Instructions were received on behalf of the insurer for a Children’s Home, against whom a number of claims for physical and sexual abuse were brought by the former residents, dating back to the late 1960s and early 1970s.
Costs of assisting a criminal investigation were challenged and generic costs reduced to reflect the number of failed claims.
A number of claims for damages for child abuse were brought, five of which settled without the need for proceedings, with combined damages of £65,000 being paid. A further claim was also successful.
One bill of costs was served in respect of the 5 claims, totalling almost £210,000, including over £90,000 in generic costs. These sums were felt to be grossly excessive and disproportionate.
The generic costs were a reduced sum to reflect one failed claim and to allow for a share for the sixth claim that settled shortly afterwards. Whilst it was pleasing to see costs conceded for the failed claim the defendant was concerned that in fact there were many more claims that had not succeeded and for which a discountshould be applied. It seemed to be the case that there was work for attempting to “farm” potential claimants.
The initial letter of claim identified a further 11 potential claimants. The defendant could only assume that claims had been investigated but not pursued. With no proceedings to consider, a detailed analysis of the bill was required. This analysis revealed that “generic” work was claimed for a further seven potential claimants. Whilst not identified as claimants, SAR requests were made, a step that would not be taken for a mere potential claimant. The defendant argued that a further discount should be made to reflect the relevant shares of individuals who were regarded by the claimants’ solicitors as a client.
The bill of costs also raised concern because the narrative referred to work claimed for “assisting the police.” It became apparent that the bill contained items that related to supporting the criminal investigation and subsequent proceedings. This work included attending hearings in the Magistrates Court, attending 2 directions hearings in the County Court and a “Fitness to plead” hearing. Whilst laudable this work was not felt to be recoverable as costs in the context of a civil claim for damages and the information obtained did not assist the claim.
There were numerous other issues that consideration of the bill highlighted.
The costs were clearly disproportionate - over £205,000 in costs was clearly high for claims that were never litigated when some of the claimants recovered damages as low as £5,000. The bill included 342.6 hours of documents time, the equivalent of 49 full, 7 hour working days on matters that settled on the basis of one medical report.
As well as seeking enhanced rates the bill also contained no less than 13 advices from Counsel, including multiple conferences.
Detailed Points of Dispute were served and the claimant requested extra time to prepare Points of Reply. Prior to their preparation negotiations ensued and the claimant accepted £125,000 fully inclusive, plus agreed to waive the share of generic costs for the remaining claimant so a future saving will also be achieved.
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