Costs News

03 July 2019
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Claimant refused time extension after three-year delay in applying for assessment hearing

A client of well-known London firm Carter-Ruck who delayed applying for a detailed assessment hearing for more than three years has had his application for an extension of time refused.

Master Leonard said the evidence showed that Vivek Rattan chose to delay the application, giving priority to other matters including bringing a parallel negligence case against Carter-Ruck.

“Were I to grant the extension of time he seeks, the consequences would most probably be to extend these proceedings for months, and possibly years, in order to accommodate several days of hearings from which it is highly unlikely that the claimant will derive any material benefit,” he ruled.

In Rattan v Carter-Ruck Solicitors [2019] EWHC B7 (Costs), Mr Rattan had run up pre-action costs of £145,000 in taking advice from two other firms of solicitors about potential mis-selling claim against a bank which had provided to him financial advice and investment management services.

He then signed up with Carter-Ruck and counsel Dov Ohrenstein under conditional fee agreements with 100% success fees, and after-the-event insurance from Temple Legal Protection.

The claimant’s costs budget, which did not include the costs of the previous solicitors, was reduced by Mr Justice Males from £848,915 to £762,695 and the bank’s from £1,190,516 to £770,000. The claim settled in December 2014 for $500,000, with costs of £340,000 paid directly to Carter-Ruck, which told Mr Rattan that it would not seek any deduction from his damages as a result.

In December 2014, Carter-Ruck rendered two bills settling all costs, disbursements and VAT at £340,000 (£200,000 for its fees, £42,905 in counsel’s fees and £26,500 for the insurance premium).

Mr Rattan applied for a Solicitors Act assessment in March 2015. Carter-Ruck served its breakdown of costs in June 2015 – two weeks later than provided in an order from Master Simons – for a total of £934,799. The claimant’s points of dispute were served in October 2015, more than two months after the time limit for applying for a hearing.

There was no further procedural step taken until December 2018, when the defendant applied to strike out the detailed assessment proceedings. The claimant sought an extension of time.

Master Leonard said it was right to treat the claimant’s application as if it were an application for relief from sanction. “His position is comparable to that of a party suing for a sum of money, who knows that the court has ordered that an application must be made for the hearing of his claim within a specified period.

“It is for him to protect his position either by applying for a hearing within the period prescribed by Master Simons’ order, or by making a timely application for an extension of time. He has done neither.”

Turning to the Denton criteria, Master Leonard said the delay was “self-evidently serious and significant”, and the case was not ready for hearing. “Further, the defendant is quite right to say that it is highly unsatisfactory that the claimant now seeks to determine the same issues, simultaneously, in two different courts. If it were right for the detailed assessment, at this very late stage, to proceed at all it would probably be right to order a stay until the QB claim had concluded. That could add years to the process and, even without a stay, it would take many months to resolve.”

The master said the claimant had given no good reason for the delay and the fact he was a litigant in person was not relevant. “It would not furnish any justification for ignoring an order of the court in any event. Requesting a detailed assessment hearing requires only the completion of a form, the filing of some papers and the payment of a fee. On the evidence, the claimant could have done that at any time, just as he could have instructed solicitors if he needed to. He did not act until he was effectively forced to do so.”

Master Leonard added: “If it is not right to treat this application as if it were an application for relief from sanction, then it seems to me that the simple question is this. Leaving aside the Denton criteria, is it consistent with the overriding objective to allow the claimant the very exceptional extension of time he seeks?

“It seems to me that the answer must be ‘no’. That is partly because of the conduct of the claimant to which I have referred and partly because of the force of the defendant’s submissions (duplication of proceedings aside) in relation to abuse of process.

“In order to consider those submissions, it is necessary for me to take a broad, preliminary view on the merits of the claimant’s case. Even on that basis, it is clear that he faces major, if not insurmountable, obstacles to reducing the claimant’s chargeable costs and disbursements to a figure below the sum billed.”

Master Leonard said the claimant was not forced into approving the settlement – Carter-Ruck was not threatening to cease to act – but did anyway. “In consequence, it seems to me that by far the most likely outcome of any detailed assessment… is that the defendant’s costs would be assessed at the amount freely agreed to by the claimant in October 2012.

“If that proves not to be the case, then I believe that the defendant is right in saying that the claimant is still unlikely to achieve any significant reduction in the defendant’s billed costs.”

The claimant’s task would be to show that the claimed costs and disbursements figure should be reduced below £340,000. “That looks unlikely, particularly given that most of his complaints about the claimant’s conduct of the proceedings against the bank are manifestly weak and/or misconceived.”

As a result, it was not necessary to address the strike-out application, but Master Leonard said it would have been likely to succeed.

Ian Beeby (instructed by Philip Smart and Associates) for the claimant and James Newman (instructed by Carter-Ruck) for the defendant.


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