There have been several cases relating to the law of costs since the 1993 update published in [1994] Gazette, 30 March, 20.-- TaxationProbably the most important costs decision this year has been KPMG v HLT [1994] Independent, 18 March.

In this Queen's Bench taxation review, the expense rate survey of the Central London Law Societies was held to be 'an important factor to take into account' and on the facts of the case was the central consideration in the judge's mind.

The decision should not however be misconstrued.

It is confined to this particular survey and, even there, it did not make survey rates 'the going rate': the sums claimed and allowed on review in KPMG were lower than those in the survey.

The case is also notable for its rejection of two arguments.

The first is that the plaintiff in this complex professional negligence action should have shopped around and instructed a cheaper solicitor in the West End rather than a City firm.

The second is that the uplift for care and conduct should be reduced on review if, as happened here, the hourly rate is substantially increased.The old chestnut that counsel are deemed to know the law and cannot charge for legal research was knocked on the head in Perry v Lord Chancellor [1994] The Times, 26 May.

It was decided that counsel could be assumed to be up to date in the law in the field in which they practised, but a charge could be made for research on unusual, infrequent or unexpected points.

This criminal case about counsel must apply to civil cases, and with due allowance for different degrees of specialisation to solicitors as well.In Re B and H [1994] 1 FLR 327 it was acknowledged that there was a 'welfare element' in attending a distraught and disadvantaged client, and that this ought to be remunerated in a standard legal aid taxation.

Similar thinking was applied on an inter partes taxation in Evason v Essex HA [1994] The Litigation Letter, 33, where the client's distress resulted from the very personal injuries for which she had successfully claimed damages.The extent to which VAT on costs can be recovered in an inter partes taxation has always caused more problems than it should, because the principles are settled and clear.

They are now helpfully set out in a series of practice directions at [1994] 1 All ER 96.-- Discretion as to costsMoving the spotlight away from the taxing officer's chambers to open court, what of the case law on the exercise by the courts of their discretion in the award of costs? In Singh v Parkfield [1994] The Times, 27 May, it was held that a Calderbank offer could not be relied upon by a defendant who could have protected his position by making a payment in; this point hardly required decision since it is so provided by RSC ord 62, r.9(1).

Silicon Graphics v Indigo [1994] FSR 403 provides a useful analysis of the exercise of the court's discretion to award costs where an application for an interlocutory injunction fails; on the facts o f that case the usual order 'defendant's costs in the cause' was made.Cases with multiple parties often give rise to difficult costs questions, particularly where a party succeeds against some but not all of his or her opponents.

In Magee v Taymech [1994] PIQR 299, the Court of Appeal overruled a judge who had made no order for costs in favour of the second defendant against whom the action was discontinued, a payment in by the other two defendants having been accepted.

The court held that as the defendants had been sued severally there was, in the absence of a trial, no basis upon which the second defendant could be deprived of its costs.

A decision of importance to county court practitioners is Frank Jones v Roberts [1994] Independent, 7 February.

The Court of Appeal decided that in determining the amount recovered by a plaintiff in order to ascertain the scale for costs, there should be included a payment made by a defendant who was unaware that proceedings had been commenced.-- AppealsIf a party who has failed at first instance appeals successfully, the Court of Appeal has power to backdate its judgment to the date of the hearing at first instance in order to enable interest on the revised award of costs to run from that date: this was decided in Kuwait Airways v Iraqi Airways (No.2) [1994] 1 WLR 985, though in that case the court felt it would be unfair for interest to run from the original hearing, and only backdated to an intermediate date.-- Costs against non-partiesThe decision of the House of Lords in Aiden Shipping v Interbulk [1986] AC 965, that costs can be awarded against a person who is not a party to the litigation, has given rise to a host of such applications.

Orders were successfully sought in two recent cases.

In R v Darlington BC, ex p.

Darlington Taxi Owners (No.2) [1994] The Times, 14 April, an application for judicial review was set aside for lack of legal capacity in the purported applicants, an unincorporated association: nevertheless an order for costs was made against individual members of the association.

Perhaps more significantly, in R v Home Secretary, ex p.

Osman [1993] COD 204, the Divisional Court held that a prima facie case for such an order had been made out where an application for habeas corpus, which had twice before been found to be an abuse of process, was unsuccessfully renewed.

The court ordered third parties who had funded the litigation in the knowledge that the applicant could not meet any costs order made against him to show cause why they should not pay costs, and why such costs should not be on the indemnity basis.Skuse v Granada [1994] 1 WLR 1156 In an allegation of third party funding failed.

The Court of Appeal had made a costs order in favour of the plaintiff.

The amount of the costs and the impecuniosity of the client were relied upon before the taxing master as prima facie evidence of either third party funding or a contingency fee agreement with the solicitor: on that basis the master ordered disclosure of certain privileged documents.

On a preliminary point it was held that an appeal against the disclosure order could be made direct to the judge without having to go through the objections and review procedure.

The judge then decided that, on the facts of that case, the funding issue ought to have been raised before the Court of Appeal and the defendants were estopped from raising it before the taxing master: he went on to say that there was no evidence of any impropriety such as would justify the order for disclosure of the documents.-- Wasted costs The best known example of the power to award costs against non-parties is the wasted costs jurisdiction.

The Court of Appeal decision in Ridehalgh v Horsefield, noted briefly in the first article in this series, is now fully reported in [1994] 3 WLR 462.

The way in which the court dealt with each of the six cases heard in that conjoined appeal is highly illustrative of the exercise of the jurisdiction, and what comes across most clearly is the importance of establishing a causative link between the wasted costs and the act or omission for which the lawyer is criticised.

The working of the jurisdiction in practice is also well illustrated by the case of C v C [1994] 2 FLR 34, where a wife's lawyers had caused an enormous amount of unnecessary work to be done on an ancillary relief application, and an award of costs was made against them, being apportioned between solicitors and counsel.In R v Lambeth BC, ex p.

Mahmoud [1994] The Times, 23 February, Sedley J fired a shot across the bows of local authorities which abandon their opposition to a judicial review application at the last moment; in such a situation he said that individual officers might be held personally liable for wasted costs.

In Re a Barrister [1994] The Times, 15 March, a wasted costs order was made against a barrister who had failed to watch the court lists.-- Security for costsApplications for security costs can only be made against a plaintiff.

In CT Bowring v Corsi [1994] The Times, 28 June, it was held that a defendant initiating an inquiry as to damages pursuant to the undertaking given by the plaintiff when obtaining an injunction was not a 'plaintiff' for the purposes of the section and accordingly no security for costs could be ordered.-- Judicial reviewThe ever-growing field of judicial review has thrown up its fair share of costs cases, particularly in relation to discontinuance.

In R v Liverpool City Council, ex p.

Newman [1993] COD 65, the continuation of an application for judicial review became academic after a rescission by the respondent of the decision under challenge.

The respondent nevertheless sought the costs of the proceedings.

The court allowed discontinuance with no order as to costs.

In R v Warley JJ, ex p.

Callis [1994] COD 240, the application became doomed to failure by an adverse decision in an identical case.

The court held that if an application for leave to discontinue had been made promptly, it would have been granted with no order for costs but, by reason of the delay, the applicant should pay the costs.

In Kingsley v Transport Secretary [1994] COD 358, an order for costs was made against the applicant notwithstanding that both parties had previously submitted to the court a signed consent order allowing the withdrawal of the application.-- ArbitrationsThe most important decision on arbitration costs was Piper Double Glazing v DC Contracts [1994] 1 All ER 177, which decided that a successful party who had instructed a non-solicitor claims consultant to represent it in an arbitration was entitled to recover the reasonable costs of so doing from his opponent.

The court declined to decide that costs allowed for a claims consultant could never exceed those of a solicitor, but did say that claims for costs exceeding what a solicitor would have charged would be viewed with considerable caution.In awarding costs arbitrators are bound to apply largely the same principles as the courts.

In Channel Island Ferries v Cenargo [1994] 2 Ll R 161, the court dismissed an appeal against an arbitrator's costs award on its facts, but said that if there were a practice among arbitrators of not awarding full costs where a claimant had recovered less than the amount of the claim, it should cease.

The House of Lords in Coppee-Lavalin v Ken-Ran [1994] 2 All ER 449, considered an application for security costs in an arbitration being held in England under ICC rules: it was decided that there was jurisdiction to order security but that such orders should be exceptional.-- FamilyThe unsuccessful party in H v H [1994] 2 FLR 94 claimed that there was a rule against ordering costs in ancillary relief cases where the divorce was based on five years' separation; the court would have none of it.

In Sutton BC v Davis (No.2) [1994] The Times, 15 June, a potential child-minder had successfully appealed against the refusal of the council to register her.

The argument that the council should not pay her costs because it was a 'children's case' was firmly rejected.-- MagistratesThere is no statutory machinery for the quantification of costs orders made by magistrates in the exercise of their civil jurisdiction, and the Sutton case, above, is also illuminating for its suggestion as to how costs might be quantified in this situation.

The same problem arose in R v Southend Magistrate, ex p.

Rochford DC [1994] The Times, 10 May: an application for judicial review against the amount of costs was dismissed, and the court held that the magistrate had a very wide discretion.-- Legal aidFranchising apart, the most important recent development in legal aid has been the introduction of statutory rates for solicitors' costs in all civil cases below the Court of Appeal: SIs 94/228 to 230.

Notwithstanding this, a successful party is still entitled to claim the going rate inter partes.

Practice Direction No.3 [1994] 3 All ER 125 spells out the format for bills containing both inter partes and legal aid elements.A more welcome statutory instrument concerning legal aid is SI94/1822 which, among other things, gives the board a discretion to postpone enforcement of the statutory charge over the assisted person's home in all cases.

The former rule confining the power to matrimonial and similar cases caused enormous hardship to those outside its purview, particularly mortgagors who successfully headed off a claim by their mortgagee only to find that the board had a statutory charge for all the legal aid costs and no discretion to postpone its enforcement.

The all-embracing nature of the statutory charge is well illustrated in Parkes v Legal Aid Board [1994] The Times, 24 May, where the charge was held to bite on a property following the assisted person's successful resistance to an application for sale under s.30 of the Law of Property Act 1925.R v Legal Aid Board, ex p.

Nicolson [1994] The Times, 24 June will come as good news to solicitors who have overlooked the need for an amendment to a legal aid certificate, as the court found that a retrospective amendment could be made where there had been a 'mistake': the 'mistake' was that of the solicitor rather than the board.

Even so, it is clear that the jurisdiction is limited, and does not extend to effecting a fundamental change in the scope of the certificate.In Re B and H [1994] 1 FLR 327, parents in a children case with no obvious conflict of interest had been separately represented under separate legal aid certificates.

On taxation the costs of each solicitor, including counsel's fees, were halved but on review they were restored on the basis that both solicitors were doing what they were authorised t o do by the board.What amount to 'exceptional circumstances' in cases where statutory rates are prescribed was considered in R v Legal Aid Board, ex p.

Broudie [1994] The Times, 11 April, a criminal case but of more general relevance.

The Divisional Court held that it was inappropriate to fetter the taxing officer's discretion, but that in deciding whether a case was exceptional, one compared it with the ordinary run of criminal cases generally rather than other cases of its particular type, such as murder.

London Borough of A v M and SF noted briefly in [1994] Gazette, 7 September, 10, provides the most up-to-date guidance on the enhancement of prescribed rates in family work where there are exceptional factors.In Norglen v Reeds Rains [1994] EGCS 21 the court refused to give effect to the assignment of a cause of action by a company to its directors designed to enable legal aid to be obtained to fund the litigation.By s.17(3) of the Legal Aid Act 1988 execution of an order for costs cannot be levied against an assisted person's home.

In Parr v Smith [1994] Independent, 7 March the Court of Appeal held that a charging order was 'execution' for these purposes.-- Solicitors ActBilling one's client is a process beset with technical problems, one of which concerns the format of the bill in contentious work where, as is usual, the solicitor opts to deliver a gross sum bill.

In Re a Solicitor [1994] Gazette, 13 July, 19, it was held that a bill merely 'for professional services' would be void; a valid bill required a summarised statement of the work done sufficient to tell the client what he or she is paying for, but details of hours and letters were quite unnecessary.

If, however, a solicitor and own client bill is defective and the defect comes to light in the course of an action on the bill, the Privy Council has confirmed that the judge has a discretion to allow the bill to be withdrawn and replaced with a proper bill - Zuliani v Veira [1994] 1 WLR 1149: dicta from this case may be persuasive, but the actual decision was heavily influenced by a particular provision of Eastern Caribbean statute law with rather different wording from its English equivalent.Finally, solicitors acting for clients against whom a Mareva injunction has been obtained will be relieved by the decision in Cala Cristal SA v Emran Al-Borno [1994] The Times, 6 May.

Ferris J authorised the payment of legal costs out of assets frozen by a Mareva, on the basis that payment of legal costs was not 'dissipation'.

Comforting for the lawyers but how many laymen would agree?