19.04.2011Barr & Ors v Biffa Waste Services Ltd. [No 4]  EWHC 1107 (TCC)
Key areas: basis for assessment; Part 36 offer; Indemnity Basis; High Court
This Hearing was over costs and an Application for Permission to Appeal arising from the main action, in which the 30 lead claims, out of 152, were dismissed, while two other Claimants were awarded £2,000.00 in total.
The Application was refused and so the Court dealt with the costs issues arising from the main action.
The Defendant had made Part 36 offers on 7th December 2009 to settle each claim for £1,000.00.
The Claimants submitted that the Defendant’s costs should be limited or not be awarded any costs due to their actions in the proceedings, but the Court noted that they did not mention their own conduct.
The Defendant submitted that these criticisms were in fact related to its dealings with other parties, who were not involved with these proceedings, which the Court agreed with.
The Court held that the Defendant’s actions did not cause the trial to last longer than anticipated and in fact helped the proceedings.
The Claimant submitted that costs in relation to a statutory defence should be excluded because the Defendant lost this argument. However, the Court disagreed on the grounds that this work overlapped with other defences on which they were successful, and so no further costs were incurred.
The Defendant then submitted that their costs from 1st January 2010 should be assessed on the Indemnity Basis due to their Part 36 offers. However, the Court held that the Claimants only acted unreasonably from September 2010 when certain allegations were abandoned, which should have caused them to re-consider the case as a whole.
Therefore, the Claimant was order to pay the whole of the Defendant’s costs, with them to be assessed on the Indemnity basis from 1st October 2010, and an interim payment of 60%.
18.04.2011Media CAT Ltd. v Adams & Ors  EWPCC 10
Key issues: Patents Court, Wasted Costs Order
The Claimant in this case issued proceedings against various companies for breach of copyright. However, these proceedings had been struck out – after the Claimant’s attempt to discontinue had been rejected – because the copyright holders had not been joined into the proceedings in time. It was also held that costs were to be paid on the Indemnity Basis and that the Part 45 Patents costs would not apply due to the Claimant’s actions.
This particular hearing was whether the Claimant should be subject to a Wasted Costs Order in relation to costs incurred after the discontinuance notice was served, and in relation to dealing with revenue-sharing agreements they had with ACS:Law, which was granted.
There was also a separate point about whether ACS:Law should be added to the proceedings as a Third Party. This was granted on the grounds that there was a good chance that they would be liable for the costs incurred.
12.04.2011Motto & Ors v Trafigura Ltd.; Trafigura Beheer BV  EWHC 90207 (Costs)
Key areas: ATE; SCCO
The ruling was to determine whether the Claimants should have incurred a staged ATE premium and what was a reasonable and proportionate premium. The Defendants also wanted a ruling on whether the premium fell within s. 29 Access to Justice Act 1999.
The premium was claimed at £9,677,554.
The insurers’ file considered that when the premium was calculated they considered the prospects of success to be 65%.
The Defendants submitted that the premium was calculated on too-low a prospect of success, based on the Court’s own decision on the success fee of 61.2%; and that as the case progressed they should have re-calculated the premium. They also submitted that the term in the insurance policy of “opponent’s costs” is not defined, while “Adverse Costs” which does not appear in the policy, is defined. They submitted that it should be calculated on their liability to costs, which would equate to a premium of £2.8 million.
The Claimant submitted that there was no evidence that any other policy would provide better cover; that the risk assessment was correct when it was done; and they had insured against the maximum risk of the Defendants’ costs which were stated as totalling £14.6 million, not the minimum. As a result, the premium was reasonable.
The Court noted that it was a valid premium; that no evidence was given as to what the premium should be reduced to; and so the premium should not be reduced.
11.04.2011Seef and Seef v Dinh Nam Ho and Bich Thuy Ton Nu  EWCA Civ 401
Key issues: Court of Appeal, Part 36 offer
The Appellants in this case had won their appeal.
During the proceedings the Appellants made a Part 36 offer of £200.00, with the parties to bear their own costs and the Respondents to re-pay £15,000.00 in costs which had been awarded to them in the original hearing. This offer was rejected and beaten at trial by the Appellants.
The dispute was over whether the offer was a Part 36 offer given the term to re-pay the £15,000.00. It was held that it was a valid Part 36 offer.
08.04.2011Legal Services Commission v F, A and V  EWHC 899 (QB)
Key issues: High Court, Legal Aid
This was an appeal by the LSC against an order that they indemnify the losing party who was legally-aided.
The LSC appealed on the ground that the judge had made an error in his ruling that if the LSC did not pay the winner’s costs, he would suffer hardship and that he had also decided that too high a sum should be paid by the LSC.
However, the appeal was dismissed.
08.04.2011Zodiac Training Ltd. v Third Eye Technologies Ltd. & Anor  EWHC 881 (TCC)
Key areas: security of costs; High Court
This Hearing was over the costs resulting from the Defendant’s unsuccessful Application for Security of Costs.
The Court held that the Claimant should get their costs of the Application. However, due to them not disclosing documentation in opposition to the Application until late on, they were only awarded 85% of those costs, because earlier disclosure may have led to a settlement of the Application, and were summarily assessed.
06.04.2011HMRC v Colquhoun Cost Decision  UKUT B10 (TCC)
Key areas: costs in the Tribunal; disclosure; Upper Tribunal
HMRC won an appeal in the Upper Tribunal from the First-Tier Tribunal (Tax) and applied for their costs to be summarily assessed, which were claimed at £3,499.40, under r. 10(6) and 10(8)(a)Tribunal Procedure (Upper Tribunal) Rules 2008.
The Respondent submitted that no order for costs should be made because HMRC appealed and he had no influence on their actions; no application was made following the original decision; and because an award would be a penalty for challenging an uncertain HMRC decision.
In the hearing, HMRC disclosed a letter which the Respondent had not previously seen, to which the Respondent stated that had he received the letter he would probably not have appealed their original decision.
The Tribunal held, reluctantly, that the Respondent should pay some costs, which it assessed at £1,000.00.
05.04.2011Prodec Networks Ltd. v N2check Ltd.  EWHC 90215 (Costs)
Key areas: costs estimates; SCCO
This hearing was concerned with the second Point of Dispute raised by the Defendant, namely that the Bill of Costs exceeded the Claimant’s estimate.
The Bill claimed over £300,000.00, including an ATE premium of £31,000.00, and a success fee. The base costs totalled approximately £190,000.00, for a claim for £10,000.00 which lasted 12 months. However, they had previously been ruled to not be disproportionate as a whole, and they were incurred mainly due the Defendant’s own conduct.
The Claimant had provided three costs estimates: at allocation and listing stages, and when the ATE premium was taken out; the first two totalled £71,000.00, and the third totalled £80,000.00, all of which excluded VAT. The Claimant also provided a statement of costs for trial which stated £80,000.00, excluding VAT.
The Bill of Costs also included post-trial work. When this was excluded, the Bill totalled approximately £135,000.00. This exceeded the estimate by 60%.
The Claimant justified the difference on the basis of using lower hourly rates; on discounting costs to enable quick settlement; the Defendant’s own conduct; the late incurrence of the ATE premium; and due to the complexity of the documentation, which meant it was difficult to accurately estimate the costs. They also submitted that the Bill included time which was not recorded on the Solicitors’ time sheets.
The Defendant submitted that they had relied on the estimate in their decision not to appeal the main action, which the Claimant did not dispute; and that the discounts were in fact deliberate mis-statements, not simple errors, and so the court should use its powers under CPR 44.14 to impose penalties.
The Court noted that there was no real difference between the disbursements in the Bill and those in the estimates, but that profit costs in the Bill were 196% in relation to compared to the second estimate, or 182% when considering hours spent. It also noted that the base profit costs in the Defendant’s statement of costs totalled £55,797, and they spent 200 hours less than the Claimant.
The Court noted that the Claimant’s retainer letter matched the rates claimed in the Bill, but was “disappointed” about the error, which would have increased the profit costs in the second estimate by £5,000.00. It also stated that the work claimed by the Costs Draftsman was “optimistic”. Overall, it held that the second estimate was a useful guide for costs up to that point, but not subsequent costs.
The Claimant submitted that the third estimate also had the same issues as the second estimate.
The Court held that the Solicitors should not be allowed to use their own deliberate under-estimate as a reason not to rely on it. However, it also noted that the Defendant placed more reliance on their own costs estimate than the Claimants’.
Overall, the Court allowed the hourly rates in the Bill multiplied by the hours claimed in the Claimant’s statement of costs, as well as any reasonable trial and post-trial costs and success fees.
05.04.2011Webb v Environment Agency QB LTL 05/04/2011
Key issues: discontinuance, High Court
The Claimant in this matter had discontinued proceedings in the Courts and they had been transferred to the Lands Tribunal.
The original case was a claim for negligence due to flooding caused by a grate which the Agency had installed.
The Agency originally stated that there was no liability on their part even though there had been a failure to act.
Proceedings were issued and this position was maintained in the Agency’s Defence.
The Agency subsequently filed an Amended Defence, referring to a statutory obligation, which meant that the case had to be transferred to the Lands Tribunal with the Court case being discontinued.
Even though the Claimant discontinued, their costs were sought; however this was adjourned until after the tribunal hearing.
The Tribunal proceedings settled, but for significantly less than what was claimed. The Claimant was also awarded 80% of their costs.
In relation to the Court proceedings, the Claimant submitted that because they had won and because the statutory defence was raised at a late stage, they should be entitled to their costs, i.e. the Court should depart from CPR 38.6.
On the facts, it was held that the Claimant was entitled to their costs because only the Agency could know that there was a statutory defence and the Claimant was awarded 80% of their costs.
04.04.2011Leeds CC v Price & Ors  EWHC 849 (QB)
Key issues: High Court, Legal Aid
The council had defended a claim brought by a party funded by legal aid and so made a claim for costs against the LSC.
The LSC disputed this claim on the grounds that proper notice had not been given under the Community Legal Service (Costs Protection) Regulations 2000 and was also out-of-time.
The Court held that the proper notice was not given and so the LSC were not liable for costs.
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