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Costs: Entirety of costs bill disallowed after solicitors' improper conduct

  • Market Insight 26 June 2020 26 June 2020
  • UK & Europe

  • Insurance & Reinsurance

The Senior Courts Costs Office has held that the unreasonable and improper conduct of a firm of solicitors during the assessment process can result in the entirety of a claimant’s entitlement to costs being disallowed.

Costs: Entirety of costs bill disallowed after solicitors' improper conduct

Colin Farmer v The Chief Constable of Lancashire [2019] EWHC B18 (Costs)

Master James concluded the firm's conduct had also been in breach of the CPR “especially of the provisions of CPR 1.3 whereby the parties are required to help the court to further the overriding objective”.

The Claimant had initially served a bill of costs totalling £174,565.79 in June 2018. However, it was subsequently conceded that a success fee of £28,088.41 was pursued under an unenforceable CFA, and £20,556 had been claimed at incorrect hourly rates. A replacement bill was lodged in the sum of £116,192.50.

The Defendant successfully applied to disallow the entirety of the bill pursuant to CPR 44.11, which allows a court to reject all or part of the costs being assessed where “it appears to the court that the conduct of a party or that party’s legal representative, before or during the proceedings or in the assessment of proceedings, was unreasonable or improper”.

Background

The claim had been funded by two Conditional Fee Agreements ("CFA"), one of which was signed pre-LAPSO and the second post-LASPO. The first CFA covered the first three parts of the bill and the final part of the bill was covered by the second CFA.

Points of Dispute were filed. On reviewing the documents, Master James stated that it was clear that the Claimant clearly believed the first CFA was valid and enforceable.

However, prior to the hearing, the Claimant’s solicitors submitted the second CFA was retrospective and covered all of the work done in parts one, two and three, as well as four of the bill; all in the absence of a cancellation notice for the first CFA.

Master James found that this was clearly incorrect; upon examination of the Claimant’s solicitors’ file there was nothing to suggest the Claimant had been advised that the second CFA was intended to have retrospective effect covering the entirety of the bill.

Indeed, Master James stated that such a move would have been a “colossally bad bargain” on the part of the Claimant, and in the absence of independent advice, would have created a conflict of interest with his solicitors. Therefore, there was no retainer under which parts 2 and 3 of the bill could be recovered.

In addition, the Claimant had signed a notice of cancellation for the second CFA in June 2015, and had not signed a new agreement.

Master James concluded the bill “should be something like one third of the figure it started out at, and that it would be well below the threshold for provisional assessment”, meaning the court fee would have been lower and the costs limited to £1,500.00 + VAT. Those errors had wasted court time in dealing with an incorrect bill.  

Counsel for the Claimant asked the Court to restrict any disallowance to the amount claimed for drawing and checking the bill and the court fee.

Outcome

Master James held that the bill should have totalled £59,933.10, 34% of that originally claimed. This vastly reduced bill was also considered in the context of numerous examples of documents which had been signed “without any proper regard for the need to fact-check and ensure that matters were dealt with properly”.

Counsel for the Claimant made submissions seeking to relying upon (and distinguish) the case of Bamrah v Gempride, by arguing that the errors identified were genuine mistakes, and therefore a reduction of less than 50% (the figure applied in Bamrah) should apply.

Master James disagreed, finding that the case turned on its own facts, and that “on the facts of the case, the conduct of [the Claimant’s solicitors] warrants disallowance of what is left of the bill".

End

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