Costs News

13 May 2020
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High Court orders immediate detailed assessment on preliminary issue

The High Court has used its power under CPR 47.1 to order a detailed assessment on a preliminary issue at once, saying there was no good reason why the successful claimants should have to wait for it.

Mr Justice Warby said an early detailed assessment would not affect the timetabling of the underlying proceedings and would not cause the defendants any unfair prejudice.

His decision in Barclay and Anor v Barclay and Ors (No.1) [2020] EWHC 1179 (QB) came in the high-profile dispute between two branches of the Barclay family, headed by the twins Sir Frederick and Sir David Barclay. Their business empire includes The Ritz Hotel in London and the Telegraph Media Group.

Sir Frederick and his daughter, Amanda, claim that their rights of confidentiality and privacy were infringed by a scheme, lasting many weeks, to make covert recordings of their private and confidential conversations in the conservatory of The Ritz Hotel.

When the claimants discovered evidence of the scheme, they issued proceedings and obtained without-notice doorstep delivery-up orders against the defendants. One of the issues that then arose was the defendants’ claim that some of the items delivered up were covered by legal professional privilege (LPP).

This was resolved in favour of the claimants, who sought an order for costs in relation to the LPP issue on the indemnity basis – on the basis it was a “try-on” – with detailed assessment forthwith, pursuant to CPR 47.1.

Warby J said he was “not attracted by the idea that a decision on these costs should be avoided or ducked” by making them costs in the case. He explained: “The result of that would be to make the identity of the paying party, in respect of the costs under discussion, dependent on the wholly separate and distinct question of who wins the litigation as a whole.

“That would not be a just or convenient outcome; it would be an arbitrary basis on which to determine the allocation of these costs. Nor would it be satisfactory to take the alternative way out of an immediate decision, namely to reserve the costs decision to a future occasion. To be fair, nobody has advocated that approach. Its drawbacks are obvious.”

The LPP issue was “raised, investigated, argued about, and then for the most part abandoned by the defendants” and there was unlikely to be “any real difficulty” in identifying the costs relating to it.

Warby J said: “The general rule is that the time for detailed assessment is at the end of the proceedings, but the court can make a different order: see CPR 47.1. In this case, I accept Mr Rees' submission [for the claimants] that there is no good reason why the claimants should have to wait many months before being able to have their costs assessed, and there is a good reason why they should have their costs assessed now.

“I accept that an earlier detailed assessment would have no material impact on the timetabling of the underlying proceedings, and would not cause the defendants any unfair prejudice.

“There is little authority on this point, but I have been referred to the decision of Aikens J (as he then was) in Greencore (UK) Holdings PLC v Elementis PLC [2005] EWHC 2139 (Comm). That decision lends some support to the submissions I have identified.

“Granted, this decision was made after the trial of preliminary issues in the case, but I do not regard that as a distinction of principle, given the analysis that I have set out. In this case, as in Greencore, there is no risk that, if a costs order was made the other way in future, the claimants would be unable to meet it.”

On indemnity costs, while there were various factors that took the case “well outside the norm”, the judge decided as a matter of discretion that it would not be unjust to require the claimants “to undertake the burden of satisfying a costs judge the costs incurred were proportionate and reasonable”.

Warby J explained: “Without casting aspersions on anyone in this case, it is important for the court to keep in mind that in litigation of this kind, in particular, interim ‘wins’ can be sought, and might be used, as negotiating tools or levers. There is nothing inappropriate about that, as a matter of principle, but it is important to bear in mind the need to look at these issues in a balanced way, asking if justice requires an order such as that which is sought.”

Hefin Rees QC, Tamara Oppenheimer QC and Cleon Catsambis (instructed by Brown Rudnick) for the claimants, with Heather Rogers QC, Aidan Eardley and Jonathan Price (instructed by Signature Litigation) for the defendants.

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