Costs News

04 May 2017
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Successful claimant loses 50% of costs over bill chaos

A successful claimant has been docked 50% of her costs because of her solicitors’ conduct during the detailed assessment proceedings, which saw them serve four different versions of their bill.

Jago v Whitbread Group PLC was decided last October but has only recently been distributed by Justin Edwards, an associate Costs Lawyer at BLM who had conduct of the case for the defendant.

The defendant applied for an order pursuant to CPR 44.11(1) and (2) that the court disallow all or part of the claimant’s entitlement to costs on the grounds of her solicitors’ “improper and/or unreasonable conduct” during the detailed assessment proceedings.

The claimant’s personal injury claim against the defendant, her ex-employers, settled for £51,035. She indicated informally that her costs were £101,677, including a 20% success fee. However, after BLM asked for a copy of the conditional fee agreement, it emerged that the claimant’s solicitors, Davies Solicitors, were not operating under one.

Several months later, the claimant served notice of commencement of detailed assessment with a bill claiming £91,474, including a 25% success fee. Rather than respond to the points of disputes that were then raised, the claimant instead served a fresh bill of costs for £56,719, which did not include a success fee and also reduced profit costs significantly.

In response, the defendant’s solicitors pointed out the procedural error of serving a new bill as opposed to amending the existing bill. The claimant’s solicitors then filed and served an amended bill of costs, reduced again to £55,393.

In each iteration of the bill, there was a claim for time spent by a costs draftsman drafting the bill and for work on it by the supervising solicitor.

The final two versions of the bill were signed and certificated by a partner on behalf of the claimant’s firm, signing as ‘Davies Solicitors’.

Davies Solicitors submitted that, aside from an increase in the costs incurred during the course of the detailed assessment, the defendant suffered no prejudice.

However, Master Whalan concluded that “the claimant has filed and served, and done so repeatedly, bills that are both inaccurate and mis-certified”.

That the second version of the first bill should still claim a success fee was “inexplicable to the point of bizarre” given that the error had been pointed out, he said.

“It is clear, without descending into a broad let alone line-by-line detailed assessment, that the bills as filed exhibited repeated errors in claim and calculation, so that Mr Dunne [for the defendant] is certainly right in claiming that not only were the three statements of bills characterised by inaccuracy and mis-certification, but also that the final and indeed existing bill is still undermined, at least in part, in that way…

“There are aspects of the claim proffered in the new bill that are irrecoverable, to the certain knowledge of the claimant’s solicitor by reason of contrary costs orders made by the court during the interlocutory substantive process.”

The claimant accepted that her claimant’s solicitors did not “cover themselves in glory” and that the bills were characterised by inaccuracies that were reproduced repeatedly, Master Whalan recorded.

He summarised her mitigation: “Davies Solicitors LLP are a comparatively small high street firm who do not have the financial resources to engage either experienced or competent costs lawyers or draftsman… Where errors were pointed out, they were acknowledged and the bill was reduced accordingly. This is not a case where dishonesty is either alleged or indeed demonstrated.”

However, the judge said he was “neither impressed nor persuaded” by the claimant’s explanations, including the ability to engage costs lawyers or draftsmen.

“First, in any bill – certainly a bill valued at between £50,000 or £100,000 – that facility should be open to any solicitor. The cost of both drafting and checking the bill is included ordinarily and properly in the costs to be assessed and the costs of the detailed assessment are not simply recoverable, but, pursuant to CPR 47.20, ordinarily recovered by the receiving party.

“Second, I see no appreciable difference between the cost of [a trainee legal executive at the firm] undertaking this task at a charge of £110 an hour and the costs, broadly speaking, of an experienced and competent and costs draftsman engaging in the same process.

“Third, and no doubt in the submission of Mr Dunne more particularly, it is notable in this case that, notwithstanding the explanation that the claimant could not somehow afford expert costs draftsmen, the costs of costs draftsmen is claimed nonetheless. All four gestations of the statement and bill includes a cost for drafting, checking and signing the bill.”

Especially given the importance attached to certifying a bill, he concluded that the claimant’s solicitors were “guilty of conduct that can be described properly as both improper and/or unreasonable”, and that he had to exercise his discretion to impose two sanctions on the claimant.

The first was that the claimant would only be entitled to recover 50% of her assessed costs. The second was to disallow certain specific items of the claimant’s bill, including the drafting costs.

 

This post was posted in ACL e-Bulletin

Comments

Sue Nash   25/09/2017 at 20:56

It appears that RNB is set for a HC appeal - watch this space! Meanwhile, RIP Solicitors Journal which - sadly - has just ceased publication after 180 years

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