29.07.2011Lord Chancellor v Alexander Johnson & Co. Solicitors & McCarthy  EWHC 2113 (QB)
Key areas: criminal; legal aid; Litigators’ Graduated Fee Scheme; Very High Costs Cases; High Court
This was an Appeal by the Lord Chancellor over whether the Solicitors and Counsel were to be paid costs on the “Very High Costs Cases” (VHCC) scheme or Graduated Fee Scheme (GFS) under Criminal Defence Services (Funding) Order 2007. The Solicitors stated that at stake was £270,000.00. There was also an appeal over whether costs should be dealt with as a “cracked trial” given the Defendant’s guilty plea.
The Defendant had been charged with robbery as well as conspiracy, for which there were 28 Defendants and 37 Counts. Representation Orders were granted and, given that size of the case, four separate trials were listed, and the LSC were informed of the circumstances. The LSC stated that all cases should be dealt with as VHCCs.
The Solicitors advised the LSC that the Defendant was unwilling to agree to VHCC due to his likely guilty plea, but the LSC stated that they would be paid under the VHCC scheme for “all work reasonably done”.
The Defendant pled guilty and the Solicitors then considered they were acting pro bono. The Solicitors had requested that the matter be dealt with as a GFS claim, but this was refused.
The Solicitors subsequently claimed their fees under the GFS, but this was refused. However, on Appeal, the GFS award was allowed and that the case should be considered a “cracked trial”.
The Lord Chancellor Appealed against this ruling, submitted that the VHCC and GFS schemes are mutually exclusive; that VHCC Panel Members, such as the Solicitors, are bound by its terms; and that once a case is held to be a VHCC it becomes one without further consent of the Panel firm. The Solicitors submitted that para. 10(6) Criminal Defence Service (Funding) Order 2007 should be read literally. After considering the relevant legislation in depth, the Court held that the Appeal decision was incorrect.
The Court also held that had GFS fees been maintained, then the matter would not be a “cracked trial” due to Part I, Criminal Defence Service (Funding) Amendment Order 2007 which states otherwise.
29.07.2011Schütz (UK) Ltd. v Werit UK Ltd. & Anor  EWCA Civ 927
Key areas: enforcement of EU Directives; Court of Appeal
This was a hearing over costs arising from a successful Appeal over the infringement of patents.
Shortly before judgment in the Appeal was handed down, the Respondent informed the Appellant that they would be making submissions under s. 68 Patents Act 1977, that because the Appellant’s exclusive licence had not been filed at the Patents Office in time, costs could not be awarded against them, nor could damages be awarded before the amended s. 68 came into force.
Section 68 was amended by the Intellectual Property (Enforcement etc.) Regulations 2006 in order to enforce EU Directive 2004/48/EC.
Article 14 of the Directive states that “reasonable and proportionate legal costs… shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this”. The Court noted that “equity” in this situation meant “fairness”, not the body of equity-case law.
Section 68 stated “[the court] … shall not award him costs or expenses”.
The Respondent submitted that s. 68 excluded any damages prior to its amendment and costs at all. The Appellant submitted that it was too late to raise an argument over s. 68, and if not, then costs could be awarded.
The Court agreed that s. 68 prohibited any awarded for costs, so agreeing with the Respondent. It stated that had s. 68 not prohibited, it would have been too late for the Respondent to raise it.
The Court also stated that “s. 68 is not a very well thought-out piece of legislation”.
In relation to the costs prior to the amendment, the Court said that costs would be allowed.
However, the Court went on to say that this only covered matters up to 26th November 2009, because a further unregistered licence was then agreed. The Respondent submitted that no costs could be awarded in relation to this later licence, and referred to caselaw in support; the Appellant submitted that they could be awarded. In the circumstances, the Court adjourned the case until a later date to deal with these further costs, but that it was unconvinced that the Respondent’s caselaw was correct.
29.07.2011Austin & Ors v Miller Argent (South Wales) Ltd.  EWCA Civ 928
Key areas: Group Litigation Orders; Protective Costs Orders; Court of Appeal
This was an Appeal against the refusal to grant a Group Litigation Order (GLO) under CPR 19, section III in a claim for nuisance resulting from open-cast mining.
Even though the matter did not fall within “public law” the Claimants had also applied for a Protective Costs Order (PCO) due to the claim falling within art. 9(3-4) Aarhus Convention.
The GLO had been refused because there was insufficient information about the claims and it was not certain that the Claimants could fund the claim. The Claimants has also been ordered to pay the Defendant’s costs of the Application.
In their Appeal Notice; the Claimants submitted that they were unable to obtain ATE for the claim, but due to the Convention, a PCO would be granted; due to the lack of information, the Application should have been adjourned; and they were exposed to a “prohibitive expense” which goes against art. 9(4) of the Convention (the Defendant’s costs were claimed at £257,150). At the Appeal Hearing, the Claimants also submitted that funding issues should be dealt with by Directions.
The court dismissed the submission that the GLO Application should have been adjourned because it had already been adjourned more than once, and nobody asked him to adjourn at the Hearing. The refusal of the GLO was also upheld as it was a reasonable decision based on the facts at hand.
The Claimants also submitted that their liability for costs should be capped at “Nil” or a low sum, while the Defendant submitted that the Convention did not apply and the costs are not “prohibitive”. The Court noted that the Defendant accepted that the costs would be no more than £153,646, which was to be split on a pro rata basis and so the amount claimed from each Claimant was £361.52. The Defendant also stated that costs would not be claimed from any Claimant who did not proceed further or from any of the minors. The Court upheld the Defendant’s submissions.
In relation to the PCO, the Defendant submitted that there is no jurisdiction to order one; that it is too late; and the costs are not “prohibitive”. The Defendant’s costs in relation to the PCO worked out at £192.04 per Claimant, and the Court agreed that this was not prohibitive and the PCO was not granted.
29.07.2011Temple Island Collection Ltd. v New English Teas Ltd. & Anor  EWPCC 21
Key areas: summary assessment; Patents Court
The Parties had agreed that the Defendants had violated the Claimant’s copyright. However, they had subsequently agreed terms of a licence by which the Defendants could exploit the copyright and it was to be drawn up at the First Defendant’s expense.
The Claimant had claimed £2,000.00, reduced from their calculations of £2,771.00 based on the costs of a normal licence which would then need to be adapted to the Parties’ needs. The Defendants had offered £500.00 on the grounds that the licence was not complex and drafts had included terms which had not been agreed.
The costs were summarily assessed at £1,500.00.
27.07.2011Grand v Gill  EWCA Civ 902
Key areas: pro bono; Litigant in Person; Court of Appeal
The Claimant won on appeal and obtained an order for pro bono costs for £2,500.00 under s. 194 Legal Services Act 2007. This Application was for Litigant in Person costs for the time which the Claimant spent in the preparation of the case prior to obtaining pro bono representation, as well as the related disbursements.
Costs were claimed at a total of £15,257.50, with her own fees calculated at the prescribed rate of £9.25 per hour.
The Court noted that because she had won the Appeal, she was entitled to her costs in principle.
The Claimant had sought to Appeal on 11 different grounds, but only received permission on two of these and only actually succeeded on one issue.
The Court stated that the Claimant’s Skeleton Argument was “a similarly valueless document” in that it was 27-pages long, but only 14 pages of it related to the issue on which she won.
In the circumstances, the Court made an award of £703.77, after taking into account what it considered to be unnecessary work and expenses.
26.07.2011R (Bahta; AK; TZ; RO; KD) v Secretary of State for the Home Department  EWCA Civ 895
Key areas: party’s conduct; Judicial Review; Court of Appeal
This was an Appeal over whether decisions over costs incurred in immigration cases in light of the Parties agreeing Consent Orders. The Court noted that this ruling also applied generally to Judicial Review cases.
The Appellants obtained rulings in their favour and then the cases were withdrawn by consent.
Prior to this case, due to R (Boxall) v Waltham Forest LBC ((2001) 4 CCL Rep 258) the fall-back position was that no order to costs was to be made unless the outcome was “plain and obvious” when the claim was brought.
At first instance, in AK and TZ it was held that the case was not “plain and obvious”, but was rendered academic due to leave to remain being granted.
In RO the claim was “vindicated” by a separate Supreme Court ruling (R (ZO (Somalia)) v Secretary of State for the Home Department  UKSC 36), but again was not “plain and obvious” at the start.
In Bahta, again, the Court did not consider that the matter was “plain and obvious”, but a grant of asylum, again, made the claim academic.
In KD, the Court was sympathetic, but also stated that the matter was not “plain and obvious” and so an Order for costs was not made.
The Respondent submitted that due to the terms of the various consent orders the Court of Appeal did not have jurisdiction. However, the Court held that there was nothing to prevent them having such jurisdiction.
The Court referred to CPR r.44.3(5)(a) which mentioned that the conduct under the Pre-Action Protocol was to be taken into account when determining costs.
The Appellants submitted that Boxall pre-dated Pre-Action Protocol in Judicial Reviews (PAP) and had not considered the implications of the CPR. One of the Intervening Parties submitted that the PAP should be taken into account, as should the disparity between legal aid rates and inter partes rates.
Para. 13-14 of the PAP relates to the response by the Public Body: it should be made within 14 days with a possible extension of a further 14 days if one is requested, but any request should be backed by reasons. In this case, no such request was made and so the Public Body did not comply with the PAP.
The Respondent submitted that they were over-worked and under-funded, buy the Court held that this cannot be taken into account.
The Respondent then made four further submissions: that the grants of asylum were made independently to the claims; that it was not “plain and obvious” that the Supreme Court would dismiss its appeal in R (ZO (Somalia); that compromises were reached; and they had a discretion under art. 11(2) of EU Directive 2003/9/EC over whether to grant permission to work within the UK. These were all dismissed as either being “unsubstantiated” or not relevant.
The Court emphasised that if an “adequate response” is not received from the Defendant, the Claimant is entitled to issue proceedings. It also held that in relation to publicly-funded parties, it is not right for there to be no order for costs simply because to do otherwise “would only transfer funds from one public body to another”. Nor should order for costs be granted simply because the lawyers are “inadequately remunerated”.
The Court stated that the “starting point” is that a successful Claimant is entitled to their costs and that PAPs should be complied with in order to prevent litigation.
The Appeals, and costs, where therefore allowed.
26.07.2011DRL Ltd. v Wincanton Group Ltd.  EWCA Civ 839
Key areas: both parties win some issues; Court of Appeal
This was an appeal against a decision in a contractual dispute over the supply of goods.
The Appellant appealed against rulings that it was not able to repudiate the contract and that the Respondent was entitled to summary judgment on unpaid invoices. The Appellant won on the “repudiation” argument, which knocked-out the summary judgment against it. The Appellant also appealed – and the Respondent cross-appealed – against issues in the contract itself, but these were dismissed.
The Court then turned to issues of costs.
The Claimant submitted that it should be entitled to 90% of its costs of both the Appeal and Cross-Appeal, while the Respondent submitted that there should be no order as to costs on both.
The Court held that given the overlap between the two it was wrong to distinguish between them and so any costs order should relate to both issues. It stated that given that the Appellant lost on some issues, it should be awarded 70% of its costs.
The Court made no order as to costs in relation to the summary judgment – on Appeal or at first instance – because of the impact of the main Appeal. Therefore, the Respondent had to pay back any costs it has already received in relation to this. The Court also stated that the Appeallant should have reserved this appeal pending the outcome of the main appeal.
22.07.2011GW v BW & TA v RA  EW Misc 10 (CC) Romford County Court
Key areas: infant settlements; RTA; CPR 45; costs against Solicitors; County Court
Both Claimants were infants who had been involved in RTAs which had settled without the need to issue proceedings. As a result, proceedings were issued under CPR Part 8 for the Court’s approval under CPR 21.10.
The case itself was concerned with the information which is required so that approval can be obtained without the need for a Hearing.
In GW, the Part 8 Claim Form stated that damages would be invested in a Special Investment Account and it appeared that the Solicitors had not considered other means of investing the money.
In TA, no draft order was provided at all, giving the Judge no option but to list the matter for a Hearing.
The Court noted that inflation was significantly higher than the Special Investment Account (SIA) interest rate and that bank deposits had been guaranteed up to £50,000.00 by the government. Therefore, any Judge who simply provided for a SIA would be guilty of an “abrogation of judicial responsibility”. The Court also noted that there were a number of accounts which had interest rates in excess of the SIA rate.
As a result, the SIA should be “the place of last resort” for damages payable to infants.
The Claimants were due to turn 18 in 9 months. The Court discussed the matter with them and their Litigation Friends and it was agreed that immediate payment was more appropriate in the circumstances.
The other issue in dispute was costs. Both cases had settled for less than £10,000.00 and so CPR 45, section II applied.
The Claimants submitted that if the Court fixes a Hearing, then they have no option to attend, and also had to instruct Counsel.
The Court rejected this submission saying that CPR 45.10(2)(c)(i) only covers Counsel when work is “necessarily incurred” due to the Claimant being a child.
The Court then considered CPR 21(10) and PD 21 para. 5.1. It noted that the Solicitor must decide whether it was “necessary” to instruct Counsel or pay the fees out of the fixed profit costs. However, it is not “necessary” if Counsel is instructed because it is more “economic” to instruct him. The case needs to have “some exceptional feature”.
Separately, at para. 50-58, the Court noted that the Claimants had raised the same arguments in a variety of County Courts, but on almost every occasion had been rejected. The Court considered this to be “forum shopping”. However, the Judge held that it was time for the Solicitors to “put up or shut up” and granted permission – straight to the Court of Appeal under CPR 52.14 – for a determinative ruling on the issue. The Court also stated that should the Solicitors decide not to appeal and raise the same arguments again, they would face costs sanctions.
In relation to the Settlement Hearing itself, Counsel’s fees were rejected in GW, while in TA the Solicitors were put on notice that an order for costs would be applied for against them, which was granted.
19.07.2011Attorney General v Associated Newspapers Ltd. & News Group Newspapers Ltd.  EWHC 1894 (Admin)
Key areas: Contempt of Court; party’s conduct; Indemnity Basis; basis of assessment; High Court
This was a hearing to determine the costs arising from a successful Application for Contempt of Court, arising from the accidental publication of a photograph.
The Defendant’s submitted, as a point of mitigation, that it was difficult to access the photographs, but it was held that there was a real risk that a Juror may see the articles in question.
The Defendants also submitted that the Attorney General’s costs of £28,117.23 were excessive and should be assessed on the Standard Basis, not the Indemnity Basis.
The Court rejected this argument stating that the costs were incurred due to their own actions, and they chose to fight the case and summarily assessed so the costs as claimed.
14.07.2011Allen v Bloomsbury Publishing Ltd. & Murray  EWCA Civ 943
Key areas: security for costs; Court of Appeal
This was an appeal over a Costs Order in a case of copyright infringement.
At first instance, the Claimant had been order to pay into court £50,000.00 else the case would be struck out.
The Claimant appealed on the grounds that the order had been for too high a sum; that it was an Unless Order not an Order for Stay of the Proceedings; and that costs had been awarded in the case in relation to the Defendants’ Applications.
The Claimant sued the Defendants for breach of copyright of the “Harry Potter” series. He claimed that they had been lifted from a book called “Willy the Wizard” which he obtained copyright from due to the bankruptcy of its author.
The First Defendant had applied for summary judgment on the grounds that the case had no real prospects of success; else the Claimant should pay a sum into Court for security of costs. The Second Defendant also applied for summary judgment.
The Court at first instance said that it was unlikely that the claim would succeed and only just rejected the Applications for summary judgement. It also noted that the Claimant had not provided any details as to his means, or those helping to fund the case and so an Order for security of costs was justified.
On Appeal, the Claimant submitted that the Defendants’ own costs estimates should that the sum to be paid into Court was too high; that the normal procedure for non-payment was a stay; and that because the Defendants’ summary judgement Application was failed, and were separate to the main case, could be dealt with separately.
The Court rejected the first and second grounds entirely, and, in relation to the third ground, because the Applications had only just been rejected, it was justified to Order costs in the case.
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