Legal Cost Specialists

detailed assessment

Another one bites the dust

By on Oct 30, 2020 | 0 comments

The wheels of justice turn slowly at the best of times but one would hope the regulatory authorities would act with a degree of alacrity. Many readers will recall the case of GSD Law Ltd v Wardman & Ors [2017] EWCA Civ 2144.  This case concerned a number of personal injury claims where GSD Law acted for the claimants. At the subsequent detailed assessment of the costs of those claims in 2014, the paying parties’ insurer alleged systematic fraud and misconduct against GSD Law, including claiming for hourly rates in excess of the retainer rates, claims for senior lawyers’ rates for work done by junior fee-earners, and claims for work that had simply not been done. At first instance, Regional Costs Judge Neaves found GSD Law’s principal, Kirna Madhas, to be “a wholly unreliable witness” and that her evidence was “not only evasive and inconsistent, but dishonest”. He held all the allegations made against GSD Law proved and that the extent of the conduct and dishonesty of GSD Law was at the most serious end of the scale. This included submitting a forged conditional fee agreement to the court. He concluded: “The conduct of the receiving party’s solicitor is sufficiently egregious as to make the only appropriate sanction the disallowance of all costs on the sample files. The receiving party will also pay the costs of the assessment proceedings including the preliminary issues.” The Court of Appeal rejected GSD Law’s subsequent appeal. One of the most striking features about the case (as if forging a CFA were not bad enough) is that during the detailed assessment proceedings Ms Madhas admitted making false allegations to the Costs Lawyer Standards Board about the conduct of the insurer’s Costs Lawyer, Jon Williams of Williams Associates Costs Lawyers.  This was clearly a blatant attempt to undermine the proper challenges that had been made to her fraudulent claim for costs.  Jon Williams is one of the country’s most highly respected Costs Lawyers and, even at the time, this act alone appeared to be adequate reason for Ms Madhas to be struck off. The original decision was in 2014 and the Court of Appeal decision was in December 2017.  The relevant authorities do not appear...

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Belsner v Cam Legal Services Ltd

By on Oct 19, 2020 | 0 comments

The decision in Belsner v Cam Legal Services Ltd [2020] EWHC 2755 (QB) will have sent a shiver down the spine of many claimant solicitors in the personal injury field, although the decision may well have wider implications. The case concerned a solicitor/own client assessment. The underlying matter concerned a low value RTA being pursued in the RTA portal.  The costs recoverable from the opponent to the RTA claim were limited to fixed costs plus disbursements. The client’s solicitors sought to charge their client the costs recovered from the opponent plus 25% of the damages recovered. Section 74(3) of the Solicitors Act 1974 provides: “The amount which may be allowed on the assessment of any costs or bill of costs in respect of any item relating to proceedings in the county court shall not, except in so far as rules of court may otherwise provide, exceed the amount which could have been allowed in respect of that item as between party and party in those proceedings, having regard to the nature of the proceedings and the amount of the claim and of any counterclaim.” Although the claim itself settled prior to proceedings being issued, it was not disputed that this section applied to the case. CPR 46.9(2) provides, in relation to the detailed assessment of solicitor and client costs: “Section 74(3) of the Solicitors Act 1974 applies unless the solicitor and client have entered into a written agreement which expressly permits payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings.” The issue for the court was whether a solicitor seeking to rely on CPR 46.9(2) has to show that the client gave informed consent to the payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings. The terms of the CFA, which governed the costs payable between the solicitors and the client, contained standard Law Society wording: “Normally, you can claim part or all of our basic charges and our expenses and disbursements from your opponent. You provide us with your irrevocable agreement to pursue such a claim on your...

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Recovery of interest paid on disbursement funding loan

By on Jul 13, 2020 | 4 comments

Last week in Marbrow v Sharpes Garden Services Ltd [2020] EWHC B26 (Costs) (10 July 2020) the Senior Costs Judge Master Gordon-Saker handed down a reserved judgment in relation to three discreet issues where I acted for the Defendant paying party. None of the issues were novel, but they are ones that have continued to trouble the lower courts, which was no doubt part of the reason for the reserved judgment. The issue I will deal with today is the decision relating to whether the interest paid on a disbursement funding loan was recoverable as an item of cost or, alternatively, by way of allowing interest to run from an earlier period. The Claimant claimed, as an item of costs, the interest payable under a loan agreement with his solicitors in relation to the funding of disbursements. The agreed interest rate was 5%. The Claimant relied on the decision of the Court of Appeal in Secretary of State for Energy v Jones [2014] EWCA Civ 363 as authority that such an item was recoverable as an item of costs.  The Master rejected that on the basis the Court in that case was concerned with the rate of interest that could be allowed on costs from a date earlier than judgment where, as here, the claimants had incurred a liability to pay interest to their solicitors in respect of the funding of disbursements. In Hunt v RM Douglas (Roofing) Ltd [1987] 11 WLUK 221 the claimant sought to recover on the taxation of his costs the interest that he had incurred under an overdraft to fund the disbursements required for his claim.  The Court of Appeal held that funding costs had never been included in the categories of expense recoverable as costs and to include them would constitute an unwarranted extension. The Master held that it was clear following Hunt that interest incurred under a disbursement funding loan cannot be recoverable as costs and so disallowed the item within the bill. However, the Master then considered CPR 44.2(6)(g), which does allow the court to order the payment of interest on costs from a date before judgment.  He distinguished Jones on the basis it was a different case to the present:...

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Accepting offer after detailed assessment has commenced

By on May 29, 2020 | 0 comments

Can a “Calderbank” offer made during the course of detailed assessment proceedings be accepted by a receiving party after the detailed assessment hearing has commenced and once it has become clear that the receiving party will ultimately recover less than the amount of the offer?  Yes, ruled Mr Justice Morris in MEF v St George’s Healthcare NHS Trust [2020] EWHC 1300 (QB). Various offers and counter-offers had been made during the detailed assessment proceedings.  These concluded with an offer on 19 August 2019 by the paying party to settle for £440,000 (the same amount as had previously been offered) with the following condition attached: “The Defendant’s offer dated 27/09/18 is only capable of acceptance subject to the agreement of the Defendant’s costs of Detailed Assessment incurred since that date.” It was not in dispute that this was not a Part 36 offer. The matter was listed for a three day detailed assessment due to commence on 17 September 2019. At the end of the second day of the hearing, the Bill of Costs had been reduced – as a consequence of concessions already made by the receiving party and by decisions made by the costs judge – to below £440,000.  Just before the end of the second day, the receiving party sent an email purporting to accept the 19 August 2019 offer.  The paying party argued it was too late for the offer to be accepted. The matter initially came before Master Rowley for determination as to whether the detailed assessment proceedings had been compromised.  He concluded that the matter was subject to common law principles of offer and acceptance.  As there was no time limit placed on acceptance of the offer, he held that the offer had been properly accepted. On appeal before Mr Justice Morris, it was decided that Master Rowley had not expressly applied the contractual principle of an offer being capable of lapsing after a reasonable time.  However, applying that principle to the facts of the case, where none of the earlier offers had contained a time limit, he concluded that the offer had not lapsed and was therefore still capable of acceptance. Although it was held that the prior offers were “highly relevant context”,...

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Guidance on remote costs hearings

By on Apr 24, 2020 | 0 comments

Guidance on remote costs hearings has now been produced.  This has apparently been produced by a group of costs professionals with the support of the regional costs bench.  It has been met with approval by the costs judges at the Senior Courts Costs Office.  The guidance can be found on the Association of Costs Lawyer’s website...

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Failure to serve electronic bill of costs

By on Dec 10, 2018 | 8 comments

PD 47 para.5.1 requires an electronic bill of costs for any work  undertaken after 6 April 2018 where the claim is a Part 7 multi-track claim. The Practice Direction contains no sanction for failing to comply with this requirement. CPR 44.11 provides:         “(1) The court may make an order under this rule where – (a) a party or that party’s legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order; … (2) Where paragraph (1) applies, the court may – (a) disallow all or part of the costs which are being assessed” There appear to be a number options open to the Court where there is a failure to comply with PD 47 para.5.1, including: Tutting and proceeding with the assessment regardless. Refusing to proceed with the assessment until a compliant electronic bill (and amended paper bill) is served/filed. Making an unless order requiring a compliant electronic bill (and amended paper bill) to be served/filed by a certain date failing which all costs will be disallowed. Disallowing any post-6 April 2018 work (which may not be straightforward where the bill does not clearly identity all such work). Making a percentage reduction to the bill (perhaps roughly reflecting the proportion of post-6 April 2018 work claimed). Disallowing all...

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