The defendant costs specialists

Posts by Simon Gibbs

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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Cap on costs of provisional assessment

By on Dec 21, 2017 | 4 comments

The Court of Appeal has given an important judgment on the issue of the costs of provisional assessment.  In W Portsmouth and Company Ltd v Lowin [2017] EWCA Civ 2172, the Court ruled that the £,1500 cap on the costs of provisional assessment continues to apply even where a party has succeeded on a Part 36 offer made in the assessment proceedings. This is to be distinguished from the situation where a party succeeds on a Part 36 offer in relation to a fixed fee matter.  In that case, Part 36 trumps fixed fees (as per Broadhurst v Tan [2016] 1 WLR 1928). This is a sensible decision and should speed up the provisional assessment process by reducing the scope for argument and ensure the overall costs are proportionate. Interestingly, an unnamed spokesman for the Association of Costs Lawyers was reported as commenting: “While the clarity provided by the ruling was needed, the outcome is very harsh for costs lawyers. There will be plenty of cases where the paying party does not accept a part 36 offer and instead causes the other side to spend significantly more than £1,500 in dealing with costs issues. But on beating their own offer at assessment, the receiving party enjoys all the usual benefits, except in relation to this one aspect of their case. And it will be their costs lawyer who suffers through no fault of their own. We call on the Civil Procedure Rule Committee to consider the impact and fairness of this ruling – making this exception seems at odds with the thrust of the whole part 36 scheme.” I am not sure I agree. Plainly, this decision will have no adverse impact on in-house Costs Lawyers. It will also have no impact on Costs Lawyers employed by costs firms. I believe the “harsh” outcome being described was intended to mean: “Costs Lawyers who own their own costs firms and who conduct costs litigation on a CFA Lite basis will lose out because they will be unable to recover any shortfall between the work undertaken and the cap of £1,500”. I do not know how common it actually is for costs firms to agree to limit their fees to the level...

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BNM v MGN Ltd – Court of Appeal decision on proportionality

By on Nov 8, 2017 | 0 comments

The Court of Appeal decision in BNM v MGN Ltd [2017] EWCA Civ 1767 manages to be both very important and a massive anti-climax. The decision is important because it finally resolves the issue of whether post-1 April 2013 additional liabilities are subject to the old or new proportionality test.  The answer is that the old test applies (contrary to Master Gordon-Saker’s original decision).  Although this will potentially have a large impact on the costs recoverability of some big-ticket costs claims, this is mainly limited to a dwindling number of old cases (4½ years and older). What the judgment entirely fails to do is give any wider guidance as to how the new test should be applied.  Even on the facts of the case, we still do not know the answer as the matter is to be referred back to Master Gordan-Saker for him to have another...

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