30.11.2011Legal Services Commission v Henthorn  EWCA Civ 1415
(30 November 2011) – Key areas: Legal Aid; limitation; Court of Appeal
This was an Appeal by the LSC in relation to the alleged overpayment of Barrister’s fees.
At first instance it was held that limitation runs from the date of the work.
The LSC appealed on four grounds: that time only starts from when payment is demanded; when the LSC notices there has been an overpayment; when assessment has been completed; or when the LSC have been advised of the outcome of an assessment by the Solicitors.
The Respondent had been voluntary disbarred in 2001 due to illness and the Law Society and Bar Council intervened in the case on her behalf.
Originally the LSC claimed £351,420.88, which they reduced to £109,084 and then, on this appeal, to £80,470.23. It was claimed that this relates to overpayments in 11 different cases.
It was agreed that there was a 6-year limitation and at first instance it was held that only 1 claim fell within this period.
The Respondent submitted that should limitation not apply, then the proceedings were an abuse of process; that some individual claims were out-of-time and if so, the LSC had a claim for restitution.
The LSC submitted that their claim was based on reg. 100(8) Civil Legal Aid (General) Regulations 1989 and that time runs from when it makes the demand for re-payment under that regulation or from the date of the costs assessment. The Respondent submitted that the time ran from when the work was done.
The Court ruled in the LSC’s favour on this.
The Respondents also submitted that the LSC’s argument would lead to Solicitors and Counsel having to “retain their papers and other records potentially indefinitely”. The Court did not consider this to be a problem given that they would have to retain papers for any costs assessment, and was “not persuaded” that there were any arguments over practicalities.
It was also submitted that a ruling in LSC’s favour would be “unfair to Counsel” because if the Solicitor did not make a claim for costs within the time period, they would be unable to claim any costs. This was also dismissed with the Court stating that there was “a powerful case” for a breach of duty claim under reg. 82(2)(b) and 112. The Court also could not see why Counsel could not apply to the LSC on their own.
The Court also dismissed the Respondent’s submission that there was a defence of an abuse of process should the LSC be able to make a claim after such a long time, as the claim would be based on limitation periods.
The Respondent then submitted that on some cases she was not bound by a “nil” assessment as it was clear that she had been instructed. This was also rejected as it was held that the LSC were entitled to rely on an assessment certificate. The Court also said that in this situation there would be grounds to apply for the certificate to be amended, and if not, for a claim against the Solicitors. As a result, the arguments over “restitution” were not necessary.
Overall, the appeal was allowed.
29.11.2011HMRC v Talentcore Ltd. t/a Team Spirits  UKUT B28 (TCC)
Key areas: costs vs HMRC; summary assessment; Upper Tribunal
This was a decision on costs resulting from a failed appeal by HMRC.
The Respondent served a Schedule of Costs which stated “Anthony Weller (accountant to the Respondent) approx 25 hours @ £100 per hour = £2500; Jeremy Woolf (counsel) brief fee £9000 (approx 80 hours)”.
HMRC responded stating that there shouldn’t be a summary assessment due to a lack of detail and so it didn’t comply with r. 10(8)(c) Tribunal Procedure (Upper Tribunal) Rules 2008. They also submitted that the costs were excessive and claimed items which were irrecoverable, such as accountant’s fees. The Respondent subsequently served a more detailed breakdown.
The Tribunal held that for a two-day trial, costs of £11,500.00 were “relatively modest” and that their later breakdown was sufficient in the circumstances.
The Tribunal held that as the accountants dealt with the matter, they were entitled to claim costs.
Overall, the Tribunal held that 80% of the Respondent’s costs were recoverable, and so were assessed at £9,200.00.
25.11.2011Osonnaya v Queen Mary University of London  UKEAT 0225_11_2511
Key areas: unreasonable conduct; Employment Appeal Tribunal
This was an appeal by the Claimant against an order that she pay £500.00 in costs. The Order was made because she caused a hearing to be adjourned, but she could have alerted the Tribunal of the need for an adjournment at an earlier time.
The adjourned hearing was listed for between 12th and 15th January 2011. In December 2010, she was aware that her medical condition would make it difficult for her to attend the hearing. The hearing opened on 14th January 2010, but was then adjourned.
The Claimant swore an affidavit that she made the application to adjourn on 4th January 2011, but the Respondent submitted that it was not received until 2 months later.
The Tribunal rejected the Claimant’s claim that she could not previously disclose the letter, and agreed with the Respondent that such an argument was “not credible”, noting that there was no reference to the letter in her subsequent correspondence.
As a result, the appeal was dismissed.
23.11.2011Hudson v New Media Holding Company LLC; Covington & Burling LLP  EWHC 3068 (QB)
Key areas: Indemnity Basis; Basis of assessment; party’s conduct; High Court
This was an appeal over a costs Order.
On 9th March 2011, the Appellant lost an Application for costs of an Application in October 2010, and the Respondent was awarded their costs on the Indemnity Basis.
It was submitted that the October application (to obtain an order for a party to give evidence) was unnecessary because he had already agreed to attend in order to give evidence, and so was an abuse of process.
The day before the Application was due to be heard, the parties came to an agreement and that there would be no order as to costs.
The Appellant appealed on three grounds: that the Judge made an error by not setting aside the agreement as there had been a change in circumstances; that he was in error by not granting them their costs, but awarding the Respondents theirs; and that it should not have been ordered on the Indemnity Basis.
The first ground was dismissed as the Judge had no power to set aside the agreement as there was no basis for him to do so. The second was dismissed as it was linked to the first.
The Court then held that the Judge rightly took into account a number of factors, including the Appellant’s insistence on there being a full hearing and other aspects of his conduct. It therefore held that it was correct to award costs on the Indemnity Basis.
21.11.2011Manning; Reggs v King’s College Hospital NHS Trust  EWHC 3054 (QB)
Key areas: party’s conduct; High Court
It dealt with costs relating to the appeal itself and the Defendant’s cross-appeal; costs relating to the Claimant’s fresh evidence; and whether there should be costs sanction due to the lateness of the Claimants’ Application for Relief from Sanctions regarding success fees and ATE.
The Claimants submitted that there should not be any costs sanctions because they beat the Defendant’s offer in both the High Court and Court of Appeal. They also submitted that they should be entitled to Indemnity Costs because they beat their own offer. The Defendant submitted that the lateness of the Application meant that it was difficult for the Defendant to make an offer, and so they should be entitled to the costs of the assessment; else no order for costs; or the Claimant should only get 50% of their costs.
The Bill of Costs for the High Court claimed £1,014,838 excluding success fees, and £1,779,740 in total. It was assessed at £817,840, excluding success fees and £1,343,443 in total. The Claimants offered £1.75 million for the High Court and Court of Appeal. The Defendant offered £1,050,000 for the High Court, which included a sum for the ATE premium.
The Bill of Costs for the Court of Appeal claimed £317,200 excluding success fees; £246,325 also excluding ATE; and £563,463 in total. The Defendants offered £300,000. The Bill was assessed at £275,014, taking into account an exclusion of success fees for 17 months, and ATE which was struck out completely. The Defendant was awarded £8,000 for its costs of assessment. The Claimants’ successful appeal ensured that the costs would be assessed at more than the Defendant’s offer.
The Defendants admitted that they did not want the Claimant to make the application for Relief of Sanction until as late as possible because it would be more difficult for them to justify such Relief. However, they also admitted that this made it difficult to make an offer, and any increased offer would have altered the Claimant to the need for such an application. The Court stated that the Defendant was “trying to have it both ways”.
The Court held that it was right to reduce the Claimants’ costs of assessment due to the lateness of their Application to 75% of those claimed.
The Defendant submitted that the Claimants should only be entitled to 75% of their costs of the appeal and cross-appeal because they did not win fully. This was rejected because the Claimants ended up with an extra £203,000 and the Defendant lost on a cross-appeal which was only issued because the Claimants appealed.
In relation to the “fresh evidence”, the costs of the application itself were disallowed and the Claimants’ costs of the cross-appeal were reduced to 90% as a result.
The Court left arguments as to interest on costs until after the appeal in Motto v Trafigura was handed down.
21.11.2011Community Gateway Association Ltd. v Beha Williams Norman Ltd.  EWHC 2994 (TCC)
Key areas: basis of assessment; Part 36 offer; Indemnity Basis; both parties win some issues; High Court
This was a hearing to determine costs issues arising from a judgment in the Defendant’s favour.
The Defendant submitted that it should be awarded Indemnity Basis costs because the Claimant’s case was “always very weak” and because it made a Part 36 offer which was rejected.
The Claimant stated that an issues-based costs order should be made because it won on some points, namely that the Defendant abandoned at trial a denial of duty; that it won one issue of breach of contract; that subject to causation it would have obtained funding from the government; that it won a technical argument on which it won without requiring expert evidence, unlike the Defendant; and that it won because its expert evidence was accepted, subject to causation.
The Court stated that “undoubtedly” the Defendant won.
Regarding the Claimant’s points, the Court held that the first did not create any extra work; that the second was the only win on many issues; the third and fourth were minor factors in the Claimant’s favour; and the fifth was dismissed as had it won, it would only have received 20% of what was claimed.
The Court therefore held that it was not correct to make an issues-based costs order. However, taking into account the issues on which the Defendant lost, was awarded 85% of its costs.
On 11th April 2011, the Defendant made a Part 36 offer of £500,000.00. On 7th July 2011, one day after the Trial had finished, the offer was withdrawn, and an open offer was made for the Claimant to pay £1 million towards the Defendant’s costs. On 13th July the Defendant made a “without prejudice save as to costs” that the Claimant pay £9 million.
The Court held that Indemnity costs were to be awarded from 3rd May 2011, i.e. once the offer expired, given that it was rejected and it should have been “increasingly apparent” to the Claimant that they would not win.
The Claimant then asked for permission to appeal, but this was refused.
18.11.2011Bethell Construction Ltd. & Bethell Group PLC v Deloitte & Touche  EWCA Civ 1321
Key areas: jurisdiction; Court of Appeal
This was an appeal against, amongst other things, whether at first instance, the Court had jurisdiction to award costs in proceedings which were issued, but not served. The proceedings were ultimately stuck-out due to limitation.
The Court stated, simply, that “the claim form had been issued”. As a result, under s. 51 Senior Courts Act 1981 and CPR 43-44 jurisdiction was available because it was not excluded to unserved proceedings.
18.11.2011Cheshire West & Chester Council v P  EWCA Civ 1333
Key areas: Court of Protection; Court of Appeal
The Appellant submitted that they should be entitled to their costs; the Respondent that there should be no order as to costs.
The Parties had agreed that although it was an appeal from the Court of Protection, its rules did not apply; nor did CPR 44.3(3), and so costs had to be determined by the other sections of CPR 44.3. As a result, the general rule is that CPR 44.3(2)(a) applied, namely that the Respondent should pay costs.
The Respondent submitted that although the CoP did not fall within the exemption under CPR 44.3 (3)(a), it was “closely analogous to” public law proceedings and “indistinguishable in practice”, and so should fall within the exemption. It also submitted that the Court should be less willing to use its discretion to order costs where “personal welfare proceedings” took place.
The Appellant submitted that the Respondent did not have to resist the appeal, and that an award of costs in their favour would comply with CPR 1.1(1) and CPR 44.3(3), and so the general rule should apply.
The Respondent’s submissions were rejected as they would be a “re-write” of CPR 44.3.
However, on the facts of the case, the Court stated that not awarding costs was correct in the circumstances.
17.11.2011Dean & Dean (a firm) & Ors v Dionissiou-Moussaoui (Rev 1)  EWCA Civ 1332
Key areas: unreasonable conduct; Court of Appeal
This was an appeal regarding costs in the Employment Tribunal.
The Appellants submitted that the ET was wrong not to award costs when claims for discrimination, sex harassment, unfair dismissal had been withdrawn or struck-out due to jurisdiction issues.
The Appellants had sought costs in the ET on the grounds that the Respondent had been “unreasonable” in her actions and had been warned early on that costs would be sought.
The Application was dismissed as “it was clear that this was a case where both parties would contest each allegation”.
In this appeal, the Appellants submitted that they had incurred a significant amount of costs dealing with “scandalous and salacious allegations of sexual misconduct” which were not raised by the Respondent during the company’s grievance procedure. As a result, her conduct justified an award for costs.
The Court held that the ET did exercise its discretion correctly, given that it had just dealt with a 2-day hearing on the case and so was fully aware of the circumstances.
The Appellant’s Appeal was therefore dismissed.
16.11.2011VA; SB; DH; RM; EN; DR; AH; SP; DS v Hertfordshire Partnership NHS Foundation Trust; Hertfordshire PCT; Hertfordshire CC; Ealing PCT; Barnet PCT/LB Barnet  EWHC 3524 (COP)
Key areas: party’s conduct; Court of Protection
This was a judgment concerning costs in a successful set of care proceedings brought by the Claimants.
The general rule is that costs cannot be claimed, but they can be allowed under r 157-9 Court of Protection Rules 2007 and s. 55 Mental Capacity Act 2005.
The Seventh Claimant submitted that 50% of their costs should be awarded to the Defendants’ pre-action conduct; that the Official Solicitor had to be involved due to the Defendants’ conduct; that the Defendants had not undertaken care reviews of his status; that the Defendants did not provide information; that he was successful; and that the Fifth Defendant maintained their position even after the other Defendants had conceded the case.
The First, Second, Fourth and Fifth Defendants submitted that their conduct was justified; that costs could not be apportioned between the Defendants; that the lack of care reviews did not have any impact overall; and that the Fifth Defendant was entitled to act how it saw fit.
The Third Defendant submitted that conduct issues arose before their involvement; that they acted in his best interests; and that nay costs order must be specific to the issues.
The Seventh Claimant stated that the Defendants had the same solicitors and so costs could be apportioned, or should be equally liable.
The Court noted that there were no claims of bad faith against the Defendants, but they did not comply with the Pre-Action Protocol, and that it the circumstances as a whole, an order for costs was justified.
The Court ordered that the First and Fourth Defendants were each to pay 25% of the Seventh Claimant’s costs from the date proceedings were issued.
In relation to the other Claimants, the Court noted that they each claimed all of their costs. It stated that the same facts and situations applied to them as to the Seventh Claimant. Therefore, they were each awarded half of their costs from the date proceedings were issued from the Third and Fifth Defendants.
Thomas Legal Costs
12 Token House Yard
DX 138752 CHEAPSIDE
18 Park Street
T: 020 7073 2600
F: 020 7073 2955