Civil Costs Case Law Update – July 2024
Houssain v London Capital Ltd [2024] EWCA Civ 721. Newey, Asplin, Baker LJJ 28 June 2024. When holding that the issue of whether default interest under a facility agreement amounted to a penalty would be remitted to the judge, the court also allowed an appeal in relation to an issue based costs order. Newey LJ held that the judge below should first have determined who was the overall winner, then taken account of the offers made where relevant and then decided whether to apply a discount before resorting to an issue based costs order under CPR 44.2(7).
Stella v Hodge Jones & Allen [2024] EWHC 1704 (SCCO) 2 July. Master Whalan held that £225,697 worth of the defendant’s bills, of which £198,635 had been paid, were merely requests for payments on account and not final “statutory” bills for the periods to which they related. As such, all were susceptible to an order for detailed assessment upon the claimant’s application under s.70 Solicitors Act 1974. In the Master’ view, if a solicitor wanted to provide for the demand and payment of interim statute bills, then the retainer should express an unequivocal provision to this effect: the profession’s consistent failure to do so was “baffling”.
Simon v Simon [2024] EWHC 1728 (KB) Peel J 2 July. In a final financial remedies hearing, the husband and wife had reached a prior agreement meaning that they no longer wished to continue with the proceedings, and the wife wanted to withdraw her application. Earlier, the wife had obtained a loan of £630,000 from a litigation funding company which had intervened in the case because the agreement left her with no funds to repay the loan. On the funder’s application to set aside the consent order on grounds that the husband and wife had entered into a collusive agreement to deprive it of its entitlement under the loan, Peel J acceded to the husband and wife’s request to make “No Order”, thereby bringing the proceedings to an end. The court could not force them under the Matrimonial Causes Act 1973 to seek any orders, whether by consent or otherwise, and the funder already had civil proceedings in progress against the wife to recover its loan.
St James v Wilkin Chapman LLP [2004] EWHC 1716 (KB) Constable J – 4 July. In an action for personal injuries in which the claimant had recovered £65,000 in damages and £52,000 for costs, his solicitors had deducted £13,750 for a success fee claimed under his Conditional Fee Agreement (CFA). Below, that sum had been reduced to 10% on a detailed assessment brought by the client under s.70 Solicitors Act 1974. On appeal, the Court found that a client care letter was part of the overall retainer package and that it prevailed over the general wording of the CFA. That had turned the CFA into a CFA “lite” meaning that the claimant was liable to a deduction of £3,668.71 from his damages.
Pan Nox Emissions Litigation [2024] EWHC 1728 (KB) Constable J, Master Gordon-Saker – 5 July. In the “Dieselgate” group litigation, the claimants and defendants had asked the court to approve costs budgets, of, respectively, £342m and £306m, those figures having excluded costs incurred already. Whilst the Court’s power to approve budgeted costs for a particular phase was limited to phases where budgeted costs had not been agreed, at the invitation of the Court, it had been accepted by the parties that it was appropriate for the Court to substitute an approved phase total in place of an agreed phase total. In doing so, the Court stated that the incurred were as eye-watering as the costs that were yet to be incurred, and budgets for the Claimants’ costs for the Tranche 1, Tranche 2 of the action, were reduced to £51,997,713.75, and the aggregate of the Defendants’ costs to £113,973,384.37.
Khokan v Nirjhor 2024] EWHC 1873 (KB) [Hill J -19 July. The court had struck out a claim in libel because the claimant had failed to pay an outstanding costs order of £20,646.58 by 4 pm on 14 June 2024 under an “unless” order. In a hearing for “consequentials”, the court was asked to decide whether costs should follow the event, or whether the defendant’s conduct justified a departure from that general rule. Hill J held that none of five arguments advanced by the claimant did so. They included the defendant’s conduct at the pre-action stage and in respect of his alleged failure to engage with settlement offers and Alternative Dispute Resolution during the currency of the claim. So far as the defendant’s costs budget was concerned, an upwards variation of an additional £82,954.78 in estimated costs, thereby more than doubling the estimated costs figure if permitted, was excessive. Whilst costs relating to the application for an unless order and an application for security for costs were “significant developments” within CPR 3.15A(1), costs such as those for amending the pleadings, were not. In the result, the claimant was ordered to pay the costs of the claim on the standard basis (with some variation of the defendant’s costs budget being permitted), together with the costs of the consequentials hearing, summarily assessed at £5,500.
