Tag: costs lawyer leeds

Strike Out and Multiple Defendant Costs Entitlement: Clarifying the effects of both under Post-September 2023 Fixed Costs Rules

Daniel MurrayLeave a comment

District Judge Field, sitting in the County Court at Truro, has delivered perhaps the most interesting and seminal judgment of the new fixed costs era.

In MIL Collections Limited v My Shop 4 Ltd & Ors [2025] EWCC 38 (04 July 2025), the Court was asked to consider whether each of the 13 Defendants were entitled to fixed costs where the Claimant’s case was struck out for non-compliance with an Unless Order. The quantum of those costs was also considered, given events which meant determination of the award was not straightforward.

Case Facts

The Claimant was a company, whose business involved the purchase and recovery of debts. In late 2024, they had taken an assignment of debts owing by commercial entities to E.on Next Energy Ltd (‘Eon’). The debts varied in size.

Multiple claims were issued, which were transferred, piecemeal, to the County Court at Truro. In each case the Claimant had served a short template Particulars of Claim, and in many instances similar issues were being raised in Defence.. In the interests of the overriding objective, the decision was taken by the Court to manage the cases together, with the case allocated to the Fast Track and assigned to Band 1.

It later became apparent that multiple Defendants were co-ordinating their approach to the litigation and an identical Defence was being filed by each of them. All 13 Defendants in this case, had adopted this approach and thus an order was made on 28 April 2025 consolidating each of their cases and providing a tight timetable to trial.

Directions were subsequently given in several cases, which amongst other things, required the Claimant to file better Particulars of Claim, within 14 days of the order. In this case, this was to be by 13 May 2025, something the Claimant did adhere to. However, the Court took the preliminary view that the pleadings were still deficient and that unless order had not been complied with.

A hearing was listed to take place on 21 May 2025, to consider whether the claim had been or should be struck out. In the intervening period, the court sent out a notice dated 19 May 2025, listing a two day trial to take place across 14 and 15 July 2025. This is one of the first notes of interest in this case, on the basis that traditionally, as per the factors considered for allocation, matters will not usually be allocated to the Fast Track when the trial is expected to last no longer than one day. Here the Court exercised the discretion available to it pursuant to CPR PD 26 16.3(c), to still determine the case was not suitable for the Intermediate or Multi Track.

Until 19 May 2025, the Defendants had all been Litigants in Person, however, the 12th and 13th Defendants sought representation shortly before the final hearing. At the hearing on 21 May 2025, the Claimant accepted that there had been a breach of the unless order and that, consequently, the claim had been automatically struck out on 13 May 2025. The Claimant made an application for relief from sanction on the evening of 20 May 2025. Most of the hearing on 21 May 2025 was therefore concerned with the application for relief, which was dismissed.

The Parties’ Positions

At the conclusion of the hearing, the 12th and 13th Defendants sought their costs of the hearing pursuant to CPR 45.8 in accordance with Table 1 of PD45. These were determined at the hearing on 21 May.

With regards to the substantive litigation, the 12th and 13th Defendants sought fixed costs pursuant to CPR 45.44 and Table 12 of PD45 following the strike out of the claim; and the 1st to 11th Defendants each sought two thirds of the fixed costs in Table 12, pursuant to CPR 45(2)(a).

Due to a shortage of time, written submissions were ordered on the issues in relation to costs which were:

  1. The extent to which the fixed costs provisions apply at all in relation to a claim which is struck out;
  2. The applicable amount of fixed costs and the appropriate stage in Table 12 of Practice Direction 45
  3. Whether, where there is more than one defendant, each defendant is entitled to recover fixed costs in their own respect.
  4. Any entitlement to fixed costs in respect of unrepresented parties.

A.) The extent to which the fixed costs provisions apply at all in relation to a claim which is struck out

There was no dispute between the parties in relation to the allocation or assignment of the matter, which is traditionally a battleground on the new fixed costs regime. The Claimant here did dispute however, that there was an entitlement to costs by the Defendants, based on the specific wording in Table 12 of PD 45, which stipulates costs are payable where a claim “settles or discontinues“. There are also provisions for costs where the matter is disposed of at trial, which did not apply here. It was asserted that none of these conditions had been triggered and therefore no costs should be awarded. It was suggested by the Claimant that any liability should extend only as far as the interim application costs outlined in Table 1 of PD 45.

The Defendants’ position was that the triggers in terms of when an award for costs can be made, was non-exhaustive in Table 12 and that it would be an “absurdity” if a party whose case is struck out would escape liability for costs which would have flowed from, for instance, a discontinuance.

The Court dismissed the Claimant’s approach, confirming that the Table 12(B) did not contain an exhaustive list of the circumstances in which it applied. The Court went further, confirming that “those drafting the rules have clearly gone to extensive efforts to ensure that the fixed costs rules and Practice Direction address most circumstances and permutations, it cannot have been expected or intended that they would expressly deal with every possible circumstance which might arise in such a wide range of cases. The rules must be construed widely and purposefully.”

The Defendants were therefore entitled to costs of the action on accordance with Table 12.

B.) The applicable amount of fixed costs and the appropriate stage in Table 12 of Practice Direction 45

Given the listing of the trial in the intervening period between the deemed automatic strike out and the hearing on 21 May 2025, there was a dispute as to which was the applicable stage in Table 12 of PD 45. This was namely whether the matter fell into stage 2 which applies to case ‘from allocation up to listing for trial’; or stage 3, which applies to case ‘after listing but before the trial.’

The 12th and 13th Defendant’s drew  a distinction between the “listing” of a trial and the “fixing” of a trial. They submitted that stage 3 costs should apply, on the basis that case are traditionally listed in a floating window, with a fixed start date listed afterwards. Reference was made to guidance in the Chancery guide.

The Court found difficulties in accepting this approach, given that in the vast majority of Fast Track cases, the first case management order will provide for both allocation and provision for the trial to be listed either within a window or on the first available date after a particular date.

It was therefore determined that stage 2 costs applied.

C.) Whether, where there is more than one defendant, each defendant is entitled to recover fixed costs in their own respect.

The arguments here arose because of the ambiguity in CPR 45 regarding the position. Where there are multiple Claimants, the position is much clearer and the rules provide for the recovery of 25% of costs where additional Claimants are represented by the same firm of Solicitors.

After deliberation of several factors, including the position on cases allocated to the Multi Track, whereby Defendants are each entitled to their own costs, and the fact that had the  rule makers intended to deviate substantially from principles which would ordinarily apply in respect of costs, this would have been dealt with expressly in the rules, the Court determined that each Defendant was entitled to their fixed costs as set out in Table 12 of PD45. This was subject to the Court’s discretion to make an order under CPR 44.2(6)(a) that a party pay only a proportion of another party’s costs. The Court did not believe the fact that an award of two sets of fixed costs might produce a windfall for the Defendants was a relevant circumstance which should carry significant weight.

D.) Any entitlement to fixed costs in respect of unrepresented parties

Having determined that the individual Defendants were entitled to costs of the claim, the final issue to be determined by the Court was the position regarding the Defendants’ status as Litigants in Person and the level of entitlement.

CPR 45.4 deals with the position in relation to recoverable costs of Litigants in Person on the fixed costs regime, and confirms the application of CPR 46.5, which in turn confirms that Litigants in person are entitled to the same categories of costs and disbursements as represented parties, payments reasonably made by the litigant in person for legal services relating to the conduct of the proceedings; and the costs of obtaining expert assistance in assessing the costs claim. Where a party is a litigant in person throughout the entire claim, the costs allowed under this rule shall not exceed, except in the case of a disbursement. The amount to be claimed will be done so where the litigant can prove financial loss and is calculated at a rate of £19 p/h.

In the case of the 12th and 13th Defendants, the Court determined swiftly that, although they were acting as litigants in person as at the date of strike out, witness statement evidence of their representatives confirmed that prior to that, they had been acting for the Defendants by assisting in the drafting of the Defendant and working on an Amended Defence to the Amended Particulars of Claim.

The costs claimed by them were therefore deemed reasonable costs for legal services related to the conduct of the litigation and are therefore allowed under CPR 46.5(3)(b), subject to the two thirds cap referenced above.

The position in relation to the remaining Defendants was less clear. There was nothing to suggest that they were liable to representatives for fees and there was no evidence of financial losses. Invitations were made by those Defendants, for an award in line with that made in favour of the 12th and 13th Defendants.

However, the Court had difficulty in finding that the remaining Defendants had spent 91 hours engaging with the litigation, which was the number of hours that would have been required at the rate of £19 p/h to reach the level of costs awarded to the represented 12th and 13th Defendants. 7 hours was deemed reasonable and awarded to the 1st to 11th Defendants.

The Defendants sought an uplift of 50% on their costs in accordance with CPR 45.13 because of the Claimant’s conduct in the manner in which they pursued the claims.  The Court again refused this on the basis that the Claimant had already been penalised through the striking out of the claim and there was no evidence to support how the costs had been increased as a result of the Claimant’s conduct.

Summary

The decision is well thought out and provides useful guidance on numerous issues under the new extended fixed costs regime. It further exemplifies the Court’s discretion in terms of allocation and assignment of cases that may well have landed themselves on another track in view of the trial length and combined value. Further, the closing comments confirm a burden on receiving party’s to provide evidence in support of claims for additional sums pursuant to CPR 45.13 because of alleged poor conduct.

In conclusion, where a Claimant’s case is struck out against multiple defendants, each Defendant is entitled to recover their costs on an individual basis. It is essential that a specific trial date has been set, prior to the claim concluding to engage the fixed costs regime under stage 3 of Table 12 CPR PD 45, even if the trial itself does not take place. Furthermore, litigants in person are entitled to recover upto two-thirds of the costs awarded to legally represented parties, ensuring fair but proportionate remuneration for their time and effort in defending the claim. But this must be evidenced.

 Clarion’s Costs and Litigation Funding Department who can be contacted on any fixed costs issues, at our dedicated fixed costs email address at FRC@clarionsolicitors.com.

Breakdown of agency uplift on expert fees … a step closer to clarity?

ujjainimistryLeave a comment

In the recent case of JXX v Archibald [2025] EWHC 69 (SCCO) Costs Judge Rowley considered whether a breakdown of an expert’s fee is required when the expert is instructed by an agency.

The Defendant applied for a declaration that the Claimant’s bill of costs was non-compliant with the CPR and requested that the detailed assessment proceedings were stayed until the Claimant filed and served copies of the experts’ fee notes and separate breakdowns of the costs of the medical agency and experts. The application also sought that the bill of costs was to be struck out in its entirety or the claims that relate to medical evidence were to be assessed at zero.

This led to the question – is the Claimant obligated to provide a breakdown of the expert fee note to show the percentage of the fee being taken by the medical expert agency?

Background information

A Consultant Ophthalmologist was instructed by the Claimant, directly in the first instance and then through the medical agency for further evidence; with fees amounting to around £120,000. Medical and Professional Services Limited (‘MAPS’) was the agency used in this case and the Defendant’s noticed a ‘stark and shocking’ difference in the fees of the expert from when they were directly instructed, compared to when they were instructed via MAPS. The invoices provided by the expert to MAPS had been increased by approximately 60%

In the Defendant’s Points of Dispute, they stated that the “Claimant was accordingly required to file and serve a breakdown in respect of each, and every fee rendered by MAPS… and the Court can arrive at a reasonable and proportionate allowance. […] Pending this further information the Defendant puts in dispute each and every fee charged by MAPS and declines to make any offer for any such fees at this time.”

The Claimant responded to this point, in an attempt to justify their use of MAPS and submitted that all expert fees were “reasonable and proportionate on a global basis, particularly taking into account the specialist skill, knowledge and expertise of the experts involved.” The Claimant also requested a breakdown from MAPS.

The Claimant’s argument against MAPS’ approach

The Claimant argued that MAPS was instructed to prepare a medical report and to provide all relevant services, and the fee claimed was one which the Claimant was liable to pay and was appropriately invoiced and vouched for on the assessment.

Unhelpfully, MAPS declined to provide a breakdown of the expert’s fees, and the managing director claimed it was not part of MAPS’ standard policy to supply such information as it was regarded as being “unimportant and misleading when considering the overall reasonable cost of obtaining the medical expert evidence … as well as being confidential”.

Cost Judge Rowley stated that “the approach of MAPS has left the Claimant in something of a bind” on the basis that MAPS’ involvement required a ‘slight’ increase in the fee but would result in a ‘significant’ drop in the Solicitor’s own charges. The extent of MAPS’ charges was to be justified by showing the work it has done, but as there was no evidence provided, the position was not expected to change.

He also goes onto say that “if the MRO decides not to justify its charged by way of evidence, it seems to me to be likely that the composite fee would be reduced on assessment.” A justification of the charges is based on a comparison of the work done by the third party and if it would be cheaper if it was carried out by the Claimant’s solicitor.

This comparison means looking at whether it was reasonable for the report (or similar work product) to be produced by the expert without any additional quasi-legal work being carried out.

Conclusion

There are two options a Claimant could take when faced with a composite invoice; they could pursue assessment:

  1. on the basis of the expert’s evidence and the agency work in obtaining that evidence if the information sought by the Defendant is provided; or
  2. on the hypothetical basis that there has been no MAPS involvement, and the fees claimed are solely for the expert’s evidence, if no such information is provided.

The Defendant would then be entitled to produce and rely on comparative evidence, dependant on the approach taken.

On a practical level, when contemplating instructing a medical agency, calculating and comparing the additional time of the lawyer in the event of a direct instruction versus the costs of the agency, may be useful when determining the overall costs benefit.

Practitioners may opt to instruct experts directly and avoid using medical agencies altogether.

This is an example of yet another case in favour of evidencing the breakdown.

Ujjaini Mistry is a Paralegal in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Uplifted Guideline Hourly Rates from 1 January 2025

ujjainimistryLeave a comment

The Guideline Hourly Rates have increased with effect from 1 January 2025.

In December 2023, the Master of the Rolls accepted the recommendations of the Civil Justice Council Costs Review, which was published in May 2023. One of the recommendations was to annually review and increase the Guideline Hourly Rates in accordance with the Services Producer Price Index (SPPI).

The Guideline Hourly Rates are now as follows (the brackets reflecting the rates effective from 1 January 2024 to 31 December 2024):

Grade Fee Earner London 1 London 2 London 3 National 1 National 2
A Solicitors and legal executives with over 8 years’ experience £566

(£546)

 £413

(£398)

 £312

(£301)

 £288

(£278)

 £282

(£255)
B Solicitors and legal executives with over 4 years’ experience £385

(£371)

 £319

(£308)

 £256

(£247)

 £242

(£233)

 £242

(£233)
C Other solicitors or legal executives and fee earners of equivalent experience £299

(£288)

 £269

(£260)

 £204

(£197)

 £197

(£190)

 £196

(£189)
D Trainee solicitors, paralegals and other fee earners £205

(£198)

 £153

(£148)

 £143

(£138)

 £139

(£134)

 £139

(£134)

 

 

There has been an average of a 5%  increase to Grade A rates and 4% increase to Grade B, Grade C and Grade D rates.

Ujjaini Mistry is a Paralegal in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Getting it Right – CPR 2.8 and calculating dates for service

Joanne ChaseLeave a comment

Calculation of Time

The recent case of Corfield v Howard [2024] EWHC 2727 (Comm) is a reminder of the importance of calculating time for service and filing of Court documents.

In the above matter, the Defendant applied for declaratory relief as to the meaning of enforcement of a settlement agreement scheduled to a Tomlin order. In accordance with a consent order, skeleton arguments were due to be served and filed one clear day before the hearing. The Court staff noted that no skeleton arguments had been filed and served by the due date. Their time was therefore taken up identifying the breach and writing chasing letters to the parties’ representatives. Both parties subsequently filed their skeleton arguments. HHJ Judge Davis-White KC sated that he did not need to enquire further as to where the fault lay, however, he said that Counsel and instructing solicitors should liaise in good time to ensure that the required skeleton argument can be prepared by Counsel by the required time.

The Judge went on further to state that:

“the delivery of skeleton arguments in accordance with guidance of court order is essential for the efficient running of the courts”. Although the Judge was able to proceed with the hearing on this occasion, the Judge did warn that “the court is likely to impose sanctions in cases as egregious as these”.

Although there were no sanctions in this case, it serves as a timely reminder that compliance with court imposed deadlines is mandatory and, in an appropriate case, the Court may impose sanctions for a failure to comply. Getting it wrong can be costly, and, in the extreme, fatal to the case.

The Rules

CPR Part 6 is at the heart of the rules relating to service of documents, and Practice Direction 6A relates to service within the United Kingdom.

CPR 2.8 sets out how we go about calculating time, and parts 2.8 (2) and (3) specifically explains the clear day rule which often catches practitioners out:

“(2) A period of time expressed as a number of days shall be computed as clear days.

(3) In this rule ‘clear days’ means that in computing the number of days –

(a) the day on which the period begins; and

(b) if the end of the period is defined by reference to an event, the day on which that event occurs are not included.”

CPR 2.8 (4) continues to explain that:

“Where the specified period –

(a) is 5 days or less; and

(b) includes –

(i) a Saturday or Sunday; or

(ii) a Bank Holiday, Christmas Day or Good Friday,

that day does not count”

Examples

Where a CMC is listed for 28 March and the Court orders bundles to be filed no later than 7 days before the CMC, the last date for filing is 20 March.

Alternatively, where a witness statement must be served 5 days before a hearing listed on Tuesday 18 March, the deadline for service is Monday 10 March.

Interestingly, CPR 44 practice direction 9.5 (4) provides different rules for the filing and service of a statement of costs before a fast-track trial and other hearings;

“The statement of costs must be filed at court and copies of it must be served on any party against whom an order for payment of those costs is intended to be sought as soon as possible and in any event –

(a) for a fast track trial, not less than 2 days before the trial; and

(b) for all other hearings, not less than 24 hours before the time fixed for the hearing.

Where a fast track trial is listed for 1.30pm on the first Tuesday after Easter, taking into account the clear day rule and CPR 2.8 (4), the statement of costs must be filed and served no later than the Tuesday before. Wednesday and Thursday provide the 2 clear days, with Good Friday, Easter Saturday, Sunday and Monday not counting. Therefore, in this instance, 7 days before the hearing – suddenly the 2 days turn into 7 days.

However, if it were an interim application hearing listed for 1.30pm on the first Tuesday after Easter, the statement of costs must be filed and served no later than 1.30pm on Maundy Thursday.  What is crucial here is that this rule provides for hours and not clear days. Therefore, filing and serving at 1pm on Maundy Thursday would be perfectly acceptable despite it being within no clear days of the hearing. The clear day rule does not apply when the rules specify the deadline as a number of hours rather than a number of days.

Conclusion

Being aware of this subtle difference could prove to be a very useful tool for any practitioners who are under time constraints for the filing and service of Court documents. A note of advice –  if in doubt then check the rules. The rules regarding filing and service can easily catch you out, particularly bearing in mind that there are also rules surrounding the method of filing and service, i.e. service by email, fax etc., in addition to those relating to timing.

Joanne Chase is a Legal Director in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

J v Luton Borough Council & Ors (2024) EWCA Civ 3

AshleySmithLeave a comment

The recent case involved J (the Protected Party) and his lack of capacity in deciding whether he could travel abroad with his family in order to enter into an arranged marriage and engage in sexual relations.

Background

J and his family were planning to travel to Afghanistan to visit their family who resided there. The reason for their travel was to visit family but to also enter into arranged marriages for both J and his sister. In 2022, J’s sister requested support in bringing J’s soon to be wife to the UK. However, a mental capacity assessment confirmed that J did not have capacity to enter into a marriage or have sexual relations.

The case

J’s family made an oral application in order to confirm that J was allowed to travel to Afghanistan with the family. The application was denied on the grounds that there had been a ‘Forced Marriage Protection Order’ placed on J. The Judge agreed to meet with J and collated oral evidence from J’s father, his social worker and J’s sister. The appeal confirmed that the decision would not be overturned due to the clear and significant risks for J and any other British nationals travelling to Afghanistan, this was in respect of the decision made by ‘The Foreign, Commonwealth & Development Office’ against travelling to and from Afghanistan which was targeted towards the general population.

The family of J had appealed the decision in reference to the decision failing to take J’s wishes and values into consideration and that the decision would go against J’s Article 14 rights. However, it was argued that the safety of J and his lack of capacity did not deem him able to engage in a marriage or sexual relations and therefore the decision was in his best interests.

 Conclusion

The Court upheld the decision against J travelling to Afghanistan for the arranged marriage. They had reviewed the risks involved in travelling to Afghanistan and the importance of travelling for J and his family in order to reconnect with J’s family. The Judge also concluded that J’s capacity could possibly be maximised with further education and that further decisions regarding travel should be dealt with in a pre-planned way in the future and would be further reviewed at the appropriate time.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at costs.support@clarionsolicitors.com.

A Party’s impecuniosity is not a reason to depart from the normal position on costs

Katie SpencerLeave a comment

In the case of K v W (Respondent’s Costs on Application for Permission to Appeal) [2023] EWFC 300 (B) (25 October 2023), HHJ David Williams outlined the costs implications for unsuccessful appeal attempts within the Family Court. The ruling ordered the Mother to pay the Father’s legal costs totalling £6,021.

The Appeal

Within the judgment, HHJ David Williams referred to the Appellant and Respondent as the Mother and Father. The Mother made an oral application to appeal the decision of the District Judge at the handing down of judgment hearing, which was refused. The Mother filed an Appellant’s notice for leave to appeal.

The Father was required to file a skeleton argument in response to the appeal and attend the hearing. At the permission to appeal hearing, the Appellant’s notice was refused on all grounds.

Costs of the Appeal

The Father filed a Schedule of Costs in advance of the hearing seeking a costs order against the Mother in the sum of £6,021. The Father submitted that as his attendance at the hearing was requested by the Court and due to the application being unsuccessful, a costs order should be ordered in his favour. The Father’s Schedule of Costs included £2,000 for Counsel’s brief fee and £1,000 for drafting the skeleton argument.

The Mother opposed the costs order and submitted that she had already paid the sum of £20,000 to Dr Proudman for drafting her skeleton argument and a £8,000 brief fee for attending the hearing. The Mother further submitted that she had been struggling financially and had only £100 in her bank. Nonetheless, her financial contributions to her own legal costs raised questions about her ability to pay the costs submitted by the Father.

Paragraph 4.24 of Practice Direction 30A states:

“Where the Court does request –

  • submissions from; or
  • attendance by the respondent,

the court will normally allow the costs of the respondent if permission is refused.”

In this case, the Court requested that the father file a skeleton argument and attend the hearing. For the Court to depart from the usual position as set out in the Practice Direction above, there must be a compelling reason. The Court held that “The mother’s alleged impecuniosity is not a reason to depart from the normal position on costs, although it may be relevant to how or when any costs order is to be satisfied.”

Furthermore, HHJ David Williams stated “it is clear from the mother’s own case that she either had or has been able to access funds of circa £30,000 in order to pay the fees of her counsel, Dr Proudman. If the payment of those fees has brought about the mother’s impecuniosity, as alleged, that cannot be a reason not to make a costs order in favour of the father.”

The Judge held that as the Mother was previously refused permission to appeal and knew the risks of having to pay the Father’s costs, there was no reason for the Father to be left out of pocket. When assessing the costs, the Judge concluded that the costs claimed by the Mother were significantly higher than the costs claimed by the Father. The Judge made reference to both fees for the skeleton arguments, noting that the Mother’s was 10 times more than the Father’s. An order for costs was ordered in favour of the Father and the full sum of£6,021 was held to be reasonable and proportionate.

Katie Spencer is a Paralegal Apprentice in Clarion’s Costs and Litigation Funding Team. You can contact her on 07741 988925 or at katie.spencer@clarionsolicitors.com.

Pre-judgment interest allowed at 2% above the Bank of England base rate

Ellena HunterLeave a comment

Asturion Foundation v Alibrahim [2024] EWH 757 (Ch) concerned a very long-running action (9 years) during which the Defendant had incurred about £6.6 million in costs. The Claimant sought recovery of the title of an English property that had been transferred to the Defendant, by a board member of the Claimant.

Mr Justice Johnson found that the transfer of title was made within the purposes of the Foundation and the transferor had acted within the scope of internal competencies. It was agreed by the Claimant that the Defendant was the successful party and was therefore entitled to her costs.

The Defendant had failed on some points and therefore, the Claimant sought a percentage deduction to the Defendant’s recoverable costs to account for those unsuccessful issues. The Defendant conceded that a percentage deduction should be made but did not agree with the extent proposed by the Claimant. Ultimately, Mr Justice Johnson made a deduction of 15% from the Defendant’s otherwise recoverable costs.

The parties addressed Mr Justice Johnson on the issue of interest on costs. It was the Defendant’s position that interest should be paid on the costs expended by her since the dates of payments of the relevant invoices rendered by her solicitors. The Defendant emphasized that due to the litigation spanning a period of 9 years, she had been ‘out of pocket’ for a considerable period and she should therefore, be entitled to a payment reflecting the time value of money. This was calculated by the Defendant’s costs draftsman using a rate of 2% above the Bank of England base rate which was argued to represent a reasonable approximation of the Defendant’s likely costs of borrowing.

The Claimant argued that there should be suspension of payment of judgment debt interest until it had a fair opportunity to decide what sums it accepts should be payable, as a detailed bill of costs had not yet been received.

The Judge saw merits in both parties’ arguments.

In terms of pre-judgment interest, it was noted that this was within the Court’s discretion. The Judge determined that as the Defendant had been ‘out of pocket’ for a significant period of time, it would be unfair for her not to be compensated accordingly. Therefore, the Judge ordered that pre-judgment interest be paid at 2% above base rate from time to time. Interest was not, however, awarded during a 2.5-year period in which the proceedings were in a ‘state of suspense’ pending determination of the Defendant’s strike out application that was eventually unsuccessful.

The Judge did agree that the Claimant should be afforded further time to consider the bill (when received) and to determine what it accepts as reasonable and proportionate. Therefore, Mr Justice Johnson suspended the accrual of judgment debt interest for a period of 3 months but allowed pre-judgment interest to continue.

Ellena Hunter is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

A substantial reduction of costs on the indemnity basis in a summary assessment

ujjainimistryLeave a comment

Mrs Justice Knowles summarily assessed the costs of a dismissed committal application, made by the wife in Alvina Collardeau v Michael Fuchs & Anor [2024] EWHC 642 (Fam). The costs of the First and Second Respondents were assessed on the indemnity basis, but they were substantially reduced for the reasons set out below.

Indemnity Basis:

Mrs Justice Knowles saw ‘no justification for departing ’’ from the principle that indemnity costs are usually imposed in contempt proceedings, and she, therefore, assessed the costs on this basis. The Judge noted that the applicant’s case was ‘weak and evidentially flawed’’ as well as being ‘improperly motivated and disproportionate’.

CPR 44.4(1)(b) outlines the factors to be considered in deciding the amount of costs to be awarded when assessing on the indemnity basis. Costs will be allowed if they are not unreasonably incurred, or they are not unreasonable in amount; any doubt will be resolved in favour of the receiving party. The Court do not need to have regard to proportionality when assessing costs on the indemnity basis. This means that the receiving party is likely to obtain a higher percentage of their costs claim on assessment than if costs were assessed on the standard basis.

Despite Mrs Justice Knowles ordering that the costs be assessed on the indemnity basis, she did determine that the costs incurred by both respondents were ‘manifestly excessive and unreasonable’. The total spent between both respondents was £510,876.90. The Second Respondent submitted that he was entitled to have regard to the wife’s profligate approach to litigation costs when instructing his own legal team. The Judge deemed this as a ‘wholly unreasonable approach, which encourages exorbitance, if not profiteering’.’ This Respondent’s total costs exceeded £330,000.

The First Respondent’s costs were reduced by 33% as it was not justifiable to have 2 of each grade of fee earner preparing the case, charging a significant rate. Counsel’s fees were also reduced by 50%.

The Second Respondent’s fees were reduced by 44%. But this was still considered unreasonably high and excessive. There were 3 Grade A fee earners on this matter, which was deemed unnecessary. The costs associated with any obtained expert evidence was deducted in full as the court did not grant authorisation for expert evidence to be adduced.

Mrs Justice Knowles considered all features of the case and in order to reach a just decision, costs were assessed on an indemnity basis, but the costs were heavily reduced as they were considered to be wholly unreasonable.

Ujjaini Mistry is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at CivilandCommercialCosts@clarionsolicitors.com

Litigant in Person required to file and serve a costs budget

Bethany CollingsLeave a comment

In a recent Judgment, Cotham School v Bristol City Council & Ors [2024] EWHC 824 (Ch) it was held that a Litigant in Person (“LIP”) was required to file a costs budget as they instructed Direct Access Counsel. HHJ Paul Matthew handed down a judgment following an application for a costs capping order under CPR rule 3.19.

HHJ Paul Matthew stated:

“It seems to me that, if there is any risk, let alone a substantial risk, that disproportionate costs would be incurred in this case, the better instrument for preventing that undesirable event is effective costs management orders, rather than the ‘blunt instrument’ of a costs capping order. In the circumstances, I propose to order pursuant to rule 3.15(1) and (3)(a) that, although this is a Part 8 claim, and although the second defendant is a litigant in person (albeit employing counsel on a direct access basis), all parties must file and exchange costs budgets not later than 21 days before the first case management conference. Having so ordered, the preconditions for a cost capping order under rule 3.19 are not satisfied, and I decline to make such an order.”

Under CPR 3.12(1), LIPs are exempt from complying with costs budgeting. However, the Court retains discretion to order a person to file and serve a costs budget, even if they are not obliged to do so pursuant to CPR rule 3.12(1A).

HHJ Paul Matthew referred to the case of Campbell v Campbell [2016] where Chief Master Marsh confirmed:

“Furthermore, the court may decide to make a costs management order in relation to a litigant in person’s budget. Indeed, in a case in which a litigant in person is likely to be seeking a substantial costs order, whether because there will be fees of counsel under the Direct Access scheme or otherwise, it may well be desirable to do so.” 

Conversely, HHJ Paul Matthew referred to the case of CJ and LK Perk Partnership v Royal Bank of Scotland [2020] EWHC 2563 (Comm), where it was held that LIPs with direct access Counsel should not file and serve costs budgets.

In this case, although the LIP had instructed Counsel under the direct access scheme and did not instruct solicitors, HHJ Paul Matthew concluded that due to the potential significant claim for costs if successful, all parties, including the second Defendant (the LIP), should file and serve a costs budget, regardless of the nature of Part 8 proceedings.  

Bethany Collings is a Paralegal in Clarion’s Costs and Litigation Funding Team and can be contacted on 07774 951949 or at bethany.collings@clarionsolicitors.com

Kenton v Slee Blackwell [2023] EWHC 2613 (SCCO)

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Senior Costs Judge Gordon-Saker found that providing a ‘hopelessly inaccurate estimate’ and an inadequate risk assessment regarding a success fee will result in the claim for costs against the client being decreased significantly.

Background

In Kenton v Slee Blackwell [2023] EWHC 2613 (SCCO), the Claimant sued her previous solicitors who had acted for her in a professional negligence claim against another firm, ABC. They had entered into a Conditional Fee Agreement (CFA) in May 2018, with a success fee of 80% if the claim concluded before trial and 90% if it concluded at trial. After mediation, ABC agreed to pay Kenton’s costs in the sum of £138,000.

Slee Blackwell, subsequently, sent Ms. Kenton a bill which amounted to approximately £342,000, where approximately £90,000was payable to the Claimant after damages.

The Defendant’s did not adduce their own evidence or cross-examine Ms Kenton’s witness statement.

But this raised numerous concerns and questions by the Claimant as she had relied on the estimates provided by the Defendant’s, as well as the success fee outlined in the CFA. Judge Gordon-Saker addresses the two key issues of: reliance on costs estimates, and the risk assessment in creating the success fee. This blog will explore his reasoning and decision in turn.

Costs Estimate

Ms Kenton clearly relied on the estimates provided by the Defendant; it was one of the reaons why, she decided to proceed with them to act on her behalf. Slee Blackwell’s estimates outlined as follows:

£5,000 to £20,000 if settlement was reached before issuing of proceedings.
or
£30,000 to £50,000 if the case went to a contested hearing.

In addition to the above estimates, Slee Blackwell’s Ms Slade also explained how she was ‘yet to have a single case where [her] basic fees have been £100k […] the closest is £85k with a fully contested trial’. So, it was expected, from the Claimant’s point of view, that fees would not exceed this, especially since the case settled prior trial.

Unfortunately, the reliance on the estimates by the Claimant was heavily disputed by the Defendants, claiming that it would have been ‘unreasonable’ as it would not have accounted for the ‘unanticipated work required in considering the documents from ABC’. They argued that Ms Kenton did not complain about the original estimates after the costs exceeded £100k as per the costs spreadsheets that were sent to her 5 times over the period of the claim.

However, Judge Gordon-Saker found in the Claimant’s favour that the estimate was ‘inadequate’ and ‘a reasonable estimate of profit costs would have been about £50,000 before issue of proceedings’– not between £5,000 and £20,000. The Defendant’s did not provide a reason as to why the costs far exceeded the estimate and the Judge deemed it would be ‘reasonably expected for [the client] to pay a figure close to the estimate upon which she relied’’. He also added how the Claimant did not have the opportunity to ‘do something different’ as she had already signed the CFA and knew she would ultimately be liable if she tried to terminate it- ‘she could not escape it’. Therefore, £40,000 was the sum that the Claimant was expected to pay.

Success Fee

A risk assessment was carried out by the Defendant’s, which justified the success fees of 80% or 90% (as explained above). Mr Brighton, for the Defendant’s, argued to the Court that the success fees were reasonable and in accordance with the uncertainties involved and was given to the Claimant in an informed manner, to which she had approved. The Claimant contended this line of reasoning by stating these fees were unreasonably high.

Judge Gordon-Saker also agreed with the Claimants in this issue in that the risk assessment was ‘lacking’ and, therefore, there was no informed approval of the Claimant in accordance with CPR 46.9 (3) and (4). He points to paragraph 37 from Herbert v HH Law Ltd [2019] EWCA Civ 527 where informed approval means “that the approval was given following a full and fair explanation to the client” and Judge Gordon-Saker clearly states that the assessment was not a ‘proper assessment of the prospects of successes.’  The risk assessment that would be deemed reasonable and realistic would have generated a success fee of 50% of the basic charges; which was the final decision of the Court in this matter.

Summary

This case emphasises the importance of informed communication with the client, alongside the significance of correctly estimating figures and costs as the figures produced and presented to the client could be the last factor that contributes to the client’s decision in proceeding with the case. Solicitor’s should set out all estimates and charges in a clear format and any risk assessment’s should be undertaken with all factors of the case considered. 

Ujjaini Mistry is a Paralegal in Clarion’s Costs and Litigation Funding Team. You can contact her at ujjaini.mistry@clarionsolicitors.com or on 07436033368.