Manchester Messenger July 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
We start with an unusual judgment where the successful party wanted a detailed assessment rather than a summary assessment but did not get one! In Scenic International Group Ltd (In Provisional Liquidation) v Adenaike (Costs) [2024] EWHC 1178 ( Ch), a party had won an application and a summary assessment was appropriate under Practice Direction 44, para 9.2(b). No statement of costs had been filed and served because the successful party did not wish to go to that expense (as it was unlikely that the losing party would ever pay the costs) and sought a detailed assessment instead. That request failed. Roth J said that that was a mistaken approach and ordered a schedule to be served, with the costs to be assessed on the papers. That schedule had subsequently sought £36,000 which was disproportionate: £23,235 was a reasonable sum to allow.
In Francois v London Borough of Waltham Forest [2024] EWHC 1162 (KB), Yip J, gave a lesson to counsel about making sure that they have an up-to-date practising certificate in place. Following a detailed assessment during which the court had allowed fees for the claimant’s counsel of £894 against a claim for £3,200, she upheld the decision of the Master below in having disallowed fees for the period during which counsel had inadvertently let his practising certificate lapse. She held that an unregistered barrister cannot act as a barrister and must be treated no differently to any other professional such as a debt collector, tax adviser or foreign lawyer, all of whose services have been found not to qualify for recovery under CPR 45.5(3)(b).
Next, a rare foray into the world of costs in Family cases where the general practice is to make no order in matters involving children. In Re O (Appeal: Costs) [2024] EWHC 1163 (Fam,) Ms Justice Henke found that there was no good reason to depart from that general practice when requested by the Petitioner to do so. She held that the Respondent’s litigation conduct could not be characterized as unreasonable or reprehensible. Having instructed Counsel, the Respondent had taken proactive steps to narrow the issues and reach a compromise. “No order as to costs” was the correct order.
In DH v RH [2024] EWFC 114, however, MacDonald J went the other way, albeit in a family case not involving children. Although under FPR r.28.3(5), the court will not ordinarily make an order requiring one party to pay the costs of another party, the wife had been guilty of persistent and egregious conduct (extra costs in an unsuccessful attempt to find hidden assets). That justified a departure from the general practice and the wife was ordered to pay over £250,000 in costs out of her matrimonial settlement.
Allegations of “fundamental dishonesty” made by defendants in personal injury actions are without doubt on the increase, usually generated where video surveillance is relied on by the defendant to show that a claimant has exaggerated their injuries to the extent of being dishonest. However, in Thakkar & Ors v Mican & Anor [2024] EWCA Civ 552, the defendant’s case went further. The court below had dismissed the allegations of fundamental dishonesty. Accordingly, the claimants had wanted indemnity basis costs against the unsuccessful defendant. That submission failed, with the Court of Appeal holding that there was no presumption or reversal of the ordinary burden of proof where fundamental dishonesty had not been found. Whether an award should be made for indemnity costs would always depend on the circumstances of the particular case, and the judge retained a complete and unfettered discretion. Failed allegations of dishonesty might be the starting point for any consideration of those circumstances, but that did not reverse the burden of proof or put the burden on the paying party to explain why indemnity costs were not appropriate.
The growing trend to make solicitors pay the costs in proceedings in which they act for litigants, took a further, albeit unusual twist, in Tonstate Group Ltd (In Liquidation) v Wojakovski [2024] EWHC 1196 (Ch). Adam Johnson J held that there had been no proper justification for adding a firm of solicitors as a third party to an application and ordered the applicant to pay the firm’s costs. In the proceedings, the firm had been dis-instructed during the course of a hearing. Later, the successful claimant had served the firm with the order subsequently made by the court at that hearing. However, the claimant’s further application seeking a declaration that by sending the sealed order to the dis-instructed solicitors, the defendant had been validly served, came at a heavy price. The firm was entitled to recover their costs which Adam Johnson J summarily assessed at £45,000!
Finally, a short summary cannot do justice to Joanna Smith J’s judgment in Leonard v Leonard [2024] EWHC 979 (Ch) which encompasses costs in contested probate proceedings, Part 36 and issue-based costs orders! Her decision will repay a full reading. In short, the testator had made two wills (in 2005 and 2015 respectively) with there being a dispute as to his capacity to make the second will, and about two lifetime gifts he had made. The court found in favour of the 2005 will and upheld the lifetime gifts, meaning that the parties had both won and lost, so the costs orders went both ways. Just to muddy the waters there were Part 36 offers, and an issue about whether the additional benefits payable under CPR 36.17(4) were payable. In the end, the judge found that there was no reason to disapply the rule. She also held that this was one of those cases where an issue- based costs order would have to be made under CPR 44.2(6)(f) as it was not safe to make a percentage-based order under CPR 44.2(6)(a) or (c) given the disparity of dispute between the wills issue and the gifts dispute.
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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