Manchester Messenger – April 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.
First, a successful Court of Appeal case in which Kain Knight’s very own Mark Brighton was involved. Hadley v Przybylo [2024] EWCA Civ 250 concerned whether, and to what extent a solicitor could recover costs between-the-parties where time was spent attending case management meetings with medical and other professionals in the course of managing a claimant’s rehabilitation needs. Master McCloud, at first instance, decided that, as a point of principle, such costs were not recoverable as they did not ‘progress’ the case. Lord Justices Colson, Dingemans and Birss allowed the appeal finding that, in principle such costs are recoverable, but the extent to which they are is a matter for the costs judge against a test of reasonableness. Solicitors acting for Claimants working with case managers can now breathe a huge sigh of relief.
It is rare for any appeal against a costs management decision involving costs budgeting to succeed, but Woolley v MOD [2014] EWHC 304 (KB) is one such case. Below, the judge had fixed the parties’ costs budgets, making heavy reductions to the claimant’s Form H in a personal injury action when doing so. On appeal, Kerr J held that the judge below had made a serious procedural error or other irregularity in that she had closed her mind to any argument based on a comparison with items in the defendant’s costs budget. Kerr J allowed the claimant’s appeal and sent the matter back for a different judge to re- fix the budget.
Next family law costs. In KS v VS [2024] EWHC 278 (Fam), the husband had applied for £331,000 in costs following his successful application to stay divorce and financial remedy proceedings. He argued that the civil “Guide to the Summary Assessment of Costs” should not form part of a family court’s consideration in making a summary assessment. However, Arbuthnot J held that the Guide was helpful as it set out what a reasonable and proportionate hourly rate would be in the various types of cases that came before the court.
Still in family law, in Xanthopoulos v Rakshina [2024] EWCA Civ 100, a costs order in financial remedy proceedings had been made in favour of a successful appellant. However, the Court of Appeal held that a significant discount was required to reflect the court’s findings of litigation misconduct against him, which included having to increase the time estimate for the hearing by half a day to accommodate his numerous unmeritorious ancillary applications.
Next a victory for insurers against credit hire companies where vehicles have been rented after a road accident whilst the claimant’s car is under repair. In Kindertons v Murtagh [2024] EWHC 471 (KB), Turner J upheld a non-party costs order made below against the appellant credit hire company. Following the dismissal of a personal injury action arising out of an RTA, the losing claimants had been found to have been fundamentally dishonest, had failed to pay the other driver’s insurers’ costs of £12,000. Turner J agreed that the original claim (which had been for damages and car hire charges) had been for the financial benefit of the credit hire company which had had a very strong financial stake in the litigation; any benefit to the losing claimant in pursuing the claim for hire charges had been all but illusory. It followed that the non-party costs order stood, with the combined costs of the appeal estimated to be in the region of £100,000.
Still with non-party costs orders, but with a slight difference. Topalsson GmbH v Rolls Royce Motor Cars Ltd [2024] EWHC 297 (TCC) concerned an application by Rolls Royce for funding information in support of its application for a non-party costs order under s. 51 of the Senior Courts Act 1981 against Kubilay Topal the founder, managing director and majority shareholder of the claimant, and importantly, other potential funders. Rolls Royce succeeded, but not without Constable J stating that “….there is a depressingly real risk that an order requiring disclosure may provoke a side alley of satellite litigation around compliance”.
In an usual case involving a potential Damages Based Agreement, in Stoop (t/a Warwick Risk Management) v Johnson [2024] EWHC 286 (CH), Elizabeth Jones KC dealt with whether an agreement was a DBA at all, and if so, whether the success fee was reasonable. She held that the agreement did not comply with the DBA Regulations 2013 and was unenforceable, but if that were wrong, it related to family proceedings. Accordingly it was also unenforceable being in breach of s 58AA(4)(aa) Courts and Legal Services Act 1990.
Finally, Holden v Holden [2024] EWHC 453 (Ch) which concerns Part 36. Nicholas Thompsell KC had given judgment on various preliminary issues and had then moved on to consider the costs. In doing so, he was mindful of the limitations which apply about making costs orders after a trial of preliminary issues where, as was the case, there had been Part 36 offers. However, the parties agreed that he should look at the offers. Upon doing so, the judge decided that they were not valid offers under the rule. It followed that he could make costs orders other than “costs reserved”, holding that he need not defer dealing with the costs until the final determination of the litigation.
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
Read the full issue or download here.
