Manchester Messenger – October 2024
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update, we focus on those cases which we believe are likely to have a practical relevance for its members. We welcome feedback and if there is an area, topic or case you would like us to address, please let us know
With the High Court and Court of Appeal on vacation until 1 October, it has been a quiet month for judgements. However, the Solicitors Act 1974 has not let us down! In Candey Ltd v Finnan [2024] EWHC 2157 (Ch) HHJ Cadwallader, on appeal, upheld the decision of the costs judge below. In proceedings under the Solicitors Act 1974 (the Act), the judge had 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 costs of £100,000 to be enforced against their former client. HHJ Cadwallader ruled that it had not been open to the judge to have enquired into the hourly rates, or the hours worked as the client wanted. S.58(4), Courts and Legal Services Act 1998 provided for the fees and expenses to be paid only in specified circumstances. On the facts, £40,000 (of the £100,000) was payable 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. It followed that the order enforcing payment of the £100,000 was correct, so the appeal was dismissed.
Next planning costs. R. (on the application of Halton BC) v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 2030 (Admin) concerned an application for a judicial review of costs orders awarded against a local planning authority under Pt XII s.250(2) Local Government Act 1972. Support for a planning application had been withdrawn by the authority after its safety planning expert had failed to come up to proof in his evidence, as a result of which a Planning Inquiry, after 8 days, had been aborted. Fordham J refused the application. He held that 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.
We have noticed that more recently, reported decisions have dealt with“consequentials”. In Queensgate Place Ltd v Solid Star Ltd [2024] EWHC 2139 (Ch), David Rees KC had been concerned with the determination of a petition under s.994 Companies Act 2006. Subsequently, this had involved “consequentials” (including liability for the trial costs and a payment on account) and a late application to amend the petitioner’s costs budget under CPR 3.15A. The amount sought had been £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” under the rules for the court on assessment to depart from the petitioner’s approved budget, he held that 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. Note that judgments have gone the other way, where the trial judge has declined to direct that the matter should be left to the costs judge to decide.
Next, a rare visit to the Family Court. In Re A (Appeal: Costs) 2024 EWHC 2218 (Fam), 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. She held that no order as to costs had been the correct order, so the appeal was dismissed.
Next costs on account following a summary judgment. It was the receiving party’s case that when deciding how much of the £274,138.61 sought was payable, 70% was the appropriate figure. In Matrix Receivables v Musst Holdings (re Costs) 2024 EWHC (KB), 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.
Finally costs in applications for freezing injunctions and the extent to which they should be reserved to trial or further order. In Cancrie Investments Ltd v Haider [2024] EWHC 2302 (Comm), Nigel Cooper KC 9 held that the ordinary approach to costs in such situations is that the court should make an order for costs following the hearing of a continuation application while reserving the costs of the original without notice application. A defendant had a choice about resisting continuance of a freezing order and thereby causing the costs of a return date to be incurred, in which case it would be open to the court to make an order for costs, rather than reserving the costs. On the facts, it had been appropriate to reserve the costs of the original hearing and to order the defendant to pay those incurred on the return date.
As always, these are a selection of the principal recent cases which are likely to be of use to practitioners and if any further information is required, please contact either Nick McDonnell or Colin Campbell at Nick.McDonnell@kain-knight.co.uk or Colin.Campbell@kain-knight.co.uk
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