Manchester Messenger August 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
The Solicitors Act 1974 has kept the courts busy again during the past month. At costs judge level, in Stella v Hodge Jones & Allan LLP [2024] EWHC 1704 (SCCO) Master Whalan was asked to decide whether 34 bills were interim “statutory” bills, or merely requests for payments on account, in which case, time would not run for applying for assessment under s.70 until delivery of the final bill. He held that all £225,697.60 worth of the bills, of which £198,635 had been paid, were the latter, so they could all be assessed. He added “If a solicitor wants 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 is, frankly, baffling”. It is surprising how often firms fail to do that!
However, in Holcroft v Thorneycroft Solicitors Ltd [2024] EWHC 1473 (KB), Eyre J refused to make an order for detailed assessment under the 1974 Act Act of a bill rendered by the solicitors to their former client for work in a personal injury claim. Before the issue of proceedings, the client had authorised the firm to accept a settlement offer of £24,200 including costs on the terms set out in a letter of 4 August 2020 which had identified the profit costs and disbursements to be deducted from the settlement sum. The client had written “I have signed and accepted it on the attachment”. That had amounted to a binding agreement not only that the offer would be accepted, but also as to the division of the offer amount between the parties and as to the precise amount recoverable by the solicitor for its costs and disbursements. It followed that the client could not seek to use the section 70 procedure to reopen that agreement.
Next, non-party costs orders. In a decision which has only just come to light although handed down on 20 May, in Transomas Ltd v Kheri Trading Ltd [2024] EWHC 1349 (Ch) Joanna Smith J, made a non-party costs order against the sole director of the two claimant companies, to prevent her from hiding behind a corporate identity and thus engaging in what would otherwise have been, for her, risk-free litigation. Her conduct over the course of the litigation had justified the order since she had repeatedly made very serious and unsubstantiated allegations which the court had found to be completely misconceived.
For guidance about varying an order for security for costs, see Exporien Mining Private Ltd Co v Aggreko International Projects Ltd [2024] EWHC 1463 (Comm) in which Phillip Marshall KC dealt with an application for an extension of time to provide security as previously ordered, and for a variation of the order in terms of the type of security to be provided. The judge held that under CPR 3.1(7), the court could entertain a claimant’s application to vary the form of security it had been ordered to provide, despite a lack of material change in circumstances since the order had been made. However, the judge went on to direct that an After-the-Event insurance policy offered as security required dealing with, within 21 days, in order to address points of objection raised by the defendant which the judge had accepted.
As usual, Part 36 has provided for almost monthly caselaw. In Elbanna v Clark [2024] EWHC 1471 (KB) Sweeting J held that an offer to settle on terms that “The Claimant will settle the issue of liability in this claim on the basis that the Defendant will accept 75% of the Claimant’s claim for damages to be assessed”, was not an offer effective so as to give rise to the Part 36 consequences which would otherwise follow from the claimant’s success at the trial. The wording had not made reference expressly to breach of duty or to a causation issue which was initially to be determined at a preliminary issue hearing. However, the judge went on to say that the offer might have those consequences at a later stage when all liability issues had been determined, but that would be a matter for further argument if it arose.
Judgment in what is probably the largest costs budgeting case was also heard this month. In Pan NOx Emissions Litigations, Re [2024] EWHC 1728 (KB), Constable J and Senior Costs Judge Gordon-Saker were asked to approve budgets where the claimants sought over £342 million and the defendants £306 million. They were unimpressed and did not hold back “The incurred costs to date are as eye-watering as the costs that are said yet to be incurred”, they said and approved “only” £52m for the claimants for tranches 1 and 2 and £114m for the defendants! Also interesting was the number of counsel who were needed to “budget” at the hearing -5 silks and 18 juniors who took three days to present their arguments!
Space constraints permit only a mention of two other cases. Houssein v London Credit Ltd [2024] EWCA Civ 721 is principally about whether default interest amounted to a penalty, but the Court of Appeal also gave interesting guidance about issue based costs orders and indemnity basis costs. Finally in McAteer v Hat & Mitre (In Liquidation) [2024] EWHC 1746 (Ch) Sir Anthony Mann dealt with “consequentials” and payments on account, having one or two choice remarks about “..the technique of a practitioner who submits a skeleton argument also providing submissions directly from the client without actually adopting them [was] not to be encouraged.”
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 August 2024 edition of the Manchester Messenger here.
