Kerry Underwood

Archive for September 2021

NEW GUIDELINE HOURLY RATES IN NOW RULES HIGH COURT

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This piece appears in Issue 21 of Kerry On Costs and So Much More…, a fortnightly publication costing £500 a year plus VAT, but available for the rest of 2021, including back issues, for £200 plus VAT here.

In

Axnoller Events Ltd v Brake & Anor [2021] EWHC 2362 (Ch) (23 August 2021)

the Chancery Division of the High Court, with a Judge sitting as a High Court Judge, that is not as a Costs Officer, stated that the new Guideline Hourly Rates, which do not come into effect until 1 October 2021, should be used now, including for work already done.

I accept that the 2010 summary assessment guidelines are now well out of date. In a case like this, I would simply put them on one side as of little assistance. Although they are strictly speaking not yet in force, the new 2021 guidelines (which have been approved by the Master of the Rolls) have already been used in summary assessment in the High Court: see eg ECU Group plc v Deutsche Bank [2021] EWHC 2083 (Ch), [25]. I consider that I should take these guidelines into account.”

Practical Tip

If the receiving party, rely on this case.

If the paying party, point out that this is effectively retrospective legislation, and that the Master of the Rolls has chosen to implement the new Guideline Hourly Rates from 1 October 2021, and has not made them retrospective.

Written by kerryunderwood

September 3, 2021 at 11:23 am

Posted in Uncategorized

CPR 46.9 (3)(c): PRESUMPTION OF UNREASONABLY INCURRED COSTS DOES NOT APPLY IN FIXED, OR NO, COSTS CASES

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This piece appears in Issue 21 of Kerry On Costs and So Much More…, a fortnightly publication costing £500 a year plus VAT, but available for the rest of 2021, including back issues, for £200 plus VAT here.

In

Farrer & Co LLP v Yertayeva [2021] EWHC B16 (Costs) (17 August 2021)

the Senior Court Costs Office upheld the claimant solicitor’s bill in full in a section 70 Solicitors Act 1974 assessment, and this 204 paragraph, 37 page, judgment deals with the disputed issue of informed consent.

There is a detailed examination of the law of informed consent, including the decision under the old Rules of the Supreme Court, comparable to CPR 46.9 (3) in

MacDougall v Boote Edgar Esterkin (a firm) [2001] 1 Costs L.R 118

where the court said

“… the quality of the approval has to be such as to raise a presumption. In the course of argument I talked of ‘informed’ approval and even with reflection I adhere to that concept. To rely on the Applicants’ approval the solicitor must satisfy me that it was secured following a full and fair exposition of the factors relevant to it so that the Applicants, lay persons as they are, can reasonably be bound by it…”

There is an interesting discussion of CPR 46.9 (3) which reads

“(3)        Subject to paragraph (2), costs are to be assessed on the indemnity basis but are to be presumed –

(a)          to have been reasonably incurred if they were incurred with the express or implied approval of the client;

(b)          to be reasonable in amount if their amount was expressly or impliedly approved by the client;

(c)           to have been unreasonably incurred if –

(i)           they are of an unusual nature or amount; and

(ii)            the solicitor did not tell the client that as a result the costs might not be recovered from the other party.”

It will be seen that CPR 46.9 (3)(a) and (b) deal with a presumption of reasonableness, whereas (c) deals with a presumption of unreasonableness.

The court doubted whether the test in (c) has anything to do with informed consent.

It pointed out that the presumption only occurs if the costs are of an unusual nature and the solicitor did not tell the client that as a result the costs might not be recovered from the other party.

The importance of that wording is that the presumption will apply only where there is a possibility of recovering costs from another party.

This was an asylum claim where, in the court’s words, recovery of costs was “at best, highly unlikely”, and therefore the court’s primary conclusion was that CPR 46.9 (3)(c) had no application.

The issue here was the level of the solicitor’s charging rate.

The logic, which seems to me impeccable, must apply now to virtually all of Road Traffic Accident matters, now small claims, where there is no recovery beyond a very small fixed sum.

This logic applies to all fixed recoverable costs cases.

It is not the solicitor’s charges which are unusual or causing the costs to be unrecoverable, but rather the fixed costs regime.

It is simply not that case that “as a result” of the solicitor’s charges they may not be recovered from the other party.

Rather it is “as a result” of the fixed costs regime.

Take a case where the hourly rates are reasonable, but the costs not recoverable because of a fixed, or no, costs regime.

It cannot possibly be the case that it is “as a result” of rates that would be recoverable in any other litigation, that the costs “might not be recoverable from the other party.” This is a whole new ball game as far as informed consent is concerned.

Written by kerryunderwood

September 1, 2021 at 11:56 am

Posted in Uncategorized

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