30.03.2011Hare-Brown & QCC Information Security Ltd. v Trent and Alison Trent & Co.  EWHC 90202 (Costs)
Key areas: Solicitor/own client; costs under a contract; SCCO
This is a Solicitor/Own Client dispute arising from invoices sent by the Defendant.
The First Defendant – the principal Solicitor of the Second Defendant and Landlord of the Claimant – was instructed to deal with conveyances for the Claimant.
The Claimant– in breach of their lease – had “swapped” its name with another company; this was in breach of Part II, Landlord & Tenant Act 1958; a further company had also taken use of the property; and there were security issues arising from the use of key fobs by individuals who did not have the right to enter the property.
The Solicitor claimed that the Claimants’ actions had forced her do work in both her position as Solicitor and as Landlord and had invoiced the Claimants for this work, as she was entitled to do under the lease.
The issue was over whether the invoices were to be assessed under s. 70 or s. 71 Solicitors Act 1974.
The Claimant submitted that s. 70 applied because the Solicitors were instructed under a retainer. However, this was rejected on the grounds that there was no suggestion that there was a retainer nor was there a client care letter.
The Court also held that cl. 17 of the lease obliged the Claimant to indemnify the Defendant for any costs caused by their own breach of the lease.
The Defendant submitted that the claim be struck out but this was rejected as the Court held that the Defendant could not claim that the costs were to be assessed and then deny that such assessment could take place. The costs were therefore held to be assessed under s. 71 Solicitors Act 1974.
An issue then arose in that the Claimant was now a Third Party to an assessment between the First Defendant (acting as a client) and the Second Defendant (acting as Solicitor). Given that the First and Second Defendants were effectively one and the same, there was no real prospect of the costs being disputed.
The Court specifically rejected the First Defendant’s submission that “I have agreed with myself that the Invoices are reasonable” and so they could not be challenged and emphasised that such a close relationship should make the Court more wary of the costs being claimed. However, it held that should an assessment take place, there was no real prospect of the First Defendant being part of the proceedings given that she was effectively also the Second Defendant. Therefore, the costs could be assessed under s. 71 Solicitors Act with reference to CPR 48.3 where required.
29.03.20118, 9 & 10 Ethelbert Terrace – Thanet: Midland: Birmingham (Service Charges)  EWLVT CHI_LV_SVC_29UN_0126
Key areas: unreasonable actions; landlord and tenant; Leasehold Valuation Tribunal
The Appellants in this matter won an appeal over costs of building works to the property.
The Appellants applied for an Order under s. 20C Landlord & Tenant Act 1985 that the Respondents’ costs of the proceedings were not to form part of their rental charges, which was granted.
The Appellants also sought an award for their costs of £500.00 under para. 10, sch. 12 Commonhold & Leasehold Reform Act 2002.
The Tribunal noted that the Respondents had not complied with any of the previous Tribunal Directions and made very late concessions, which, had they been made earlier, would probably have made the proceedings unnecessary. As a result, the Respondents were held to have acted “unreasonably” and costs were awarded.
25.03.2011R v Brandon  EWHC 90205 (Costs)
Key areas: Legal Aid; enhancement; SCCO
The Solicitors in this case acted for the Defendant on a Legal Aid basis.
The Solicitors submitted a claim for 100% enhancement on the grounds of “special preparation” under para. 15, Criminal Defence Service (Funding) (Amendment) Order 2009, on the basis that there were 13,500 pages of documents to consider on 23 CD ROMs and 4 further CD ROMs had contained video footage but were corrupted.
The LSC initially did not consider that the enhanced rate applied and the Solicitors submitted the CD ROMs in support which resulted in the LSC allowing a rate of 1 min/page at £45.00/hr for 3,911 pages, making a total of 65.18 hours.
The Solicitors appealed and were awarded 100 hours. However, the claim for enhancement was rejected.
25.03.2011Brook v Reed (Trustee in Bankruptcy of the Estate of Brook)  EWCA Civ 331
Key issues: Court of Appeal, insolvency proceedings
This was a second appeal in a case was concerned with how the costs and remuneration should be dealt with in bankruptcy proceedings.
In the original decision and the first appeal, the Judge did not refer to the relevant Practice Statement regarding insolvency proceedings, but the Court held that the principles it contained were correctly applied.
The appeal was therefore dismissed.
25.03.2011Pine v DAS Legal Expenses Insurance Co. Ltd.  EWHC 658 (QB)
Key areas: legal expenses insurance; BTE insurance; access to justice; instruction of Counsel; High Court
The Claimant in this action had household insurance which included legal expenses coverage.
In November 2008 she advised the Defendant of the need to use the policy in relation to a claim for outstanding legal fees resulting from a claim of professional negligence.
The Claimant had already advised another insurer who funded the matter until the indemnity limit was reached. Those insurers allowed her to use Counsel of her own choice on a public access basis, who was also her Counsel in this case.
Due to the indemnity issues, she asked the Defendant to take over funding of the matter and for Counsel to continue to act on her behalf on a public access basis. DAS were happy the use Counsel, but only on the basis he was instructed through Solicitors.
The Claimant sought a declaration under The Insurance Companies (Legal Expenses Insurance) Regulations 1990, which enforced EU Directive 87/344/EEC, and under her policy that she was entitled to instruct a Barrister on a public assess basis.
Once legal proceedings had been issued the policy gave the Claimant the ability to choose legal representation, subject to DAS’s agreement, which would only be done “in exceptional circumstances”. However, this phrase was not defined.
The Regulations did not give any basis for refusal on the grounds of “exceptional circumstances”, nor did the Directive. There was also an earlier EU Directive concerning the freedom to provide legal services (77/249/EEC) included “Barrister”, which the Defendant accepted applied in this case.
The Defendant submitted that the correct interpretation of the Regulations was that it was entitled to refuse to indemnify unless Counsel was instructed through a Solicitor and that this was due to the Claimant not being legally qualified nor sufficiently independent. They also argued that Counsel would not be in a position to advise them of the current status of the case as the policy requires.
The Court held that instructing Counsel on a public access basis fell within the terms of the policy. It also held that a public access basis was “nothing like enough to take [it] into the arena of “exceptional circumstances””.
Therefore, the declaration was granted that DAS were bound by the policy and so had to indemnify Counsel instructed on a public access basis.
24.03.2011R v Reeves & Co. Solicitors  EWCA Crim 819
Key areas: Wasted Costs Order; Court of Appeal
This was an appeal by the Solicitors against a Wasted Costs Order under reg. 3C Costs in Criminal Cases (General) Regulations 1986.
The Defendant was due for Trial on 18th August 2010. On the day of trial further evidence was disclosed which led to the Prosecution offering no evidence. As a result, the Defendant was acquitted.
The Defendant stated early on in the case, that he had emails in support of him from a third party.
At a Case Management Hearing on 3rd February 2011, the charge was altered from dishonestly attempting to cash a cheque to dishonest possession. Counsel stated that the Defendant had attempted to determine whether the cheque was valid and the Cashier had not given evidence in support of the Prosecution. Counsel also showed the emails to the Prosecution, but copies were not made.
At Trial the Prosecution stated that the case would be reviewed, should the emails be presented. They were, and the Defendant was found not guilty.
The Prosecution then issued their Application on the basis that the emails could have been provided earlier. It was granted on the basis of a “negligent omission” and £250 was awarded.
The Appeal was made on two grounds – that it was in breach of the guidelines in that the Solicitors were not given any notice of the Application, and in any event, there was no basis to make such an Order, given that the emails had been offered at the earlier Hearing.
It was allowed on both grounds. The latter was upheld because the figure had been decided on no real basis, and it had not been determined that Counsel’s fee would not have been incurred had the Trial not taken place.
The Court also held that it was “perfectly proper” not to volunteer the emails, given that they had not been requested, and so the Prosecution were being put to proof.
11.03.2011R (Alistairs Solicitors) v Exeter Crown Court  EWHC 1794 (Admin)
Key areas: criminal cases, costs from central funds; Judicial Review; standing; High Court
This was an Application for Judicial Review.
The Appellant acted for a client in a criminal case who was convicted on some Counts, but, on appeal, was found innocent of some charges.
The Appellant then asked for a hearing to be listed to determine whether their costs to be paid out of central funds, but was refused on the grounds that the client was convicted on the “principal” charge.
The Appellant then appealed on the grounds that they were not given a “proper opportunity” to make costs submissions and, separately, that the refusal was based on an error of fact that the client had been convicted when, in fact, most of the charges were set aside.
Permission was granted on the first ground, but the Court considered that it would need a transcript of the case in order to rule on whether to also grant permission on the second ground.
In spite of this, the Court was concerned over whether the Applicant had standing: the case was not brought by the client, but by his Solicitors. However, the Court stated that this was a matter for the full Judicial Review hearing.
10.03.2011Chepstow Plant International Ltd. & Anor v HM Revenue & Customs  UKFTT 166 (TC)
Key areas: Wasted Costs Order; unreasonable conduct; First-tier Tribunal (Tax)
This was an appeal over national insurance contributions.
The Appeal was originally listed for 3rd August 2010, but was adjourned to enable the Appellant to obtain further expert evidence and was re-arranged for 1st November 2010.
Three weeks before the re-arranged hearing, the Appellant tried to obtain a further adjournment, but were refused.
The Appellant attempted to persuade the Tribunal to re-consider its decision, but was rejected again.
On the day of the hearing, the Appellant issued an Application for a further adjournment because their main witness was away on business. It was granted, however, given that the Appellant had not previously informed the Tribunal that the witness would be unavailable, HMRC were awarded their wasted costs on the grounds that they had acted “unreasonably”.
07.03.2011AB v CD & Ors  EWHC 602 (Ch)
Key issues: High Court, Part 36 offer
In this set of proceedings, there was a split liability hearing with the quantum part of the case to be determined at a later date.
The Defendant had made a Part 36 offer for a specified sum. The Claimant made a Part 36 offer for the Defendant to discontinue the claim, the Defendant to make an account of profits for a sum to be determined; and for the Defendant to undertake not to infringe the Claimant’s copyright. Both offers were rejected and the Claimant won on liability.
It was held that the Claimant had not made a valid Part 36 offer because they had not conceded anything on their part, nor had they stated the sum for which they wished to settle.
In relation to the Defendant’s offer, the Claimant submitted that they did not have sufficient information to assess it. However, this was rejected with the Court holding that the Defendant’s offer was a valid Part 36 offer, but the costs after its expiry could only be determined after the quantum trial. The Court also ruled that costs incurred prior to the expiry of the Defendant’s offer should also be reserved due to the separate quantum trial.
The Court also suggested that in any case the Judge should not be made aware of the existence of Part 36 offers until after the quantum stage had been dealt with.
04.03.2011HMRC v Taylor; Haimendorf (Costs)  UKUT B7 (TCC)
Key areas: costs in the Tribunal; Upper Tribunal
HMRC won an appeal in the Upper Tribunal from the First-Tier Tribunal (Tax). The Respondents applied for permission to the Court of Appeal, but permission was refused.
HMRC therefore sought summary assessment of their costs in the Upper Tribunal.
The Respondents challenged the costs on the grounds that there were disproportionate, and the Tribunal agreed.
The costs were also challenged on the grounds that the appeal was only initially issued due to “ambiguity in the statutory provisions” and so should not have to pay costs for clarifying the law. However, even though the Tribunal was sympathetic, it did not consider that there were any compelling reason why costs should not be awarded and noted that the Respondents did not submit any evidence that hardship would be caused.
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