A Court of Appeal judge has made clear that solicitors should not be paid for trial preparation that is capable of being dealt with by counsel.
Lord Justice Leggatt slashed the winning appellants’ costs in Jofa Ltd & Anor v Benherst Finance Ltd & Anor, reducing the final amount from £71,000 claimed to £13,000 recovered.
The judge noted that to say, as counsel for the appellants had done, that the claimed figure may be seen as slightly higher than expected, was a ‘mastery of understatement’.
The costs were claimed for what the judge said was a ‘straightforward’ appeal where the hearing lasted less than two hours. Counsel’s fees of £6,652 were deemed reasonable and proportionate, but the solicitors’ costs were stripped back to £4,500, representing 20 hours of work at an hourly rate of £225.
The court heard that large sums were claimed which appeared to be ‘manifestly unreasonable’. Examples included three solicitors each attending on the appellant for five hours, 15 hours spent ‘considering’ a witness statement, 14 hours of ‘legal research’ by two solicitors, another 14 hours spent preparing a five-page witness statement, and 18 hours for preparing a 200-page bundle of documents.
Leggatt LJ added: ‘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.’
The appeal had been against a £23,000 costs so-called Norwich Pharmacal order. This is where a wrong has been done or arguably done, and a third party mixed up in the wrongdoing may be ordered to provide information needed to enable the victim to sue the alleged wrongdoer. In this case, the alleged victim of an investment fraud applied for a Norwich Pharmacal order against a building business on the basis that they could and should have provided documents voluntarily without the need for them to go to court.
Leggatt LJ set aside the High Court’s order, saying the builder had adoped a reasonable position by not accepting the invitation to disclose a long list of documents voluntarily.