Entries by Toby Moreton

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ATE Premium Is Not A “Solicitor’s Disbursement” | Disclosure Application Dismissed | Herbert v HH Law Applied

In Bendriss v Nicholson Jones Sutton Solicitors Ltd, the High Court dismissed the claimant’s application for specific disclosure of documents relating to an ATE insurance premium claimed by the defendant solicitors. The court found that pursuing disclosure was disproportionate given the modest sum in dispute and high costs of the application. Crucially, following the Court of Appeal’s decision in Herbert v HH Law, the judge held that an ATE premium is not a “solicitor’s disbursement” to be assessed within a Solicitors Act assessment unless there is a legal obligation or professional custom to treat it as such, which was not established in this case. The judgment emphasises the importance of proportionality in costs disputes and confirms that ATE premiums will generally be excluded from Solicitors Act assessments post-Herbert.

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Statute Bills And Payments On Account In Solicitors Act Assessments

Pickering v Thomas Mansfield Solicitors Limited [2024] EWHC 1107 (SCCO) involved a client’s application for assessment of her former solicitors’ invoices, which totalled over £2.5 million. The key issues were whether the invoices were statute bills capable of assessment under the Solicitors Act 1974 and if so, whether the assessment should be conditional upon a further interim payment by the client. Costs Judge Brown found the invoices were statute bills but declined to order a further payment on account, citing concerns about potential reductions to the bills on assessment and the continued availability of security for the solicitors’ costs. The decision provides guidance on the requirements for statute bills and the court’s approach to interim payments in the context of a solicitor and client assessment.

Costs Penalty Applied For Silence In The Face Of An Invitation To Mediate | Court Of Appeal Decision

In Northamber plc v Genee World Limited and others [2024] EWCA Civ 428 the Court of Appeal considered an appeal concerning inducing breach of contract, directors’ liability, and costs sanctions for unreasonably refusing ADR. The case involved breaches of an exclusivity agreement between two companies, and the potential liability of a director and a third party for inducing those breaches. The Court found the third party (IES) liable for inducement, as its conduct amounted to active participation, and held the director (Mr Singh) personally liable for causing the company  to breach an injunction, which was a serious breach of his duties. On the issue of costs, the Court held that the judge at first instance had erred in not imposing any costs sanction on Mr Singh and IES for their unreasonable failure to engage in mediation. The Court emphasised that silence in the face of an offer to mediate is itself unreasonable (PGF II SA v OMFS), and that breaches of court orders to consider ADR should not be ignored when deciding costs. The Court imposed a “modest, but not insignificant, costs penalty by increasing Northamber’s costs recovery by an additional 5% to 75%.”

Solicitor Liens And Set-Off Rights vs Third Party Debt Orders

In Next Generation Holdings Ltd & Anor v Finch & Ors [2024] EWHC 927 (Ch), the High Court considered the priority between a solicitor’s lien and right of set-off and a third party debt order obtained by a judgment creditor over monies in the solicitor’s client account. The monies represented the proceeds of sale of a property owned by the judgment debtor and were paid into the account before and after the grant of a freezing order. The Court found that the solicitor had a lien over the monies paid in prior to the freezing order and a right of set-off in respect of unpaid fees invoiced before the interim third party debt order was served. The judgment creditor was therefore only entitled to have the third party debt order made final in respect of the balance of the monies after deduction of the amounts covered by the solicitor’s lien and set-off.

Litigant In Person Directed To File Costs Budget

In Cotham School v Bristol City Council [2024] EWHC 824 (Ch), the High Court addressed the issue of whether a litigant in person instructing direct access counsel in Part 8 proceedings should be required to file and serve a costs budget. The case involved an application for a cost capping order, which was refused. The judge instead ordered all parties, including the Second Defendant, a litigant in person, to file and exchange costs budgets. Despite standard directions suggesting otherwise, the court clarified that it has the power under CPR rules 3.12(1A) and 3.13(3) to make a costs management order and require a litigant in person to file a costs budget, particularly where the claim is complex and substantial recoverable costs are likely. The decision emphasizes the court’s discretionary powers in costs management and the importance of considering the potential scale of recoverable costs in such cases.

Medical Agency Fees | “Proportionality Demands Transparency”

Ena Aminu-Edu versus Esure Insurance Company Limited involved a dispute over the recoverability of a medical agency fee within a pain management expert report disbursement. The Claimant argued that under the fixed costs regime, disclosure of a breakdown was unnecessary, while the Defendant maintained that transparency was essential to assess reasonableness and proportionality. The court held that transparency is crucial, and commissioning solicitors should evaluate the reasonableness of agency fees before incurring them. The judge ordered that unless the breakdown was provided, the Claimant’s recoverable costs for the disbursement would be reduced from £2,430 plus VAT to £750 plus VAT.

“The Claimant (or her advisers) can use agencies that are prepared to be transparent rather than those who are not. Alternatively, the work can be done in-house as it always was. It seems to me to be that it would be an enfeebled court system that buckled under any suggestion that a non-transparent cartel would simply withdraw its services en mass from the market if required to be open. The agencies may be cheaper than in-house services in which case the agencies should not hesitate to tell us and should be displaying their proportionality for all to see.”

CPR 36.17 | Claimant Beats Own Part 36 Offer Against “Intransigent” Police

“…it was plain to me that the Claimant has suffered profound and enduring distress due to the Defendant’s officers’ failings. The Defendant’s intransigent conduct of these proceedings, contrary to the obligation on all parties to engage meaningfully with settlement possibilities, has compounded the failures that underpinned the Claimant’s claims. I have no difficulty in accepting that the Defendant’s conduct of the litigation has prolonged and exacerbated the Claimant’s distress. That is a relevant factor when the court is considering the use of compensatory powers in relation to interest.”

Costs Of Attending Rehabilitation Case Management Meetings Not Inherently Irrecoverable | CA Decision

“…for the reasons we have given, we allow the appeal. But the only real consequence is that the defendant can take all the reasonableness/proportionality arguments that they always wanted to take at the assessment stage. Those are arguments for which, as we have said, we have sympathy. In all those circumstances, we would urge the parties to agree a realistic order as to the costs of this appeal.”

Court Rejects Admissability Of Costs Lawyers’ Report In Common Law Assessment

In Laytons LLP v Savage & Ors [2024] EWHC 512 (SCCO), a law firm brought a Part 7 claim against former clients for unpaid fees. The clients had failed to pursue a statutory assessment, resulting in a limited common law assessment. The court dismissed the clients’ application to rely on a costs lawyer report, finding it went beyond the scope of the ordered assessment. The court also refused the clients’ request for disclosure of files relating to earlier paid invoices, satisfied that the necessary information was already provided in the itemised bills and breakdowns. The judgment illustrates the court’s approach to evidence and disclosure in common law assessments where the scope has been limited due to a party’s failure to pursue a statutory assessment.