Hourly rates in mesothelioma cases
Claims for mesothelioma victims can be differentiated fairly easily from the generality of personal injury matters and historically there has been a degree of acceptance by Costs Judges and some insurers that the specialist work involved commands an enhanced hourly rate.
Mesothelioma claims (but not other cases arising from asbestos exposure) are specifically exempt from the provisions of sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Therefore, success fees and additional liabilities remain recoverable from paying parties. This has the effect of minimising any market forces that might be at play in the wider personal injury market, as a mesothelioma Claimant on a CFA is very unlikely to have to be concerned with meeting any part of their own solicitors’ fees. It also exempts mesothelioma claims from costs budgeting, so costs are usually only dealt with retrospectively.
The sole effective fetter on hourly rates for mesothelioma matters therefore remains the discretion of the Costs Judge, only exercised once the substantive matter has been concluded.
The factors to be taken into account by a Court when decoding the amount of costs to allow are dealt with at CPR 44.4. It is commonplace for the work undertaken in a mesothelioma claim to stack up well against many of the factors listed at CPR 44.4(3), frequently referred to as the “seven pillars of wisdom” and that should form the basis for a submission that a substantial hourly rate should apply.
Dealing with those factors in turn;
(a) the conduct of all the parties, including in particular –
(i) conduct before, as well as during, the proceedings; and
(ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;
This is frequently relevant to the liability work necessitated by a mesothelioma claim, particularly in the context of the urgency where the victim is still alive. Did your opponent choose to defend the matter, putting you to the task of an extensive liability investigation on subject matter stretching back many decades? Did your opponent delay in responding to correspondence or to offers, in the context of a terminally ill client? Was your client put to unnecessary stress and difficulty in proving their claim, exacerbating the difficulty of the already sensitive task of representing them in their claim?
(b) the amount or value of any money or property involved;
A government study was undertaken in 2013 to estimate average civil compensation for work related mesothelioma claims arrived at a range of £148,023 to £159,039, with 95% confidence, as a true mean value across a very substantial sample of mesothelioma cases.
There would be some inflationary effect in the interim and given the average annual inflation of 2.2% in the interim, a comparable range for 2017 settlements could reasonably be expected to span from £160,000 to £175,000.
It is reasonable to argue, therefore, that compared to the generality of personal injury claims, mesothelioma matters are of high value. The 2013 study referred to above found that the distribution of quantum levels tailed off very quickly from the median, such that a bell curve illustration would have very long tails, indicating a strong cluster around the median.
The difficulty and extent of the work in establishing liability is unlikely to bear any particular relationship with the eventual level of quantum. This was borne out by the finding of the 2013 study that there was no clear relationship between the size of the award and the length of the case. The factor with the strongest relationship to quantum was the age of the claimant, quantum decreasing as age increased to reflect fewer lost years. This ought to be ammunition for an argument in support of higher rates in even lower value mesothelioma cases, as the work involved in representing an octogenarian Claimant is often greater than that involved in representing somebody in their 50s who would nonetheless be likely to recover double the amount of compensation.
It should therefore be possible to argue that any mesothelioma claim justifies the attentions of a specialist on the grounds of quantum. In the instance of a mesothelioma matter resulting in damages exceeding £250,000 it would be reasonable to argue that the amount of money involved sits well outside the usual range of quantum.
(c) the importance of the matter to all the parties;
This is a difficult factor for anybody to dispute. Mesothelioma is noted as an extremely unpleasant condition even in the context of terminal cancer. The importance to the Claimant is likely to be even greater if they have dependents.
(d) the particular complexity of the matter or the difficulty or novelty of the questions raised;
This is frequently applicable to mesothelioma cases in terms of the difficulty of a liability investigation, the tracing of witnesses, the piecing together of a working history from many decades ago, the establishing of exact working practices and the extent of likely exposure.
The nature of the tasks that had to be undertaken should, where necessary, be spelled out to the paying party or the Costs Judge. Specialists in mesothelioma claims often work on those matters to the exclusion of any other type of work and will therefore be used to embarking upon liability investigations that would be extremely daunting to many practitioners less used to that type of work. Self-deprecation comes naturally to many professionals but there is a risk of specialist solicitor selling themselves short. The nature of the work may have become second nature to you but that does not mean that it should not be considered difficult, complex or on occasions novel. By way of example, any other type of personal injury claim with the index incident having happened in, say, the 1960’s, would be likely to qualify as “novel”.
(e) the skill, effort, specialised knowledge and responsibility involved;
Again, an exercise in specialist practitioners not selling themselves short. If you practice exclusively in asbestos claims then the Court should know that. Reference should be made to any relevant positions held and to any entries in publications such as Chambers or Legal 500. Specialised knowledge is another area that could be taken as a given by a practitioner in these matters, but which can add extraordinary value. By way of example, relationships with solicitors in other firms or other areas of the country can form extremely effective short cuts in witness appeals or liability investigations, in terms of cases with Defendants in common. A practitioner who commissions 15 reports a year from a given expert is likely to be in a position to pick up the telephone or otherwise obtain quick access to wider expertise that again constitutes a shortcut. A specialist is likely to have a set up whereby instructions can be taken from a new client at very short notice and then to have a team on hand in terms of experts and Counsel, all the more important when time is short for the terminally ill client.
The skill in dealing with subject matter that can be desperately upsetting for Claimants and their families should not be under-estimated.
(f) the time spent on the case;
In terms of the justification for enhanced rates, this ties back in with the factors at d) and e) insofar as, hopefully, the specialist skill, knowledge and expertise deployed by a specialist in mesothelioma claims allows those claims to be dealt with far more economically in terms of time than would be the case if the matter was handled by a non-specialist.
(g) the place where and the circumstances in which work or any part of it was done
This is frequently relevant to costs assessments following mesothelioma claims where the Claimant instructs a specialist on the strength of their reputation or a recommendation, as opposed to their geographical proximity.
Defendants are likely to make representations that the Claimant should have instructed a local firm, typically at lower expense. Frequently the case of Wraith v Sheffield Foragemasters [1998] 1 All ER 532 is cited in support of this submission.
The Wraith appeal was heard in conjunction with the appeal in Truscott v Truscott. In Wraith it was found to have been unreasonable for a steelworker in Sheffield to instruct a Central London solicitor upon the recommendation of his trade union. In Truscott it was found that it was reasonable for a divorcee from Surrey to instruct a Central London firm in court proceedings about a maintenance payment order involving his ex-wife, upon his having been dissatisfied with his local solicitors. The ratio from the joined appeal hearings was that the question should have been the reasonableness of the decision to instruct a distant solicitor, given the relevant considerations.
The lead case in the context of mesothelioma claims is William Higgins v MOD [2010] EWHC 654 (QB) where it was held that it was objectively reasonable for a vulnerable mesothelioma claimant resident on the Kent coast to instruct a specialist solicitor in Central London and that someone in those circumstances should not be expected to conduct a trawl, when he had received a recommendation.
Based on Higgins it should at the very least be possible to justify the instruction of a solicitor from the nearest recognised centre of legal expertise, if not always Central London. In practice, some Costs Judges have shown willingness to allow rates for Central London firms for claimants from distant areas of the country, but this is an area where the assessing Master has a great deal of discretion. It may be relevant that a Claimant is too unwell to travel. If A Claimant is located one hour from Birmingham but three hours from London, yet too frail to travel, then arguably that location is of lesser relevance.
In Practise
It can be seen from the above that an argument for an enhanced hourly rate should be available to practitioners specialising in mesothelioma claims. Practically, the question then arises as to what level of enhancement ought to apply and from what starting point.
Paying parties frequently refer to the 2010 guideline rates for summary assessment. Those guidelines are specifically intended only to assist judges without sufficient experience of their own to apply rates to summary costs assessments following hearings of a single day or less. It is arguable that those rates have nothing whatsoever to do with the assessment of costs in mesothelioma cases, but it should be recognised that some Costs Judges consider the guidelines to be a good place to start, if not necessarily to end up.
Opinion amongst the Costs Judiciary seems to be split as to whether any inflationary consideration should be given to the 2010 guideline rates. Certain Costs Judges are prepared to adjust the guidelines to reflect inflation in the interim whereas some have been reluctant to do so.
The question would then arise as to how an enhancement ought to be applied to either a guideline rate or notional basic going rate. Traditionally solicitor’s hourly rates were deconstructed to notional constituent (A) and (B) factors, (A) being the expense rate and (B) being a notional “care and conduct” element. It is widely accepted that the published guideline hourly rates incorporate a notional 50% (B) factor, and that therefore the notional expense rate is treated as being two thirds of the stated guideline. A traditional approach would be to address the Costs Judge on an alternative to the 50% (B) factor, having first established the appropriate expense rate or (A) factor.
An alternative would be to address the Costs Judge on a percentage to be applied to an overall guideline or basic rate in the matter. The advocate should be prepared for either and to address the Costs Judge on the basis of the factors identified above from CPR 44.4(3).
Again, judicial discretion is key here and there is a reasonably broad spread of opinion between Costs Judges as to the appropriate approach to and level of enhancement.
As an example of the variations that could be seen dependent upon the discretion of the Costs Judge, take an example of a case handled in Central London in 2017 and let us assume quantum of £500,000, taking the matter into the exceptional in terms of mesothelioma settlements. Assuming each Costs Judge to accept that a Central London guideline rate from 2010 was the appropriate starting point, let us say that Costs Judge A adjusts the 2010 guideline for inflation and permits a 20% uplift overall, and that Costs Judge B does not consider an inflationary adjustment appropriate and applies a 70% B factor. Both are perfectly conceivable outcomes and it would be hard to identify grounds for appeal in either instance.
Costs Judge A would take the base rate of £317, inflation adjust that to £386 (per bank of England calculator) then apply 20% overall, giving a maximum rate of £463.20.
Costs Judge B would take the base rate of £317, deconstruct to a base rate of £211.33 and apply a 70% B factor to arrive at £359.27.
An experienced costs specialist will be able to help you navigate these arguments and apply them to the specifics of each case to ensure that you are properly remunerated for the work you do.
Harmans have been dealing with asbestos related costs cases for a number of years now and are well aware of the specific issues arising in such cases. If you have any questions or if there’s anything we can help you with please contact Partner and Costs Lawyer Steve Jones on 01992 807935 or stevej@harmanscosts.com.
