28.09.2012Tinseltime Ltd. v Roberts; M & JT Davies; Denbighshire CC; Welsh Assembly Government v Edmondson  EWHC 2628 (TCC)
Key areas: non-party costs orders; Wasted Costs Order; High Court
The Defendants in this matter sought a Non-Party Costs Order and/or a Wasted Costs Order against Edmondson (the Claimant’s Solicitor).
The Solicitor admitted that due to the Claimant’s lack of funds he took the case on under a CFA, with a 100% success fee should the matter go to trial, and 12.5% should it settle before; and agreed to fund the disbursements, on condition that he was indemnified from any winnings.
The Defendants submitted that these facts meant that the Solicitors were funding the Claimant’s case.
The Solicitors submitted that he was simply acting like any other Solicitor would under a CFA.
The Court noted that the Solicitor was simply acting as a Solicitor, and only took the case on because he didn’t realise at the outset how complex it was. In addition, it held that the Solicitor only paid for the disbursements himself, and did not take out ATE because the Claimant was unable to pay for these items itself. In relation to the instructions, the Court noted that it was clear that they were coming from the client. As a result, the Non-Party Costs Order was refused.
As for the Wasted Costs Order, the Court noted that the Application did not attempt to link any extra costs to the Claimant’s conduct, and that the intention was to make the Solicitor pay the whole of the Defendants’ costs. Given its comment in relation to the Non-Party Costs Order, the court held that it would be right to award Wasted Costs, and so this was also refused.
26.09.2012Zakirov v Newmans Solicitors  EWHC 90222 (Costs)
Key areas: hourly rates; Solicitor/Own client; Basis of assessment; Indemnity Basis; SCCO
This was a hearing to determine 4 outstanding issues arising from a solicitor/client dispute.
In the previous hearing, the Court held that allegations of forgery in relation to the retainer “had no foundation in fact”.
The client submitted that although he had lost, their conduct did not justify Indemnity costs being awarded, and that the claim was made “in good faith”. In addition, he submitted that the level of costs claimed justified the Court considering proportionality, which an order for Indemnity basis would prevent.
The Solicitors submitted that the original Bill was only of a small amount, but the proceedings themselves were to have “a practising solicitor found to be dishonest, with all the potential consequences for her career”.
The Court held that the Claimant did not act in good faith, and that their conduct throughout “tainted the entirety of the application”. As a result, an order for Indemnity costs was justified, and there “could not be a clearer case” for doing so.
The Claimant then submitted that only Litigant-in-Person costs should be awarded because the Solicitors acted for themselves, and that CPR 48.6(6) confirms this. The Solicitors submitted that the “firm represented itself” and that “no solicitor acted in person”, and referred to Costs Practice Direction 52.5. The Court agreed with the Solicitors, stating that there is a difference between a solicitor acting for him/herself and the firm doing so.
The parties then disputed the rate to be charged: a Central London Grade A rate of £317 was claimed, but National 1 Grade C was offered. The Court held that the SCCO Central London rate of £250 should apply.
20.09.2012Gimex International Groupe Import Export v The Chill Bag Company Ltd.; Kiki’s Import & Export Ltd.; Turner; Brand; Brand  EWPCC 34
Key areas: Part 45; Patents Court
The Claimant won an action for copyright infringement and its costs were summarily assessed and capped at £50,000 under CPR 45, section VII.
The Claimant submitted that given that the Defendants were separated out into 2 distinct groups, it should be entitled to split its costs which were claimed at £119,000, especially given that had it lost it would face 2 separate claims for costs. This would have entitled them to £90,000 in costs.
The Court held that the Defendants were jointly and severally liable for the costs, and so would only be able to claim £50,000 had they won. Therefore, the Claimant was only allowed a maximum of £50,000.
However, the Court noted that the rule as drafted could cause difficulties should there be multiple successful Defendants who run different defences. It suggested that such concerns should be dealt with at any CMCs that take place.
07.09.2012Brit Inns Ltd. (in liquidation); Barber; Lawless v BDW Trading Ltd.; J. Reddington Ltd. (No 2)  EWHC 2489 (TCC)
Key areas: both parties win some issues; Part 36 offer; High Court
This was a hearing to determine costs resulting from a main action.
In the main action, the Claimants sought £660,000 but were awarded £157,467.89 + 1% interest, i.e. 25%, and incurred costs of £528,547.02. In a separate uninsured claim, they sought £522,000, but recovered £16,403.24 + 1% interest, which was 3% of the claim; and incurred costs totalling £157,311.16.
The Court noted that the high main action claim arose from loss adjusters not properly evaluating an insurance pay-out, and because the Claimants “were not helped” by their experts.
In addition, the Court noted that the insured claim should not have been made at all, and should have formed part of the main claim.
Once the proceedings had been issued, the Defendant made a Part 36 offer for £139,000.00, and the Claimant offered £550,000.00.
Less than a month before trial, the Defendants made a Part 44 offer – stated as being open until 30/05/2012 – for £267,046.00, including interest, plus £85,000.00 for costs. In response, the Claimants made a Part 36 offer for £300,000.00 plus costs. Both were rejected.
The day before trial, the Defendants made a Part 44 offer for £200,000.00 plus £100,000.00 for costs. On the day of the trial, the Claimants offered £270,000.00 plus £170,000.00 for costs. During the trial, the Claimants then offered £141,000.00 plus £200,000.00 for costs.
The Court held that the Claimants had failed to match either of their Part 36 offers, but the value showed that the Claimants had an “unrealistic and unreasonable view” of the case. Also, the Defendants’ own Part 36 offer had been beaten, but their offer was closer to the eventual outcome.
The Defendants submitted that due to the Claimants’ lack of disclosure, it could not fully-evaluate the claim. This was rejected due to the value of their initial offer. The Court also noted that the Defendants did not raise any issues during the proceedings over disclosure.
The Court also held that until 30/05/2012 the Claimants were successful in the main claim; however, the claim was exaggerated, and the Defendants’ view was more realistic.
Overall, the Defendant was ordered to pay 60% of the Claimants’ costs of the main claim up to 30th May 2012. However, it did beat its offer of £267,000.00. As a result, the Claimants were ordered to pay their costs from that point onwards.
In the uninsured claim, the Defendants made a Part 44 offer for £27,139.20 plus £35,000.00 for costs on 16/05/2012. The Claimants countered with £141,793.20 + 75% of their costs. The Claimants submitted that the Defendants should pay 50% of their costs, given the outcome. However, the Court held that the Claimants’ conduct in issuing two separate claims, most of which would be duplicated, and given that they only received 3% of the claim, justified them paying 90% of the Defendants’ costs in the uninsured claim.
In addition, all of the Costs Orders were made on the Standard Basis, but given the complexity of the cost claims, no interim payments were ordered.
03.09.2012French v Carter Lemon Camerons LLP  EWCA Civ 1180
Key areas: solicitors’ lien; Solicitor/Own client; termination of retainer; Court of Appeal
This was an appeal from a ruling that the solicitors were entitled to be paid £10,000.00 for work done on behalf of their ex-client.
The client had instructed the solicitors to act for her in a claim against an insurance company. The solicitors were sacked and the client then acted as a Litigant in Person. The solicitors then exercised their lien over her documents due to their outstanding invoices.
The ex-client applied for an order that the documents be released to her, but it was rejected and she was ordered to pay £8,000.00 in costs. The client appealed, but it was rejected and she was ordered to pay £10,000.00 in costs for the appeal, with the Court holding that either their relationship had broken-down, and that either the client had sacked the solicitors, or they had validly terminated their retainer.
The ex-client then obtained permission for a second appeal.
The ex-client submitted that the solicitors were not entitled to terminate the retainer in the way that they did, because it was a repudiation of the retainer, and so they could not have a lien because no fees were payable; that if they were entitled to terminate they could not use the lien to prevent the ex-client acting in person because the solicitors had discharged themselves.
The solicitors submitted that the ex-client terminated their retainer and they were entitled to a lien in relation to their costs due to her acting in person.
The Court held that at the meeting the day before the retainer was terminated, the solicitors were still acting for the ex-client, and they had agreed to continue to do so “at least until the [forthcoming] CMC”. Also, the solicitors wrote to the ex-client saying that they had “deferred” any termination.
Overall, it held that the solicitors did not repudiate the retainer, and it was in fact terminated by the ex-client a week later.
As a result, the solicitors were entitled to a lien over the ex-client’s documents.
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