Relevant Background Facts
- The appellant instructed the respondent to act for him in relation to proceedings in the Chancery Division which were subsequently transferred to the Central London County Court.
- On 4 June 2014 the respondent delivered to the appellant a bill for a gross sum of £12,600 including VAT. The bill was in general of terms and contained no details of the times spent on work done nor of the time period over which the work had been done. On the reverse of the bill, to which attention was drawn on the front of the bill, was the following notification:
“You may be entitled to have our charges reviewed by the court (this is called ‘detailed assessment’). The provisions are set out in ss 71 and 72 of the Solicitors Act 1974.”
- On 9 June 2014 the appellant sent an email to the respondent asking for a breakdown of the costs. This was not responded to.
- On 16 June 2014, within the one-month time limit in s 70(1), the appellant commenced proceedings in the SCCO for a detailed assessment of the bill under s 70 of the Solicitors Act.
- The application came before Master Rowley on 13 November 2014. The appellant appeared at that hearing in person.
- Paragraph 26.5(a) of the Costs Office Guide provides as follows:
“(a) Where an application is made by a litigant in person, an order for detailed assessment will not normally be made in the absence of the parties. The litigant in person must attend in order that the costs judge may explain the effect of s 70(9) of the Act (‘the one-fifth rule’, as to which, see para 26.6 below).”
- At the hearing on 13 November 2014 Master Rowley made gave standard directions, including that the respondent had to serve by 12 December 2014 a breakdown of costs.
- On December 12, the last day for service, the respondent provided that breakdown.
- In January 2015 the appellant offered to pay the bill, with interest, in full.
- At a hearing on 11 July 2015 Master Rowley determined that the appellant should pay the respondent’s costs of the detailed assessment proceedings under s 70(9) and that there were no special circumstances within s 70(10) justifying departure from the normal rule.
Master Rowley’s Judgment
At para 4 of his judgment he concluded that the bill “contained a succinct narrative” and that there was nothing additionally provided by way of computer printout or summary or narrative of any length. At para 6, after considering the case of Ralph Hume Gary v Gwillim (CA)  EWCA Civ 1500 and the observations of Ward LJ on the provision of printouts, he held, “I do not accept therefore that there was a lack of specific information”.
At para 7 he held that the claimant clearly decided that there was sufficient information in the bill to make a decision as to whether to have the bill assessed. Then at paras 13 to 16 of his judgment he gave his reason for his conclusion that there did not exist “special circumstances”.
In summary, the Master’s reasons for his conclusion were:
(1) The appellant acted too quickly in commencing proceedings for a detailed assessment, and that if he had wanted more information, the more appropriate course would have been to have made a request under s 64 of the 1974 Act for a more detailed bill. Section 70 proceedings were the wrong proceedings.
(2) The fact that the appellant was a litigant in person was not a reason not to expect the appellant to have taken this course. Litigants in person should not be treated differently from those who are represented, and the appellant could have taken legal advice as to his best course.
(3) He pointed to the fact that s 70(9) prescribes how the costs are to be paid in s 70 proceedings.
(4) In any event, the respondent had complied with the need for a breakdown in the course of the proceedings which were in fact brought by the appellant.
The Appellant’s Position
Mr Benson for the appellant submitted that:
- the respondent’s failure to provide an explanation of the bill amounted to “a special circumstance”, and that Master Rowley was wrong to conclude otherwise.
- had the respondent done so, the appellant would have conceded the matter promptly. The costs of ensuing litigation necessary to extract that application ought to be the claimant’s.
- first, the respondent ought to have given the appellant an appropriate explanation of the bill.
- secondly, as regards s 64, as a litigant in person the appellant was entirely unaware of s 64 or of the distinction between gross sum bills and detailed bills.
- the respondents did not draw the appellant’s rights under s 64 to his attention but rather in fact directed his attention to ss 70 to 72.
- the SCCO’s own guidance also makes no reference to s 64.
- thirdly, s 64 is not necessarily an advantageous way to proceed since it gives the solicitor the right to reissue the bill in a higher amount.
- fourthly, para 16 of the Master’s judgment was at the very least the nub of his decision and it was fundamentally wrong.
- finally, it is wrong, as a matter of policy, for the appellant, who wanted further information, to be penalised in costs when the respondents, who failed to tell him about s 64 and who did not provide any information until required by the court to do so, should be rewarded.
The Respondent’s Position
Mr Edwards for the respondent submitted that:
- first, the decision as to whether there are “special circumstances” is a value judgment or an exercise of discretion, and an appellate court can only interfere if the lower court has erred in principle, taken into account matters which should have been left out of account, left out of account matters which should have been taken into account or reached a conclusion which is so plainly wrong that it can be described as perverse.
- in the specific context of special circumstances under the 1974 Act there is strong authority that the appeal court will not lightly interfere with an exercise of discretion by the specialist costs judge.
- secondly, in this case there was no basis for interfering with the Master’s exercise of discretion. He considered the argument concerning the failure to provide proper detail in the bill and decided, as he was entitled to do, that the appellant had not demonstrated special circumstances.
- thirdly, the Master was in fact correct: the obvious and reasonable course in this case was for the appellant to have exercised his rights under s 64 of the 1974 Act.
- fourthly, the argument that the respondent bill made no mention of s 64 was not raised before the Master below and cannot be relied upon in the appeal.
- finally, ultimately the Master applied the right test. He took account of everything urged upon him and he did not take account of anything he should not have done. He reached a conclusion that was plainly open to him and indeed right.
MR JUSTICE MORRIS:
20. I have been referred to a number of authorities in relation to “special circumstances” under s 70(10), in particular Re Cheesman  2 Ch 289, Falmouth House Freehold Company Ltd v Morgan Walker LLP  EWHC 2092 (Ch) and Wilsons Solicitors LLP v Bentine  EWCA Civ 1168. I have also considered the provisions of CPR 52.11 and the notes in the White Book Service 2016 at pages 1700 to 1701. The principles which emerge from these authorities are as follows:
(1) The test for “special circumstances” under s 70(10) is the same as that for the same phrase as used in s 70(3), and the authorities in s 70(3) are thus relevant.
(2) Whether special circumstances exist is essentially a “value judgment”. It depends on comparing the particular case with the run-of-the-mill case. The question is whether something so outside the run-of-the-mill has occurred so as to justify departing from the prima facie result given by the default rule in s 70(9).
(3) However, “special circumstances” do not have to be “exceptional”; rather, just something out of the ordinary course justifying a departure.
(4) An experienced costs judge is in general well placed to make the required value judgment.
(5) The court on appeal considers the case by way of review and not rehearing. The court may interfere where the court below erred in principle or in law or failed to take account of relevant considerations or took account of irrelevant considerations or reached a conclusion that was so perverse that no costs judge could have reached that conclusion. However, I point out that this is not the same approach as judicial review, and in this regard I refer to subparagraph (iii) of para 52.11.1 of the White Book Service at 1701, which is quoting from or at least summarising the effect of what May LJ said in the Du Pont case ( EWCA Civ 1368) where he drew the distinction between an appeal by way of review and judicial review and pointed out that there is a varying degree of intensity of review on appeals under what is now 52.11.
21. I agree that in the circumstances of this case detailed assessment proceedings were the wrong route for resolving issues surrounding the June 2014 bill, as indeed found by the Master at para 15 of his judgment. Having started off on the wrong foot, the problems multiplied, this being the second appeal in these proceedings. The question is whether the appellant should bear the costs consequences of this wrong path having been taken.
22. I have reached the conclusion that the learned Master’s analysis, in particular at paras 13 to 16 of his judgment, was erroneous in a number of respects, as follows. First, as regards the last sentence of para 6 of his judgment,
whilst the conclusion that a computer printout was not required may have been justified, the original bill had no information of any detail at all about the work that had been done, the time that had been taken and when it had been done. Accordingly, in my judgment the Master’s finding that there was not a lack of specific information in the bill was not well founded and indeed inconsistent with what he said about this in para 9 of his judgment.
23. Secondly, in my judgment
the Master failed to take into account sufficiently the fact that a breakdown was expressly sought in the email of June 9 and that no answer was given to that email then or indeed for some considerable time, indeed for over six months. Had it been given at any stage in that period, then the proceedings would have been at an end.
24. Thirdly, in my judgment
the Master erred (at para 7 of his judgment) in ascribing to the appellant a belief that he considered that there was sufficient information to make a decision whether to bring detailed assessment proceedings. It was plain on the facts and given the email of a few days earlier that the appellant did not believe that he had sufficient information.
In general, the Master may have been justified in taking the position (at paras 12 and 13 of his judgment) that a litigant in person should in principle be in no different position than a person with legal representation and to suggest that legal advice was available to the appellant. However I take account of the fact that
requiring the taking of legal advice is not necessarily realistic in cases where small amounts of costs are in issue, such as in this case. In any event, it does not follow that, where no such legal advice has in fact been obtained, a belief in the sufficiency of the bill should have been ascribed to the appellant merely by dint of the fact of the commencement of the assessment proceedings.
25. Fourthly, at para 15 the Master concluded that s 70 proceedings were the wrong proceedings and that a separate discrete application ought to have been brought. I take the latter to be a reference to a request for a detailed bill under s 64(2). However, I accept that at the time of commencing the assessment proceedings the appellant was not aware of the provisions of s 64. The court itself did not draw it to the appellant’s attention. Moreover, there is nothing in the SCCO guide about s 64. Further, the respondent did not draw it to the appellant’s attention. Indeed, to the contrary, the reverse of the bill referred only to ss 70 to 72 and to that extent rather directed the appellant towards s 70 proceedings rather than a s 64 request. In reaching this conclusion at para 15 that s 70 proceedings were the wrong proceedings and rather that a s 64(2) request should have been made and thus effectively that responsibility for this course lay with the appellant, the Master did not take account of these facts at all. In this connection I do not accept that the fact that the back of the bill did not refer to s 64 had not been raised before the Master means that it cannot be considered now by this court in reviewing the Master’s decision. If, as I consider to be the case, these factors are and were relevant considerations in reaching a conclusion on the value judgment to be made, the fact that through no fault of the Master’s they were not considered by him does not mean that the decision below took account of all relevant factors. The decision was nevertheless made without consideration of a relevant factor, even though the Master could not be criticised for that omission.
26. Finally, para 16 of the judgment, which contains the Master’s overriding conclusion, is in my judgment flawed in its logic. To say on the one hand that the s 70 proceedings were the wrong proceedings and the wrong remedy for the absence of information, on the other hand that in any event the appellant’s complaint about insufficiency of information was met because the information was provided in the course of those wrong proceedings, is circular. By the time the information was in fact produced in December 2014 it was too late. Those “wrong” proceedings had already been commenced. Thereafter, the proceedings effectively continued only because of the dispute about who should pay the costs of the proceedings.
The information to which the appellant was entitled and the provision of which would have obviated the need for s 70 proceedings was only obtained and provided as a result of the commencement of those proceedings. In my judgment, at para 16 the Master took account of a consideration that was not relevant.
27. I have reached the conclusion that in these foregoing respects the master erred in principle and failed to take into account relevant considerations, took into account irrelevant considerations, and accordingly it is appropriate for me to interfere with his value judgment as to the existence of special circumstances.
28. In my judgment, in the particular circumstances of this case
the failure to provide an explanation for the bill in response to an express request and the failure to do so at any time until provided on the last day of the time set by the order of the court, the fact that the appellant was not aware of s 64 and had not been informed of s 64, either by the court or by the respondents, are such as to take this case outside the “run of the mill” case so as to justify departing from the normal default rule in s 70(9).
29. In these circumstances I therefore can consider the appropriate order for costs of the detailed assessment below, and in my judgment the appropriate order in respect of the costs of those detailed proceedings is that the respondent should pay the appellant’s costs.
The respondent, first, could and should have responded much sooner to the request for a breakdown of the original bill, and, secondly, could have suggested that s 64 was the better route.
I will make an order to this effect subject to summary assessment which the learned Assessor will conduct following this hearing.