Cost appeals

The recent decisions of the Supreme Court Taxing Office in cost appeals numbers 10 to 15 of 2002 highlight a number of important points

10 of 2002: JM Ryan v Tretol Group Ltd and Others

This appeal concerned the claimant's disinstruction of his original firm of solicitors and instruction of London solicitors.

At the detailed assessment hearing, he was not allowed the London rates of the second firm of solicitors instructed.

On appeal, further evidence was presented and it was noted that the claimant could identify points relating to seven of the nine factors set out in the judgment in Truscott v Truscott and Wraith v Sheffield Forgemasters Ltd [1998] 1 All ER 532.

The judge concluded that the costs judge had asked himself the correct question as to the test to be applied but did not have sufficient information on which to conclude that the client had acted reasonably in changing solicitors to a London firm.

It was held that the costs judge had misdirected himself when he considered that the claimant could have gone to other local solicitors but not to London solicitors.

In Truscott, it was stated that it was an inappropriate test to compare local rates with London rates.

It was emphasised that the appeal court had much more information than had been available to the costs judge.

The appeal was allowed.

11 of 2002: Bufton v Hill

This case concerned the decision by the judge to disallow the claimant's costs of preparing for the assessment and the assessment proceedings as a sanction for failing to commence detailed assessment in time.

It was held that rule 47.8 of the Civil Procedure Rules 1998 (CPR) did not apply to the costs of the detailed assessment but to specific costs which are the subject of that assessment.

CPR 47.8(3) needs to be read with 47.8(2), although the sanctions were different.

CPR 47.8 made sense only if it applied to the costs to be assessed rather than the costs of the assessments for two reasons.

Firstly, it applied to a failure to commence in time and the actual costs of a detailed assessment hearing will be incurred after this failure and, secondly, the reference to CPR 44.14 in CPR 47.8(3) must be to the costs to be assessed.

It reserved the right of a paying party who had not made an application under CPR 47.8(2) to challenge costs on the basis of prior misconduct, or breach of the law or court orders.

The judge accepted that CPR 47.18(1) meant there was a rebuttable presumption that a receiving party was entitled to the costs of detailed assessment, subject to the right of the costs judge to make some other order having regard to all circumstances.

Therefore, the appeal was allowed after the circumstances and factors to be considered were reviewed by the judge.

12 of 2002: Wulfsohn v Legal Services Commission

This appeal concerned the costs awarded to a litigant in person in judicial review proceedings against the Legal Services Commission.

The applicant appealed against the granted costs of only 120.

The Court of Appeal took evidence from Mr Wulfsohn and concluded that he might well have spent in excess of the 1,200 hours of preparation that he claimed to have spent.

The question then arose as to how to apply the cap to be found in CPR 48.6(3)(a), which limits the cost of a litigant in person in relation to the costs incurred by a represented party.

The court considered evidence in the form of an estimate as to what a firm of solicitors would have charged for the work which Mr Wulfsohn had put in and took the pragmatic view that in the interests of proportionality it should apply the two-thirds cap to that figure.

13 of 2002: United Building and Plumbing Contractors v Kaila

This appeal concerned the cost of a building dispute in which the defendant had been awarded the costs of assistance from a director of a debt collection company.

The appellants appealed to the Court of Appeal on the basis that CPR 48.6(3)(b) only provided for a defendant in person to recover 'payments reasonably made by him for legal services in relation to the conduct of the proceedings' and the Court of Appeal accepted the appellants' argument that the services received by the defendant were not legal services and the costs were therefore not recoverable by the successful respondent.

15 of 2002: McIlwraith v McIlwraith and Stevens & Bolton

In this case, a beneficiary sought an order from the court for assessment of the costs charged to an estate pursuant to section 71(3) of the Solicitors Act 1974 even though more than 12 months had elapsed since those costs had been paid.

It was held that although the 12-month bar under section 70(4) of the Act was certainly quite clear, that there was a residual discretion under section 71(4) to allow assessments in this sort of situation.

Section 70(4), although a matter to be taken into account, was not determinative of applications under section 71(3).

Accordingly, there was a discretion that should be exercised by the court in the circumstances, but it will be for the applicant who is interested in the bill to persuade the court that he should nonetheless order an assessment and some special circumstances would have to be shown to invoke the court's discretion.

The Supreme Courts Costs Office (SCCO) prepares summaries of recent costs appeals.

Copies are available from the Law Society library, tel: 0870 6062511