Legal Cost Specialists

detailed assessment

Assessing costs on the indemnity basis

By on Aug 2, 2021 | 0 comments

The recent decision of Louis Dreyfus Company Suisse S.A. v International Bank of St. Petersburg (Joint-Stock Company) [2021] EWHC 1039 (Comm) contains a short passage dealing with the approach on detailed assessment where costs are to be paid on the indemnity basis. The decision was reported in Costs Law Reports.  (Copies of their latest reported judgments are available free for a short period on their website, where you can also sign up to their monthly newsletter.) The headnote to this decision included: “On taxation the costs would be heavily taxed down, even after the application of the receiving party’s presumption that the costs had been reasonably incurred and any doubt was to be given in its favour under CPR 44.3(3).” However, there is nothing in the judgment itself that refers to there being a presumption that costs have been “reasonably incurred”. The relevant part of the judgment reads: “CPR 44.3 and 44.4 provide that where costs are to be assessed on an indemnity basis, the court (1) will not allow costs which have been unreasonably incurred or are unreasonable in amount; (2) will have regard to all the circumstances in deciding whether costs were unreasonably incurred or unreasonable in amount; and (3) will resolve any doubt which it may have as to whether costs were unreasonably incurred or were unreasonable in amount in favour of the receiving party (“the receiving party presumption”).” It is more than simple semantics to note that there is a crucial distinction between “any doubt” being resolved in favour of the receiving party and whether there is a “presumption” that any costs have been reasonably incurred.  This judgment supports the former (because that is what the rule says) but not the latter. Interestingly, comments closer to the summary in the headnote were made by Woolf CJ in Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson (a firm) [2002] EWCA Civ 879, dealing with the pre-Jackson rules, addressing the distinction between costs on the standard basis and the indemnity basis: “The differences are two-fold. First, the differences are as to the onus which is on a party to establish that the costs were reasonable. In the case of a standard order, the...

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Part 36 offers in detailed assessment – Best v Luton & Dunstable Hospital NHS Foundation Trust

By on May 21, 2021 | 0 comments

The costs subcommittee of the Civil Procedure Rule Committee (CPRC) is apparently due to consider whether it should be possible to make Part 36 offers in relation to the costs of detailed assessment. This follows the recent decision of Master Leonard in Best v Luton & Dunstable Hospital NHS Foundation Trust [2021] EWHC B2 (Costs) whereby he concluded a Part 36 offer could not be made in respect of the costs of the detailed assessment proceedings (although Part 36 offers can clearly be made in respect of the costs claimed in the Bill). It will be a missed opportunity if the CPRC considers this narrow issue alone. Part 36 offers in detailed assessment proceedings create a unique imbalance between receiving parties and paying parties. Normally, the Part 36 benefits to claimants will only crystalise if a claimant wins on a Part 36 offer at trial.  In relation to substantive matters, there is the process of disclosure.  By the time a matter reaches trial, and usually long before then, both parties will have received disclosure of all relevant evidence and documents from the other side and will therefore be on a broadly equal footing in terms of considering the reasonableness of any Part 36 offers.  The Part 36 sanctions therefore bite when a defendant has failed to accept a reasonable offer in circumstances where they were in a fair position to judge the reasonableness of that offer. In detailed assessment proceedings, the receiving party is treated as the claimant for the purposes of Part 36.  However, unlike in substantive proceedings, there is no disclosure process to the paying party of any kind during detailed assessment proceedings. A paying party is required, for example, to consider the reasonableness of the number of communications and attendances on the claimant without sight of any of those communications or attendance notes.  A paying party is required to consider the reasonableness and quantum of advices from, and conferences with, counsel, often with no information from the Bill or fee notes as to what they related to, much less copies of the advices or attendance notes themselves.  And on it goes. Paying parties are at a material disadvantage to the usual position that arises when Part...

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Cost of travelling to conferences

By on May 14, 2021 | 0 comments

As far back as 2005, Lord Justice Brooke observed in Black v Pastouna & Anor [2005] EWCA Civ 1389 that: “It is incumbent on those advising parties appearing before this, or any, court to take all the steps they can in accordance with CPR Rules 1.1 and 1.3 to reduce the cost of the proceedings. This includes taking advantage of such cost-saving facilities as video-conferencing whenever they are available and it is appropriate to use them.” It is fair to say that this was probably observed more in the breach than the observance. Eighteen months ago, many solicitors would have been astounded at the suggestion that it might be possible to hold a conference with the client and/or counsel and/or experts other than around a table with everyone in attendance. As a consequence, £1,000s of additional costs were routinely incurred in travel time and costs for each conference. Now, conferences, JSMs, and even full trials, are routinely being conducted remotely. It will no longer be plausible to argue that a conference needs to be face-to-face to be effective. However, the technology to make this happen has not been invented in the last eighteen months. Its existence was recognised in 2005. The technology has been in most people’s pockets for at least the last decade. It is not really much of an excuse to argue that it is only because of Covid-19 that solicitors realised what was possible and available. For any existing, or future, claims for costs, receiving parties are likely to face an uphill struggle justifying the cost of travel to...

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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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