Applications to deduct 'from a child's damages

District Judge Marshall Phillips wrote an article only a few months ago (SJ 160/8) setting out the approach of district judges at an infant approval hearing of an application to deduct from the child's damages an amount representing additional liabilities payable under the conditional fee agreement (CFA) entered into by the solicitors and the litigation friend of the injured child.

Readers must refer to the relevant rules: the Civil Procedure Rules (CPR), the Civil Procedure (Amendment No 2) Rules 2015, and Practice Direction (PD) 21.11.1.

While the approaches of individual district judges may differ, this article aims to assist solicitors attending on these applications by suggesting that, to comply with the rules and PD, they are likely to be expected to have followed what is essentially a three-stage process.

Informed consent

All district judges are likely to want to be satisfied there has been informed consent to the agreement by the litigation friend. This will more often than not necessitate the attendance of the litigation friend, as a witness statement alone is unlikely to be accepted in practice in the absence of the litigation friend.

Solicitors should, therefore, consider issuing their application in the litigation friend's local court. The practice of listing to the acting solicitor's convenience must stop. However, PD 21 also requires a witness statement from the litigation friend dealing with the matters set out within the practice direction. The district judge is likely to ask questions of the litigation friend to ensure the requirements of the PD have been complied with, and that they clearly understood the agreement being entered into.

Key questions to ask are:

• Whether the solicitors advice as to funding was clearly understood by the litigation friend and what alternatives were offered;

• Whether the litigation friend was advised that the solicitor acting for him or her will get fixed costs in addition to the deduction, and that sum should, in my view, have be quantified as far as possible when disclosure is made;

• Whether the litigation friend was advised that not all solicitors require a deduction of 25 per cent or 10 per cent or at all; and

• Whether the risk assessment was discussed and explained to the litigation friend.

PD requirements

It is likely, then, that the
judge will check through the rest of the PD requirements.
A common issue that arises is that risk assessments are often not produced or, if they are, they are generic and do not reflect the actual risk involved in the instant infant case. If the judge is satisfied that the PD requirements have been complied with, and is satisfied there is a risk to be borne, then the actual costs claimed have to be assessed which is stage three of the process.

Often a flat, 25 per cent deduction from damages is sought, with no reference to the actual costs incurred. However, the judge will also need to be satisfied that the actual costs claimed are proportionate and reasonable. It is anticipated that most judges will require some sort of bill or costs schedule to be drawn up and proof of service on the litigation friend to be produced. The instant hearing will, of course, have to be adjourned. Judges will also continue to consider whether an order should be made, 'the solicitors waiving any claim for further costs.'

Finally, if the application is refused, some solicitors, I note, are seeking permission to appeal, when in fact they have no standing to do so as they are not parties to the proceedings and are not acting on instructions from the litigation friend. This was dealt with some time ago on appeal in His Honour Judge Halbert's judgment in the case of K-J N
(by his litigation friend SN) v JG (unreported).

District Judge Nigel Law sits at Blackpool County Court and Family Court and is media and PR officer for the Association of Her Majesty’s District Judges