Letters Of Claim, Schedules Of Loss, Experts’ Fees And Hourly Rates | A Standard, Standard Basis Assessment

Summary

---

HD v Northern Devon Healthcare NHS Trust [2023] EWHC 2118 (SCCO) was a costs dispute arising from six clinical negligence cases brought by the firm Fortitude Law against Northern Devon Healthcare NHS Trust. The cases concerned claims by six women – referred to as HD, HL, CB, CM, CD and CT in the judgment – who underwent surgery to have vaginal mesh implants inserted to treat stress urinary incontinence (SUI).

All 6 claimants alleged they suffered significant complications following the surgery, including chronic pain, recurring UTIs, and problems with mobility and sexual function. They claimed the risks of the surgery were not properly explained to them and their consent was not fully informed.

Fortitude Law was instructed to bring clinical negligence claims on the claimants’ behalf against the NHS Trust responsible for their treatment. The claims were settled prior to the issue of proceedings, via a mediation process under a Claims Handling Agreement (CHA) between Fortitude Law and the NHS Trust’s insurer.

As part of the settlement, it was agreed that Fortitude Law’s costs would be subject to a detailed assessment. This judgment dealt with the NHS Trust’s challenges to the reasonableness and proportionality of Fortitude Law’s costs on various preliminary issues, in the lead case of HD.

Costs Judge James considered the time spent on drafting the lengthy Letters of Claim, considering the Defendants’ Letters of Response and formulating the Schedules of Loss detailing heads of claim and quantum. The judge also examined hourly rates and the size of the fees charged by the medical experts instructed by Fortitude Law to prepare reports on liability and condition/prognosis.

The NHS Trust argued that the documents produced were excessive and duplicative, with some evidence of cut-and-paste precedent use. It claimed the Schedules were vastly over-pleaded compared to the modest settlement sums. It also challenged the medical experts’ fees given the use of precedents.

Fortitude Law maintained its costs were high due to the complexity of the cases and the detailed requirements of the CHA. It stated experts were entitled to charge market rates. It denied there was any attempt to over-plead or any misconduct in its approach.

After considering parties’ arguments, the judge found that in several respects Fortitude Law’s costs were disproportionate and allowed reductions. However, the judge deferred a decision on whether there was any misconduct under CPR 44.11 pending further submissions.

Letters of Claim

The defendant argued that the Letters of Claim drafted by Fortitude Law were unnecessarily long and duplicative. They contained extensive extracts copied directly from medical records rather than concise summaries. Much of the legal argument consisted of verbatim quotations from cases slotted in from precedent documents. Overall, the defendant contended that the Letters of Claim involved an unreasonable amount of precedent use and excessive time across multiple fee earners given the work produced. The defendant asserted that the Letters of Claim did not comply with the requirements of proportionality and reasonableness under CPR 44.3.

The claimant maintained that the Letters of Claim needed to be exceptionally detailed to comply with the defendant’s own Claims Handling Agreement (CHA), which required compliance with the Pre-Action Protocol and set out various information to be included. The claimant contended this level of detail was necessary pre-issue to put the parties in a position to settle at mediation and avoid litigation. The claimant argued the medical records extracts provided important context, while the legal precedents were required to demonstrate consideration of the law. According to the claimant, this approach was reasonable and proportionate in the circumstances of these cases, where the CHA mandated comprehensive Letters of Claim.

The judge found that the Letters of Claim were unreasonably long and duplicative, containing excessive extracts from medical records and verbatim quotations slotted in from precedent documents. She concluded that the significant use of precedent and the time across multiple fee earners was disproportionate for the work produced. In the lead HD case, the judge allowed just 15 hours for the Letter of Claim, reduced from the 62.3 hours claimed.

“Something else that shows that there was a precedent for each of these sections, is the extent to which several of the letters have errors in them where the precedent has been either overwritten incorrectly (so that a completely different Claimant’s name appears) or not completed fully (so that, for example, three of the letters of claim call for a Reply by ‘………’ with a date four months hence having been omitted by oversight). There is nothing sinister in that and indeed, notwithstanding the individual journeys of each of the Claimants, as they have all suffered due to the same kind of treatment it makes sense to have drafted up a precedent for those sections of the Letter of Claim that were always going to be the same or at least very similar in content. The issue is simply that, having done so, the amounts of time spent on drafting individual Letters of Claim which are both excessively lengthy and largely precedent-led, are neither reasonable nor proportionate.”

Letters of Response

The judge designated the relevant items as ‘DR1’ (D’s Letter of Response), ‘CR1’ (C’s Response thereto) and ‘DR2’ (any further Response from D).

The defendant argued that the Claimants’ CR1 documents essentially reiterated the Letters of Claim and involved cutting and pasting significant portions from the DR1 documents. The defendant asserted that there was a great deal of duplicate content across the CR1 documents, with only a small amount of unique information specific to each claimant’s case. The defendant contended that the CR1 documents did not advance the cases and the time claimed for producing the CR1s was disproportionate and unreasonable considering the minimal bespoke work produced.

The claimant maintained that it was necessary to fully consider the DR1 documents in order to properly draft the CR1 documents. The claimant argued that the CR1 documents required them to engage with the specific disputes raised in the DR1 documents regarding the facts and legal merits of each case. The claimant contended that it was reasonable to quote content from the DR1 documents to directly address the issues in dispute raised in the defendant’s correspondence. According to the claimant, the CR1 documents involved reasonable time across fee earners considering the importance of responding to the defendant’s arguments.

The judge found that the CR1 documents involved a significant amount of cutting and pasting content from previous correspondence including the DR1 documents. She considered there was very little unique information specific to each claimant in the CR1 responses. She concluded that the time claimed for producing the CR1 documents was disproportionate to the minimal bespoke work involved. In the HD case, she allowed 10 hours in total for considering the DR1, drafting the CR1 and reviewing any further DR2 response from the defendant.

“The Grade D time spent on sorting and indexing the Medical Records ought to have made this task much more straightforward, especially if they had been tabbed or otherwise marked up to make locating the relevant records easy to locate within the bundle. In fairness, if these matters come to a line-item Assessment, it needs to be recognised that sorting and indexing Medical Records is prime Grade D territory; Ms McDonald referred to using a Medical Reader, which some firms do (but then, under Crane v Cannons Leisure charge it at fee earner rates) but if I have reduced these items because the Medical Records should have been in good order prior to their being done, that sorting and indexing time (certainly at Grade D rate) is less likely to be reduced as much as times spent on Letters of Claim and DR1, CR1 and CR2.”

Schedules of Loss

The defendant argued that the Schedules of Loss were greatly overstated and overpleaded compared to the settlement sums ultimately agreed (In “HL” a pleaded claim in excess of three quarters of a million pounds, settled at £30,000.00. The remaining claims were pleaded at approximately 18 times the amounts achieved in settlement). It asserted errors were made including use of incorrect hourly rates for care claims and there was a failure to properly assess recoverable heads of loss, with speculative claims made without evidential support. Overall, the defendant argued that the Schedules of Loss involved disproportionate time across multiple fee earners and did not represent a reasonable or proportionate approach.

The claimant maintained that the Schedules of Loss required significant time as factors like the discount rate changed during the cases. It argued Cs mitigated losses appropriately once full records were obtained, improving their position. The claimant contended that the initial Schedules had to be served quickly due to the defendant’s CHA requirements. It was only later that documentary support became available to refine the heads of claim. The claimant asserted the time spent on the Schedules was reasonable given the complexity of quantifying the losses and the need to fully plead the monetary claims.

The judge found basic errors in the Schedules of Loss, including wrong care rates used initially and failure to separate recoverable from non-recoverable claims. He held there was significant overpleading of heads of loss compared to the modest settlement sums. The judge concluded that the lack of a systematic approach and the numerous errors demonstrated that the time claimed on producing the Schedules across multiple fee earners was disproportionate and unreasonable. In the HD case, he allowed just 7.9 hours for the Schedule instead of the 31.3 hours claimed.

“One of the most striking problems with the first two Schedules is the hourly rates that they use to calculate past and future care costs. These are either £6.50 or £10.00 per hour (presumably £6.50 is a rough approximation of 2/3 of £10.00 per hour). However, by Schedule 3 the National Joint Council Payscales Basic rates have been used instead. That is an improvement, but it is unclear why those rates were not used before; the earlier rates are described as ‘conservative’ but they were quite simply wrong.”

Medical Report Fees

The defendant argued that the medical experts produced generic reports reusing extensive amounts of precedent material. It asserted that despite having access to full medical records, the experts provided minimal critique or analysis of the contemporaneous evidence. The defendant contended that with the high volume of instructions received, the experts should have achieved economies of scale and charged reduced fees reflective of this repetitive nature of work. Overall, the defendant argued that the expert fees claimed did not reasonably correlate to the work undertaken nor reflect any moderation for the extensive use of duplicated precedents.

The claimant maintained the medical experts were entitled to charge market rates and that the reports contained appropriate expert analysis of complex medical and legal issues. It argued that while some precedent material was inevitably reused given the similar medical histories, the experts needed to consider each claimant’s records in detail to provide case-specific opinions. The claimant contended that the requirement for experts to be highly qualified and experienced justified the levels of fees charged. It denied the experts failed to engage sufficiently with the contemporaneous medical evidence.

The judge found that the medical reports contained substantial replicated precedent material and lacked detailed analysis of the specific medical records. She considered that with the volume of instructions received, the experts should have reflected this in their fees by making economies of scale. In the HD case, the judge reduced Dr Agur’s fee from £4,200 to £3,000 to better reflect this element of repeated work. She concluded that the fees claimed did not reasonably correlate to the work actually undertaken once the extensive use of precedent material was factored in.

“What does assist the Defendant, and which came to the fore during the Hearing (although it was referred to in the PoD) is the fact that Dr Agur does so many Reports for Fortitude Law and that there is so much common material across not only his Reports but also the Report of Mr Riad in “CM”. There was some reference to the way in which Defence lawyers (whether Counsel or Solicitors) are paid well below market rates because of the bulk nature of the work that they do. In the above table it is noted that between 12 August 2020 (when he took a medical history from both Ms “HD” and Ms “CH” over the telephone) and 14 January 2021 (when the Report on Ms “CT” was produced) Dr Agur produced 5 Reports which contain a preponderance of common/precedent material. I do not have any information upon how many more Reports he has produced, during that period or overall, but the sample I have seen is sufficient to enable me to conclude that the fee charged for each of them, is too high. With this level of involvement/ instruction and making use of a precedent as he clearly has (and as was clearly reasonable to have done) Dr Agur ought to have been able to make some economies of scale. I do not see that Dr Agur’s fee in “HD” reflects that very obvious fact.”

Hourly Rates

The defendant argued that the hourly rates claimed by the claimant were disproportionate and excessive considering the nature and complexity of the cases. It contended that as clinical negligence cases that settled pre-issue without requiring trial, these should attract rates on the lower end of the Band 1 range. The defendant asserted that the work was conducted by Fortitude Law from their home office set-up without substantial overheads. It stated that the rates claimed did not reasonably correlate with the ‘pillars of wisdom’ in CPR 44.4(3).

The claimant maintained the hourly rates claimed were reasonable market rates for clinical negligence work conducted by specialist solicitors in this field. It argued that Band 1 was accepted but the cases involved significant complexity to justify rates at the upper end. The claimant contended that Fortitude Law incurred considerable business expenses and overheads as a national firm handling a high volume of complex litigation. It asserted the rates accounted for case complexity, specialised skill and regional variations in line with CPR 44.4(3). The claimant denied the rates were disproportionate.

The judge considered reasonable hourly rates based on the specific nature of these clinical negligence cases. She found Band 1 appropriate but held the rates claimed should be moderated given the lack of complexity and lower value of the settled claims. The judge concluded that rates of £285 for Grade A, £250 for Grade B and £120 for Grade D, Costs Lawyers and Costs Draftsmen were reasonable to apply. The judgment on hourly rates was given ex tempore, with only short reference made to judge’s reasoning in the handed down judgment.

“…think rates are on high side. Run from home office set up. Seek above rates so something to be said on rates point. Some overheads. Not a case guideline rates applicable. RTA, slip & trip, not most complex or valuable clinical negligence cases. There is a degree of specialisation claimed. Rates allowed on basis appropriate clinical negligence Band 1 and a degree of work by Grade A.”