter judgment for damages to be assessed. 
11.	On 2 May 2001 the Defence was served denying liability. The matter then proceeded and the case was listed for a two day hearing commencing on 7 August 2002. 
12.	In January 2002 the Defendant changed solicitors again and Kennedys (who are now the Defendant’s solicitors) informed Gadsby Wicks on 1 February 2002 that the Defendant would not be serving any expert evidence and would consent to judgment. Judgment was entered by consent on 14 February 2002 for damages to be assessed and costs to be assessed if not agreed. 
13.	On 12 July 2002, following a further payment into court by the Defendant, judgment was entered by Consent that the sum of £30,000 standing in court to the credit of this action be paid out to the Claimant’s solicitors and that the Defendant pay the Claimant’s reasonable costs of the action to be subject to detailed assessment if not agreed. 
14.	In this application the Defendant applies for an order that: 
"(i) The success fee of 100% is disallowed or reduced; and
(ii) all or part of the Claimant’s costs be disallowed
because the Claimant’s solicitors failed to comply with the Pre-Action Protocol for the Resolution of Clinical Disputes pursuant to the Civil Procedure Rules. The court has discretion to impose a Costs Order under CPR 44.14(1)(a) and (b) in relation to a party’s misconduct."
15.	In her Witness Statement in support of the Defendant’s application Ms Bell of Kennedys says (among other things): 
"7. The objective of the Pre-Action Protocol is, namely:
(1) To encourage the exchange of early information about the prospective legal claim;
(2) to enable the parties to avoid litigation by agreeing a settlement of the claim before the commencement of proceedings; and
(3) to support the management of proceedings where litigation cannot be avoided.
8. It is submitted on behalf of the Defendant that the Claimant’s solicitors should have followed the Pre-Action Protocol for the Resolution of Clinical Disputes. If the Claimant’s solicitors had served a Letter of Claim in accordance with the Pre-Action Protocol for the Resolution of Clinical Disputes (which came into force on 26.04.99) this would have enabled the Defendant to carry out their investigations and assess liability prior to proceedings being issued.
9. The Claimant first consulted her solicitors in November 1997, giving the Claimant’s solicitors ample opportunity to carry out investigations and serve a Letter of Claim prior to proceedings being issued on 04.09.00 and before service of proceedings on 21.12.00. They failed to do so.
10. It is clear from the Claimant’s solicitors letter of 26.02.01 that they acknowledge that they failed to comply with the Pre-Action Protocol.
11. A CFA was entered into on 19.06.00 with a success fee of 100%. It is submitted that if the Claimant had not left investigations until the very end of the three year limitation period, then they could have served a Letter of Claim several months before the need to issue proceedings. The Defendant could then have carried out its own investigations with a view to making the relevant admission and possibly settling the claim at the pre-action stage. The litigation risk to the Claimant would have been 0% and an appropriate success fee of 0% allowed."
16.	At the hearing of the Defendant’s application Mr Monaghan referred me to the Pre-Action Protocol for the Resolution of Clinical Disputes and particularly to paragraphs 1 to 4 (the Executive Summary), paragraphs 1.12 to 1.14 (Enforcement of the Protocol and Sanctions) and paragraph 3.14 to 3.22 (Letter of Claim). 
17.	He also referred me to CPR Part 44.3 and particularly to Part 44.3(5)(a). The court will have regard to the conduct of the parties in deciding what order (if any) to make about costs and the conduct of the parties includes conduct before, as well as during, the proceedings, and in particular the extent to which the parties followed any relevant pre-action protocol. 
18.	Mr Monaghan also referred me to CPR Part 44.3(6)(a)-(g) which sets out orders which the court may make about costs and CPR Part 44.14 which sets out the court’s powers in relation to misconduct. 
19.	He submitted that since the Claimant had had her first meeting with Gadsby Wicks on 28 November 1997, there had been ample time for them to send a letter of claim and that the Claimant was estopped from relying on the exemption given in paragraph 3.21 of the Protocol relating to limitation problems. 
20.	He said that the Defendant had been denied the opportunity of settling the claim before proceedings were issued with the result that they faced the possibility of having to pay a success fee of 100% whereas on the authority of recent Court of Appeal decisions the success fee recoverable if proceedings had not been issued would be far less. Further still, if the Letter of Claim had been sent before 1 April 2000 when the Access to Justice Act 1999 came into force, and if the claim had then been settled, no success fee would have been recoverable at all. 
21.	Miss Lambert on behalf of the Claimant, referred me to paragraph 3.15 of the Protocol which states: 
"If, following the receipt and analysis of the records, and the receipt of any further advice (including from experts if necessary – see Section 4), the patient/adviser decides that there are grounds for a claim, they should then send, as soon as practicable, to the healthcare provider/potential defendant, a letter of claim."
22.	She pointed out that having entered into the CFA on 19 June 2000 and having received the ATE insurance policy on 5 July, Gadsby Wicks had proceeded to obtain the Claimant’s GP records and to instruct experts. The experts’ reports had not all been received until 15 December 2000 and the letter of claim was sent to the Defendant on 19 December 2000. She submitted that this had not been an unreasonably long period within which to decide whether there was a valid claim which justified the Claimant’s solicitors in sending the letter of claim. 
23.	Miss Lambert referred to paragraph 3.21 of the Protocol which states: 
"Proceedings should not be issued until after three months from the letter of claim, unless there is a limitation problem and/or the patient’s position needs to be protected by early issue."
24.	She pointed out that the limitation period had very nearly expired when the proceedings were issued on 4 September 2000. In view of the fact that funding arrangements had not been concluded until 5 July 2000 the limitation period had been a serious problem. 
25.	She submitted that the court had to consider the Practice Direction: (Pre-Action Protocols) (1999). Paragraph 2.2 states: 
"The court will expect all parties to have complied in substance with the terms of an approved protocol."
26.	She pointed out that paragraph 2.4 of the Practice Direction states: 
"The court will exercise its powers under paragraphs 2.1 and 2.3 with the object of placing the innocent party in no worse a position than he would have been in if the protocol had been complied with."
27.	Miss Lambert submitted that the Defendant’s time for serving a Defence had been extended substantially by agreement and finally by an order of the court. It was therefore difficult to see how the Defendant could realistically be said to have been disadvantaged by the fact that it did not have three months after the delivery of the Letter of Claim before proceedings were issued. 
28.	She pointed out that paragraph 3.4 of the Practice Direction states: 
"The court is not likely to be concerned with minor infringements of the practice direction or protocols. The court is likely to look at the effect of non-compliance on the other party when deciding whether to impose sanctions."
29.	Miss Lambert submitted that since the Defendant continued to defend after service of the Defence, through the case management conference and for some 14 months after receipt of the Particulars of Claim it was ludicrous to suggest that the Defendant would have settled the claim prior to issue of proceedings if it had been given three months between the letter of claim and the issue of proceedings. 
30.	Mr Monaghan, in his submissions about the orders the court should make in relation to this application, referred to the decision of the Court of Appeal in Ricardo Biguzzi v Rank Leisure Plc [1999] 4 All ER 934. In his judgment Lord Woolf referred to paragraph 2.3 of the Practice Direction: (Pre-Action Protocols) [1999]. This sets out the orders which the court may make if, in the opinion of the court, non-compliance: 
"has led to the commencement of proceedings which might otherwise not have needed to be commenced, or has led to costs being incurred in the proceedings that might otherwise not have been issued."
31.	However, as mentioned in paragraph 26 above, paragraph 2.4 of the Practice Direction states: 
"The court will exercise its powers under paragraph 2.1 and 2.3 with the object of placing the innocent party in no worse position than he would have been in if the protocol had been complied with."
32.	I am satisfied that the extensions of time given to the Defendant to serve its defence gave ample time for the Defendant to decide whether to defend the claim. Indeed the Defendant was given more than the three months provided for in paragraph 3.21 of the Protocol. 
33.	I am also satisfied that on the basis of the history of this matter which has been outlined above, it is highly unlikely that even if the Defendant had been given the three months provided for in paragraph 3.21 of the Protocol, it would have settled the claim prior to the issue of proceedings. The fact that the Defendant did not admit liability until February 2002 is a very significant factor in persuading me to come to that view. 
34.	Accordingly in my judgment no sanction for the Claimant’s failure to observe paragraph 3.21 of the Protocol would be justified. 
35.	Although it is not (it seems to me) necessary for me to decide the point, I think I should add that in my judgment the Claimant was entitled to have her litigation funding arrangements in place before instructing experts and obtaining GP records. That had not been achieved until July 2000 and the relevant information required by paragraph 3.15 of the Protocol had not been received until December 2000. No letter of claim could have been sent until then and so the Claimant cannot in my judgment be held to have been in breach of the Protocol because there was a limitation problem as referred to in paragraph 3.21 of the Protocol. 
36.	This application must therefore be dismissed. I will hear submissions on the question of costs and on the question of appeals at a later directions hearing if the parties do not attend when this judgment is handed down.