A London law firm has won its appeal against a detailed assessment of proceedings brought to recover its costs from two clients who were themselves barristers and also property developers.
Hugh Cartwright and Amin acted for the defendants in respect of their property development business, and were in heated dispute over an unpaid bill for £19,276.
The claimant solicitors issued proceedings, and the defendants entered a defence and counter-claim for the return of £3,665 held on account of costs, and separately issued a negligence claim.
A settlement for £24,250 was agreed at a mediation in early 2016, the day before a preliminary hearing on a jurisdiction issue and five days before the trial.
The defendants agreed to pay the claimant’s costs subject to detailed assessment. The claimant served a bill for £50,305. In Hugh Cartwright and Amin v Devoy-Williams and Anor [2018] EWHC 1692 (QB), Master Rowley’s detailed assessment was challenged by the claimant on four grounds, two of which succeeded.
The first was the brief fee, which had been claimed at £6,500. The master allowed £3,000, but Mrs Justice Nicola Davies said his “reasoning on this point is less than easy to discern”; he focused on the notification of counsel that the case had settled at 10.30pm, when he said counsel could have been stood down in the late afternoon.
Davies J said: “In the context of this ‘high temperature’ litigation, the case was not settled until it was finally settled which was not until 10:30pm on the night before the jurisdiction hearing. Counsel’s brief fee had been incurred.
“No counsel properly observing his or her duty would stop working on this case until he or she had been informed of a final settlement. All the preparation work had been done. The barrister was entitled to be paid his or her fee.
“The master erred in finding that the brief could have been cancelled on the previous afternoon and that some of the preparation could have been avoided. The master originally accepted that the fee per se was reasonable, but reduced it for reasons which do not stand up to scrutiny…
“Whether or not the barrister could find something else to do is not relevant to the brief fee which was payable on a brief properly delivered. There were no good grounds to reduce the brief fee.”
The other successful ground of appeal concerned an offer made by the defendants on 20 January 2017 to settle the claimant’s costs for £29,500, inclusive of the costs of the assessment, conditional upon the claimant agreeing that the defendants could set off against that sum their entitlement to damages and costs in the negligence action.
Master Rowley ordered that the defendants pay the claimant’s costs up to 20 January 2017 and thereafter the claimant pay the defendants’ costs.
The claimant argued on appeal that it was unable to accept the offer; the negligence action was being conducted by solicitors on behalf of the firm’s insurers, as the defendants knew.
The master accepted that the offer as made was incapable of acceptance, but ruled that “the quantum might have been accepted and the conditions either varied or an agreement reached to have a hearing before me to deal with the set off”.
Davies J said she accepted the claimant’s argument that the quantum offer was linked to conditions and thus was one which it was unable to accept.
“In highly contested proceedings, agreement as to conditions was unlikely. In order to rely upon this offer for Calderbank purposes, it had to be an offer which was acceptable upon its stated terms, not one which contemplated further attempts to negotiate.
“Pursuant to CPR 47.20(1), the default position is that the receiving party (the appellant) is entitled to the costs of the detailed assessment proceedings. It is open to the paying party (the respondents) to make a Calderbank offer such that by matching or exceeding the receiving party’s costs as assessed it proves to be effective so as to displace the entitlement of the appellant as the receiving party to the costs of the detailed assessment.
“The effect of the master’s reasoning is to place the burden on the receiving party to negotiate a settlement of the conditions or to make a counter-offer. This does not reflect the wording of the rules, nor the nature of a Calderbank offer, namely that it is either acceptable or it is not. Accordingly, the master erred.”
The judge went on to record that, since drafting her judgment, the parties had agreed the costs: the post-20 January 2017 costs of the detailed assessment to be paid by the defendants. These costs were assessed at £3,000 and the defendants would also pay £3,500 in respect of counsel’s fees.
The claimant had also argued that Master Rowley was wrong to disregard a pre-action offer of £14,873 that the claimant had made.
But Davies J said: “The offer was in the substantive proceedings. It was not made in respect of the costs of the assessment proceedings. The hearing before the master was in relation to the assessment of costs. The master was aware of the offer in the substantive proceedings, but directed his mind to the offer in the costs proceedings. For the purpose of the assessment proceedings, this was the relevant offer.”
A challenge to the hourly rate Master Rowley allowed was also dismissed.
Andrew Nicol (instructed by Hugh Cartwright and Amin) for the appellant; Robin Dunne (instructed by direct access by the respondents) for the respondents