March 2009

BIRMINGHAM CITY COUNCIL v ROSE FORDE (2009) [2009] EWHC 12 (QB) QBD (Birmingham) (Christopher Clarke J) 13/1/2009

The appellant local authority appealed against a decision on preliminary issues about costs in litigation with the respondent (F), who was one of its tenants. F had signed a conditional fee agreement (CFA) agreement with her solicitors in relation to proceedings against the local authority for failure to repair her property. Shortly before the proceedings were settled the local authority had challenged the validity of similar CFA’s and her solicitors wrote to her asking her to sign a second CFA. The letter explained that the legal costs up to that date would be dealt with under the second CFA unless the court ruled it invalid, in which case they would revert to the first CFA, and that the second CFA contained a success fee, whereas the first did not. The consideration expressed in and for the second CFA was that the solicitors would continue to act for F. In costs proceedings the master decided that the letter formed part of the second CFA, that the solicitors’ agreement to act was adequate consideration, that the presumption of undue influence did not arise, that a retrospective success fee was not permissible but that that did not invalidate the second CFA and that accordingly it was enforceable. The local authority submitted that (1) the letter did not form part of the retainer agreement; (2) there was no consideration for the second CFA because the solicitors were already bound to continue acting for F under the first CFA, which was never terminated in accordance with its terms; (3) the second CFA had to be presumed to have been procured by undue influence and it was manifestly to F’s disadvantage because it imposed a retrospective liability whereas, if the first CFA was invalid, she was not liable for the solicitors’ fees under it; (4) a retrospective success fee as abhorrent and a retrospective CFA, with or without a success fee, was unenforceable, particularly when the CFA was made after the Conditional Fee Agreements (Revocation) Regulations 2005 but related to a period before those Regulations came into force when the solicitor would have had to comply with the notice requirements in the Conditional Fee Agreements Regulations 2000 reg.4.

HELD: (1) The letter had been part of the retainer. Not only did it invite acceptance of the second CFA, it also contained two provisions that the parties must have intended to be part of their agreement. As the second CFA had regime applicable after the 2005 Regulations it had not been necessary for F to sign the letter for it to have contractual effect, nor did a CFA have to be contained in one document, Jones v Wrexham BC (2007) EWCA Civ 1356, (2008) 1 WLR 1590 applied. (2) The consideration consisted of continuing to act, in circumstances where, if the local authority had been right in its challenge to the validity of the first CFA, the solicitors had no obligation to continue acting, and the right not to do so, Williams v Roffey Bros & Nicholls (Contractors) Ltd (1991) 1 QB 1 CA (Civ Div) and Arrale v Costain Civil Engineer (1976) 1 Lloyd’s Rep 98 CA (Civ Div) considered. The provision of an enforceable obligation to provide services in place of one which the local authority asserted to be unenforceable was consideration for a fresh promise to pay. Further, the second CFA provided a benefit to F that the first had not because it extended the scope of work covered by the retainer. (3) F’s willingness to sign the second CFA was readily accounted for by the ordinary motives of ordinary people, namely her wish for the solicitors to continue acting for her and for them to be paid for their work, and no presumption of undue influence arose Royal Bank of Scotland Plc v Etridge (No2) (2001) UKHL 44, (2002) 2 AC 773 applied. Although the success fee was an additional liability it was subject to assessment as to reasonableness by the costs judge, and if and to the extent that F was liable to pay it, it would be recoverable from the local authority, whose ability to pay was not in doubt. So the disadvantage was more apparent than real. (4) There was no prohibition on CFA’s being retrospective and no reason per se why a retrospective success fee was contrary to public policy, Adam Musa King v Telegraph Group Ltd Unreported disapproved. The court had the ability to disallow or reduce retrospective fees that were unreasonable. If that were wrong, there was no reason why the court could not delete the success fee leaving the obligation to pay unaffected. There was nothing in the statutory provisions requiring a retrospective CFA to comply with the notice requirements in reg.4 of the 2000 Regulations and no reason to conclude that the second CFA was invalid because the retrospection extended back to before the 2005 Regulations had been introduced.

Appeal dismissed

Counsel:
For the appellant: Kerry Bretherton
For the respondent: Roger Mallalieu

Solicitors:
For the appellant: In-house solicitor
For the respondent: McGrath

ANNE-MARIE JUDGE v (1) PAUL RUPERT JUDGE (2) OGIER TRUSTEES (JERSEY) LTD (TRUSTEE OF PRJ SETTLEMENT) (2008) [2008] EWCA Civ 1458 CA (Civ Div) (Longmore LJ, Wilson LJ, Lawrence Collins LJ) 19/12/2008

The appellant former wife (W) appealed against a decision to dismiss her application to set aside ancillary relief orders made against the respondent former husband (H) and appealed against a costs order made against her, while H also appealed against the costs order. H and W had been trustees of a charity which H had founded and donated to. The charity had invested in a company in which H had a substantial personal interest and which had subsequently collapsed. There was a risk that the Charity Commission would require H and W to reimburse the charity for the sums lost, because as trustees they had decided to invest its funds to H’s indirect benefit. Gift aid relief H had claimed would also have to be repaid to the Revenue as invalidly made. At the ancillary relief hearing both parties agreed, and the court ordered, that the liability should be entirely borne by H. W had wanted this so that in whatever sum the liability was eventually assessed, she would be protected and have a definite understanding of her funds: she had rejected the suggestion of a calibrated award dependent on the outcome. W was awarded 38 per cent of the couple’s assets, which totalled £29.6m but which were calculated as £15.5m once the liability, estimated as £14m, was deducted. Documents had been disclosed and discussed at the hearing which suggested that H’s donations had been made on condition that they were invested into his companies. Because the donations were conditional, the Charing Commission later agreed that H and W had no liability as trustees, although repayment of £600,000 had to be made in respect of the gift aid relief. W’s subsequent application was dismissed and she was ordered to pay half of H’s costs. W argued that (1) the orders had been vitiated by a mistake under which the parties and the court had laboured, namely that they had been unaware of the availability of a conditionality defence which could have reduced the liability so substantially; (2) the judge should not have ordered either party to pay the costs of the other, applying the Family Proceedings Rules 1991 r.2.71(4)(a).

HELD: (1) The assertion that the award had been vitiated by mistake is rejected. In the original proceedings the size of the liability had been found that the spectrum within which it might fall was vast, and had contemplated the possibility of there being a liability of nought. The makings of a conditionality defence, which would have dramatically reduced the liability, had been there in the proceedings for all to see and further to have explored. Moreover, it was because she acknowledged that the size of the liability was so uncertain that W had pressed the court to transfer her exposure to it to H to the maximum possible extent. She had sought and secured a solution under which she left the marriage with assets of firm value and under which H was required to meet the liability, whatever its size: the chance that had the liability proved to be far greater, H would have secured the reopening of the award and a refund from W was almost non-existent. For the same reason, W had showed no interest in the suggestion that her award might be calibrated so as to rise or fall in accordance with the determination of the size of the liability: she had forsworn the benefit attendant on the determination of a low liability because of the detriment attendant on that of a high liability. (2) There had been no general rule for the judge to apply in his decision on the costs of the application: r.2.71(4)(a) of the 1991 Rules applied to “ancillary relief proceedings”; while the application was in connection with ancillary relief, it was not for ancillary relief, so that rule did not apply. Similarly, CPR r.44.3(2)(a) did not apply to “family proceedings” by virtue of r.10.27 of the 1991 Rules; although the application did not constitute ancillary relief proceedings, it did constitute family proceedings within the meaning of r.1.2(1) of the 1991 Rules and the Matrimonial and Family Proceedings Act 1984 s.32 in that it constituted a matrimonial matter within the meaning of the Supreme Court Act 1981 Sch.1 para.3(a). The judge had been entitled to start from the position that H would be entitled to his costs, and had just about been entitled to reduce W’s liability for H’s costs by half, considering that the circumstances of the case were extraordinary and she had been entitled to ask the court to consider setting the orders. Both appeals against the costs order were therefore dismissed.

Appeals dismissed

Counsel:
For the appellant: James Turner QC, Stewart Leech
For the first respondent: Robert Seabrook QC, Rebecca Bailey-Harris
For the second respondent: No appearance or representation

Solicitors:
For the appellant: Charles Russell LLP
For the first respondent: Payne Hicks Beach

(1) BRAY WALKER SOLICITORS (A Firm) (2) BEVANS BRAY WALKERS LTD (T/A BEVANS) v CARLO MOISE SILVERA (2008) [2008] EWHC 3147 (QB) QBD (Blake J) 18/12/2008

The claimant solicitors (B) sought payment of their basic costs incurred when they acted as solicitors for the defendant (S). S had brought proceedings for negligence and breach of contract against his former legal advisors. B acted for S in those proceedings over a period of 4 years pursuant to a number of conditional fee agreements. The CFAs remained unpaid and B issued proceedings for payment. S disputed liability on the basis of breaches of the regulations governing the CFAs and by B of the terms of the retainer and CFA under which they were retained. The parties disputed the terms of the CFAs. S submitted that B had breached the Conditional Fee Agreements Regulations 2000 as they had failed to explain to S properly the effect of the CFA and how it could be brought to an end. S further claimed that B had failed to explore insurance cover.

HELD: There was no evidence before the court of breach of contract disentitling B to their fees. Fees could not be recovered under a CFA unless there had been substantial compliance with the duties set out in the Regulations. On the evidence there had been no breach of the Regulations. There was no reason to believe that the costs of the litigation could be met under an existing contract of insurance. If the client or the context suggested that the litigation costs might be covered by a pre-existing policy of insurance then there was a clear duty to investigate the matter with appropriate scrutiny. It did not require detailed inquiry into something that there was good reason to believe not to exist. B had not been in breach by not looking into the question of insurance as there was no basis for any belief that an existing contract of insurance might have covered the risk. B had satisfied the court on the evidence that they had made out their claim for the recovery of their basic fees due under the contract set out in the CFAs. S had failed to satisfy the court that the contract was unenforceable by reason of non-compliance with the regulations or any other pleaded reason.

Judgment for claimants

Counsel:
For the claimant: Nicholas Bacon
For the defendant: Paul Staddon, Andrew Post

Solicitors:
For the claimant: Bevans
For the defendant: Jeffrey Green Russell

C (A PATIENT ACTING BY HER LITIGATION FRIEND JOCELYN FOX) v W (2008) [2008] EWCA Civ 1459 CA (Civ Div) (Arden LJ, Thomas LJ, Moore-Bick LJ, Master Hurst) 19/12/2008

The appellant (W) appealed against a success fee under a conditional fee agreement allowed by a judge in costs proceedings following an action for personal injury between W and the respondent (C). W admitted liability and entered into a CFA. That agreement provided for a success fee of 98 per cent of which 15 per cent represented the cost of funding. The CFA was modelled on the Law Society’s standard form of agreement which contained a clause that provided that in the event C was advised to reject an offer of settlement, and damages were awarded that were less than or equal to the offer C would not have to pay any of the solicitors’ basic costs or percentage increase for the work done after notice of the offer was received. W raised the issue of contributory negligence which was subsequently not relied on. The claim was subsequently settled. When assessing costs the district judge allowed a success fee of 70 per cent. On appeal that was reduced to 50 per cent. W contended that the success fee was too high given that liability had already been admitted at the time the CFA was entered into and, in those circumstances, there was no significant risk that C would fail to recover substantial damages in respect of her injuries even if she was found partly to blame. W submitted that it was wrong to calculate the success fee in the way that would have been appropriate if liability had been in doubt.

HELD: It was accepted by the parties that a success fee had to reflect a reasonable and rational assessment of the risks facing the solicitors at the time when the agreement was entered into. In the absence of any evidence that the accident had been caused by anything other than the negligence on the part of W, and in light of the fact liability had been admitted, it as difficult to see how C would have failed to recover substantial damages given the serious nature of her injuries. It followed that the chance of success was very high. The real difficulty was the assessment of the risk that the solicitors might lose the right to recover part of their fees as a result of C’s failure to beat a CPR Pt 36 offer which she rejected on the advice of the solicitors. The chance that the solicitors would advise C to reject an offer which she subsequently failed to beat at trial was difficult to assess but it was unlikely that highly experienced solicitors practising in that field would differ widely in their assessment. A costs judge could not refuse to award a success fee simply on the grounds that the difficulty of assessing the risks made it unreasonable to enter into a CFA at all. There was nothing unreasonable in entering into a simple CFA at a time when liability had been admitted, provided that the parties made a proper assessment of the inevitably much reduced risk of failure. In the circumstances the success fee allowed by the judge was too high and a success fee of 20 per cent was appropriate.

Appeal allowed

Counsel:
For the appellant: Jeremy Morgan QC, Benjamin Williams
For the respondent: Andrew Post

Solicitors:
For the appellant: Beachcroft LLP
For the respondent: Taylor Vinters

J MURPHY & SONS LTD v JOHNSTON PRECAST LTD (FORMERLY JOHNSTON PIPES LTD) (2008) [2008] EWHC 3104 (TCC)QBD (TCC) (Coulson J) 16/12/2008

The court was required to determine costs in a claim by the claimant main contractor (M) to recover sums from the defendant sub-contractor (J) that M had paid in settlement of arbitration proceedings with the employer arising out of defective water main refurbishment works. J had made and supplied a pipe to M that it used in the refurbishment works. Four years later the pipe had burst and M sought to recover damages from J for alleged breach of contract and breach of duty. J denied that any concluded contract had been made. The judge found that there had been a concluded contract but found against M on the issues of contract terms, breach and causation and found that J were not liable for any damages. M submitted that as a matter of principle, in every case in which an issue based costs order was sought, the court should ask itself the question posed in Fleming v Chief Constable of Sussex (2004) EWCA Civ 643, (2005) 1 Costs LR 1, namely whether there was any discrete issue or matter pleaded which added significantly to the length of the trial to necessitate displacing the prima facie rule that costs should follow the event. M submitted that J had failed on two arguments, the existence of the contract and one of the causes of the pipe bursting, so should recover only 80 per cent of its costs. J argued that, by analogy with CPR r.36.14(2)(b) in relation to interest on costs to be paid to a defendant who beats an offer, because M had rejected two offers to settle the proceedings it should have to pay an enhanced rate of interest on costs.

HELD: (1) There was no difficulty in identifying J as the successful party. M had recovered nothing and had lost each of the significant issues so that an issue-based costs order was inappropriate. The question posed in Fleming simply did not arise, Fleming considered. The mere fact that a successful party had not been successful on every last issue could not, of itself, justify an issue-based cost order. If it was necessary to ask the question posed in Fleming, the conclusion would be the same. The issue about the existence of a contract was a part of a much wider series of contentions designed to show that J owed no obligation to M in relation to the fitness for purpose of the pipe. Whichever version of the contract the court had accepted, it had found that it did not contain a fitness for purpose obligation, so J had won on the underlying dispute. Although the issue about the causes of the burst had taken some time, it had not significantly added to the length of the trial, and J had won on the critical issue about liability for the possible causes. (2) Another reason why M should be ordered to pay J’s costs was because M had rejected J’s two offers to settle. The second offer would be treated as having been made in accordance with CPR Pt 36 because, even though it referred to claims “whether pleaded or not”, it had been made at a time when it was clear that M would need to amend the claim and subsequently did so, and because it was expressed as a Pt.36 offer and treated by the parties as such, Hertsmere Primary Care Trust v Rabindra-Anandh (2005) EWHC 320 (Ch), (2005) 3 All ER 274 considered. (3) The appropriate rate of interest on costs from the commencement of proceedings was base rate plus one per cent, ABCI v BFT (2003) Lloyds LR 146, HLB Kidsons v Lloyds Underwriters (Costs) (2007) EWHC 2699 (Comm) and Nova Productions Ltd v Mazooma Games Ltd (Interest on Costs) (2006) EWHC 189 (Ch), (2006) RPC 15 considered. That rate properly compensated J for losing the use of the money that it had been obliged to pay its solicitors. The wording of CPR r.36.14(2)(b) was deliberately different to the wording of CPR r.36.14.(3)(c), which set out the consequences when a claimant beat an offer and talked about an interest rate not exceeding ten per cent above base rate. The express power to award interest on the defendant’s costs at an enhanced rate was not available under the CPR, whereas it was available in relation to the claimant’s costs, Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson (Costs) (2002) EWCA Civ 879, (2002) CP Rep 67.

Costs determined

Counsel:
For the claimant: Christopher Lewis, Jennifer Jones
For the defendant: Neyrs Jefford QC

Solicitors:
For the claimant: Fenwick Elliot LLP
For the defendant: Mills and Reeve LLP

JEFFREY WAKEFIELD (T/A WILLS PROBATE AND TRUSTS OF WEYBRIDGE) v (1) IAN ROGER FORD (2) CAPORN CAMBELL (A Firm) (2009) [2009] EWHC 122 (QB) QBD (Eady J) 29/1/2009

The applicant (W) applied for an order that he should be permitted to accept an alleged outstanding offer to settle defamation proceedings that had been made by the respondent solicitors (F) several months earlier. W wrote and advised on the preparation of wills. He had prepared a deed of variation for a client, and asserted that it had been specifically drafted by counsel with the client in mind. However, the deed had referred to issues that were not relevant and contained paragraphs that were inconsistent with each other. It was alleged that W had plagiarised or copied a precedent of a deed relating to a different person entirely, and that he had merely copied the documents more or less word for word without applying his mind to the appropriateness of the drafting to the case in hand. It followed that F informed a third party firm of solicitors that they were acting on a claim arising out of W’s admitted negligence in the preparation of the deed in question. W brought libel proceedings against F on the grounds that the words in question bore the meaning that he had been negligent in another case and that the negligence had been admitted by him. The court held that the occasion of publication was protected by qualified privilege, and that the real sting of the claim was in the allegation of negligence, rather than the issue concerning admission. F also claimed a plea of justification that W had indeed been negligent in certain respects and that an admission had previously been made on his behalf. W alleged that F’s comment had therefore been made maliciously and continued to press ahead with his claim, despite numerous attempts by F to persuade otherwise, on the basis that it would prove impossible to establish malice against them. W therefore rejected various offers to settle, but agreed to withdraw and apologise for his allegation of malice an apology for the allegation of admitted negligence and that each party bear their own costs. No request was made of F to withdraw or apologise for the allegation that negligence had actually taken place. Consequently, F made an offer acknowledging that W was prepared to drop his demand for an apology for the negligence allegation, and highlighted the court’s determination that there was no sting in the allegation of admitted negligence. The offer also requested that W withdraw his complaint of malice and that F would accept their costs to date. Following further disclosure several months later, W purported by letter to accept F’s offer, although the plea of malice was still being held out as a threat. He subsequently applied that he should be permitted to accept the offer.

HELD: (1) No outstanding offer by F to settle the proceedings remained by the time W purported to accept the offer that had previously been made. W’s offer had been clear that they were prepared to accept costs “to date”, and that if the offer was not accepted the demands on W would be correspondingly greater as costs built up towards trial. I was therefore untenable to construe that that offer was to continue indefinitely into the future, such that W could accept it at any time. In any event, W’s purported acceptance was not couched in the same terms as F’s offer. (2) As a result, in light of W’s conduct in the proceedings, F were entitled to their costs on the indemnity basis following the anticipated discontinuance of the proceedings. F had given W a full explanation as to why his claim for malice was likely to fail, and the arguments advanced had been particularly compelling and should not have been ignored. It was also unreasonable that W had rejected the offer for settlement on the ground that he was holding out for an apology over the admission issue, especially in light of the court’s finding that the allegation regarding negligence was the more significant of the two.

KIER TANKARD (Appellant) v JOHN FREDRICKS PLASTICS LTD (Respondent) : (1) FAWCETT OLD LTD (2) MICHAEL JANE HAIR & BEAUTY (Appellants) v YVONNE HIBBERD (Respondent) : MARK JONES (Appellant) v KARL JOSEPH ATTRILL (Respondent) & LAW SOCIETY (Intervener) (2008) [2008] EWCA Civ 1375 CA (Civ Div) (Sir Anthony Clarke MR, Dyson LJ, Jackson LJ) 11/12/2008

In conjoined appeals brought by the appellants (T, F and J) the court was required to consider the true construction of the Conditional Fee Agreements Regulations 2000 reg.4(2)(e)(ii). F had been the defendant and T and J the claimants in three separate personal injury claims. In each case the claimant had entered into a conditional fee agreement (CFA) with his solicitor prior to November 2005, and in each case the claim had succeeded on terms that the defendant was liable to the claimant in costs. The solicitors were each members of a membership scheme known as Accident Line Protect (ALP) and had recommended its after-the-event (ATE) insurance to their clients. The defendants asserted that the solicitors were in breach of the Regulations in that they had failed to disclose to their clients that they had an interest within the meaning of reg.4(2)(e)(ii) and that in consequence the CFAs were unenforceable against the claimants. If that was correct, the claimants were not entitled to recover some or all of the costs claimed against the defendants. In T’s case it had been conceded before the district judge that the solicitors had an interest. The issue was whether in each case the solicitors had an interest within the meaning of reg.4(2)(e)(ii), and whether T’s solicitor had been right to make the concession.

HELD: (1) For the purposes of reg.4 a solicitor had an interest if a reasonable person with knowledge of the relevant facts would think that the existence of the interest might affect the advice given by the solicitor to his client. Such a test ensured that any interest of the solicitor that might affect his advice was notified to his client, and was consistent with the language of reg.4 construed with due regard to its legislative purpose, namely protecting the client.
(2) While membership of the panel of a claims management company could amount to an interest, it would not do so in all circumstances. In the instant case the overriding consideration was the quality of the policy. That was why the solicitors subscribed to the scheme and recommended the policy, and the obligation in the scheme to recommend the policy arose not as a quid pro quo for the referral of a case, but as the ordinary consequence of a conventional ATE arrangement, where the concern of the underwriter was to avoid adverse selection, Myatt v National Coal Board (2006) EWCA Civ 1017, (2007) 1 WLR 554 distinguished.

There was nothing in the ALP scheme of a general nature that required disclosure to the claimant on the ground that his solicitor had an interest within the meaning of reg.4(2)(e)(ii). That conclusion was not affected by the requirement that an ALP policy be effected in all qualifying cases, the fact that subscribing solicitors had cases referred to them from time to time, and the fact that subscribing solicitors could receive a rebate of part of their membership fees if they issued a sufficient number of policies in any year. There was nothing that would lead a reasonable person with knowledge of the facts to think that the solicitors had an interest in the scheme that might affect their advice. (3) (Obiter) Under reg.4(1)(a) a solicitor had to inform his client about any interest within the meaning of reg.4(2)(e)(ii). In order to meet that requirement it was not sufficient for him simply to say that he had an interest, rather, he had to identify the nature of that interest. Although reg.4(2)(e)(ii) did not spell out such a requirement, it had to be interpreted purposively so as to enable the client to make an informed decision. The solicitor had to explain to the client the nature of the benefits to him in remaining on the ALP panel with sufficient clarity for the client to understand what those benefits were and to assess their significance. What was said at para. 103 of the judgment in Myatt, to the effect that a solicitor had simply to tell his client that he was contractually obliged to recommend a certain policy, was not to be followed. (4) None of the solicitors had an interest that ought to have been disclosed. F’s appeal was therefore dismissed and J’s allowed. In T’s case the solicitor was permitted to resile from his concession that he had an interest.

Judgment accordingly

Counsel:
For Kier Tankard: Nicholas Bacon
For John Fredricks Plastics Ltd, Fawcett Old Ltd and Michael Jane Hair & Beauty: Robert Marven
For Yvonne Hibberd: Benjamin Williams
For Mark Jones: Michael Pooles QC, Roger Mallalieu
For Karl Joseph Attrill: Jeremy Morgan QC, Alexander Hutton
For Law Society: Richard Drabble QC, David Holland

Solicitors:
For Kier Tankard: Warner Goodman LLP
For John Fredricks Plastics Ltd, Fawcett Old Ltd and Michael Jane Hair & Beauty: QM
For Yvonne Hibberd: Leigh Day & Co
For Mark Jones: Walton Mills & Co
For Karl Joseph Attrill: Beachcroft LLP
For Law Society: In-house solicitor

LORD CHANCELLOR v JOHN CHARLES REES & ORS (2008) [2008] EWHC 3168 (GB) QBD (Sir Charles Gray) 19/12/2008

The appellant Lord Chancellor appealed against the decision of a costs judge to increase by significant amounts the basic fees allowed to the respondent counsel (R). R had acted for defendants in complex and lengthy criminal proceedings for serious fraud. As they had been instructed under public funding pursuant to the Criminal Defence Service (Funding) Order 2001, the basic fees payable to them were subject to an ex post facto assessment, that was, they were to be assessed retrospectively. The determining officer who subsequently carried out that assessment held that the basic fees claimed by R were wholly unsupportable and should be reduced. In arriving at his conclusion, the determining officer took account of the fees paid to the prosecuting counsel and the rates that would have been payable to R if the case had been accepted under the very high cost cases scheme. He did not consider a comparator. On appeal, the costs judge increased the basic fees payable to R by significant amounts. He held that the Clerk of the Parliaments Reference Regarding Criminal Legal Aid Taxation (2000) 1 Costs LR 7, which was a report that reviewed the fees allowed to barristers for conducting appeals to the House of Lords, did not lay down any general principles, and that the very high cost cases scheme, graduated fee scheme and the prosecution counsel fees were not relevant comparators for determining R’s fees. He also held that, where appropriate, a determining officer could take into account the issue of “lost work” and the recovery of additional remuneration for other professional work lost as a result of R’s lengthy involvement in the instant case. The Lord Chancellor submitted that, pursuant to the House of Lords report, the costs judge had erred in failing to consider as comparators the very high cost cases scheme, graduated fee scheme and prosecution fees and that no allowance could be made for lost work. R submitted that, in determining the reasonable amount to be paid to counsel by way of basic fees in ex post facto cases, the use of any comparators was illegitimate and impermissible.

HELD: (1) Pursuant to sch.1 para.1(2) and sch.1 para.15(1) of the 2001 order, the appropriate officer, in determining costs, was required, having taken into account all the relevant circumstances of the case, including the nature, importance, complexity or difficulty of the work and the time involved, to allow a reasonable amount in respect of all work actually and reasonably done. Further guidance as to the factors relevant in determining the reasonable amount were to be found in the Taxing Officer’s Notes for Guidance 2002. In accordance with the House of Lords report, which was not intended to be confined to appeals in criminal cases to the House of Lords, it was in principle legitimate to have regard to comparators as a means of cross-checking what amounts should be payable to counsel by way of ex post facto fees in other criminal cases. (2) The House of Lords report specifically stated that in appeal cases the fees paid to the prosecution as to the proper fee for defence counsel. In many cases it would be legitimate for the determining officer to take such fees into account, Lord Chancellor v Wright (1993) 1 WLR 1561 QBD applied. Although there were obvious differences between the role of a prosecutor and a defender, such factors did not amount to a good reason for rejecting the use of prosecuting counsels’ fees as a comparator. (3) A comparison with fees payable in cases within the very high costs cases scheme might, however, be inappropriate by reason of the particular circumstances of the ex post facto scheme under consideration. That particular scheme remained separate and distinct from the category of cases where costs were assessed on an ex post facto basis. Likewise, sufficient care should be taken when using the graduated fees scheme as a comparator, due to the difference in cases under the fees scheme and ex post facto. It was not legitimate to use privately funded cases as comparators in the assessment of publicly funded work. Privately funded work was market-driven and was the subject of negotiation, whereas publicly funded work was closely regulated. (4) In respect of the issue of lost work, although R’s commitment of time in the instant proceedings was very significant, it was clear from the wording of Sch.1 para.1 that the costs to be determined were the costs of “work done” under the relevant representation order, so that the amount allowed related only to work “actually and reasonably” done in that case, Loveday v Renton (No2) (1992) 3 All ER 184 QBD applied. In any event, the calculation of the value of lost time would be a formidably difficult task and represent a significant additional burden for determining officers. (5) The costs judge had, accordingly, fallen into error in the way he had dealt with R’s costs and the assessments were remitted to a costs judge for determination of the appropriate fees payable in each case.

Appeal allowed

Counsel:
For the appellant: Clive Lewis QC, Vikram Sachdeva
For the first respondent: In person
For the second to fifteenth respondents: Clare Montgomery QC, Andrew Post

Solicitors:
For the appellant: Treasury Solicitor
For the second to fifteenth respondents: Irwin Mitchell

RICHARDSON ROOFING CO LTD (Claimant) v BALLAST PLC (Dissolved) (Defendant) & COMPCO HOLDINGS PLC (Third Party) & THE COLMAN PARTNERSHIP (Fourth Party) (2009) CA (Civ Div) (Jacob LJ, Aikens LJ, Sullivan LJ) 13/2/2009

The Appellant architects (C) appealed against a decision ((2008) EWHC 1806 (TCC)) made in relation to costs. The respondent roofing company (R) had been involved in litigation concerning the development of a building and was alleging that C was guilty of professional negligence. A trial of preliminary issues was ordered, which was subsequently adjourned and R’s particulars of claim were struck out. C applied for costs and a consent order was entered into. Under that order R was to pay to C’s costs incurred and thrown away by the adjournment of the trial. Three years later C served a draft bill of costs for its entire costs until the hearing ordering the preliminary issue. C issued proceedings and sought an order that the costs judge dealing with the assessment should be directed that such costs included C’s preparation for trial as there was no prospect that the claim would be revived. The judge directed that an order be drawn up whereby the costs judge was directed to carry out his assessment using the guidance set out in six specified paragraphs of the judgment.

HELD: (1) It was highly debateable whether the judge had any jurisdiction to hear the application. The order in dispute was a consent order and there had been no application to vary it. As the jurisdiction point had not been fully argued before the instant court the point could not be decided and the court therefore assumed jurisdiction despite its serious reservations. Even if the judge had jurisdiction he should not have exercised that jurisdiction as the matter would ordinarily go before a costs judge for a detailed assessment. (2) The basis for the judge’s order referring to paragraphs in his judgment was extremely diffuse and it was unlikely that any costs judge would be able to follow them. As a matter of practice it was undesirable for judges to enter into this form of order. Judgments provided the reasons for the subsequent orders and any order made at the end of a judgment should stand on its own. (3) The judge had failed to answer the issue in relation to the construction of the consent order and his consequent order was of no assistance to a costs judge. Accordingly, his order could not stand.

Appeal allowed

Counsel:
For the appellant: Richard Wilmot-Smith QC, Benjamin Pilling
For the respondent: Jonathan Marks QC, Benjamin Williams

Solicitors:
For the appellant: Fishburns
For the respondent: C J Hough & Co.