The defendant costs specialists

Posts made in January, 2018

Premature witness statements

By on Jan 23, 2018 | 5 comments

The recent decision of Master Leonard in Douglas v Ministry of Justice & Anor [2018] EWHC B2 (Costs) concerned the issue of the recoverability of the costs of attending an inquest. One particular comment made during the judgment has attracted attention: “... the cost of preparing witness evidence will normally be recoverable as part of the cost of a successful claim even if that claim settles before the witness evidence is ever needed.” Gordon Excall’s Civil Litigation Brief blog interpreted this as meaning: “This emphasises the point that there is nothing to lose (and everything to gain) by the careful and early collection of witness evidence.” It is no doubt correct that the mere fact a matter settles prior to witness statements being served will not of itself prevent recovery of the costs of obtaining them. However, I am not sure that Master Leonard sought to imply that the costs of obtaining witness statements would always be recoverable regardless of the stage of the claim they were obtained.  It is important to the see the context within which his comment was made: “one must not use hindsight in applying the Gibson principles. So, for example, the cost of preparing witness evidence will normally be recoverable as part of the cost of a successful claim even if that claim settles before the witness evidence is ever needed.” This is no more than pointing out that hindsight will not usually be applied when assessing costs.  The key issue remains as to whether obtaining witness evidence was reasonable at that point in time.  Obviously, each case is fact specific, but costs are routinely disallowed on detailed assessment on the basis they have been incurred prematurely. Friston’s Civil Costs correctly summaries the position: “Speaking of a costs regime long since passed, Lord Hanworth referred to the following extract from a Master’s certificate dealing with material thrown away: ‘We have always acted upon the principle that the costs of all work in preparing, briefing, or otherwise relating to affidavits or pleadings, reasonably and properly and not prematurely done, down to the time of any notice which stops the work, are allowable; and … the Taxing Master, having regard to the circumstances of each case, must decide whether...

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Requesting a detailed assessment hearing

By on Jan 19, 2018 | 0 comments

Two letters received from the Claimant’s solicitors, both dated 4 August 2017.  The first is a Part 36 offer.  The second attaches Replies and states: “We shall now be making a Request for a Detailed Assessment Hearing.” As the Part 36 offer was unacceptable in amount, I simply awaited receipt of a notice of hearing from the court.  (Given the date of the final costs order, a request for assessment needed to be filed by 13 October 2017 in any event.) By 14 November 2017, I had heard nothing further and so wrote to the other side asking them to confirm the date they had filed their request for assessment. The response received, dated 21 November 2017, read: “We did not receive a response to our Part 36 offer and was awaiting a response before incurring further costs by lodging the matter.  We assume that our Part 36 offer is rejected and are now taking instructions. We intend to lodge the matter for assessment by the end of the week.” Am I being overly legalistic to suggest that the original statement that “we shall now be making a Request for a Detailed Assessment Hearing” failed to adequately convey what was presumably the intended meaning: We currently have no instructions to request a hearing. We intend to take no further steps in this matter, including sending any chase-ups, until we hear further from you. Needless to say, I am still awaiting a hearing date....

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Proportionality test – providing specific reasoning

By on Jan 17, 2018 | 0 comments

At the heart of the successful appeal in May v Wavell Group was the appeal judge’s view that, apparently, the issue of proportionality is something readily discoverable once all the relevant factors have been taken into account.  He held: “the construction of the rules relating to the definition of proportionality and their application do not involve a discretion properly so called but require the court to make a judgment on what the rules mean and how they should be applied. That is a matter of law. The application of the rules, once interpreted, require a balance to be undertaken, in that weight (which includes the possibility of no weight) has to be accorded to each of the factors specified by the rules, but that again is the making of a judgment, albeit of a rather broader nature than construction of the rules, rather than the exercise of a discretion.” and: “There may be a limited range of acceptable difference in the total figure once the rules have been applied, in that different judges could legitimately come to slightly different conclusions as to the proportionate sum, and so long as they have applied the rules correctly they should not be open to challenge on appeal.” Given the rules and Practice Direction are entirely silent as to what amounts to “proportionality”, this is a surprising view.  We now have a member of the judiciary who believes that the new proportionality test can be applied in a quasi-scientific manner. Again: “Whether the relationship is reasonable is, in my view, a matter of judgment, rather than discretion, and, as I have said above, requires a costs judge to attribute weight, and sometimes no weight, to each of the factors (a) to (e).” His criticism of Master Rowley’s decision was that: “the final figure in this case does not appear to be based on any specific mathematical calculation nor is there a specific explanation of how the weighting of the various factors resulted in the final figure.” Surely then, the appeal decision undertook just such a careful mathematical calculation and/or gave a specific explanation as to the weighting given when allowing the figure of £75,000 plus VAT.  Here it is: “In those circumstances we...

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Proportionality – May v Wavell Group appeal

By on Jan 16, 2018 | 1 comment

The history of the courts’ attempts to ensure legal costs are proportionate is a strange one.  The appeal decision in May v Wavell Group Plc is no exception to that trend. To recap, Master Rowley, on a line-by-line assessment, reduced the costs claimed from £208,236.54 to £99,655.74.  He then concluded that this was still disproportionate for a claim which settled pre-trial for £25,000 and made a further global reduction, to reflect proportionality, down to £35,000 plus VAT. On appeal, His Honour Judge Dight, CBE concluded that Master Rowley had misinterpreted and misapplied the new proportionality test and concluded a figure of £75,000 plus VAT was proportionate (presumably resulting in a global figure close to £90,000).  (There was no challenge to the finding that the reasonable costs were £99,655.74.) Of the various interesting comments made by the judge, one that stands out is: “I doubt … that the proper interpretation of the rules requires or indeed entitles a costs judge at the end of an item by item assessment to impose a very substantial reduction on the overall figure without regard to the component parts.” The issue of whether it is appropriate to reduce a successful litigant’s costs below the level that it was reasonable and necessary for him to incur is one of policy.  There were many strong arguments advanced as part of the Jackson consultation process as to why this was wrong, but those arguments did not prevail.  (It is equally a matter of policy that means that in the field of personal injury claims, successful defendants are now usually deprived of all the legal costs they have reasonably and necessarily incurred.) The rules relating to proportionality expressly state: “Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred” The express intention of the new rule is that proportionality trumps reasonableness/necessity (ie the assessment of the component parts). On what basis can it be suggested from the wording of the rules that the test is not designed to “impose a very substantial reduction on the overall figure”?  There is none.  A County Court judge has decided he does not like the new proportionality test and has therefore sought to re-write...

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