Manchester Messenger – October 2023
Colin Campbell and Nick McDonnell provide a legal cost update in the October 2023 edition of the Manchester Messenger, the monthly magazine of the Manchester Law Society.
With the High Court closed during August and September, judgments are thin on the ground at this time of year. Nonetheless, we can report some interesting decisions, including one from outside the jurisdiction of England and Wales, namely Scotland! In Kirkwood v Thelem Assurances [2023] Scot CS CSIH 3, the court did not allow the costs of English solicitors acting for a Scottish client in the Scottish courts (who had been injured in France). This involved £250,223.35 (the English element of the fees) not being recovered.
Hourly expense rates for solicitors are always at the forefront of the minds of the profession, and with no sign of any uprating since the last review of the Guideline Rates for Summary Assessment (GHR) on 1 October 2021, it is little wonder that firms are pushing the boundaries. In Merricks v Mastercard Inc [2023] CAT 53, an action described by Roth J as “a claim of gigantic size”, following the determination of four applications, both sides had sought summary assessments of their costs. Each had claimed for their grade A and C fee earners, £825-£870 and £450-478 respectively. Roth J allowed £665.60 and £451 per hour. Given that this action involves huge sums and ticks all the CPR 44.4(3) boxes in terms of complexity, value etc, it might be thought that these figures, for the time being, will provide the ceiling for rates to be allowed on summary assessments where the GHR apply.
For another decision on rates, see Scenna v Chen [2023] EWHC 2173 (Ch) in which on a summary assessment on the indemnity basis involving schedules of £242,000 and £160,000, rates had been sought at A grade of between £550- £668 for London 1. The judge not only reduced them, but also allowed only the GHR rate for London 2 of £373. That, with other disallowances, reduced the costs to £157,000 and £110,000. Tricky to explain that one to the “successful” client.
In the Family court, in Tsvetkov v Khayrova [2023] EWFC 131, Peel J was persuaded to depart from the usual “no costs” rule where findings had been made against the wife of multiple instances of litigation misconduct. That meant that she should pay 50% of the husband’s costs on the indemnity basis, that being the just figure because (i) the wife had offered a 50/50 outcome which the court had adopted and (ii) on occasion, the husband had overplayed his claimed losses, and his position on child maintenance had been found to have been unreasonable.
Also involving conduct, in Ramji v Harvey [2023] Costs LR 1047, the court ordered the claimant and ninth defendant to pay the costs of action on the indemnity basis where those parties had knowingly lied in an attempt to gain a financial advantage and had perpetuated those lies in their written and oral evidence. Payments on account were ordered of 80% of the costs (being £69,000) rather than 90% as there had been no costs budgeting.
Next Part 36. In Colicci v Grinberg (re costs) [2023] EWHC 2075 (Ch), the judge held that an offer to pay £150,000 for shares was an offer to compromise that issue. No reasonable person would have seen it as an offer to pay £150,000 by way of a contribution to the defendant’s costs as the defendant had contended. Moreover, the claimants had done better than their own Part 36 offer and it was not unjust that the benefits under CPR 36.17(4) should be awarded.
Lastly, a mention of two less common costs points. In Viking Trading OU v Louis Dreyfus Co Suisse SA [2023] EWHC 2160 (Comm), Bright J gave guidance on how a respondent should approach costs on an application for permission to appeal pursuant to the Arbitration Act 1996 s.69. In ClientEarth v Shell PLC [2023] EWHC 2182 (Ch), Trower J addressed the costs of an application for permission to commence a derivative claim. Following an oral renewal hearing at which the court had refused the claimant’s application for permission to continue with it, the judge held that it had been appropriate and proportionate for the company to have attended the hearing, and so should have the costs of the entire action.
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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