Legal news: out with the old guard and in with the new
The end of the Trinity term in July each year also marks the start of the Long Vacation. As your co-editors will shortly be packing their buckets and spades for their holidays, this Bulletin will be shorter than usual until normal service is resumed in the autumn. It is also a time of hellos and goodbyes and this July has certainly seen more than its fair share in legal circles.
Lord Dyson announced his retirement from the Court of Appeal several months ago and his successor as Master of the Rolls is the Chancellor, Sir Terence Etherton. In the costs world, only time will tell whether John Dyson will be remembered for more than just his decision in Mitchell and the “trivial” test applying on relief from sanctions, which generated so much legal opprobrium and was subsequently dumped into the jurisprudence dustbin by Denton v White. Unexpected and much more dramatic has been the dumping of Michael Gove as Lord Chancellor and his replacement by Liz Truss, she being the first Lady Chancellor to hold the Great Seal and the third non-lawyer to do so in modern times. Apart from Gove, the other incumbent was Chris Grayling who ran Theresa May’s successful prime ministerial campaign. This led to the legal profession recoiling in horror at the prospect of his being promoted back to the office of Lord Chancellor. Happily, that did not happen and Grayling has been sent to Transport to play with his HS2 train set and his aeroplanes on the third runway at Heathrow.
That is not to say that the appointment of Liz Truss has been uncontroversial. Predictably, the legal-lot have commented about her lack of any earlier career or qualifications in the law. That alone was enough for Lord Faulks: upon her appointment, he promptly resigned as Justice Minister. However, kinder pundits have stressed that in becoming the first Lady Chancellor, Liz Truss has broken a male monopoly going back to 1254. According to the researches of Lord Campbell (no relation) in the nineteenth century into the history of the office of Lord Chancellor, there was, in fact a Lady Chancellor during the reign of Henry III, Eleanor of Provence who became the Lady Keeper of the Great Seal between 1253 and 1254 when the King was fighting the good fight with all his might in Gascony. However, Lady Eleanor was never sworn in as Lord Chancellor and so when Liz Truss made her vows before a packed Lord Chief Justice’s Court on July 21, she became the first member of the fairer sex to do so. And not before time, said the Lord Chief in welcoming her to his court. At just 40, Ms Truss is also the youngest Lord Chancellor since 1685, but tactfully this was not mentioned as her illustrious predecessor just happened to be Judge Jeffreys, “the Hanging Judge” of the “Bloody Assizes”!
That acclamation has not been universal and before poor Liz had even put on her judicial robes, the much respected Lord Charlie Falconer had written a scathing attack in the Times, not only on her appointment but also about her appointor, Theresa May.
“Liz Truss is entirely unsuited to the job of Lord Chancellor,” The former holder of the office from 2003 until 2007, wrote:
"The new Prime Minister’s reshuffle could not have revealed more clearly her indifference to the rule of law. In any government, the Lord Chancellor has a duty to ensure that judges are properly protected from political attack and are able to act independently – and that the government itself always acts in accordance with the law.
The Lord Chancellor has to be someone with weight and stature to stand up to the Prime Minister or Home Secretary when, for instance, they want to compromise on complying with the law in an attempt to placate the public. Or when the politicians are determined to blame the judges when their policies go wrong.
Theresa May did this when, as Home Secretary, she inaccurately asserted that a judge had allowed an immigrant to stay in this country because he loved his cat so much. The Lord Chancellor of the day, Kenneth Clarke, gave her short shrift.
The most amenable Lord Chancellor that a Prime Minister could find would be one who looks to her for promotion: an ambitious middle ranking Cabinet minister whose main ambition is to go further up the greasy pole with no known signs of independence.
Liz Truss appears to fit the bill perfectly. She has displayed no obvious signs of independence as a minister, backed Mrs May right from the off in the leadership election, and so far shows every sign in her career, of being more interested in promotion than the rule of law
There is nothing wrong with ambition – but the Constitutional Reform Act 2005 said that the Prime Minister could only appoint someone who appears to be qualified by experience. The Lord Chancellor is the only job in the Cabinet where there are personal conditions, laid down by statute, which have to be satisfied by the holder.
There is no one who could possibly suggest that Ms Truss met the bar set by that law …"
Cor! And everybody thought dear old Charlie was an affable, avuncular type. Ah well. He has not had it all his own way. Also, writing in the Times, the former Lord Justice Sir Christopher Rose pointed out that it was…
“richly ironic that he, of all people, should choose to make such comments, as it was he, as Lord Chancellor, who was primary responsible for the abolition in 2006 of the centuries-old tradition that the Lord Chancellor should be a lawyer.”
Then there is the question of how should the new incumbent be addressed? Another Times correspondent, Anthony Radevsky, pointed out that the first Lady Justice of Appeal, Elizabeth Butler-Sloss on her appointment in 1988, was known as Lord Justice Butler-Sloss and that it:
“took an age for her title to be amended from Lord Justice to Lady Justice. Indeed, when counsel referred to her in court, she was initially described as ‘My Lady, Lord Justice Butler-Sloss’ which sounded ridiculous.”
In Mr Radevsky’s view, the title “Lady Chancellor” would avoid similar errors.
He may well be right. In his welcoming speech, the Lord Chief himself appeared to be confused, referring to the first female Lord Chancellor in 1,000 years as “My Lady, hmm, My Lord Chancellor…” However, there has yet to be an announcement from number 10 or elsewhere on this momentous question, so for the moment, Lord Chancellor Truss it is.
Back in the world of Costs Law Reports, the cases “below” are now available online following the issue of our bonus edition, a Lower Courts Supplement, by popular request. They include May v Wavell Group plc  3 Costs LO 455 on the subject of the “new” proportionality test under CPR 44.3(2) in respect of which a blistering attack by Queen guitarist Brian May appeared in the Times on July 28. The case involved his costs which had been assessed under the rule following a successful nuisance case he had brought against his neighbour about a mega-basement garage. Dr May explained:
"At the end of all this, I instructed my lawyer to present the case for compensation for the amount I and my family have suffered. We won the case. We accepted a settlement offer of a fairly paltry sum – £25,000 in damages. We then asked for the defendants to pay the costs of my action – as is normal in such cases. My total bill, from my lawyer and the acoustic expert advice, amounted to more than £200,000. The other side objected and we went to a costs court to get satisfaction.
At this point [the court] decided the costs I detailed were unreasonable, so … reduced them to less than half and then … applied this new rule of proportionality which dictates that if the costs are much higher than the damages, they must be reduced to be ‘in proportion’. So I ended up with about £35,000 plus VAT instead of £208,000, that I’d spent on the action."
Dr May then commented on BNM v MGN  3 Costs LO 441 which we also report in the bonus edition:
“I notice I’m not the only one to suffer this treatment. In another case, a primary school teacher recently sued a newspaper that had somehow got access to information on her mobile phone, and wanted to splash details about her private life all over the press. She had to hire solicitors and two barristers to do so. The newspaper first tried to put up a defence, but then settled the claim by paying £20,000 and promising not to use the confidential information. Her costs were nearly £242,000. [The court] decided that only £167,000 of this was reasonable and necessary … [and] went on to find that only half of this figure was proportionate. So, as in my case, the £20,000 compensation for the newspaper’s outrageous behaviour was dwarfed by the £158,000 of costs that they did not have to pay.”
And then the denouement for the likes of Lord Justice Jackson, who proposed the new proportionality rule in the first place:
“This proportionality rule is a nonsense and makes a mockery of justice; it is yet another way of ensuring that the super-rich can do anything they like, including destroying the quality of life of those around them. What was in the mind of the people who introduced this ridiculous rule of proportionality?”
Some light on what was in the minds of Lord Justice Jackson and the retiring Lord Dyson when they endorsed the “ridiculous” rule may be shed next winter. We understand that the insurance company Temple involved in BNM is appealing the decision and from what he has written, the unhappy Dr May will be doing so too.
Happy holidays to all our subscribers.
The headnotes and full texts of the cases below are available to online subscribers at www.costslawreports.co.uk.
NEW! Costs Law Reports Online 2016/4
Rosenblatt v Man Oil Group SA  4 Costs LO 539: Construction of solicitor’s retainer: whether a solicitor was to be held to a fixed fee structure agreed with his client or whether that structure had been superseded thereby entitling the solicitor to charge fees that were higher than those agreed by the fixed fee structure.
Churchill v Boot  4 Costs LO 559: Permission to appeal on an application to vary a costs budget on the grounds that there been a “significant development” in the case since the original budget had been fixed.
Surrey v Barnet and Chase Farm Hospitals NHS Trust; AH v Lewisham Healthcare NHS Trust; Yesil v Doncaster and Bassetlaw Hospitals NHS Foundation Trust  4 Costs LO 571: Proceedings for clinical negligence funded by conditional fee agreements: where those claims had succeeded, whether additional liabilities, following the transfer of the method of funding from legal aid to CFAs prior to 1 April 2013, were costs reasonably incurred on an assessment of costs between the parties: assessment of after-the-event insurance premiums without expert evidence.
Bolt Burdon Solicitors v Tariq and Others  4 Costs LO 617: Part 36 offer beaten by the successful party: whether under CPR 36.17(4)(d), the extra 10% applies to the contractual interest as part of the “additional amount” payable under that Part.
Dixon and Another v Blindley Heath Investments Ltd and Others  4 Costs LO 627: Appropriate costs order in a claim that had been partially successful but which included allegations in deceit that were unjustified, oppressive and wrong: whether the refusal to make a “Bullock” order was correct.
Radford and Another v Frade and Others  4 Costs LO 653: Conditional fee agreements: limitation of the paying parties’ liability to pay costs where the work undertaken by the solicitor for the receiving party was contended to be outside the scope authorised within his conditional fee agreements with, respectively, his client and counsel.
Gresham Pension Trustees v Cammack  4 Costs LO 691: Appeal against a costs order; use of “without prejudice material”: the extent to which it was permissible, in deciding what costs order to make, to consider “without prejudice” material not disclosed to the other party.
R v Andrews  4 Costs LO 705: Role of an advocate appointed under s 38 Youth Justice and Criminal Evidence Act 1999: whether counsel entitled to payment from the beginning until the end of trial, or merely until the end of the cross examination of prosecution witnesses.
NEW! Costs Law Reports Online 2016/3: Lower Courts Supplement
BNM v MGN Ltd  3 Costs LO 441: Proportionality: application of CPR 44.3 to costs incurred after 1 April 2013: reasonable and necessary costs of £167,389.45 reduced to £83,964.80 upon application of the rule following the line-by-line assessment.
May and May v Wavell Group plc and Another  3 Costs LO 455: Proportionality: application of CPR 44.3 costs incurred after 1 April 2013 in proceedings for private nuisance: reduction in costs found to be reasonable and necessary where those costs were disproportionate.
Iraqi Civilian Litigation v Ministry of Defence  3 Costs LO 471: Costs budgeting: factors to take into account in deciding whether costs budgeting should be carried out in group litigation.
Various Claimants v Ministry of Defence (the Iraqi Civilian Litigation)  3 Costs LO 477: Costs budgeting: factors to take into account in deciding whether costs budgeting should be carried out in group litigation.
Jones v Spire Healthcare Ltd  3 Costs LO 487: Validity of assignment of conditional fee agreement where a firm of solicitors in administration, with the consent of its client, wished to assign the burden of performance of the contract under the agreement to another firm of solicitors.
Wooldridge v Wooldridge and Others  3 Costs LO 531: Judgment on costs in proceedings under the Inheritance (Provision for Family and Dependants) Act 1975; conduct of the claimant: award of costs on the indemnity basis: referral to detailed assessment for the costs judge to carry out that assessment where the costs budget had been exceeded.