Neutral Citation Number: [2015] EWHC B16 (Costs)
Case No: JR 1406346
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE

Thomas More Building
Royal Courts of Justice
London, WC2A 2LL

Date: 10/08/2015

Before:

MASTER ROWLEY, COSTS JUDGE
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Between:

	Kai Surrey (by his Mother and
Litigation Friend Amy Surrey)
	Claimant	
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Barnet & Chase Farm Hospitals NHS Trust	
Defendant	

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Stephen Innes (instructed by Irwin Mitchell) for the Claimant
Alexander Hutton QC (instructed by Acumension) for the Defendant

Hearing dates: 4th and 5th June 2015
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Judgment
Master Rowley: 

1.	This judgment addresses a number of preliminary issues brought in the context of detailed assessment proceedings in respect of the claimant’s bill of costs.  As with many detailed assessments, the issues of hourly rates, success fees and the ATE premium are important matters here and they are dealt with later in this judgment. But the central issue between the parties is whether it was reasonable for the claimant to change the funding of his case from legal aid to a conditional fee agreement (“CFA”).  For reasons that will become clear, this is an issue which needs to be dealt with in relatively broad terms and as such my conclusions potentially affect cases beyond the one before me.
Background
2.	The claimant was born on 1 December 2004.  Unfortunately, he suffered serious brain damage at that time and the underlying proceedings relate to his attempt to attribute the blame for his injuries to the defendant.  Liability was disputed by the defendant but this was compromised on a 70/30 apportionment in the claimant’s favour shortly before the liability trial.  It took a further 18 months for the parties to reach agreement as to quantum before the court’s approval was sought and the case concluded.  A chronology of the relevant dates for the purposes of this judgment is as follows:
	9 January 2006 – legal aid certificate granted
	10 February 2012 – round table meeting at which liability was agreed
	21 March 2012 – court approval of agreement on liability
	26 March 2012 – liability trial due to start
	15 March 2013 – legal aid certificate discharged
	21 March 2013 – CFA entered into between claimant and Irwin Mitchell
	22 March 2013 – After the Event (“ATE”) policy taken out by the claimant with Allianz
	29 August 2013 – round table meeting at which quantum was agreed
	4 November 2013 – court approval of damages
3.	The claimant commenced detailed assessment proceedings on 30 January 2014. Within the total costs claimed is a success fee of £57,119.40 and an ATE premium of £50,681.78.  The defendant says that the claimant’s decision to change from using legal aid to a CFA and ATE arrangement in March 2013 has therefore unreasonably incurred costs of £109,968.02.  The claimant accepts that this is the consequence of the decision but says that he acted reasonably given his and his solicitors’ conclusions about the likely adequacy of the continued funding by the Legal Services Commission (“the Commission”) (now the Legal Aid Agency).  The question I am asked to determine is whether the claimant’s decision to change funding arrangement was indeed a reasonable one.
4.	The claimant relies upon the witness statement of Camilla Stanford-Tuck dated 31 July 2014 together with her letter to the Commission dated 28 February 2013 requesting the discharge of the certificate. 
5.	The defendant, as would be expected, has no direct evidence to put forward on this issue.  It did provide a redacted letter between the Commission and Irwin Mitchell from a different case to illustrate one point.  Similarly, the claimant relied on a redacted witness statement and other redacted correspondence from two other cases. I have not found it necessary to refer to those documents in producing this judgment and so I have not set out any details of them.
Ms Stanford-Tuck’s evidence
6.	Ms Stanford-Tuck is a solicitor at Irwin Mitchell and had conduct of this case in the early part of 2013 when the relevant events occurred.  She relates that in February 2013 all “case handlers” were asked by partners in Irwin Mitchell to review their legally aided cases in light of the forthcoming changes being brought into effect by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”). There was a concern that existing clients might potentially be adversely affected by the provisions of LASPO.
7.	The specific question was asked of Ms Stanford-Tuck as to whether:
“…there was likely to be sufficient cover to fund all of my cases until conclusion, including a trial or assessment of damages hearing.   If it was considered by the fee earner that there was to be any future, potential difficulty with the funding of the case until conclusion; and further if the fee earner felt the Claimant would be in a better position with a CFA with ATE funding, then the advice was that funding should be switched in advance of 1 April 2013, in order to avoid the potential adverse affects of LASPO.”
8.	Ms Stanford-Tuck says that she considered this case met “the provisions for a funding switch” and so, having taken the Litigation Friend’s instructions, “and explaining the reasons for my advice” she applied to the Commission for a discharge of the certificate.
9.	At paragraphs 8 to 15 of her statement Ms Stanford-Tuck explains the reasoning for the discharge of the certificate.  Given that they are at the heart of this case, I will set them out in full:
“8.	This was a complex, high value case with up to 15 experts.  At the time of the funding review, liability was admitted and judgment had been entered for the Claimant.  I was working to quantify the case ready for service of the final, quantum expert evidence, witness evidence and Schedule of Loss.
9.	A Round Table Meeting was set for 26 July 2013 and an Assessment of Damages Hearing had been listed to commence on 28 October 2013.  I had concerns that should negotiations fail at the Round Table Meeting, then there was currently no guarantee that the Legal Aid Agency would increase the reserve to a sufficient level to fund the disbursements and profit costs for an Assessment of Damages hearing.  There is never any guarantee that the Legal Aid Agency will provide the cost limitations to fund the life of any case.  Based on this previous experience, I was therefore unable to guarantee the client that the Legal Aid Agency would provide sufficient funding should the matter proceed to an Assessment of Damages hearing.
10.	Had this concern arisen after April 2013, then I would have been left with no choice but to switch funding to a post LASPO CFA.  A post LASPO CFA would result in my client recovering a lower level of damages, than had the claim been funded by a pre LASPO CFA.
11.	Further, if the Legal Aid Agency had refused to increase the reserve for the Assessment of Damages hearing, and we had not switched funding to a CFA, then the client or Irwin Mitchell would have been exposed to unrecoverable disbursements and profit costs following the Assessment of Damages hearing.  There was a risk to the client that there may not be sufficient funding to cover the cost of our work in the future and my client could be exposed to make up the shortfall of any costs not recovered from the Defendant.
12.	There were other general considerations to take into account.  Over recent years, significant cuts had already been made to Legal Aid funding and it was evident that I could not guarantee that the Legal Aid Agency would continue to provide funding for the life of the claim.  Further with successful Legal Aid cases, a Claimant can find that any element of the solicitor’s costs and disbursements which have not been recovered from the Defendant, may be payable and owed by them under the “statutory charge”.
13.	Legal Aid Agency funding does not protect a client’s damages from the effects of failing to beat a Part 36 Offer. In such circumstances the client may be liable for such costs and these could be deducted from the damages, together with our own costs, incurred after the date which the opponent’s offer should have been accepted.  It also does not protect against the impact of any interlocutory or general adverse costs orders, which again could result in costs being deducted from the Claimant’s damages.  The same deductions would not be made under the terms of the CFA.
14.	In order to avoid the risks stated above and avoid the effects of a post April 2013 CFA, I advised the Litigation Friend to switch funding to protect their position.  The client was made aware of the changes coming into force in April 2013 and was advised of the advantages and disadvantages of switching funding to a CFA.  At this stage, as there had not been a Part 36 offer we were able to offer the client a CFA on a guaranteed “no cost to you” basis which would fully fund all of the disbursements up to and including an Assessment of Damages hearing.  The ATE insurance would also protect them against all of the risks in terms of exposure to costs due to Part 36 offers and interlocutory matters.  This combination meant that the client would not have to make any payments for costs at the time, or out of damages recovered, and I could guarantee that there would be a sufficient funding retainer in place to cover all costs up to and including an Assessment of Damages hearing.
15.	Further, due to the fact it was a “no cost, to you” CFA, I could guarantee the client that any shortfall in costs not recovered from the Defendant, would not be charged to the client, provided they comply with the conditions of the CFA,  The costs would simply be written off.  Therefore the risk of the “statutory charge” was eliminated.” 
The letter seeking to discharge the certificate
10.	On 28 February 2013, Ms Stanford-Tuck wrote to the Commission to request a discharge of the certificate for the reasons to set out in the letter.  The letter notes that in April 2012 cover for Stage 5 funding was granted, the final schedule of loss and damage would be served “within the next couple of weeks” and that a round table meeting was anticipated in or around September 2013.
11.	The letter makes reference to “at least” 4 applications made to request additional scope and funding during the life of  the certificate and the fact that these applications had not always been granted.  In particular reference is made to an application during Stage 3 of the case where £84,500 had been requested but only £47,000 had been granted, “despite being in receipt of positive evidence.”
12.	The costs to date are put at £216,069.57 based on profit costs of £75,560, counsels’ fees of £20,640 and other disbursements from the start of the certificate of £119,869.57.   The costs limitation is said to be £103,000.  Based on these figures, the letter states that “It is clear that we have exceeded the financial limit of the Certificate without completing the work allowed within the scope.  We have also gone over our estimated costs as set out in our letter of 29 February 2012.”
13.	The further work set out under stage 5 included finalising the witness evidence and schedule of loss as well as reviewing the defendant’s evidence on quantum once served.  In relation to the costs of stage 6, the preparation for a quantum trial, Ms Stanford-Tuck estimated the future costs to be approximately £370,000.  These are broken down as profit costs £180,000, counsels’ fees £60,000 and other disbursements £130,000. 
14.	Having set out these figures, Ms Stanford-Tuck sets out her case for alternative funding and ended with a request for confirmation that the Commission would discharge the claimant’s certificate.  The four paragraphs that set out the case for alternative funding are as follows:
“Without sufficient Public Funding to cover the cost of our work, our client is exposed to make up the shortfall in any costs not recovered from the Defendant.  This is clearly not in our client’s best interests when there are alternative methods of funding available.
In addition, as we enter into litigation, it must be borne in mind that LSC funding does not protect a client’s damages from the effects of failing to beat a Defendant’s Part 36 offer.  In such circumstances the client may be liable to pay the opponent’s costs as these would normally have been deducted from damages, together with our own costs incurred after the date which the opponent’s offer should have been accepted.
In our opinion, where there is insufficient public funding, it is in our client’s best interests to have an alternative funding arrangement in place.  In this case the most suitable would be a Conditional Fee Agreement with an After The Event insurance policy, which provides no risk of our client incurring costs or deductions from her compensation.  We have advised our client’s Litigation Friend of the same.
Our difficulty comes with the changes in the rules governing the recoverability of ATE insurance premiums from Defendants in successful claims that come in to force on 1 April 2013.  If our client enters into a CFA after 1 April 2013 and her case is successful, then the ATE premium would not be recoverable from the Defendants and would leave her exposed to paying for it from her compensation.  It is therefore crucial to enter into a CFA prior to 1 April 2013 in order to protect our client’s funding position and to prevent her paying for the ATE premium.” 
15.	Mr Hutton QC, who appeared for the defendant, highlighted the contrast in evidence between this case and others where similar matters have been considered, such as LXM v Mid Essex Hospital Services NHS Trust [2010] EWHC 90185 (Costs).  In particular, the claimant had not chosen to rely on any attendance notes of the advice given to his Litigation Friend by his solicitor notwithstanding the point of dispute clearly setting out the challenge to the change in retainer.
16.	Mr Hutton sought disclosure of such documentation via the election procedure set out at paragraph 13.13 of the Practice Direction to the current Part 47 and sometimes known as the Pamplin procedure.  Mr Innes, who appeared for the claimant, resisted the application on the basis that the claimant had chosen to put in witness evidence.  To the extent that such evidence did not deal with a particular argument raised by the defendant, that would become the claimant’s problem. But that did not require the claimant being put to his election regarding the disclosure of documentation on which he did not rely.  I declined Mr Hutton’s application on the basis that I had already looked at the relevant part of the claimant’s files that had been lodged with the court prior to the hearing.  I indicated that the available documents did not take matters any further than the evidence that had been produced in my view.  I did not expect to refer to any documents other than those disclosed when giving this judgment and as such it was not appropriate to require attendance notes, which were not being relied upon in any event, to be subject to the Pamplin procedure.  As the parties will see, I have not felt the need to refer to any other documentation in this judgment.
The relevant law
17.	As with all matters concerning “pre-commencement funding arrangements” it is necessary to look at the CPR as it was before the costs rules were recast on 1 April 2013 when the new regime commenced.  References in this judgment, unless otherwise stated, refer to the “old” rules.
18.	Many of the relevant cases refer to CPR 44.5(1) as the starting point for considering the incurrence of additional liabilities.  That rule of itself simply stated that the court is to have regard to all the circumstances when deciding if costs have been reasonably and proportionately incurred and are reasonable and proportionate in amount.
19.	The Costs Practice Direction, at paragraph 11, provided more direct guidance:
“11.7 Subject to paragraph 17.8(2), when the court is considering the factors to be taken into account in assessing an additional liability, it will have regard to the facts and circumstances as they reasonably appeared to the solicitor or counsel when the funding arrangement was entered into and at the time of any variation of the arrangement.
11.8(1) In deciding whether a percentage increase is reasonable relevant factors to be taken into account may include:--
(a)	the risk that the circumstances in which the costs, fees or expenses would be payable might or might not occur; 
			(b)	the legal representative's liability for any disbursements, 
		(c)	what other methods of financing the costs were available to the receiving party.” 
20.	Mr Hutton produced a compendious and detailed recitation of case law accruing over the last 15 years since CFAs came to the fore as a funding mechanism.  Court of Appeal cases such as Sarwar v Alam [2001] EWCA Civ 1401 and High Court decisions such as Forde v Birmingham City Council [2009] EWHC 12 (QB) have given guidance on the issue of claimants choosing between alternative funding methods.  
21.	Interspersed between those decisions have been regular decisions in the Senior Courts Costs Office on the specific merits and demerits of using CFAs and legal aid. Master O’Hare gave decisions in Bowen v Bridgend County Borough Council in 2004 and in Hughes v London Borough of Newham in 2005.  Master Gordon-Saker decided Howarth v Britton Merlin Limited in 2005 and LXM in 2009.  More recently, Master Leonard decided AMH v The Scout Association earlier this year.
22.	All of the cases have been attempting, on their own facts, to apply the test originally set out in Sarwar at paragraph 50:
“The overriding principle is that the claimant, assisted by his/her solicitor, should act in a manner that is reasonable.”   
23.	Both parties’ advocates covered the facts of these cases and the principles to be extracted from them.  Mr Hutton also referred to the case of Bradley v Windsor House Group Practice, a decision of District Judge Bedford sitting in the Leeds District Registry in 2011, and which was specifically referred to in the points of dispute. I do not propose to recite the facts of the various cases covered by the parties.  Where either party specifically drew support from a factor in a particular case I have referred to it as part of the submissions.
Parties’ submissions
24.	In order to demonstrate that the claimant’s choice was, or was not, reasonable, the parties analysed the relative merits and demerits of legal aid funding versus CFA and ATE funding in the circumstances of the claimant’s case.  This analysis largely centred on the reasons given for the change of funding as set out in the evidence above. One of the main planks of the defendant’s case is that Irwin Mitchell did not advise the claimant fully on the merits or otherwise of a change in funding and as such there is one additional matter that is not covered in the evidence.  
25.	I will start with the matters that are covered by the evidence. There is, as ever, a good deal of interplay between the specifics but essentially the issues fall into two groups. First, the issues of using legal aid.  Secondly, matters concerning the recoverability of the claimant’s own costs and, to some extent, protection against payment of the defendant’s costs. 
Using Legal Aid
26.	The replies state that the “process of securing legal aid funding for every step became more complex and cumbersome, which would have impeded the progression of the Claimant’s case…” This is a suprising contention given that the claimant had had the benefit of legal aid for seven years at the time of the discharge of the certificate.  There is no evidence of the increasing bureaucracy although it is fair to say that it is a comment often made judging by the decisions in LXM and AMH.  As is said in those decisions, such bureaucracy is a matter for the solicitor and is not a factor that is relevant for the client to consider.
27.	In the replies to the points of dispute, it is suggested that continuing with legal aid funding would have had an effect on the quality of the evidence.  This enigmatic statement is not amplified anywhere else. There is no evidence to suggest any difficulty in the claimant obtaining the expert evidence he required whilst the certificate was in place nor anything to suggest that this would not continue to be the case. I also reject this as a relevant factor to be considered.
28.	The replies to the points of dispute say that one of the significant difficulties for the claimant stemmed from the abolition of legal aid for most clinical negligence claims. Mr Hutton was vehement on this point that it was nonsensical since the claimant already had legal aid.  Mr Innes did not try to support this reply and he was right to do so. The position in respect of other cases cannot be of any relevance to the claimant in the decision he had to make.  I note that the comment later in the reply on this point refers to legal aid being subject to review which is a different point.  
29.	From the phrase “Without sufficient Public Funding to cover the cost of our work” in the letter to the Commission, Mr Hutton extracted a suggestion by the claimant that there was a risk of the Commission pulling the plug on this case based on the cost / benefit analysis applied to all legal aid funding.  This was something of a straw man argument because there is no suggestion to my mind that the claimant or his advisers were concerned about this happening. Mr Innes readily accepted that it was very unlikely that the Commission would do such a thing given the fact that liability was admitted and the case was of high value.  The concern was, as Mr Innes was keen to point out, that the costs limitation would not be increased sufficiently to cover the costs that needed to be incurred.
30.	The figures set out in the letter to the Commission make stark reading on the face of them.  But it is clear that they are not to be taken at face value.  When Mr Hutton queried why the Stage 6 figure of £370,000 was so high given the work that remained, Mr Innes explained that that was meant to be a cumulative figure for all 6 stages.  But Mr Innes was unable to explain why the combined figure for disbursements and counsel’s fees in the letter is said to be £140,509.57, even though the equivalent figure in the bill of costs (for parts 1 to 5) is only £74,010.58.  There were some speculative exchanges between the parties regarding how this circle might be squared but it ended unsatisfactorily to my mind.
31.	Much of the force of the letter to the Commission is dissipated by the uncertainty over the figures. Should I consider the claimant’s costs to have exceeded the limitation of £103,000 already by £113,000 (to reach £216,069.57)?  Or should I consider it to be a more limited excess of £43,000 based on the seemingly correct disbursement figure and the profit costs figure in the letter reaching a total of roughly £150,000?
32.	In either eventuality, the costs limitation, unless increased, would mean that Irwin Mitchell were unlikely to receive payment of their costs from the Commission if they could not recover them from the defendant, even at Commission rates.  There is no evidence before me that Irwin Mitchell sought to increase the final level of the certificate before requesting a discharge.  The reference to a number of requests for additional scope and funding in the letter is not unusual and does not of itself suggest that the Commission were being particularly parsimonious.  The statement that the additional funding had not always been granted must logically mean that on at least one occasion it was granted as requested.
33.	There is no hint, in my view, that this case was unusual as far as Ms Stanford-Tuck was concerned in respect of the costs limitation and the manner in which the case was being progressed.  Having obtained judgment on liability, and there being no Part 36 offer at the time, the prospect of having to seek payment of costs from the Commission was slim. In all likelihood, the costs would be paid by the defendant at the end of the case without any recourse to the legal aid fund save, perhaps, for certain modest items.
34.	It is clear from Ms Stanford-Tuck’s statement that the approach to the Commission was galvanised by the initiative of the partners at Irwin Mitchell to review cases on which legal aid certificates were in existence.  The terms of the letter, which appear to me to be written in sufficiently general terms as to have been drafted in a pro-forma fashion, do not suggest that the exceeding of the costs limitation was a matter of concern in itself; merely it bolstered the case for a change in funding for the future.  There is no indication in the witness statement or the letter that the costs in this case had got away from the fee earner and the situation needed to be remedied.
Recoverability of claimant’s own costs
35.	There was a good deal of discussion in the submissions regarding whether a legally aided claimant would be better off than one using a CFA and ATE insurance in circumstances where some of the claimant’s costs were not recovered.
36.	Given the claimant had already succeeded on liability here, the only prospect of a complete loss would be if the claimant decided to give up the case entirely and there was no suggestion that this was a realistic possibility.  Consequently, the reduction in recovery of damages or costs would only emanate from (1) an unbeaten Part 36 offer; (2) an adverse interlocutory costs order; or (3) costs which could not be recovered between the parties in any event.
37.	Dealing firstly with Part 36 offers, both Ms Stanford-Tuck’s evidence and her letter refer to legal aid not protecting the claimant’s damages from a well judged Part 36 offer. In such circumstances, the claimant might be liable for the defendant’s costs to be deducted from damages as well as for his own costs.
38.	Mr Hutton challenged this assertion on the basis that it was more likely to be the claimant’s costs that would be affected than his damages. This would occur by way of a set off between the claimant and defendant’s orders for costs.  Mr Hutton cited Scott LJ in the case of Lockley v National Blood Transfusion Service [1992] 1 WLR 492 where he stated:
“In general, in my opinion, interlocutory costs incurred in the progress of an action to trial and ordered to be paid by a plaintiff to a defendant would in equity impeach the right of the plaintiff to recover from the defendant costs of the action ordered to be paid by the defendant.  A set-off of costs against costs, when all are incurred in the prosecution or defence of the same action, seems so natural and equitable as not to need any special justification.  I would expect a party objecting to the set-off to give some special reason for the objection.  It is, in my opinion, less obvious that a set-off of costs against damages would always be justified.”
39.	Mr Hutton also referred to the case of R (Burkett) v London Borough of Hammersmith and Fulham [2004] EWCA Civ 1342.  There, the Court of Appeal dismissed the argument run on behalf of the claimant’s solicitors (and other solicitors generally) that a set off unfairly impacted on the lawyers.  The Court decided that the difference between the fees calculated at between the parties’ rates and at legal aid rates was a matter which must have been considered by Parliament when setting up the scheme.  The fact that a set off impacted on the lawyers rather than the claimant did not prevent such an order being made.
40.	Mr Innes raised two arguments in response to the suggestion that a failure to beat a Part 36 offer only affected the claimant’s lawyers.  First, the question of a set off has no impact on the costs payable by the claimant under the statutory charge.  Secondly, Mr Innes did not accept that costs were always set off against costs rather than damages in any event.  He referred me to several paragraphs in Burkett (quoting Scott LJ in Lockley) to show that the court had in mind the concept of costs being offset against either damages or costs depending upon the circumstances.  The following is one of the propositions put forward by Scott LJ in this context:
“Set-off of costs or damages to which one party is entitled against costs or damages to which another party is entitled depends upon the application of the equitable criterion I have endeavoured to express. It was treated by May J in Currie & Co v Law Society [1977] QB 990, 1000, as a ‘question for the court’s discretion’.  It is possible to regard all questions regarding costs as being subject to the statutory discretion conferred on the court by s51 of the [Senior Courts] Act 1981.  But I would not have thought that a set-off of damages against damages could properly be described as a discretionary matter, nor that a set-off of costs against damages could be so described.”
41.	Consequently, the description by Ms Stanford-Tuck of offsetting costs against damages was a perfectly proper description of the risk.  In practice, a court would have a decision to make as to who decided not to accept a Part 36 offer and so whether the damages or the costs should be affected.
42.	The question of interlocutory costs orders largely covered the same ground as Part 36 offers.  Mr Innes considered them to be a risk under legal aid funding of a payment having to be made from damages either directly or via the statutory charge. Mr Hutton accepted the point in principle but sought to minimise the issue on two bases. The first was that any such order for costs would in all likelihood be set off against the claimant’s costs rather than the damages for the reasons already set out.
43.	The second reason was that the prospect of any interlocutory costs order against the claimant was slim.  The claimant’s case was largely complete. Once the witness evidence and final schedule of loss were served, there were no further directions to be complied with and the onus would be on the defendant.  There would then be a round table meeting and if that did not conclude matters, there would be a final hearing.  The scope for interlocutory skirmishes against the claimant at this point in proceedings was modest.
44.	Mr Hutton’s submissions on this point ran alongside his submissions regarding the extent of a Part 36 risk.  No offer had been made at the time of the funding switch.  Therefore the costs to that point were, to all intents and purposes, secured by the claimant.  The nature of negotiations in high value clinical negligence cases militated against the use of Part 36, at least until the round table meeting.  Any offer thereafter would be of limited effect because the trial would have been close on its heels.  Mr Innes did not accept that there would be no Part 36 offer before the round table meeting. The fact that no offer had been made up to March 2013 was no reason to think that one would not be made shortly thereafter.  Any Part 36 offer made would potentially be very expensive on costs bearing in mind the forthcoming trial. Such costs might even outweigh the claimant’s costs to date according to Mr Innes. 
45.	The fact that no Part 36 offer had been made enabled Irwin Mitchell, according to Ms Stanford-Tuck, to offer a “no cost to you” CFA which is generally described as a “CFA Lite” and which precludes any recovery of costs from the claimant at the end of the case if there is a shortfall.  The combination of this agreement and ATE insurance, the parties were agreed, rendered the claimant virtually immune to the payment of costs. 
46.	Mr Innes was keen to emphasise the attractiveness of this position. He referred to the decision of Master Leonard in AMH in which the “crucial” advantage of an agreement was that it focused on maintaining the client’s damages from deduction of unpaid costs. It guaranteed to the client that “if you enter into this arrangement you will not lose any of your damages to meet unpaid costs, whether your own or the other party’s.” It also appeared to Master Leonard that a de facto CFA Lite was important to Master Gordon-Saker in LXM.
47.	Mr Hutton accepted that this was a point in the claimant’s favour.  But, as he pointed out, in the absence of any Part 36 offer the claimant was at no risk as at February / March 2013. For the reasons just set out, it was unlikely that any Part 36 offer would be made prior to the round table meeting. Even if that did occur, Mr Hutton suggested that the claimant was still some way away from really being at risk.  The offer would not only have to be rejected on advice of the claimant’s team, it would also have to be sufficient to be more than allowed on an assessment of damages hearing.  
48.	Mr Hutton’s final point on the claimant’s CFA Lite was that if the claimant had decided to change solicitors thereafter, as had happened in LXM, the claimant would have been liable for all the base costs incurred to that date.  This did not seem to me to be Mr Hutton’s best point.  The claimant had instructed Irwin Mitchell for seven years and was entering the last few months on any analysis.  The prospect of a change of representation was no more likely in my view than the idea that the legal aid funding would be withdrawn in its entirety and a possibility to which Mr Hutton had given short shrift.  In any event, the idea that Irwin Mitchell would seek their costs to be paid before the end of the case in such circumstances had no evidential backing and flew in the face of the fact that the claimant had no money until the case was resolved. This was at best a theoretical possibility and no more.
49.	The parties were agreed that the statutory charge would apply in this case.  Indeed there is a small element of the costs claimed in the claimant’s bill of costs which have been claimed against the Agency only.  If, on assessment I consider some items not to be allowed between the parties, it may well be that the sums to be paid by the Agency, and recouped via the statutory charge, will be increased. 
50.	Mr Innes sought to suggest that the eventual figure for the statutory charge could have been significantly higher if the claimant had not transferred to a CFA.  But that argument seemed to overlook the point that less than £2,000 had been claimed for the first 7 years’ work.  Mr Hutton sought to persuade me that because Irwin Mitchell had offered the claimant a CFA Lite, they would be likely to have waived any claim to legal aid only costs. That did not seem to me to be a compelling argument either. The CFA provided Irwin Mitchell with a success fee in addition to the base costs whereas the legal aid funding did not.  Many solicitors’ firms using CFAs have been prepared to use the success fees to meet the own client costs written off. There is nothing to suggest that Irwin Mitchell would have done the same having used legal aid funding.  Indeed the decision to claim at least some of the costs from the Agency in the present bill (which was drawn prior to this argument of the defendant being raised) suggests that a claim would indeed have been made for costs if legal aid had been used throughout.
51.	In both paragraph 11 of her witness statement and in the letter to the Commission, Ms Stanford-Tuck refers to a risk that the client might not have sufficient legal aid funding to see the case through to the end.  This would potentially expose him to a requirement, according to the witness statement, to “make up the shortfall of any costs not recovered from the Defendant.”  Mr Hutton queried what this could mean.  Costs that were not recovered from the defendant would be paid by the Agency.  To the extent that there remained any shortfall, Irwin Mitchell would not be able to look to their client for payment because such “topping up” is expressly forbidden by the legal aid regime.  I did not understand Mr Innes’ submissions on shortfall generally to demur from Mr Hutton’s point on topping up and which in any event is hardly controversial.  To the extent that Ms Stanford-Tuck thought that her client was in danger of having to pay costs to his solicitor, other than by way of the statutory charge, she was wrong to do so and any advice of that nature would be flawed.
52.	The parties were agreed that the ATE insurance purchased would protect the claimant against any adverse orders for costs, whether they were interim or final orders.  The extent to which the legal aid funding protected the claimant was also largely agreed.  The shield provided by section 26 LASPO would apply in principle but would be affected considerably by the size of the claim and the claimant’s own order for costs.  As discussed above, any adverse orders would in all probability have been set off against the claimant’s damages or costs and any consequent own client costs that had to be met by the Agency would trigger the provisions of the statutory charge.
LASPO 
53.	Up to this point, the arguments set out by the parties are very similar to those put before Master Leonard in AMH.  This is not surprising in that the onset of LASPO as of 1 April 2013 caused solicitors up and down the country to consider how their existing cases and future cases would be taken forward under the new regime.
54.	Mr Innes reminded me of the febrile atmosphere in the personal injury and clinical negligence world at the time. As he said, hardly a day went by in the first three months of 2013 without a seminar or article on ATE insurance; CFAs and success fees; the further restriction on legal aid; and a whole range of matters which formed part of the interlocking reforms.  In order to consider the reasonableness of the claimant and his solicitor’s actions at the time, it was necessary for me to put myself back in that atmosphere.
55.	Mr Innes suggested that the defendant’s criticisms of the advice given risked a setting of unrealistic standards. This was not a case where a new client had been taken on and advice in accordance with the code of conduct was required.  Here, the claimant and his solicitors had built up a relationship by this point and the solicitor was, quite properly, steering her client as she would do in respect of many matters in the claim.  This was the reality of the situation.  A text book setting out of all of the options with appropriate caveats and provisos might have covered the solicitor’s back better but it would not necessarily have been so helpful to the client.  
56.	The issue of LASPO arriving had been raised quite properly with the client and the answer provided of changing funding to avoid risks in an uncertain environment could not properly be criticised.  It might be that either option would have been a reasonable choice.
57.	Mr Innes also suggested that the defendant was downplaying the risks that Irwin Mitchell had identified.  The likelihood of a risk occurring had to be multiplied by the severity of the consequences if the risk did eventuate.  Such risks could easily outweigh an obvious but limited risk. Fearing an indeterminate, but potentially significant, risk more than a known risk which could be more easily considered was a natural human reaction.
58.	These observations were made by Mr Innes at the outset of his submissions.  They were very largely aimed at dealing with Mr Hutton’s trump card which was the LASPO issue that had not been mentioned in the advice given to the claimant judging by the evidence put before this court.  That issue was the claimant’s recovery of additional damages following the decision in Simmons v Castle [2012] EWCA Civ 1039 and 1288.
59.	Paragraph 20 of Simmons, as amended by the second judgment, states:
		“20.	Accordingly, we take the opportunity to declare that, with effect from 1 April 2013, the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, or (v) mental distress, will be 10% higher than previously, unless the claimant falls within section 44(6) of LASPO. It therefore follows that, if the action now under appeal had been the subject of a judgment after 1 April 2013, then (unless the claimant had entered into a CFA before that date) the proper award of general damages would be 10% higher than that agreed in this case, namely £22,000 rather than £20,000".
60.	The rationale for the Court of Appeal’s pronouncement was to put into effect recommendations 10 and 65(i) of Sir Rupert Jackson’s final report.  The additional damages were intended to recompense clients who were no longer able to recover the cost of their solicitor’s success fee or their ATE premium from the opponent where successful.
61.	As with many settlements, a global figure was reached here without specifying how much of the agreed damages relate to the general damages which would be susceptible to the 10% increase.  Nevertheless, Mr Hutton produced in his skeleton argument a range of £23,850 to £29,700. These sums represent 10% of the Judicial College guidelines for the assessment of general damages for personal injuries in respect of cases of quadriplegia.     The claimant was to receive 70% of the full liability figure and that would reduce the range to a bracket of £16,695 to £20,790.
62.	Mr Hutton’s argument was a simple one, but no less forceful for that.  By entering into a CFA before 1 April 2013, the claimant denied himself up to £20,790 of Simmons damages.  That was, to quote Mr Hutton’s skeleton, “a lot of money to write off immediately by entering into a pre-April 2013 CFA with success fee.”
63.	It seems to me that the defendant’s legal representatives were a little disbelieving that no advice regarding the Simmons damages had been given in this case.  The Pamplin procedure request referred to above was an attempt to make sure that this court card, as the defendant saw it, could be played without being trumped by some contemporaneous document which showed the advice had in fact been given.  
64.	Mr Innes clearly saw that he would have to meet this challenge and that the evidence at his disposal did not assist him to do so.  He relied on the dicta of Master Leonard in AMH regarding incomplete advice being no bar to a reasonable decision in appropriate circumstances.  
65.	The AMH case is very similar in that a specialist personal injury firm gave no advice on the Simmons damages issue when advising a client to change from legal aid to a CFA. Mr Wheeler in that case also did not give advice regarding the capping of the success fee in a post-LASPO CFA nor the effect of Qualified One Way Costs Shifting.  Notwithstanding the failure to give that advice, Master Leonard considered that the CFA Lite arrangement overrode those failures.
66.	Mr Hutton accepted that a case where the general damages were modest (as appeared likely from the facts of AMH) would mean that the Simmons damages would also be modest and so the failure to advise the claimant of the trading away of those damages against other benefits might be less problematic. But here the sum was considerable and it could not be argued, in Mr Hutton’s submission, that the quality of advice required by the code of conduct had been given in order to advise the client and his Litigation Friend properly as to their options.
67.	Mr Hutton disputed the bald statement by Ms Stanford-Tuck at paragraph 10 of her witness statement that damages would be lower if there was a post-LASPO CFA. It may be that some of the damages would be used to pay for the irrecoverable success fee.  But the Simmons damages would only be recoverable under a post-LASPO CFA and they were a substantial sum.
Decision
68.	In every case cited to me it appeared that there was a very slight restatement of the test which I am required to apply. The test set out above from Sarwar requires me to consider whether the claimant, assisted by his solicitor, has acted in a manner that is reasonable.  The relevant action is of course the decision to change funding arrangements and so the question is whether the claimant made a reasonable choice in doing so.  As Master Gordon-Saker said in LXM, the choice does not have to be the best one, but merely a reasonable one.
69.	Mr Hutton sought to persuade me that the test is only “primarily” about whether the claimant has made a reasonable choice. Consequently, there must be secondary considerations regarding the reasonableness and proportionality of that choice.  Mr Hutton referred to a passage from Sarwar which referred to “an inquiry into the availability of alternative funding arrangements which might be less expensive…” in order to establish that the costs have been incurred reasonably and proportionately.
70.	On to this Mr Hutton grafted comments from Wraith v Sheffield Forgemasters Ltd [1998] 1 WLR 132.  The passages I was taken to referred to the need for parties in each individual case to keep the costs of litigation down and to avoid luxury choices.  It did not seem to me that these references were apposite.  Wraith was decided before Parliament decided that additional liabilities would become recoverable.  The nub of the defendant’s challenge is to the additional liabilities that have been claimed at the end of the case when it appears to the defendant that this was not required.  The choice of a London solicitor versus a Sheffield solicitor is not a similar comparison to CFA funding versus legal aid.  The approach that CFA and ATE funding was inevitably more expensive than any other form of funding was prevalent at the time of cases such as Bowen.  But as Mr Hutton himself submitted in LXM, when appearing for the claimant, such an argument is too simplistic.
71.	Considering the reasonableness of the claimant’s actions involves considering the merits and demerits of two different forms of funding. The playing field on which those two forms rest is a level one: it is not tilted in favour of a non-additional liability option.  If the claimant’s actions were reasonable, there are no secondary considerations in my view to bring to bear.
72.	Paragraph 11.8(1)(c) of the Costs Practice Direction requires the court to look at “what other methods of financing the costs were available to the receiving party” when considering whether a success fee is reasonable. Since no other method of financing costs uses a “percentage increase” it cannot be that this requirement relates to the level of the success fee claimed.  It can only be to the existence of the success fee in the first place.  
73.	For the reasons I have just given, I consider this to be a relatively low hurdle for the claimant to surmount. If it were not, then the playing field would not be level.  The most obvious reason to change from legal aid funding to a CFA is that the costs limitation has been reached and the solicitors are understandably concerned about proceeding any further on an arrangement which allows for fees if successful but not if unsuccessful. Such fees would include disbursements and for which the solicitor would probably be liable even if the case was unsuccessful.
74.	I have recently given a judgment on just such a case (Hyde v Milton Keynes Hospital NHS Foundation Trust).  The distinguishing feature between that case and this one is the completely different approach to the relevance of the costs limitation.  I have said already that in this case the limitation appeared to have been ignored and was only considered when the letter to the Commission was being prepared.  The wholly unsatisfactory nature of the figures used in that letter demonstrates, in my view, that there was no concern in the claimant’s solicitors’ minds about the recovery of the costs that had been incurred. Judgment on liability had been entered, quantum was being calculated and the defendant would be meeting the costs at the end.  This is a very different picture from the case of Hyde even though there too judgment on liability had been obtained.
75.	The arguments in relation to the use of legal aid and the relatively cumbersome requirements of it do not assist the claimant in my view.  I have largely explained why when setting out the arguments. Some of the arguments were simply irrelevant but for those that were relevant, in essence, they are the price paid by the solicitors for being able to offer legal aid funding to potential clients.
76.	It seems to me that the claimant’s strongest reasons for changing from legal aid to a CFA relate to the shortfall issues.  Whether the shortfall is significant following a failure to beat a Part 36 offer, or relatively modest in relation to the statutory charge costs for corresponding with the Commission as claimed here, there is inevitably a shortfall to be paid by the claimant when using legal aid.  
77.	I tend to agree with the defendant’s submissions in respect of set-off i.e. that it is usually against costs rather than damages, but it cannot be said in any case that it will be one rather than the other.  Even if it is in respect of costs, that may serve simply to increase the costs claimed from the Commission and recouped via the statutory charge.  
78.	The costs protection afforded by s26 LASPO is well known to be effective for legally aided parties as a shield against a successful opponent’s costs.  But that is not the situation here given the size of the claimant’s damages and own costs potentially available for a set off.  The legal aid protection is inferior to ATE cover in these circumstances.
79.	The use of a CFA leaves a residual liability for costs if they cannot be recovered from the opponent. That is inferior to the legal aid position because, in the latter, the own client costs would be sought at legal aid rates rather than commercial rates. Consequently, the use of a CFA Lite is, to use Master Leonard’s word, “crucial” in making the CFA and ATE option comparable with legal aid funding.  The solicitor takes the risk of the shortfall rather than the client and provides a better package for the client. 
80.	This begs the question of why the claimant was not offered a CFA Lite and ATE insurance at any point during the 7 years during which this claim was proceeding under a legal aid certificate.  The answer presumably is that the risks of establishing breach of duty and causation are such that using legal aid is preferable where that is possible.  Thereafter, if any costs limitation is honoured to some extent in the breach, the claim can be run quite easily via legal aid.
81.	In this case, it was only the coming into force of LASPO which prompted a change of mind about this arrangement.  I accept a good deal of what Mr Innes said about the advice to be given to an existing client when matters crop up. I do not see any objection to the advice being provided on the basis of a particular outcome being preferable, or “nudging” the client as Master Leonard described it.  The setting out of options and then advising on a preferred course is part and parcel of a solicitor’s role of adviser to her client.  Indeed it would have been entirely remiss of Ms Stanford-Tuck not to raise the issue with her client.
82.	It seems to me that there can be no criticism of a solicitor who gives cautious advice on a voyage into unchartered waters.  Therefore, whilst it might seem odd to talk of giving guarantees to the client, I do not see anything wrong in principle of drawing a distinction between the guaranteed funding option of a CFA and ATE and the inevitably non-guaranteed option of public funding.  I do not think too much can be made of this particular point though because the prospect of funding being withdrawn in this case was indeed fanciful and the costs limitation did not appear problematic to Irwin Mitchell.
83.	I also accept the observations of Mr Innes regarding the atmosphere in early 2013 and the endless debate about how to fund cases pre and post the implementation of LASPO.  Mr Hutton suggested that a phone call to Allianz would have been all that was required to find out how much a post LASPO policy would cost.  That was disputed by Mr Innes and I agree with him. The ATE insurers were keeping their post LASPO product cards firmly to their chests.  They, as with many stakeholders, were uncertain as to the most appropriate course of action.  In this context, I do not see how a solicitor can be criticised for upsetting the status quo in terms of representation and advising that a pre-commencement funding agreement on CFA Lite terms should be entered into notwithstanding the long standing legal aid arrangement.  
84.	All of these comments, however, are predicated on the basis that the solicitor will set out the various options fully and properly as part of explaining why her advice is to follow a particular course.  
85.	This does not mean that every single fact and matter has to be set out before compliance has been achieved.  I agree entirely with Master Leonard’s conclusion in AMH that:
“I am unable to accept that a choice must be unreasonable if it is not made on the best available information.  I think one has to consider…whether the choice was reasonable in all the circumstances.  It is…possible to make the right choice for, here, not so much the wrong reasons as an incomplete set of reasons.”
86.	However, on the facts of this case, the failure to give advice regarding the post LASPO landscape and in particular the Simmons damages, in my view rendered the advice to be insufficient on which to found any proper or reasonable conclusion.
87.	Mr Hutton referred to the recent Supreme Court case of Montgomery v Lanarkshire Health Board [2015] UKSC 11 on the question of informed consent being required of patients before an operation.  In the leading judgment of Lord Kerr and Lord Reed the correct position is that:
“An adult person of sound mind is entitled to decide which, if any, of the available forms of treatment to undergo, and her consent must be obtained before treatment interfering with her bodily integrity is undertaken. The doctor is therefore under a duty to take reasonable care to ensure that the patient is aware of any material risks involved in any recommended treatment, and of any reasonable alternative or variant treatments. The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient's position would be likely to attach significance to the risk, or the doctor is or should reasonably be aware that the particular patient would be likely to attach significance to it.
88.	It seems to me that the test of materiality in this context is very similar.  There is no evidence before me to indicate whether the claimant or his Litigation Friend would have considered the abandoning of up to £20,000, which was more or less guaranteed, in return for peace of mind regarding future funding.  They may have decided that the system that had apparently worked for 7 years was unlikely to break down in the final stages and they would rather have the money and risk the funding issues.  They may have taken the view that QOCS protected them sufficiently not to incur an ATE premium.  The possibilities for speculation are endless.  What is certain however, is that the Simmons damages were of significance and so should have been explained to the claimant’s Litigation Friend so that informed consent to a change in funding could be given.  The absence of any evidence from the Litigation Friend on this point, to my mind, speaks volumes.
89.	In the absence of being informed of these issues it seems to me impossible to say that the claimant can have made a reasonable choice to change funding arrangements.  Consequently, I find that the additional liabilities flowing from the new arrangements are unreasonably incurred and as such are not recoverable from the defendant.
Hourly Rates 
90.	The reasonable rates for the various fee earners who worked on this case need to be determined, regardless of the outcome of the other issues in this judgment.  
91.	The claimant lived in North London when Irwin Mitchell (then Alexander Harris) were first instructed.   The defendant says that the Guideline Hourly Rates (“GHR”) for Outer London should be the basis for the costs allowed, albeit that it accepts that some enhancement on those rates is justifiable.
92.	Sadly, this is a case at the top end of clinical negligence cases in terms of the injury sustained to the claimant.   I have no doubt that it was reasonable for the claimant to instruct a Central London firm which specialises in this work.  In the absence of any Expense of Time calculation I have used the Guideline rates for Central London as a starting point.  
93.	This case runs from 2006 to 2013 and so the relevant GHR are:
Grade of fee earner	GHR	Rate Claimed	
A	276 - 317	375 - 390	
B	210 - 242	304 - 320	
C	171 - 196	275 - 290	
D	110 - 126	130 - 150	

94.	The table is potentially misleading in that there was no involvement from a Grade A fee earner to begin with, the Grade B fee earner was only involved in the early stages and the Grade D fee earners were charged in a bracket of £130/135 to £150 throughout.  Nevertheless, the table does give some idea of how the rates claimed compare with the GHR and it was the level of enhancement on those rates which was the dispute between the parties.
95.	I have not set out the submissions made since this is an issue which is very much a matter for the costs judge’s experience and is informed by rates claimed, challenged and allowed in respect of other firms in case both similar and distinct.  Whilst the use of legal aid and CFAs means that clients are less directly affected by the solicitors hourly rates than private paying clients they are still potentially affected.  I recognise that virtually all specialist clinical negligence firms charge their clients rates which exceed the GHR and often substantially so.  
96.	Bearing in mind the value and complexity of this case, together with the other factors in CPR 44.4(3), I consider the following rates to be reasonable.  

Grade of fee earner	Rate allowed	
A	2006 - 2009 = £350
2010 onwards = £375	
B	2006 - 2009 = £270	
C	2006 - 2009 = £220
2010 onwards = £250	
D	2006 - 2009 = £120
2010 onwards = £130	

Level of success fee
97.	In case I am wrong about the central issue in this judgment, I will deal briefly with the other matters raised before me.
98.	Both the solicitor and counsel CFAs were entered into in March 2013. The risks considered at that time resulted in a 100% success fee for the solicitor and 11% for counsel.  The only appreciable difference in the risks faced between the two is that counsel did not carry the so-called “Part 36 risk” i.e. receiving no base costs if a Part 36 offer advised to be rejected is not subsequently beaten.
99.	The leading authority on success fees where liability has already been admitted is C v W [2008] EWCA Civ 1459.  In that case a 20% success fee was allowed representing essentially the Part 36 risk. 
100.	Both parties’ submissions on this issue were brief.  The 100% claimed here by the solicitors was described as insupportable by Mr Hutton and referred specifically to the amount allowed in C v W.  Whilst not conceding any reduction to the sum claimed, Mr Innes took what I considered to be a realistic view in his skeleton argument and also mentioned the C v W decision. For my part, I can see no reason to distinguish this case from C v W and as such consider that a success fee of 20% for the solicitors CFA would have been reasonable.
101.	With regard to counsel’s success fee, the defendant’s points of dispute say that the 11% claimed should be reduced to 5% but does not give an explanation of why the defendant considers the lower figure to be reasonable but not the higher.  Mr Hutton did not expand on that point of dispute and Mr Innes maintained the 11% as being a measured and realistic assessment of the risk.
102.	Paragraph 23 of C v W is often quoted on assessment of the level of the success fee.  It states that the best a lawyer can do is to make a broad assessment of the risk based on their own experience.  Providing the resulting success fee falls “within a reasonable bracket”, the Court of Appeal would not expect the costs judge to reject that assessment of risk.  Counsel has effectively halved the success fee he might have claimed if he had taken the Part 36 risk.  I do not see that I could possibly conclude that the resulting success fee is outside a reasonable bracket for the remaining, modest risks. I would have allowed the success fee as claimed for counsel. 
Level of ATE premium
103.	The claimant purchased a LitigATE policy underwritten by Allianz and for which Irwin Mitchell have delegated authority.  It is a block rated policy and so needs to cater for cases which have barely started as well as cases such as this one, where liability has been conceded and the risks have reduced. 
104.	Mr Hutton sought to persuade me that I should not take Rogers v Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134 as a bar to considering the reasonableness of the premium.  Mr Hutton relied on the decision of HHJ Holman sitting in the Manchester county court in the case of Beasley v St Thomas’s Priory Golf Club (21 August 2008). It is one example of cases where the judiciary have felt themselves able to take a different view from the underwriter notwithstanding the exhortations of the Court of Appeal in Rogers (quoting Lord Hoffman in Callery v Gray [2002] UKHL 28) that costs judges should be cautious about taking any contrary view, other than in broad terms.
105.	I have no doubt that I can take a contrary view to the underwriter if the risk assessment or the level of cover has manifestly resulted in an overly high premium being claimed. But Rogers is very clear authority that the court should be slow to adjust block rate premiums in particular. There are inevitably swings and roundabouts with such premiums and it is not appropriate in my view to be trying to deconstruct the premium here in the way that Mr Hutton sought to persuade me to do. 
106.	The only aspect which demands some scrutiny is the level of cover which is £500,000.  That is considerably higher than the usual block policy in my experience.  It also provides, in my view, considerably more cover than can be required in the great majority of cases.  It is well known that the higher levels of cover cost little in terms of premium compared with the cover at the bottom since the higher levels are rarely called upon.  It is also well known that one of the purposes of setting a higher level of cover than would be needed in most cases under a delegated scheme is in order to make it administratively simpler. 
107.	I was referred to the case of Finney v Secretary of State for Health, a case heard on 4 February 2015 in the County Court at Hull by District Judge Besford who is a regional costs judge.  DJ Besford was persuaded that the level of cover was appropriate. However, he interpreted the wording of the policy to mean that only a stage 3 premium was payable which was £31,800 rather than the £50,681.78 claimed. 
108.	The circumstances of this case and the case of Finney are identical in that the policy was taken out after liability had been concluded. I do not consider that the policy wording deals with this situation.  The description of the start date, in my view, only contemplates a policy being taken out at the beginning of the claim.  I regret to say that I do not entirely follow why DJ Besford considered that the policy leapt straight into stage 3, nor that the premium for the earlier stages was not also recoverable.  
109.	Be that as it may, it does seem to me that the premium allowed by DJ Besford would be a reasonable and proportionate sum to allow in this case.  I do not think that it was reasonable to take out a level of cover more than around £250,000 on a block rated basis. Higher levels of cover will be required by so few cases that to include such cover in every policy is not a reasonable cost in my judgment. Very few firms have delegated authority schemes above £100,000 and £250,000 is about the maximum of the policies that I have seen.