Malone v Birmingham Community NHS Trust [2018] EWCA Civ 1376

Jenny Cawthorne
Costs Consultant

Our Jenny Cawthorne, Costs Draftsman and GCILEx, reports on the recent Court of Appeal decision in Malone v Birmingham Community NHS Trust [2018] EWCA Civ 1376.

The Court of Appeal ruled that a Conditional Fee Agreement was still valid despite the fact that it named the wrong Defendant.  The Court of Appeal held that the scope of the agreement still had the effect of allowing costs to be recovered from the correct Defendant.

The Case

In the case, the Claimant was a prisoner at HMP Birmingham.  The Claimant brought a claim for failure to diagnose testicular cancer.

The Claimant instructed two successive firms during the course of the claim.  The second firm entered into a CFA with the Claimant on 16th January 2013.  Both firms, however had difficulties identifying the correct Defendant to name in the CFA as there was uncertainty who was responsible for the Claimant’s medical care.  In fact, all three potential Defendants were named upon issue of proceedings.

Ultimately, the only Defendant named in the CFA was the Home Office.  The CFA covered:

‘All work conducted on your behalf following your instructions provided on [sic] regarding your claim against Home Office for damages for personal injury suffered in 2010’.

Prior to service of proceedings, the Birmingham Community NHS Trust acknowledged it was responsible for the Claimant’s treatment and settlement was reached against the Trust only in the sum of £10,000.

On assessment, the Defendant argued that they were no liable to pay the Claimant’s costs as they were not named in the CFA.

Judgment

Both the District Judge and Circuit Judge found in favour of the Defendant Trust, deeming that the CFA was not valid.

At the Court of Appeal, Hamblen LJ identified that ‘the insertions made to the CFA demonstrate poor quality drafting and little attention to detail’.

He did, however, consider that the scope of cover could be interpreted by conducting a textual and contextual review of the CFA. Following the approach taken in Wood v Capita Insurance Services [2017] UKSC 24, ‘the interpretation of such an agreement is likely to call for more emphasis on the factual matrix and contextual considerations and less principal emphasis on close textual analysis’.

The judge stated, in respect of the paragraph on cover, that:

‘As a matter of language … the most natural reading of the critical wording is that the CFA covers “all work conducted” on the claimant’s behalf which follows from the “instructions provided” in respect of his claim “against Home Office”. In other words … the reference to “Home Office” is descriptive of the instructions received rather than of the work to be done. It relates to past instructions rather than future work’.

The terms of the CFA were therefore ‘descriptive rather than prescriptive’, and the function of the CFA was intended to identify the claim, rather than a ‘positive choice’ to specify the identity of the Defendant.

As a result, the Claimant’s appeal was allowed and the previous judgment was overturned.  Hamblen LJ found that the CFA was ‘properly to be construed as not being limited to a claim against the Home Office/Ministry of Justice’.

Each case will ultimately turn on its own individual facts however the Court of Appeal’s decision will be reassuring to many Claimant firms.

 If you are unsure about the validity of your funding arrangements, it is important to seek specialist advice.

Contact Jenny here

 

 

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