Background
The Appellants (A) appealed against a Costs Judge’s decision that they were only entitled to detailed assessment of one Bill of Costs.
The Respondent Housing Association (RHA) had obtained a without notice Anti-Social Behaviour Injunction, a Possession Order and an Anti-Social Behaviour Order against A.
A had appealed the various Orders. Their appeals were successful and the Court made three Costs Orders against RHA in respect of the appeals.
A had initially been represented by one firm of solicitors, but had transferred instructions to a second firm when they were granted public funding.
The first and second solicitors agreed that they would submit separate Bills of Costs, but omitted to inform RHA of that fact.
The second solicitors then lodged Notices of Commencement (N252), referring to the first and third Costs Orders.
The Bill did not include the first solicitors’ costs.
RHA agreed to pay the second solicitors approximately £39,000 plus VAT in settlement of H’s costs of the appeal.
After the agreement had been reached, the first solicitors lodged N252 in respect of Costs Order one, and submitted a bill of £53,000.
The Costs Judge dismissed the first solicitors’ request for assessment and decided that RHA was entitled to rely on the original Notice served by the second solicitors as a declaration of their full potential liability.
Appeal
A submitted that whilst CPR47 and its accompanying PD envisaged that only one Notice or Bill would be served, there was nothing that stipulated that that must be so.
They argued that though the Bill had not been divided into separate parts for each solicitor, that did not lead to the automatic disallowance of the costs.
Further, they submitted that there was no clear evidence that the agreement as to costs had been on the basis that the first Bill constituted the entire claim; RHA knew that the first solicitors had been instructed and the Bill clearly had not included their costs.
Finally, A maintained that the agreement as to costs could be avoided for mistake.
The Decision
Christopher Clarke J held that CPR 47.6 clearly provided that detailed assessment proceedings were commenced by the receiving party serving both a Notice of Commencement and the Bill of Costs, not a bill of costs.
The Bill was the receiving party’s statement of what he claimed was due to him pursuant to whatever Order entitled him to costs.
If A was entitled to recover the cost of instructing more than one solicitor, PD 47 required them to include the costs of each solicitor separately in the Bill.
If they failed to include the costs of their previous solicitor, and the Costs Judge completed the final certificate, they could not claim a further assessment, Segalov (Deceased), Re (1952) P 241 PDAD applied.
There was nothing in the CPR which qualified the position as stated in Segalov.
Further, where there was an agreement for costs the critical question was what had been agreed.
If A had made it clear that the amount claimed was only part of their costs, and they would claim later for their first solicitors’ costs, they would not be prevented from making a claim in respect of those costs.
There would have been a failure to comply with PD 47 but, subject to any sanction that the court thought fit to impose, there would be no reason why the court should not assess the remaining costs in dispute.
If, on the other hand, what was settled was the amount of A’s costs pursuant to a particular Order, the position would be different.
If they had left some costs out of the Bill and there had been a settlement of the Bill, they could not recover more than the amount agreed.
The second solicitors’ N252s were notices of A in respect of Costs Orders one and three.
The second solicitors had indicated the sums which they would be prepared to accept in settlement of RHA’s liability under those Costs Orders.
A’s argument that such an agreement could be avoided for mistake was incorrect.
On the assumption that there was a mistake as to the terms of what was agreed, it was not common; it was not shown that RHA knew, or that any reasonable person in its position would have known, that A was under such a mistake.
RHA had not acted in such a way as to render it inequitable for it to rely on the agreement made, that was particularly so in light of the fact that the agreement did not deal with the second Costs Order.
Finally, no Notice of Commencement was ever served pursuant to the second Costs Order, and no Bill had been prepared which purported to be a bill relating to it.
In those circumstances, the agreement could not be regarded as compromising any liability of RHA in respect of the costs awarded to A under that order.
A was not precluded from issuing N252 in respect of that Order, which constituted a separate source of entitlement to costs.
As a postscript to his Judgment Clarke J added…
“The result of my [dismissing this appeal] is that the appellants will be unable to recover from the respondent an appreciable amount of costs that they might otherwise have received. I have considered whether that result is such as to demand a different conclusion. In my judgment it is not. Where there has been more than one solicitor, the absence from the bill of one solicitor’s costs, if not picked up by the solicitor who has conduct of the assessment proceedings, is likely to be picked up by the costs judge himself. The appellants’ problems in this case arise because RJH had no undertaking from, nor agreement with, SWL to include their costs in SWL’s bill. On the contrary SWL and RJH, either oblivious or heedless of the provisions of the practice direction, made a deliberate decision not to include anything in SWL’s bills in respect of RJH’s costs, but did not inform Dutton Gregory that there would be a second bill in respect of those costs. SWL then agreed a figure for the two bills that had been submitted. This is, or ought to be, an unusual set of circumstances.
Master Haworth was influenced by the difficulty that would arise in deciding what costs were reasonably incurred, if there was a duplication of costs as between a first (compromised) bill and a subsequent one, since, in the event of a settlement which simply reduced the total by a particular amount, it would not be possible to know at what figure any particular item had settled. Whilst there may be difficulties, it appeared to me during the course of the argument that they might not be as great as at first sight appeared, and could probably be addressed either by the costs judge focusing on what was a reasonable sum for the item claimed, having regard to what items had been claimed in the compromised bill, or by treating each item in the compromised bill as having been reduced by the percentage by which the total was reduced and, in any event, resolving any doubt in favour of the paying party. Whether that is so or not, I prefer to reach my conclusion on the grounds set out above rather than on the difficulties that might be produced had I reached a different one.”
Link to Judgment
Toby Moreton
