Costs News

12 July 2018
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Costs judge awarded right hourly rates even though he got the test wrong, says High Court

A costs judge made the right decision in reducing the hourly rates of a claimant’s solicitor but got there the wrong way, the High Court has ruled.

Mr Justice Goss found that, although the claimant technically succeeded in their appeal, the outcome reached by the master was reasonable and the appeal had to be dismissed.

JXA v Kettering General Hospital NHS Foundation Trust [2018] EWHC 1747 (QB) concerned a cerebral palsy claim in which the claimant's mother and litigation friend selected Paul McNeil, a senior partner at City law firm Fieldfisher following a web search and given his “highly regarded expertise in clinical negligence claims”, Goss J recorded.

There was in due course agreement that the defendant would accept 90% liability. The question of damages cannot be resolved for many years, but they could run to £20m.

On assessment, the claimant the rates contended for had been: £380 to 31 March 2013 then rising at the rate of £10 a year up to £420 at the time of assessment for a grade A partner; £150 rising similarly to £190 over the same period for a grade D trainee/paralegal; and £270 for a grade C solicitor from 1 January 2017.

Master Nagalingam allowed £350 for a grade A partner, £200 for a grade C assistant solicitor and £150 for a grade D trainee/paralegal.

The claimant argued that the master did not answer whether it was reasonable to instruct Mr McNeil.

Goss J, who sat with Master James, said Master Nagalingam referred to the claim being one of substantial value, clearly at the very highest end of importance to the claimant and exceptionally complicated.

Master Nagalingam said: “Taking all of those factors into account, and with regards to the guidance in the White Book with respect to consideration of comparable firms doing comparable work, I don't find that I need to make any ruling as to what location is appropriate.

“The ruling must be in relation to what rates are appropriate, based on comparable firms doing comparable work, and in relation to the submissions that have been helpfully made by both advocates today.”

Counsel for the claimant sought clarification as to his finding in relation to the use of a London solicitor. After enquiring whether he was required to do so, Master Nagalingam “was pressed” into ruling: “I take into account the location of the claimant as a starting point, and I look at comparable firms doing comparable work.

“In terms of the theoretical locality as a starting point, I would consider firms within the Outer London area to be a reasonable point at which the claimant could have looked at firms well outside of their area, but, of course, I am aware myself of firms, for example, in Nottingham or Manchester or other legal centres which the claimant, I think, could have reasonably gone to as well.”

Goss J ruled that the master did not “directly address”, as he should have done, the question of whether the claimant acted reasonably in employing the solicitors who had been instructed.

But he continued: “However, that conclusion is not determinative of the appeal. The question then has to be addressed as to whether, in the final analysis, the hourly rates claimed by Mr McNeil were reasonable and that the master was wrong not to allow them and to set the rates that he did.”

Goss J noted that the master had no evidence as to what rates other firms engaged in this type of work charged or the level of expertise of such firms. It was not, he said, “entirely clear how the master reached his decisions as to the appropriate hourly rate but he appears… to have concluded that the claimed rates were too high and allowed rates that accorded with his knowledge and experience”.

The judge continued: “I find that the master did err in not directly answering the first question in relation to the reasonableness of the claimant's decision to instruct Mr McNeil and Fieldfisher LLP.

Further, his judgment lacked clarity as to why he considered Outer London rates to be appropriate but, nevertheless, he did take account of City rates. He also clearly recognised the complexity of the litigation and reflected that in determining the rates that he did.”

Having been “greatly assisted” by Master James, he concluded: “I am satisfied on all relevant facts and applying appropriate considerations that the rates determined by the master fell within the reasonable band of decisions open to him, notwithstanding his failure to answer clearly the first question in the required two-stage process.”

John Foy QC (instructed by Fieldfisher) for the claimant; Roger Mallalieu (instructed by Acumension) for the defendant.

 

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