Kerry Underwood

DETAILED ASSESSMENT: COSTS DISALLOWED IN FULL DUE TO MISCONDUCT

with 4 comments


The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

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

In

Farmer v The Chief Constable of Lancashire [2019] EWHC B18 (Costs)

the Senior Courts Costs Office disallowed all of the costs of the receiving party, due to its misconduct during detailed assessment proceedings.

The receiving party’s original bill of costs for detailed assessment was £174,565.79 and included £58,573.29 for a success fee under a Conditional Fee Agreement (CFA1), which the receiving party now admitted was unenforceable, and costs calculated at wrong hourly rates, which the receiving party conceded were too high.

The paying party applied pursuant to CPR 44.11 to disallow all of the bill.

The receiving party submitted a replacement bill of costs, but the arithmetic was wrong and the summary, although not the total, still contained CFA1.

The Master held that a second CFA was retrospective only to around 14 March 2015, not the start of the action in 2012.

There was, therefore, no retainer under which parts 2 and 3 of the bill could be recovered.

The bill also included the costs of an application to dislodge the receiving party’s litigation friend, which should not have been included.

The correct total costs were about £68,000, around one third of the original total and well below the threshold for detailed assessment.

Had the bill been correct, the court fee would have been lower and the costs of the detailed assessment proceedings would have been capped at £1,500 plus VAT.

Instead, four days of court time had been set aside to hear the bill of costs which was still incorrect.

The receiving party’s solicitor had signed the bill, the replies to the paying party’s Points of Dispute and a Witness Statement without any proper regard for the need to check the facts and ensure that matters were dealt with properly.

The conduct of the receiving party’s solicitor was unreasonable, improper and in breach of the CPR, especially the overriding objective (CPR 1.3).

This justified disallowing, under CPR 44.11, all of the remainder of the bill of costs.

The court distinguished

Gempride Ltd v Bamrah and another [2018] EWCA Civ 1367

where the claimant lost half of the profit costs for claiming a higher hourly rate than the solicitor – client retainer provided for.

The claimant’s solicitors in the Farmer case, McMillan Williams Solicitors Ltd, heavily criticized here, went into administration in May 2020.

 

Comment

Time and time again solicitors conduct the actual case with great skill and tenacity, but then adopt a very scrappy and careless approach to costs, often delegating the task to a junior member of staff who is not properly informed about the file, and the law of costs.

Written by kerryunderwood

August 4, 2020 at 7:52 am

Posted in Uncategorized

4 Responses

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  1. Correction: Gempide v Bamrah – the solicitor’s firm and the solicitor are both operating under the same name, without any restriction, and fully authorised by the SRA. The solicitor’s firm have never been subject of administration and did not go into administration in May 2020. It was the costs draftsman, who had prepared the erroneous bill and kept the solicitor and the court in dark, they fell into administration in 2018.

    • The reference to the claimant’s solicitors going into administration is a reference to McMillan Williams Solicitors Limited, the solicitors in the case reported here, that is the Farmer case.

      I think that that is clear, but I have slightly amended the blog to make it absolutely clear.

      Kerry

      kerryunderwood

      August 4, 2020 at 12:27 pm

  2. No problem. Hope you are well.
    Kerry

    kerryunderwood

    August 5, 2020 at 4:07 pm


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