When it comes to detailed assessment of solicitors’ fees the level of detail required is dictated largely by the Practice Direction accompanying CPR 47, specifically paras 5.12 to 5.22. But what about the fees of any experts who have assisted with the case?
How much detail are they required to provide?
Well, this has been addressed recently by the senior costs judge, Master Gordon-Saker, in Deutsche Bank AG v Sebastian Holdings Inc & Anor  EWHC B4 (Costs). This was a substantial costs case following “mammoth commercial litigation” in which the Claimant recovered damages of £243m and successfully defended a counterclaim originally pitched at in excess of £103bn. The costs sought amounted to £53m of which almost £23m plus VAT related to the fees of the Claimant’s expert accountants, Deloitte.
The Defendant had argued that it should not be liable to pay any of the accountant’s fees because, amongst other things, there was insufficient information given to explain how those fees had been calculated.
The Master concluded that that there was no duty on Deloitte (or any expert in litigation) to record its time in any particular way, other than by reason of anything agreed with its client, nor was there any duty on the Claimant to present Deloitte’s fees for assessment in any particular way, other than the obligation to provide the written evidence required by CPR PD47 paragraph 5.2(d).
84. CPR Practice Direction 47 provides guidance about the procedure for detailed assessment. Paragraphs 5.12 to 5.22 set out the requirements for the contents of a bill, but relate largely to profit costs. There are no specific provisions as to the form or content of evidence in respect of disbursements apart from the requirement in paragraph 5.2(d) that written evidence must be served with the bill of any disbursement claimed which exceeds £500.
85. I cannot accept Mr Vik’s argument that there are special rules in relation to the fees of accountants. Mr Williams QC readily volunteered that Brook v Reed and Re Brilliant Independent Media Specialists Ltd related to the fees of office holders who owe particular fiduciary duties. In the present case Deloitte will owe the usual professional duties to the Claimant and both Deloitte and the Claimant will owe to Mr Vik the very limited duties owed to third parties.
It seems to me that an expert accountant can owe no greater duties to his client’s opponent than any other expert witness. In my view there was no duty on Deloitte to record its time in any particular way, other than by reason of anything agreed with its client, and there is no duty on the Claimant to present Deloitte’s fees for assessment in any particular way, other than the obligation to provide the written evidence required by CPR PD47 paragraph 5.2(d).
However, there must be sufficient detail provided to allow the court to determine the reasonableness of the fees claimed…
86. Mr Williams QC sought to argue that, to avoid injustice, those who seek to recover professional fees need to provide sufficient detail to enable those ultimately liable to pay them to gauge the reasonableness of the fees. I do not believe that there is such a general principle.
87. However, as I indicated in the June judgment,
the assessment of the reasonableness of Deloitte’s fees cannot be conducted in a vacuum. There has to be sufficient detail provided to allow the court to carry out the task required by the rules and, in particular, CPR 44.3 and 44.4.
88. What is sufficient detail will vary from case to case. In the very common case, where an expert’s fee is claimed supported by an invoice along the lines of “writing report (x hours) x £y = £z”, that will usually be sufficient. The court will have the report and can form a view as to how much time was reasonably spent writing it.
89. Had the Claimant sought in its bill £22,393,670.81  plus value added tax in respect of the fees of Deloitte for data extraction and the reports of Mr Inglis, Mr Millar, Mr Robinson and Mr Sealey, without more, there would be an obvious difficulty in considering whether that was a reasonable sum.
90. However there is more.
While we are not told in an invoice or breakdown who did precisely what on which day, for most of the work described that is not required. The court would simply not be assisted in gauging the reasonableness of the fees claimed by knowing that a particular fee earner spent a particular amount of time writing a particular email; just as, in the most straightforward case, the court would not be assisted by knowing how much time a medical expert spent looking at x-rays or medical records, as against time spent dictating the report. However where more detail is required to enable the court to determine the reasonableness of the sum claimed, that sum must be disallowed.
Assessment of costs is not a perfect science …
91. In determining reasonableness, a costs judge must use his or her experience. As far as I am aware no costs judge, past or present, has experience of assessing quite such a large sum in respect of accountants’ fees. However we all have experience of assessing accountants’ fees in cases where limited information has been provided as to precisely what was done; and I and, I am sure, others will have experience of assessing very substantial fees in similar circumstances.
The assessment of costs is not of course as precise as many think and is a great deal less precise than many assessments of damages. While the results are expressed arithmetically, almost every decision on assessment involves a value judgment as to the amount of time reasonably spent. Because of the common ground between the parties, the main issue on this assessment, where there is sufficient detail to form a judgment, is the value judgment that the court should make as to the reasonableness of the time claimed. That is inevitably rough justice or as Russell LJ. explained, more elegantly, when describing the taxation of costs: “where justice is in any event rough justice, in the sense of being compounded of much sensible approximation”.
93. The court’s approach to this assessment should therefore be one of “sensible approximation” where sufficient detail has been provided to do that.