Solicitors overturn master’s ruling on costs of assessment

A master was wrong to take section 70(9) of the Solicitors Act 1974 into account when considering the costs of a detailed assessment of bills owed by a client to a solicitor, the High Court has ruled.

Ahmud & Co Solicitors v Macpherson, reported last week on Lawtel, was an appeal by the solicitors against an order that they pay the costs of a costs assessment.

They had acted for the client for six years and had issued a claim against him for unpaid bills. The client filed a defence admitting that he had to pay some of the amounts, but without mentioning a figure. A master ordered those costs to be assessed on a non-statutory basis and transferred the case to the Senior Courts Costs Office.

After the costs proceedings had concluded, the master was asked to approve a note of his judgment in which he had commented that the client had taken technical and unmeritorious points to avoid payment and had been a serial litigator who knew what he was doing. The master had also said that the client should pay the costs of the assessment, but the note did not become available until after the assessment had ended.

The assessment comprised two hearings before a settlement was reached, which amounted to more than a 20% reduction of what the solicitors had claimed. Another master considered the costs of the assessment and found that, while it had been a non-statutory detailed assessment, it had not been analogous to an assessment of damages. He held that he could take into account the 20% rule in section 70(9).

On appeal, the solicitors argued that the second master had not been entitled to take section 70(9) into account and that the critical question should have been who had won.

According to Lawtel, Mr Justice Males ruled that the original master’s order for a non-statutory assessment, was effectively an assessment of damages. The report said: “Assessments under the 1974 Act and at common law were very different regimes. The solicitors had obtained an order worth more than anything which had been offered by the client and were therefore the successful party. The original master had been right to order that the basis for the assessment was non-statutory.

“The regime which the second master ought to have applied was contained in CPR rule 44.2. The general rule was that the unsuccessful party paid the successful party’s costs. The solicitors had been the successful party. The client had won the right to have the assessment carried out and had obtained a significant reduction. That did not affect the correct way to look at the matter.

“The second master had erred by rejecting the submission that the proceedings had been analogous to an assessment of damages and by holding that the client had been the successful party. Further, it had not been right to take account of section 70(9) in isolation from the 1974 Act.”

As a result, the costs order was set aside and the client was ordered to pay 75% of the solicitors’ costs of the assessment.

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Costs News
Published date
19 Aug 2016

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