Kerry Underwood

COURT OF APPEAL SLASHES SOLICITOR’S COSTS OF COSTS BY 92.82%

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Jofa Ltd & Anor v Benherst Finance Ltd & Anor [2019] EWCA Civ 899 (24 May 2019)

the Court of Appeal, at a two-hour hearing, allowed an appeal against a decision that the appellant pay part of the respondent’s costs of the original case, substituting an order for no order for costs in that original matter.

The original costs award overturned by the Court of Appeal amounted to £23,000.

As the successful party on appeal, the appellant was entitled to its costs of that appeal.

The Court of Appeal cut those costs – dealing with a costs order of just £23,000 – from £71,072 to £13,000, that is a cut of 81.71%.

Excluding counsel’s fees and disbursements the solicitor’s costs element of the bill was cut from £62,682.50 to £4,500, that is a cut of 92.82%, or to put it another way, the solicitors were allowed just 7.18% of the costs that they claimed.

Here are paragraphs 50 and 51 of the judgment:

“50. Counsel’s own fees for advice on the appeal and for the hearing amount to £6,662.50 in total, and in my view are reasonable and proportionate. The costs claimed by the appellants’ solicitors, AMZ Law, however, include very large sums which appear, on their face, to be manifestly unreasonable as between themselves and their clients, let alone as costs claimed from the respondents. To give some glaring examples, costs are claimed for: (i) three solicitors each attending on Mr Farah for 5 hours; (ii) 15 hours spent “considering” the witness statement filed by the investors in support of their Norwich Pharmacal application, most of which was of little relevance to the issues on this appeal; (iii) 14 hours of “legal research” by two solicitors; (iv) another 14 hours spent preparing a 5 page witness statement from Mr Farah, although no application was ever made (or could realistically have been made) to introduce this statement as evidence on the appeal; (v) 18 hours spent preparing a straightforward bundle of documents (of some 200 pages), with a further 14 hours then spent “reviewing” the bundle; and (vi) 8 hours of attendance by each of two solicitors at a hearing for which the time estimate was one hour, with a further two hours each of travelling time.

51. As indicated in the Guide to the Summary Assessment of Costs, para 65, where both counsel and solicitors have been instructed on a short appeal, the reasonable fees of counsel are likely to exceed the reasonable fees of the solicitor, the main element of the solicitor’s work is to instruct counsel and prepare the appeal bundle, and there is usually no reason for the solicitor to spend many hours perusing papers or to work on legal submissions when the legal argument is being handled by counsel. In my view, a reasonable allowance for the costs incurred by the appellants’ solicitors on this appeal is £4,500 (representing 20 hours of work at an hourly rate of £225). Taking into account court fees of £1,727 and some other minor expenses incurred, I would summarily assess the costs recoverable by the appellants in a sum of £13,000.”

 

Comment

The Court of Appeal should have awarded the appellant no costs at all due to conduct in claiming such a ridiculous amount; exact round numbers of hours, rather than 7 hours 24 minutes or whatever, are always a giveaway.

Surely, whatever view anyone takes of fixed costs generally, we can all agree to introduce them for all costs work and costs appeals. The legal world has truly gone mad when you can claim £71,072 costs for an appeal about costs of £23,000.

I wonder if the Solicitors Regulation Authority will now become involved, or does that only apply in personal injury cases for the plebs and their solicitors, and not commercial work?

Written by kerryunderwood

May 29, 2019 at 12:57 pm

Posted in Uncategorized

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