0 comments on “Another case in which the Court rejects comparison between each sides’ costs”

Another case in which the Court rejects comparison between each sides’ costs

In Monex Europe Limited v Pothecary and Kaufman [2019] EWHC 2204 (QB), following the refusal of an application for an injunction against the Defendants, costs against the Claimant fell to be summarily assessed. The Defendants’ costs, of c. £85k, were nearly twice that of the Claimant, of c. £44k. The Claimant, claiming to have borne the burden of the application, said that, as compared with their own, the Defendants’ costs were unreasonably high.

The Judge rejected the comparison approach: “it is not appropriate for the Court simply to compare the two sets of costs and say that the Defendants’ costs were disproportionate because they were greater, or that elements of them were greater, than that of the Claimant. It is necessary to look at the specific items for which costs are claimed”.

The Claimant was ordered to pay £74k (87% of the claimed costs) to the Defendants.

0 comments on “Lawyers avoid non-party costs order”

Lawyers avoid non-party costs order

In Willers & Joyce & Ors [2019] EWHC 2183 (Ch) the Court dismissed an application to fix the Lawyers with a non-party costs liability.

The case followed an initial unsuccessful claim (“the Langstone action”) brought by Mr Gubay (“G”) against Mr Willers (“W”). W was awarded costs which were settled a c. £1.5m leaving a shortfall of c. £2m. Of the shortfall c. £1m was attributable to the costs of W’s solicitor (“S”) in the Langstone action and c. £500k each to Leading and Junior Counsel (“L” and “J”).

W brought proceedings against G’s estate (G having died) alleging G had maliciously prosecuted the Langstone action against him. One of the heads of damages was the c. £2m shortfall in costs.

When W’s malicious prosecution claim was lost, G’s executors sought to add S, L and J (“the Lawyers”) as defendants for the purposes of costs on the basis that the Lawyers were the real parties to the claim because the principal purpose of the claim was the recovery of the Lawyers’ unpaid fees. This “direct, personal financial interest” was said to go further “in a significant way” than the interest that any lawyer has in a successful outcome for their client under a CFA.

The Judge, noting the key question is “whether [it makes a difference that] the … damages claimed … included a substantial amount of money still owed to [the Lawyers] from the Langstone Action”, concluded that the Lawyers had not acted outside the role of legal representatives to such an extent as to bring themselves within the non-party costs jurisdiction.

In reaching the decision the Judge considered that the risk of a non-party costs order would, in many instances, force a party to instruct new lawyers, who may not understand the case as well as the former lawyers, and who would cost more to get up to speed. Such consideration may not apply to the other side leading to unfairness.

Further, there are many scenarios in which damages claimed in second proceedings include unpaid costs incurred in first proceedings. For policy reasons, including access to justice, lawyers should, generally, be protected from non-party costs applications in such cases.

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Press Release: Panel Success for Phoenix Legal Services

Phoenix Legal Services is featured on Business Live and in Western Mail Business Wales today as we celebrate our success in winning a place on the Crown Commercial Services panel for legal costs services. Here is what Business Live had to say about us:

‘A Cardiff law firm is expected to double in size after securing panel status with Crown Commercial Service.

Phoenix Legal Services believes the contract has a potential value of up to £4m and increase the staffing levels to 34 in the next two years.

Phoenix was created in 2003 by Stephen Averill and is the only Welsh company to win a place on this national framework, achieving panel status following a tendering process. The firm offers costs management and recovery.

CCS is the largest public procurement organisation in the UK, playing a role in helping the UK public and third sectors save money when buying common goods and services – everything from locum doctors and laptops to police cars and electricity.

CCS is free to use for public and third sector organisations, and in 2017/18 CCS helped 17,000 buyers save £601m of public money using CCS commercial agreements.
Mr Averill said: “When I set up Phoenix I wanted to stand out from the competition, with an ethos of nurturing and supporting the individuals in my team and making them feel valued.

“It’s testament to their skills and commitment that we have achieved this prestigious panel status, a game changer for us, and we can now all look forward to significant future expansion with real confidence.”’

You can see the article here

0 comments on “No revision of budget absent significant developments”

No revision of budget absent significant developments

Seekings & Ors v Moores & Ors [2019] EWHC 1476 (Comm)

The Defendant applied to increase its budget by £130,000 citing ‘significant developments’ in the action.

Budgets were agreed ahead of the CCMC, at which time the Claimant had already served Requests for Further Information (“RFIs”). The initial replies to the RFIs were not deemed satisfactory and subsequently became the subject of interim applications brought by the Claimant.

The Defendant’s application was made on the basis that (i) significant costs had been incurred in addressing the RFIs and (ii) that a greater than anticipated number of documents had been produced.

The Judge found no significant development in the proceedings. The RFIs preceded, and were therefore anticipated within, the budget. In addition, the crux of the application was that the Defendants had failed adequately to reply to the RFIs (on more than one occasion, resulting in adverse costs).  It followed that the Defendant could not recover their costs of the applications relating to their failures to reply to the RFIs.

The Judge also refused the application for revision in respect of the additional disclosure documents as these were the Defendant’s own documents. The Defendant should have reasonably anticipated the extent of its own disclosure.

This case reaffirms that it is inconsistent with the overriding objective to allow parties to amend budgets because they have overlooked something or erred in estimations, or where the case develops in a way that should have been foreseen.

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Budget that included overstated hourly rate was “improper”

MXX v United Lincolnshire NHS Trust [2019] EWHC 1624 (QB)

The Claimant’s solicitor overstated their hourly rates in their costs budget. Following the conclusion of the matter the Defendant applied for a sanction under CPR Part 44.11. In the SCCO the Costs Judge held that it was improper:

  • to include incurred costs in a budget comprising anything other than time multiplied by agreed rates; and
  • to claim more than a client was obliged to pay.

However, the Costs Judge did not accept that failures to revise the budget before or at the CCMC were further acts of improper conduct.

The Defendant appealed and six of nine grounds of appeal succeeded. The consequence is that the Master carrying out the detailed assessment will now decide whether the substantial overstatement of the hourly rate in the budget is a ‘good reason’ (within the meaning of CPR 3.18) for departing from the budget so as “to correct any injustice caused by [the] improper conduct”.

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0 comments on “A further affirmation of the “high bar” for “exceptional circumstances””

A further affirmation of the “high bar” for “exceptional circumstances”

Hammond v SIG plc & Subsidiary Companies [2019] EWHC B7 (Costs)

The claim started in the portal and was subsequently resolved under Part 36. The SCCO found that the Claimant was entitled to fixed costs only despite arguing for an ‘escape’ from fixed costs under CPR 45.29J (i.e. “exceptional circumstances”).

The case is notable because the SCCO cited only one authority in which exceptional circumstances have been made out: “The only finding of exceptional circumstances produced by either party, notwithstanding the very substantial number of cases that are taken through the Portal each year, was … Jackson v Barfoot Farms, an unreported decision … and which is helpful if only as a contrast to the case before me. That particular case proved (as the Judge found) to be very complicated and settled for some £350,000. I would respectfully agree … that that case was indeed exceptional, but none of those considerations apply here”.

This case affirms what we already know: that the test of exceptionality is indeed a high bar.

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High bar” for award of “exceptional circumstances” costs

Ferri v McGill [2019] EWHC 952 (QB)

The claim was initially run under the pre-action protocol for low value personal injury road traffic accidents. After settlement (pre-issue) the claimant sought more than fixed costs. The rules mandate fixed costs in Protocol cases, subject only to allocation to multi-track or exceptional circumstances (r. 45.29J). At first instance the Master allowed an escape from fixed costs by setting a ‘low bar’ for exceptionality, finding that circumstances took the case out of the general run of cases which the Portal was intended to cover.

The Defendant appealed, and the test of exceptionality was (re)affirmed as a high one, the Judge stating that “policy reasons … in fixed costs [cases] …, while allowing for ‘exceptional circumstances’ to depart from the regime, require a more strict, not a ‘low bar’, approach”.

The case has been sent back to be reassessed by another Master.

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Part 36 offer is valid

Calonne Construction Ltd v Dawnus Southern Ltd [2019] EWCA Civ 754

Two questions arose on appeal: (1) was a Part 36 offer invalidated by inclusion of a counterclaim yet to be pleaded?; and (2) did the inclusion of a term as to interest (8% per annum after expiration of the offer) render the Offer invalid?

The Court of Appeal found that it did not matter that the counterclaim had not been pleaded. The Court noted that the purpose of Part 20 is to enable counterclaims to be managed effectively and conveniently. Nothing exempts counterclaims from the provisions of Part 36. A proposed counterclaim is treated as a claim for the purposes of Part 36.

Part 36.7 provides that a Part 36 offer can be made at any time, including before the commencement of proceedings. Therefore, the offer could not be invalid because the counterclaim had not been pleaded.  To rule otherwise would mean that a defendant would have to go to the expense of pleading a counterclaim in order to make a Part 36 offer.

The inclusion of a term as to interest after the end of the Relevant Period did not invalidate the offer (although Part 36 offers will be treated as inclusive of interest until the Relevant Period expires).