26 April 2022
Vos: Question over distinction between contentious and non-contentious business
By mid-October at the latest, we will have judgment in what will be the most important costs decision of 2022. What is so remarkable about Belsner v Cam is that we don’t know what the appeal is being asked to determine!
Back in February, the hearing got underway. A tetchy Court of Appeal in the course of the opening afternoon threw a string of controversial propositions at Ben Williams QC, who did not flinch. One can watch the spectacle on YouTube
The parties, with the Law Society intervening, had assumed that this second appeal concerned the nature of the relationship between solicitor and client. When did a fiduciary duty come into existence? The consequential issue concerned the legitimacy, yet again, of deductions made out of damages recovered.
The Master of the Rolls, presiding, introduced a much wider agenda. He thought that it was absurd for employment tribunal litigation to be classified as non-contentious business. Another avenue opened up was the very concept of ‘ proceedings’. Were matters that settled under the RTA portal at stages 1 or 2 the subject of proceedings given that rules of court which regulate litigation dictate what costs are recoverable?
On day two of the hearing, and after 129 pages of new authorities had been delivered at midnight, Sir Geoffrey Vos MR displayed a conciliatory tone. Through no fault of the parties, the appeal had got off on the wrong foot. Counsel agreed with his suggestion that the whole sorry episode be abandoned.
A new three-day hearing is to begin on 11 or 12 July. The parties were sent away to agree a new list of issues. Lord knows what will emerge but certainly at the heart of the hearing will be what Belsner was ostensibly about in the first place, namely, the questions of fiduciary duty and, in turn, whether deductions made from damages were properly authorised by the client. Some 900 other matters are stayed pending determination.
Blurred lines
What I think underpins the concerns of the court is a plan to drastically extend pre-action protocols and to have accompanying portals in place. The clear divide between unissued and issued cases will blur. The rules currently do distinguish between non-contentious and contentious business.
Sir Geoffrey repeatedly said that litigation was in the pipeline to transform the dispute resolution landscape. A point of the greatest importance is how this activity is regarded for the purposes of costs and funding; a non-contentious business agreement by its very nature is predicated upon the understanding that there will be no proceedings.
Shortly after the hearing began in February, the MR observed that the bench was there to apply the law. Therein may lie the problem. Whilst judges can be creative and constructive, there comes a point when there is no more room for manoeuvre. The wider, unexpected issues thrown up by the court might only be remedied by legislation.
The Senior Costs Judge, Andrew Gordon-Saker, is to sit as an expert assessor at the resumed hearing. He will undoubtedly add invaluable wisdom to the hearing. It is not often that the appeal court is obliged to deal with low-value cases but of which there are an awful lot.
I will be attending the hearing in its entirety and will report back on how things panned out immediately after it concludes. Whatever the decision, I think it certain that some long-cherished assumptions might be displaced.
Professor Dominic Regan