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The Case That Got Away

It’s an old saying: “The One that Got Away” which has been used in numerous contexts. From les affaires de coeur when the object of the affection has departed on the arm of another, to “That Song” by Katy Perry, and then of course, there was “That German”: Franz Baron von Werra, who, according to legend, was the only POW to escape from a British prisoner of war camp and make it back to the Fatherland.

But now there is “That Case”.

Keen readers and subscribers to Costs Law Reports will already have noticed, from the list of cases below, that this month we are one short. The usual complement for print issues is a dozen judgments, but in today’s printed edition there are only eleven. One has got away. How could that be? It has rarely happened before and as your co-editors are certainly capable of counting up to twelve, it cannot be their fault! Where does responsibility for this grievous omission lie?

We think that, with all due respect, the Court of Appeal Criminal Division has some explaining to do! On 18 October 2017, judgment in D Ltd v A & Ors was handed down having been given neutral citation [2017] EWCA Crim 1604. On October 24, it was posted on BAILII and on the same day, the case was the subject of an article in the Law Society Gazette entitled “‘Eye-watering’ £415,000 costs slashed because solicitors too involved”.

The perfect number 12 to make up the team for the fifth printed edition of 2017, or so we thought! But wait: a mere 24 hours later, BAILII had the following post:

“Taken down by order of the court on 24/10/2017.”

Worse was to follow. Back at the Gazette, the article had disappeared from the Law Society’s website to be replaced by a page entitled:

Sorry about this! The page you are looking for cannot be found … Here are some possible reasons why: … we have a ‘bad’ link that has been moved or removed.”

Curiouser and curiouser! What could have driven the Court of Appeal and the Law Society to remove a seemingly innocuous case about criminal costs from the public domain?

A clue might be in the name of the defendants: A & Ors indicates anonymity, but as the full identity of the defendants was disguised, what else could be so harmful as to demand withdrawal of publication? The case had involved a private prosecution by the also anonymised D Ltd, which had been stayed in March, only for that decision to have been overturned by the Court of Appeal in July with costs, but as the identities of the parties remain protected that cannot be the reason surely?

Was it something to do with the charging arrangements and bringing the legal profession into disrepute? Remember that it was about “eye-watering” costs. An hourly charging rate of £850 per hour by one counsel was “not reasonable” according to Davis LJ and the total hours claimed for all counsel was “disproportionate”. Whilst “obviously there was a complex building process involved in the appeal”, this was a case where “with respect, extensive input of solicitors was not required”. Indeed, M’Lud continued, “the retention for three counsel greatly reduced the solicitor involvement”, it had been “reasonable” to retain those three counsel for varying reasons and the case was always going to be a “counsel-led” appeal involving close examination of the judge’s original decision.

So the case was fit for counsel, and three of them at that, but not for their instructing solicitors? Looks like it. As counsel received their fees, albeit reduced to take account of the hourly rate reduction, the inference drawn by members of the solicitors’ profession who had commented on the judgment, before the page was taken down by the Gazette, was that here was a classic case of solicitor-bashing by former members of the Bar now on the bench; all that the junior branch of the profession (as it was perceived to be) had done was to act as a post box for the real lawyers, the three counsel who had led the appeal. So, what had started out as a bill for £415,000, had ended up as an amount payable of £110,000, sufficient, as it happens, had it been a bill in non-contentious business in days of yore, for the firm of instructing solicitors to have been reported to the President of the Law Society for over-charging.

The judgment has not reappeared so the mystery is unresolved. In view of the order of the court, we decided against publication and have limited our reporting of the case to the comments that have been and remain in the public domain via the printed copies of the Law Society Gazette. If anyone can shed any light on why case number twelve became the case that got away, we would be very interested to know.

Over at the Court of Appeal Civil Division, in Khaira v Shergill [2017] 5 Costs LR 953, reported below, the court has sent out a clear “No Trespassers – Keep Out” message when it comes to dealing with its own costs orders. The point is a short one. If the court makes an order for costs to be assessed and paid forthwith, the receiving party is permitted to serve a bill, have a detailed assessment and be paid and does not need to wait until the proceedings have ended to do so. Obvious and trite law. What is or was not clear until now, was what happens if the Court of Appeal disposes of a discrete, self-contained interlocutory issue on a final basis? Does that confer any similar entitlement?

Until Khaira v Shergill, there two schools of thought, one advanced by Patten J in Crystal Decisions (UK) Ltd v Vedatech Corporation [2007] EWHC 1062 (Ch), the other by Hamblin J in GB Gas Holdings Ltd v Accenture (UK) Ltd and Others [2011] 1 Costs LO 64.

The Patten view was that:

“The purpose of CPR 47.1 is to lay down a general rule that the costs of part of the proceedings, are not be assessed until the conclusion of the proceedings as a whole, unless the court orders them to be assessed immediately, which the Court of Appeal did not.”

For that reason, the costs of one aspect of the proceedings, the grant of an anti-suit injunction, which the Court of Appeal’s order had brought to an end, could not be assessed immediately, but would have to wait until the action was concluded.

The Hamblin view was to the opposite effect when dealing with an order for costs as a High Court judge which the Court of Appeal had made without ordering an immediate assessment:

“But the court may order them to be assessed immediately. In my judgment, that is an order which this court can make. This court has the conduct of the proceedings generally. It has before it a specific issue of whether it is appropriate for there to be an immediate assessment of those costs. Those costs include as part of the costs of the proceedings the appeal costs. I am therefore satisfied that I do have jurisdiction to order immediate assessment of those costs and, because they are discrete costs and because they involve no great issue of disentanglement, I accept that it would be appropriate to order immediate assessment of the appeal costs.”

In Khaira, David Richards LJ, who gave the leading judgment, had no doubts;

“I prefer the view of Patten J … There is nothing in the Rules or elsewhere that suggests the High Court can exercise a power that was clearly vested in the Court of Appeal … A High Court judge will have power, by virtue of CPR 2.4 (a) to perform any act which, under the CPR, is to be performed by the court ‘in relation to proceedings in the High Court’ but the appeal was not proceeding in the High Court, but in the Court of Appeal. Moreover, in my view, the natural reading of CPR 47.1 is, as Patten J said, that ‘the court’ refers to the court that made the costs order.”

In Khaira, the issue was whether the Khaira litigants could have their costs below assessed immediately. It had arisen because the Supreme Court had awarded them their costs of an interlocutory issue “in the Supreme Court and the Court of Appeal”.

Below, Mr Richard Spearman QC sitting as a deputy judge of the High Court (see [2016] 2 Costs LR 327), had held that the Khaira litigants were entitled to an immediate assessment of the Court of Appeal costs firstly because there was no need for an express order to that effect, secondly that under paragraph 1.3 of PD 47PD a costs judge can make an order for immediate assessment and thirdly because it was implicit in the order of the Supreme Court that it was directing an immediate assessment of the Court of Appeal costs.

None of those rulings found favour with the Court of Appeal and all were reversed. The first collapsed when the court decided to prefer the Patten J line of reasoning (see above). The second foundered because para 1.3 does not confer a general jurisdiction, but arises (if at all) only upon an application to the costs judge to determine whether an entitlement to start the detailed assessment proceedings has arisen at all. The third fell on the stony ground that there had been nothing to suggest that the Supreme Court had turned its mind to the costs incurred in the court below and the Shergill litigants had had no opportunity to make submissions on the question.

The result. Appeal allowed on all three grounds.

The message: hands off interlocutory costs orders made by the Court of Appeal.

The moral of the story: ask for an order for costs to be assessed and paid forthwith. If you don’t ask you won’t get.

As David Richards LJ put it: “All that need happen is for the receiving party to apply for an immediate assessment.”

If you get the order, you can have your costs assessed and paid straight away. If you don’t, you will have to wait. What could be clearer than that?

The headnotes and full texts of the cases below are available to online subscribers at Follow Costs Law Reports on Twitter to be notified of new cases as soon as they are published.

New cases this month

Casehub Ltd v Wolf Cola Ltd [2017] Costs LR 835: Validity of assignments of consumers’ claims to recover sums alleged to have been unlawfully charged by third parties: whether such assignments fall foul of rules against champerty and maintenance thereby rendering them void.

Houghton v PB Donoghue (Haulage & Plant Hire Ltd and Others [2017] 5 Costs LR 857: Part 36; factors applying on an application to accept a Part 36 offer of £330,000 during the trial: permission refused.

Jscmezhdunarodniy Promyshlenniy Bank and Another v Pugachev and Others [2017] 5 Costs LR 861: Costs budgeting under CPR 3.12–18: increase in budget authorised to cover anticipated additional costs incurred during the trial.

Jacobs UK Ltd v Skanska Construction UK Ltd [2017] 5 Costs LR 865: Injunctive relief: entitlement to withdraw a dispute from adjudication for referral to a second adjudication: costs consequences thereof.

Michael Wilson & Partners Ltd v Sinclair and Others [2017] 5 Costs LR 877: Unless orders: factors applying where a party had failed to pay interim costs orders totalling £1.1m: whether that party should be debarred from continuing to participate in the litigation.

Miley v Friends Life Ltd [2017] 5 Costs LR 895: Guidance concerning the length of judgments and principles to follow in order to avoid adding to the cost of obtaining legal advice.

Governors and Company of the Bank of Ireland and Another v Watts Group plc [2017] 5 Costs LR 899: Whether to award costs on the standard or indemnity basis; interim payment; issues applying when considering deduction of costs for contributory fault.

Pablo Star Media Ltd v Bowen [2017] 5 Costs LR 909: Costs in the IPEC small claims track under CPR 27.14, that neither party pays the other’s costs save as provided by the stated exceptions: where a party had conducted himself in a way designed to bring pressure on his opponent, the appropriateness of departing from that general rule.

Estate of Mr Mohammed Mossa v Wise [2017] 5 Costs LR 927: Costs of the determination of limitation under s 33 Limitation Act 1980 as a preliminary issue: refusal to make an issue-based costs order.

Harrison v Eversheds LLP [2017] 5 Costs LR 931: Solicitor and own client estimates: detailed assessment of bills under s 70 Solicitors Act 1974: reliance on estimates; factors applying in deciding the reasonableness of the sum payable by the client.

Khaira and Others v Shergill and Others [2017] 5 Costs LR 953: Entitlement to an immediate detailed assessment of interlocutory costs under CPR 47.1: whether the High Court or a costs judge has jurisdiction so to order where an appellate court has not done so.

Costs and Fees Encyclopaedia updating

The Ecclesiastical Judges, Legal Officers and Others (Fees) Order 2017 (SI 2017/796) will replace the 2016 order, with effect from 1 January 2018. New pages are now available for printing out and adding to your Costs and Fees Encyclopaedia: Pages 270–277

Other recent cases

Hussain v Chartis Insurance UK Ltd [2017] 5 Costs LO 555: Fixed costs under CPR 45.18(2)(c) in a claim funded under a conditional fee agreement: circumstances in which it is appropriate or possible to obtain an increase in the normal success fee payable where the damages are likely to exceed £500,000.

Pinisetty v Manikonda and Another [2017] 5 Costs LO 565: Extension of time for appeal; relief from sanctions; application required even where agreement of other party given.

Dunhill v Hughmans (a Firm) [2017] 5 Costs LO 589: Appeal against an order refusing to award the appellant the costs of her application to set aside former solicitor’s statutory demand.

R (Kaur and Another) v The Secretary of State for the Home Department [2017] 5 Costs LO 615: Application for review of the dismissal of a claim for judicial review on account of the failure to lodge required documents timeously: consideration of the Denton factors and avoidance of the breach by making an in-time application under para 2.7 CPR PD 23A.

Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd [2017] 5 Costs LO 631: Indemnity costs; court’s discretion as to costs where a party had pursued a claim for repudiatory breach of contract knowing that there were no grounds for it.

Thomas v Hugh James Ford Simey Solicitors [2017] 5 Costs LO 643: Extent to which solicitors acting in high volume, fixed costs schemes for low value personal injury cases are under a duty to advise about heads of claim which the client has said he does not wish to pursue.

Montpelier Business Reorganisation Ltd v Armitage Jones LLP and Others [2017] 5 Costs LO 659: Non-party costs orders; jurisdiction of the court to order costs to be borne by someone not a party to the litigation under s 51 Senior Courts Act 1998.

Royal Society for the Protection of Birds and Others v Secretary of State for Justice and Others [2017] 5 Costs LO 691: CPR 45 Section VII; costs limits in Aarhus Convention claims; judicial review.

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