Manchester Messenger – July 2023
In the July edition of The Messenger; the monthly magazine of The Manchester Law Society, Nick McDonnell and Colin Campbell provide a legal costs update.
An abundance of cases this month. First, costs budgeting and two lessons in variation, illustrating how hard it can be to vary the budget under CPR 3.15A for “significant developments”.
First, in BES Commercial Electricity Ltd v Cheshire West and Chester Council [2022] EWHC 3333 (KB), the Defendant applied after trial to increase its budget in respect of the PTR, Trial Preparation, Trial phases and Trial. Freedman J dismissed the application. Such matters were for argument to be developed in much greater detail at detailed assessment. In addition, no “narrative” would be provided giving indications to the costs judge. The parties could do that, thereby providing a fuller and more valuable perspective for the costs judge than the trial judge’s own observations.
Second, in Simpsons (Preston) Ltd v MS Amlin Underwriting Ltd [2023] EWHC 1370, the claimant sought to vary the costs management order by increasing the budget for disclosure from £59,665 to £117,807.56. Whilst there had been a “development” (discovery of two previously unknown drives), HHJ Pearce held that it had not been “significant”, so that application also failed.
For a full and useful resume into the circumstances in which indemnity costs are appropriate, see Goyal v BGF Investment Management Limited [2023] EWHC 1283 (Comm). Butcher J held that although the case had been speculative, weak and thin, that did not mean that indemnity costs should be paid throughout. Instead, they would be ordered from the time of a rejected “drop hands” offer, after which the Claimants had still continued the pursuit of the action.
Losing an award of costs was the issue in Smout v Wulfrun Hotels Ltd [2023] EWHC 1128 (KB). Although the Defendant had won the appeal, Ritchie J made no order as to the costs because the defendant had been abusive to the claimant and to his lawyers in the conduct of the claim, and the defendant’s representative had continued to make rude and abusive comments about the claimant’s solicitor which had been unfair and inappropriate.
Fancourt J’s decision in Forster v Reynolds Porter Chamberlain LLP [2023] EWHC 1150 (Ch) is another warning about solicitors keeping the client informed about what the case is costing even though it is being run on a Conditional Fee Agreement. That did not mean that costs were not a matter for the client, as there remained a risk that the client would be liable to pay the shortfall between chargeable fees and disbursements, and the costs recovered from the opponents. In the negligence action which the former client had brought against her one-time solicitors, that had been a breach of duty in having failed to have kept the client informed, even though it had caused no loss.
For an interesting case about the interpretation of a costs order made in the Supreme Court, see Micula v Romania [2023] UKSC 2018/0177. The order had said:-
“Romania pay the Micula parties’ costs in the Supreme Court and below, to be assessed on the standard basis if not agreed and limited to one set of costs to be shared between the Micula teams in proportion to their actual costs expenditure, equal to one set of costs (being the higher set of costs claimed) but with an allowance for two KCs and one junior between them”.
That did not mean that “one set of costs” meant one combined set of non-duplicated costs for each the Micula parties. “One set of costs” was limited to one set of legal representative’s costs. Since the first receiving party had incurred higher costs, those would be recoverable together with the fees of two leaders and one junior counsel at any one time. Those costs would then be shared by all the receiving parties in proportion to their actual expenditure.
For a QOCS judgment in a “mixed” claim, see GHI v Derbyshire County Council [2023] EWHC 1337 (KB) in which the losing claimants claimed that their action “in the round”, was a personal injuries claim, thereby attracting “QOCS protection”. Hill J dismissed the defendants’ contentions that there were “exceptional circumstances” under CPR 44.16 justifying enforcement of costs orders made in their favour, save for one issue. That justified the order for costs being enforced as to 5% as opposed to the 85% sought.
Lastly, an important but necessarily complex decision about joint and several costs orders. See Horn v Knott [2023] EWHC 1351 (Comm) in which Foxton J, in a detailed judgment, determined the appropriate level of contribution between the respondents to various joint and several costs orders, which fairly reflected how central the role of particular respondents had been in 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.
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