Date  Headline

  • 20.12.2013
    Bocacina Ltd. v Boca Cafes Ltd.; De Souza, Jr; De Souza [2014] EWHC 26 (IPEC)
    • Key areas: Basis of assessment; High Court; Patents Court

      This was a ruling on costs resulting from a successful claim for passing-off.

      The Claimant submitted that it should be entitled to all of its costs, with Indemnity Basis applying from 14 days after a particular CMC.

      The Defendants submitted that the Court should take into account an offer that they had made shortly after the Particulars were served, but did not make any offer towards the Claimant’s costs.  The Claimant did not accept this offer.

      The Court that in the circumstances, the offer should be taken into account, and so reduced the Claimant’s costs from the date of the offer to 50%, with 100% of costs being payable before then, and the Defendants not being awarded any costs.  These were awarded on the Standard Basis.

      The costs were then summarily assessed.

  • 20.12.2013
    Layard Horsfall Ltd. v The Legal Ombudsman [2013] EWHC 4137 (QB)
    • Key areas: Solicitor/Own client; CFA; discontinuance; High Court

      This was an application for Judicial Review against a decision to reduce a client’s fees from £5,000.00 + VAT to £1,500.00 + VAT.

      The client had instructed the solicitors to act in a contractual claim on a hybrid-CFA, with a 67% success fee, which limited their base fees to £5,000.00 + VAT.  The CFA defined a “win” as “your claim being finally decided in your favour, whether by a Court decision or an agreement or settlement or in any way that you derive benefit from pursuing the claim”.

      During the proceedings, the Defendant was declared bankrupt, and so the solicitors advised the client that there was no more point in continuing with the claim.

      The solicitors asked the client if she wanted to continue to get a judgment, which would be classed as a “win”, or simply discontinue the claim.  The client said to discontinue “if it means that I don’t have to pay”.  It was unclear if the client was aware she would have to pay the base fees.

      The solicitor was subsequently convicted of fraud in relation to a separate claim, and the SRA intervened in the firm.  At the same time, the client made two complaints against the solicitor over this and a separate claim; the other claim settled, and the Legal Complaints Service closed its file over the contract claim, due to a lack of invoices being sent to her.

      Over a year later, the client was invoiced for the £5,000.00 + VAT.  The client complained to the Legal Ombudsman over the delayed billing, and over the fact that the solicitors acted under a CFA in a discontinued case.

      The Ombudsman’s report stated that discontinuance did not equal a “win”, and so the client was only liable for disbursements.  It also stated that the delay in billing was unreasonable, and was poor service.

      The solicitors’ response said that there was a contractual entitlement to the £5,000.00 + VAT.

      The Ombudsman ultimately ruled that the client should pay £1,500.00 + VAT.

      At the hearing, the solicitors submitted that the Ombudsman’s rules excluded contractual disputes; which was rejected because the complaint was due to their service.

      A potential argument over the complaint to the Ombudsman being out-of-time was conceded because the Ombudsman would be entitled to waive the period in “exceptional circumstances”.

      The solicitors also submitted that the Ombudsman was irrational, given the contractual nature of the £5,000.00 + VAT.  This too was rejected on the basis that the Ombudsman took into account the solicitors’ response to the report, and amended its views as a result.

      As a result, the application was rejected.

  • 18.12.2013
    R (Royal Free London NHS Foundation Trust) v Secretary of State for the Home Dept.; LB Brent; Saker [2013] EWHC 4101 (Admin)
    • Key areas: Judicial Review; both parties win some issues; High Court

      This was a ruling on costs arising from a Judicial Review.

      The Claimant had won against the Second Defendant, and lost against the First Defendant, but submitted that it was entitled to costs against both.  The First Defendant did not seek her costs.

      The Court rejected the claim against the First Defendant because she was successful, and that there was nothing in their conduct that justified an order against her.

      In addition, given that the Claimant had issued against two Defendants, the Court held that it was only entitled to 50% of its costs from the Second Defendants, which were then summarily assessed.

  • 17.12.2013
    Cheema; Cheema; Kaur; Thakar v Nottingham & Newark Magistrates’ Court; HM Revenue & Customs [2013] EWHC 4022 (Admin)
    • Key areas: both parties win some issues; party’s conduct; High Court

      This was a ruling on costs following a main action.

      The Second Defendant submitted that there should be no order on costs because they had conceded some issues in its Acknowledgment of Service; the Claimants had lost some issues; and there were conduct issues with the Claimants over the relevant Pre-Action Protocol.

      The Claimants submitted that they should be entitled to all of their costs because the Protocol issue was irrelevant given the ultimate extent of the claim; and their claims were justified.

      The Court held that the concessions were limited, and the arguments raised should be dealt with at a future damages hearing.  However, it held that the Claimants did lose some issues, and so should only be entitled to 50% of their costs.

  • 13.12.2013
    Excalibur Ventures LLC v Texas Keystone Inc.; Gulf Keystone Petroleum Ltd.; Gulf Keystone Petroleum International Ltd.; Gulf Keystone Petroleum (UK) Ltd. [2013] EWHC 4278 (Comm)
    • Key areas: Basis of assessment ;Indemnity Basis; party’s conduct; High Court

      This was a ruling to determine costs arising from a failed claim.

      The Court stated that the claim was “speculative and opportunistic” and resulted in a “resounding, indeed catastrophic, defeat”, and that one of the Claimant’s Directors was “long on assertion and confidence, but short on analysis and understanding” and that he “pursued this litigation as if it was an act of war”.

      In addition, the Court held that it raised allegations that the Defendants were alter egos of each other were “completely untenable”.

      It also held that the claim itself being valued at $1.6 billion was “grossly exaggerated” and at most was only worth $3.3 million.

      The Court held that one Director of the Claimant “made false or misleading statements”.

      Overall, the Court held that both Defendants’ costs should be assessed on the Indemnity Basis, with interim payments of £6.8 million and £10.7 million to be paid out of the existing security.

  • 05.12.2013
    Kearns v Kemp; Twitter, Inc. [2013] EWHC 4093 (QB)
    • Key areas: Indemnity Basis; Basis of assessment; party’s conduct; unreasonable conduct; High Court

      This was a hearing to determine costs arising from a discontinued claim for libel.

      The First Defendant submitted that costs should be assessed on the Indemnity Basis because the claim was weak; that the Claimant had “acted oppressively and disproportionately” by the Claimant requiring further documentation and a more-detailed defence from her; that the claim should have been withdrawn at an earlier stage; that he threatened adverse costs orders without a proper basis; and had refuse to engage with the First Defendant’s application for security for costs.  Overall, she submitted that his conduct had been unreasonable.

      The Claimant submitted that costs should be assessed on the Standard Basis, because the claim was not weak and was to rectify his reputation; that the First Defendant had acted unreasonably; and he was entitled to resist the application for security for costs.

      The Court held that the Claimant’s conduct became unreasonable part-way through the proceedings, due to refusing sensible offers, and opposing the security for costs application. The Court therefore awarded Indemnity Basis costs from 10th May 2013, with an interim payment of £82,380.00.

      The Second Defendant had already agreed to have it costs on the Standard Basis, with an interim payment of £18,000.00.

  • 03.12.2013
    Rees; Rees v Gateley Wareing (a firm); Gateley LLP [2013] EWHC 3708 (Ch)
    • Key areas: champerty; maintenance; Solicitor/Own client; High Court

      This was a dispute between a solicitor and their ex-clients.  The ex-clients sued for negligence; the solicitors counter-claimed for unpaid fees under a contingency agreement.

      The retainer stated that the solicitors would charge £5,000 plus “5% of any monies recovered on your behalf, up until 22 May 2003. Thereafter, this firm’s charges shall be 6.25% of any monies recovered from 23 May 2003 until 22 May 2004. From 23 May 2004 onwards, this firm’s charges shall be 7.5% of any monies recovered”, with credit being given for the initial £5,000.00.

      This was later amended to 5% up to 22 May 2003, and thereafter shall be subject to review, but with a minimum of 5%. The other percentages were removed.

      The Court upheld the validity of the agreements, based upon the ex-clients knowledge at the time.  However, it held that although it was also valid in relation to subsequent litigation that was conducted on behalf of the ex-clients, it did not provide for a fee to be payable.  It also rejected arguments that the agreement was void by champerty or maintenance.

      The Court emphasised that it was not making a ruling on whether the agreement was contentious or non-contentious, but stated that this was relevant.

  • 02.12.2013
    Rayner v The Lord Chancellor [2013] EWHC B24 (Ch)
    • Key areas: Legal Aid; High Court;

      This was an appeal over costs payable by the LSC.

      The Appellant was the sole-shareholder of two companies that had successfully defended a claim brought by a legally-aided party.

      The relevant Regulations (the Community Legal Service (Cost Protection) Regulations 2000) state that individuals can claim an indemnity from the LSC, but companies cannot.

      In the main action, the aided party had a certificate to the end of trial, but because of delays in getting it transferred to her new solicitors, the LSC had refused to cover the 3.5 months up to trial.  This was upheld at first-instance.

      On appeal, the Appellant submitted that there was simply a need for a causal link between the LSC’s funding and other side; that it was just and equitable for the LSC to pay; that it would have an “unjust and random effect” should only certain periods be covered, but not others; and that the previous caselaw dealt with other legal aid schemes.

      The Lord Chancellor submitted that protection only applies when a valid certificate is in place; that the use of “during which” in the Regulations meant that it could only apply to certain time-periods; and that previous caselaw goes against the Appellant.

      The Court held that the existing caselaw was not relevant because “it has been reached on a basis which the court assumed to be correct without any argument to that effect”.

      It also held that it was only fair to make the LSC liable, in the same way that third-party funders can be held liable.

      Overall, the appeal was upheld on the grounds that these costs were attributable to the Claimant during her funded period.

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