Civil Costs Case Law Update – August 2024
Wells v Hornshaw [2024] EWHC 2019 (Ch) -31 Jul 2024. In proceedings involving s.994 Companies Act 2006, Adam Johnson J considered whether a Part 36 Offer made by the Respondent on 4 August 2023 was still open for acceptance when the Petitioner had sought to accept it on 22 April 2024. He held that upon a proper analysis of CPR 36.12 (Acceptance of an offer in a split trial), by the date that the petitioner indicated that he wished to accept the Offer, all the issues had been determined and the case had been decided, even though a valuation process was still ongoing in relation to the Petitioner’s shares. A further trial would not be required. It followed that the offer had no longer been open for acceptance on 22 April, so the Part 36 consequences on acceptance did not apply.
SZ Solicitors (a firm) v Bharj -6 August. In proceedings for the recovery of fees, having heard evidence and preferring that of the former client, HHJ Monty KC held that there had been no written retainer, although it had been the solicitors’ case that £223,253 was due under the terms of the material it had relied upon. It followed that the firm was entitled to charge only on an hourly rate plus disbursements basis. However, s.74(3) of the Solicitors Act 1974 limited the costs payable by the client to those recovered from a paying party in proceedings in the County Court, meaning that only £62,628 could be assessed. However, 70(9) (the “one fifth rule”) had no application as this had been a common law assessment, but as the solicitors had failed to serve their costs budget in time, their costs were limited to the £10,000 issue fee and the £1,175 trial fee.
Candey Ltd v Finnan [2024] EWHC 2157 (Ch) -19 August HHJ Cadwallader. In proceedings under the Solicitors Act 1974 (the Act), the judge had below acceded to the solicitors’ application that a Conditional Fee Agreement made in respect of s.994 Companies Act 2006 proceedings, had been a Contentious Business Agreement, pursuant to s 61(1) of the Act, and had made an order for £100,000 to be enforced against their former client. That decision had been correct, and it had not been open to the judge below to have enquired into the hourly rates or the hours worked. S.58(4), Courts and Legal Services Act 1998 provided for the fees and expenses to be paid only in specified circumstances. In the instant case, that had been £40,000 (of the £100,000) if the claim succeeded. Contrary to the former client’s contention, that had not been a success fee for which there was no provision in the CFA and his appeal was dismissed.
R. R. (on the application of Halton BC) v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 2030 (Admin) -21st August. Application for a judicial review of costs orders awarded against a local planning authority under Pt XII s.250(2) Local Government Act 1972, where it had withdrawn its support for a planning application after its safety planning expert had failed to come up to proof in his evidence, as a result of which the inquiry, after 8 days, had been aborted. Fordham J refused the application. There was a wide latitude in costs decisions, and it was not the function of the judicial review court to substitute its own view of the merits, even if it was in a position to do so, which, on the authorities, it was not.
Q Queensgate Place Ltd v Solid Star Ltd [2024] EWHC 2139 (Ch) -21 August. When dealing with “consequentials” (including liability for the trial costs and a payment on account) following the determination of a petition under s.994 Companies Act 2006, David Rees KC dealt with a late application to amend the petitioner’s costs budget under CPR 3.15A. The amount sought was £161,964 for the trial phase to cover a Remedies Hearing. Whist accepting that there had been a significant development in the litigation and good reason for the court on assessment to depart from the petitioner’s approved budget, it was not appropriate after the trial had ended to approve amendments to the budget, and the detail on the issue would be left to the costs judge to resolve.
Re A (Appeal: Costs) 2024 EWHC 2218(Fam) -28 August. On appeal from a decision of a recorder, Henke J considered whether there was any good reason to depart from the general practice of making no order for costs in cases involving children. She held that there was not. The appeal was in Children Act proceedings in which the welfare of the child was the paramount consideration. To be factored in was the obvious distrust and antagonism between the parties and that by ordering one party to pay the costs of the other, there was a real risk that that would further aggravate their poor relationship, and undermine their ability to work together for the benefit of their child. No order as to costs had been the correct order so the appeal was dismissed.
Matrix Receivables v Musst Holdings (re Costs) 2024 EWHC (KB) 2245 -30 August. Where the court had ruled that the costs of an application for summary judgment and abuse of process should be paid by the defendant to the claimant, on dealing with an interim payment, Freedman J rejected the submission that the appropriate percentage was 70%. That was too high a starting point unless the calculations were straightforward and the points of dispute limited. On the facts, the appropriate percentage was 50%, being £151,828.20 payable within 28 days.
