In Ikin -v- Shawbrook Bank Limited (2023) the judgment of Senior Costs Judge Gordon Saker looks at the issues surrounding estimated time and contains many points for litigators to take on board. Remember, the responsibility lies not just with the person preparing the Bill but with the Solicitor certifying the accuracy of the Bill.
Brief background
This case involved several Claimants, who brought claims of misrepresentation by finance companies regarding the installation of solar panel systems. 9 Claimants were represented by the same Solicitor. One claim for costs was assessed (at nil) by Regional Costs Judge Baldwin, “The Kinder Claim”. The remaining 8 claims were transferred to the SCCO, to assess counsel’s fees, the expert’s fees and profit costs.
In 2 of the bills (Ikin and Walsh), there were identical generic time entries claimed (18 in total). They were identical in both wording and time claimed.
Part 18 Requests were served, requesting clarification as to whether any time within the Bills was estimated. The response was bland and the Claimants were asked to provide a schedule of estimated time – this was never produced.
On Assessment
The first Bill to be assessed, Scott, was found to be riddled with issues. No time recording ledger was provided and it was evident that no time had been recorded within the substantive action. In truth, almost all the profit costs claimed had been estimated by the Costs Draftsman, some of which were not supported by the file of papers.
The Judge requested an explanation from the Claimants’ Solicitor. A Witness Statement from the conducting Solicitor confirmed she “had no experience of dealing with costs in this type of claim and so had instructed KE Costs (“KEC”), a firm of costs lawyers, “who indicated they had experience of dealing with similar costs arising out of solar claims in the North East”. Miss Wall said that she had assumed “that the descriptions given [of the work recorded in the bill] were fair representations of the work that had been done”. When checking the bill before signing it, she made sure that all the disbursements had been included and “that each stage of the case has been accurately identified”. However she did “not sit there and look at every single line individually and check the accuracy of every single line, because that just seems disproportionate”. She had relied on the expertise of the people she was instructing.
Amended Bills were lodged with the Court where by the descriptions to the time had been updated, however, the sums and time claimed remained unchanged. The amended Bill in Ikin was claimed at £29,774.90 and assessed at £9,250.00.
Ruling and Conduct point
The judge considered the issues relating to the Claimants’ Solicitor’s conduct. In particular the importance of the Solicitor’s signature on a bill of costs. In this case, there was a clear misconduct point, the Judge found the bills were not accurate and claimed costs the Claimants would not have been liable to pay to Parkerwall (their instructed Solicitor). The Judge imposed two sanctions. The assessed costs were reduced by 60% and the Claimant’s Solicitor was ordered to pay 75% of the Defendant’s costs of the assessment on the Indemnity Basis.
Civil Procedure Rules
“This is an appropriate case in which to disallow costs under r.44.11(2)(a). The Claimants’ legal representatives have claimed costs which their clients were not entitled and have attempted to mislead the Court. In Gempride Ltd -v- Bamrah (2018), the Court of Appeal substituted an order that one half of the profit costs otherwise payable under Part 1 of the Claimant’s bill should be disallowed. That followed findings that the Claimant Solicitor had certified a bill which claimed an hourly rate in excess of the rate that she was obliged to pay and had wrongly stated in her replies that BTE insurance was not available to her. There was no finding of dishonesty.
It seems to me that the present cases are comparable. Eight bills have either been reduced significantly or have been agreed in significantly reduced amounts as a result of the misleading entries and the overestimation of time. As the parties have agreed global figures for profit costs and disbursements in the six unassessed cases, rather than disallow one half of the profit costs I would disallow a smaller proportion of the total figures.”
Costs follow the event
The Judge’s attention then turned to the costs of the detailed assessment. “Clearly this is a case where the court should make a different order to the usual order that the paying party pays the costs of the receiving party (CPR 47.20(1)). The conduct of the receiving parties’ solicitors reasonably required investigation. That led to a significant lengthening of the detailed assessment hearings. But for that investigation, the hearings might have been avoided completely. The conduct has been found to be wanting, and the bills have been reduced substantially.
Without an order under r.44.11(2)(b), the appropriate order under r.47.20 would have been that the Claimants should pay at least a proportion of the Defendants’ costs of the detailed assessment proceedings. As between the Claimants and their solicitors, the latter should bear those costs.
Some time was spent investigating the fees of counsel and the experts, which, in the event, did not lead to significant reductions. Whatever apparent irregularities there were in billing, the work had been done and the Claimants were entitled to recover the costs of that work. The Claimants should be entitled to the costs of those issues, but they were a relatively small part of the whole. The appropriate order under r.47.20 would have been that the Claimants should pay 75 per cent of the Defendants’ costs.
The fault, however lies, at the door of the Claimants’ Solicitors, rather than the Claimants, and so the appropriate order is that the Claimants’ Solicitor should pay those costs under r.44.11(2)(b). On any view the conduct of the Claimants’ Solicitor has taken these cases “out of the norm” and it is appropriate that the costs should be assessed on the indemnity basis.”
Summary
This brings home the importance of accurate time recording and certification by Solicitors. It remains the Solicitors responsibility to ensure that the certificate of accuracy guarantees the accuracy of the costs claimed.
Helen Appleby is an Associate in Clarion’s Costs and Litigation Funding Team. You can contact the team at civilandcommercialcosts@clarionsolicitors.com
