27.02.2012West African Gas Pipeline Co. Ltd. v Willbros Global Holdings Inc.  EWHC 396 (TCC)
Key areas: Wasted Costs Order; disclosure; High Court
This was an application by the Defendant for a Wasted Costs Order due to the Claimant not disclosing documentation.
The Defendant sought an Order not just for the costs of this Application to be “wasted costs” but those from an application dated 29th September 2011, which were previously awarded “in the case”.
The Parties had been Ordered to make Standard Disclosure on 20th January 2011, and other Orders regarding disclosure had also made been since.
In the Application of September 2011, the Defendant sought further disclosure from the Claimant, which was granted.
The Defendant submitted that the Claimant had not undertaken a thorough review of their documentation, even though they described it as a “high level review”; and the general inability to obtain documentation from the company itself and related companies based in Ghana; and that the documentation which had been provided was not machine-readable which was necessary in the circumstances. The documentation which had now been disclosed created a different picture to that which first appeared. Overall, the Defendant submitted that costs totalling £1.8 million had been wasted.
The Claimant submitted that there was no change in circumstances, and that while there had been difficulties in their disclosure, the complexity of the case needed to be taken into account. It also submitted that the disclosure on a regular basis was in fact the Defendant’s suggestion.
The Court held that the need to make further disclosures was due to the Claimant not undertaking a thorough review at the outset; that on many occasions, machine-readable documents had not been provided; and that in the circumstances an order for wasted costs was justified.
The Court held that the Order from the application of 29th September 2011 would not have been impacted, had adequate disclosure made been made; that some of the costs of a further Application (dated 21st November 2011) should be considered to be wasted costs.
The Court then dealt with costs arising from the problems in disclosure. It held that 80% of the costs in relation to the Claimant’s correspondence of 21st December 2011, should also be paid by the Claimant because it related to their duplicate documentation; that 80% of the Defendant’s costs dealing with the Claimant’s redaction of documents should also be paid; and 50% of the costs dealing with the documents which were disclosed between November 2011 and January 2012, as well of costs relating to one specific item.
Given the level of costs claimed by the Defendant and the orders made, it held that it was not appropriate to summarily assess these, and so should be dealt with by Detailed Assessment, but that an interim payment of £135,000 should be made.
24.02.2012Beechwood House Publishing Ltd. (t/a Binleys) v Guardian Products Ltd.; Precision Direct Marketing Ltd.  EWPCC 8
Key areas: party’s conduct; Part 36 offer; Basis of assessment; Patents Court
The Claimant obtained a liability judgment in its favour and then parties then agreed quantum of £3,095.00.
On 27th February 2008, the Claimant made a Part 36 offer to settle for £1,230.00, with the Defendants to make various undertakings, including one regarding disclosure; in response the Defendants offered to agree that sum, but only pay £4,000.00 in costs.
The parties then negotiated quantum to £3,095.00, and in October 2008, the Defendants paid that sum into the Claimant’s bank account.
The Claimant disputed that the case had settled, and the parties could not agree costs and so the Claimant issued proceedings on 9th February 2009. As a result, the Patents County Court scale costs scheme does not apply.
At an interim hearing, it was held that the case had not settled, and at trial judgment was granted in the Claimant’s favour, with damages to be dealt with at a later date.
The Claimant submitted that as judgment was granted in their favour, and quantum was agreed at a sum greater than its Part 36 offer, it was entitled to Indemnity costs from the date the offer expired to the date of trial, and 50% of the post-trial costs.
The Defendants submitted that their offer was reasonable and the Claimant did not beat it. As a result, the Claimant should pay their costs from when the offer expired; or from when they paid the damages; or that there should be no order as to costs in relation to the proceedings; or that there should be no order as to costs up to trial, with the Claimant to pay costs thereafter.
The Court held that it was reasonable for the Claimant to request the undertakings in its offer, and that the Claimant beat its own offer.
The Defendants submitted that the Claimant had unreasonably refused mediation. The Court held that it was a reasonable refusal given the Claimant’s concerns about the costs, and that the Claimant’s rejection of the Defendants’ offers were also reasonable.
However, the Court also held that Part 36 was not satisfied, because its judgment concerned liability, not quantum. As a result, the Claimant was awarded its costs up to trial, but on the Standard Basis.
It also held that the Defendant should be awarded its post-judgment costs.
Overall, the Court awarded the Claimant 90% of its costs on the Standard Basis, to reflect the award for the Defendants.
24.02.2012Dockerill & Healy v Tullett; Macefield v Bakos; Tubridy v Sarwar  EWCA Civ 184
Key areas: CPR 21.10(2); minors; RTA; Part 45; Court of Appeal
All three of these appeals concerned the costs of proceedings brought to obtain the Court’s approval of settlements involving minors, when the min action had settled pre-issue. In the first two cases, the appeal was by the Claimant; in the third it was by the Defendant.
The dispute in the first two cases was over whether fixed costs under CPR 45, section II applied or whether they should be assessed as normal under CPR 44.5. If CPR 44.5 applied, then a further issue arose in that both cases settled for under £1,000 and so small claims costs would apply had the claim not involved a minor.
The third case was a dispute over whether Counsel’s Brief fee for the approval hearing should be recoverable under CPR 45.10(2)(c) on the grounds that it was “necessarily incurred” as a result of the Claimant being a minor.
In each case, the Parties had agreed that the costs of the proceedings themselves would be classed as Part 8 costs. This caused a further issued in that Part 8 proceedings under CPR 21.10(2) are classed as multi-track proceedings (CPR 8.9(c)), and so CPR 26 does not apply.
In its decision in the first two appeals, the Court held that CPR 44.5 did apply because had the cases been issued they would have been allocated to the Small Claim Track, and so the conditions for CPR 45, section II costs did not apply because the requirement under CPR 45.7(2)(d) was not fulfilled. As a result, Detailed Assessment applied.
The Defendants in the first two cases submitted that the Rules Committee would not have intended for the Claimants in these kind of cases to be able to claim more costs.
In the appeal over the first case, the Court held that when assessing the Claimant’s Bill of Costs, the Judge should have considered whether the damages and issues were “sufficiently complex” to justify the use of a solicitor other than in the preparation of advice on settlement. As a result, the Claimant’s appeal was dismissed.
In the second case, the Court held that the Claimant’s appeal should too be dismissed, and so Detailed Assessment applied.
The third case settled pre-issue for £2,100. An approval hearing was held and £201.25 including VAT was allowed for Counsel attending the hearing. On appeal the Defendant submitted that the lower Court’s judgment – that effectively the Court should look at what was know when Counsel was instructed to attend, not with hindsight – meant that Counsel would always attend. In this case Counsel had charged separately for advising on quantum, and so was claiming a further fee for attending the hearing itself. The Court held that the use of “necessarily” in CPR 45.10 meant that there had to be some factor to justify for Counsel’s attendance, which would not apply if the Claimant was not a minor. In this case, the Court held that there was no need for Counsel to attend the hearing. The Defendant’s appeal was therefore allowed, and so Counsel’s fee was not recoverable.
23.02.2012MMI Research Ltd. v Cellxion Ltd.; Cellxion Networks LLC; Brumpton; Datong Electronics PLC; Rohde & Schwarz GmbH & Co. AG; Timson  EWCA Civ 139
In the proceedings, costs fell into 5 main areas: costs up to the first instance hearing; costs post-judgment; costs in the Court of Appeal; costs of issues remitted back to the first instance Court; an costs of the appeal.
The first, third and fifth issues were dealt with together, due to the large overlap. The Claimant submitted that even though the Defendants won on one issue, they raised 41 separate defences and so the Claimant should be entitled to their costs. The Defendants submitted that it was reasonable to rely on their numerous defences, and their extra ones did not create any further work. The Court held that there should be no order as to costs on these issues.
At first instance, the Claimant was awarded their post-judgment costs, which was upheld on appeal, because the Defendants “brought those costs on themselves”.
As for the fourth issue, the Court noted that both parties won one issue. It was accepted that the Defendants were entitled to the costs of their successful appeal, but there was a dispute over the other issue. The Claimant submitted that because they won, they should be entitled to their costs; the Defendants submitted that there should be no order as to costs. In the circumstances, the Court held that the Defendants should be entitled to 70% of their costs of the issue on which they won, and so taking into account their loss.
16.02.2012Simcoe v Jacuzzi UK Group PLC  EWCA Civ 137
Key areas: interest on costs; CFA; Court of Appeal
This was an appeal concerning the date from which interest on costs should be calculated.
Namely, should run from the date that the order for costs is made (the “incipitur date”) or from when the costs are finalised (the “allocatur date”).
The main action was issued in Leeds County Court and the costs settled for £74,000. Interest on costs was awarded from the date of the settlement of the costs, with the judge relying on the Liverpool County Court case of Gray v Toner. However, permission to appeal was granted on the grounds that it “raise[d] an important point of principle”.
The Claimant submitted that interest should run from 16th April 2010, which is when the main action settled.
He submitted that CPR 40.8 gave the Court a discretion to allow costs from the date of judgment and in this case there was no reason not to allow it. He also submitted that CPR 40.8(1) did not apply at all to the County Court because the Order amending it was not valid due to the Treasury not being consulted in its drafting, which was a requirement under the relevant statute.
The Court agreed that there is no record of the Treasury being consulted, and so it was ultra vires. It also noted that art. 2(2) County Court (Interest on Judgments Debts) Order 1991 supported the view that interest on costs runs from the date of judgment. It also held that even if CPR 40.8 did apply, it meant that as a general rule, interest runs from the date of the judgment, and the use of a CFA did not in itself justify the general rule not applying.
As a result, the Court held that interest runs on costs from the date of judgment.
However, it did consider that the costs were far in excess of the damages, but proportionality was not an issue in this appeal.
09.02.2012Wright Hassall LLP v Morris  EWHC 188 (Ch)
Key areas: retainer; Solicitor/Own client; High Court
This was an application made by the Solicitors against a former client.
The Solicitors had previously obtained judgment for their unpaid fees of £135,000.00 plus costs of £74,000.00.
The main dispute in this hearing was whether the Order in favour of the Solicitors was enforceable against the companies which they acted for and for whom the Defendant was the Administrator of, or against the Defendant himself.
The parties’ CFA referred to the companies, while the cover letter referred to the Defendant. The Defendant signed the CFA but he did not exclude any personal liability.
The proceedings were issued against the Defendant acting as a partner in a firm, and another partner, and invoices addressed to the partnership were enclosed.
The Defendant denied the claim on the basis that the CFA was not in the name of the partnership, and because they were in the names of the companies, and so no money was due from the Administrators.
The Particulars of Claim were then amended to remove references to the other partner, the partnership, and the Defendant was named as the sole Defendant as “Administrator of” the companies. The claim was made on the basis of work done for the Defendant “in his capacity as Administrator of” the companies. The invoices were re-credited and re-addressed to the Defendant as “Administrator of”.
An amended Defence was served, again denying liability on the grounds that the CFA was done on behalf of the companies. It was also disputed that sums were due on the grounds of misrepresentation of the terms of the CFA; that the invoices were not broken down between the companies; that there was no “success” as defined in the CFA; and that they had been negligence in their advice of recommending a settlement.
In their Reply, the Solicitors said that the circumstances created a “binding effect”, but it did not address the issue over the identity of the client nor of whether the Defendant took personal responsibility when signing the CFAs.
At trial, the Solicitors won on the “binding effect” point, but no decision was made on the identity of the Defendant.
The Order agreed by Counsel was in the name of the Defendant “(Administrator for…)” the companies. The Claimant submitted that this created a personal liability to the Defendant.
The Claimant submitted that this the equivalent to the holder of an insolvency officer, for which personal liability could apply. However, the Court rejected this analogy, stating that insolvency can create an agency relationship, and so it can bind the insolvent; a trust has no separate legal personality, and so a trustee must be liable. It also stated that in insolvency proceedings, cases are issued by the office holder, and so it is only right that they can be held personally liable for costs.
However, administrators act as agents and para. 59-60 & Sch 1. Para. 69 of Sch B1 Insolvency Act 1986 states that they act “as [a company’s] agent”. The Court noted that the Solicitors were fully aware that the Defendant was the agent of the companies, and so personal liability cannot apply.
The Court also noted that as the proceedings named the Defendant “as administrator of” shows that the Solicitors were aware of the situation.
As a result, the Court held that the Order was simply against the companies.
03.02.2012Nulty; National Insurance & Guarantee Corp. Ltd. v Milton Keynes BC  EWHC 730 (QB)
Key areas: both parties win some issues; party’s conduct; Part 36 offer; Indemnity Basis; High Court
This was a hearing to determine costs arising from a main action.
On 6th December 2010 the Claimant made a Part 36 offer to settle for £1.5 million plus costs. This was not accepted and was withdrawn the day before trial.
The Claimant submitted that it was entitled to their costs of both the liability and coverage issues; or the whole of their costs of the liability issue and costs of the coverage issue from the date the Part 36 offer expired; and that Indemnity Basis costs should apply.
The Second Defendant (the First Defendant’s insurers) submitted that because it won one issue and lost another, the Court should award the Claimant its costs of the liability issue; and them their own costs of coverage issues. If not, then the Claimant’s costs should be reduced by 50% to reflect the lost argument.
The Court stated it was not happy with the Second Defendant’s conduct in the case, in particular in its original attempts to deny coverage “on grounds which were patently unsustainable”; their allegations that the Claimant’s own employees caused the problem that led to the claim, even though they were not supported by evidence; and the requests for witnesses to attend trial, which they withdrew at the last moment. It also stated that their views of their defence were “thoroughly unrealistic”, given that they stated that they had almost a complete defence to the claim. In addition, the Second Defendant was criticised for making allegations which were not pursued, but which caused the Claimant to incur costs in disclosure.
In the circumstances, the Court awarded the Claimant its costs on the liability issue on the Standard Basis up to 31st December 2010. The Claimant was also awarded costs of both issues on the Indemnity Basis from 1st January 2011 to 19th July 2011 and on the Standard Basis from that date. The Second Defendant was awarded 50% of its costs relating to the coverage dispute on the Standard Basis, from 1st November 2009 to 31st December 2010.
02.02.2012Leeds City Council v Price & Ors  EWCA Civ 59
Key areas: Legal Aid; Court of Appeal
This was an appeal by the Council over a refusal to enforce a legal aid certificate.
The Council had been awarded its costs in the House of Lords in 2006, but because the other side was legally-aided, it was made under s. 11 Access to Justice Act 1999 and so any such award was to be certified by the Clerk of the Parliaments.
For some unknown reason, the Council did not comply with the legal aid regulations.
The Council’s Bill of Costs was eventually served on the other side and sent to the House of Lords 6 weeks late, but it was not sent to the Legal Services Commission. However, the Bill did not include a notice that the costs would be sought from the LSC, even though this was a requirement under para. 10(3)(c) of the legal aid regulations.
The Bill was assessed in the normal way for £84,138.94, and the House of Lords provided an Order. However, at this hearing the Council accepted that was incorrect due to it not informing the LSC.
The Council then wrote to the LSC requesting the £84,138.94 with the Order. The LSC pointed out that the Council had not complied with the regulations and so their request was invalid.
The Council then issued an application for the LSC to pay £84,138.94, which was initially granted before being set aside by the same judge.
At this hearing, the Council submitted that the LSC had not pointed out that the Order which the Council sought was wrong. The Court noted that this meant that the Council was saying that the Court should have enforced the Order for costs, even though it was wrong, or should have stayed it, and that the LSC should have flagged-up its concerns.
As a result, the appeal was dismissed.
02.02.2012QBE Management Services (UK) Ltd. v Dymoke; Hearn; Kirk; Pro Insurance Solutions Ltd.  EWHC 116 (QB)
Key areas: party’s conduct; Indemnity Basis; Basis of assessment; High Court
The Claimant had been successful in their claim and sought their costs on the Indemnity Basis given the Defendants’ conduct.
The Defendants submitted that the Claimant’s costs should only be awarded on the Standard Basis; that they should not be allowed any costs up to 25th August 2011; and those after that date should be subject to a 30% discount, all of which they submitted was due to an issue on which the Defendants won.
The Court held that the Defendants conduct in the case, including stating that they had disclosed all documentation which they had not, and had raised arguments which they should not have, justified an award for Indemnity costs in full.
The Defendants were also ordered to pay an interim sum of £450,000.00 for costs.
01.02.2012LB Islington v Elliott; Morris  EWCA Civ 56
Key areas: party’s conduct; Court of Appeal
This was an appeal over costs brought by the Defendant.
At first instance the Defendant had been ordered to pay the Claimants’ costs up to 6th March 2009; half of their costs up to 20th March 2009; and the whole of their costs afterwards.
The main action was a successful Application for an Order to force the Defendant to remove trees which were a potential nuisance to the Claimants’ property.
The Claimants had sought to resolve the issue without the need to issue proceedings, but the Defendant had refused to act unless they could show that actual damage was being caused. By June 2008, the Defendant was on notice that proceedings would be issued should the trees not be removed by 10th July 2008.
The deadline expired and the Defendant subsequently decided to remove the trees, but did not inform the Claimants who in the meantime had issued proceedings.
The Claimants offered to stay the proceedings subject an agreement for costs, but one could not be reached. As a result, the parties went to trial.
At trial, the Judge held that there had been no damage, but that there was a “real likelihood of harm at some stage”, and that the Defendant had delayed matters for no good reason.
As a result, the Claimants won at first instance.
The Defendant appealed on the grounds that because there was no finding that there would be damage within 3 years, there was no imminent damage to the property. The Claimants submitted that damage was likely to occur in the future.
The Court held that the Judge was wrong to say that the Defendants had delayed given that they had approved work. it also held that once the Defence had been filed – that the tree had been dealt with – there was no prospect of the injunction succeeding.
The Court then turned to the costs order. The original order was granted to take into account the Claimants conduct.
It held that the Claimants should have given the Defendant a final warning before issuing proceedings, instead of leaving them uninformed as to their intentions, even though the deadline had passed. However, it also noted that the case was uncertain by the Defendant’s lack of a response.
Therefore, the Court made no order as to costs up to the service of the Defence, but awarded the Defendant their costs afterwards.
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