The recent decisions reported by the Supreme Court Costs Office in cost appeals numbers 18 to 20 of 2004 highlighted several points


No 18 of 2004 Jemma Trust Co Ltd v Liptrott & Forrester (No 2)



Following the remission to the costs judge by the Court of Appeal of his assessment of a number of non-contentious bills (see [2004] 1 All ER 510), the costs judge reconsidered his earlier decision over a period of nine days, during which he read most of the files and heard oral evidence from the fee-earners in the defendant firm.


At the end of that exercise, in a second reserved judgment, he found essentially in favour of the defendants for a higher figure than was contended for by the claimant, but lower than that which he had allowed previously.


The claimant appealed against that decision on a number of grounds. The first and most important of these was whether, in holding it unnecessary to revisit the hourly rate which he had fixed at the initial hearing, the costs judge was precluded from taking 'value' into account separately.


The judge, in dismissing the appeal, rejected the appellant's submission that, as in the present case, hourly rates having been determined by the costs judge at the preliminary issue stage, and reflected all the factors other than time and value, it was therefore impermissible to take account of those factors again when assessing the further element of value.


Though critical of the costs judge for not giving fuller reasons for the decision at which he arrived, the judge said: 'I accept also that as the judgment in that case [Treasury Solicitor v Regester [1978]1 WLR 446, 454] itself illustrates, it will often be impossible, and sometimes undesirable, for the costs judge to spell out the exact process of reasoning which has led to the final figure. That will frequently be the result of a triangulation, based very much on expert 'feel' between a variety of relatively unfixed possible positions. In the present case, the question is whether the relative absence of any identification of those possible positions renders the judgment unsustainable for want of sufficient reasons.'


After analysing the various submissions made on the point, the judge concluded: 'Despite the criticisms which can be made of the judgment for its lack of reasoning at the crucial point, I have not in the end been persuaded that it would be right to interfere with the judgment on those grounds.'


Although the case is, inevitably, heavily fact dependent, there is one other aspect of the judgment that merits mention: 'The criticism that is made is that there is no distinction to be drawn between the contentious and non-contentious work so far as the obligation to keep attendance notes is concerned. As to this, while I agree that the function of attendance notes is precisely the same in both kinds of work so far as assessment is concerned, it seems to me wrong to speak of an "obligation" to keep attendance notes. That language suggests that the failure to keep attendance notes is a duty, breach of which will be visited by the sanction of total or partial disallowance. The true position is that in both kinds of work the burden is on the solicitor not only to show that the time claimed has been spent, but that it has been reasonable to spend that time. The keeping of an attendance note is one way, but not the only way, in which this can be demonstrated. The failure to keep such notes exposes the solicitor to the risk of being unable to prove the reasonableness of the time spent.'



Then, after quoting with approval a dictum of Mr Justice Ferris in Mirror Group Newspapers v Maxwell [1998] BCLC 324, 333-334, the judge in this case concluded: 'In the present case, the costs judge was in a position to judge from his extensive examination of the files the nature of the work with which the relevant fee-earners were faced, and had the advantage of being able to question them and see them cross-examined in relation to certain of the bills. His conclusion that he was satisfied that the time recorded as spent had been reasonably spent does not seem to me to have been the result of any misdirection in point of law, was one which was open to him on the evidence, and is, accordingly, one with which this court will not interfere.'



No 19 of 2004 Aaron v Shelton



The claimant, during the course of a trial against the defendant in the light of the evidence that had been produced, consented to an order that his claim be dismissed with costs, and, in view of his conduct, the judge directed that those costs should be assessed on the indemnity basis.


At the subsequent detailed assessment, the claimant sought to reduce the successful defendant's bill by reference to rule 44.5(3)(a) of the Civil Procedure Rules 1998 (CPR). The costs judge refused to entertain that issue, saying that it had effectively been resolved by the judge's decision at the conclusion of the underlying case, and the claimant appealed.


The judge held that in a situation such as that, where the paying party wished to limit his liability for the receiving party's costs, he should make his application to the trial judge at the conclusion of the case under CPR 44.3(2), and if, as here, the paying party fails to do that, then it is too late to raise the issue of conduct again before the costs judge.



No 20 of 2004 Pearce v Ove Arup Partnership Ltd & Ors



The claimant obtained a legal aid certificate issued on 13 March 1995, to bring proceedings for breach of contract and other causes of action within the same proceedings against identified defendants.


Pursuant to that certificate, his then solicitors issued a claim form against the four named defendants on 22 March 1996. That claim form was marked not for service out of the jurisdiction. Utilising the same certificate, a second set of proceedings was issued on 30 September 1996.


Action number 1 lapsed, because it had not been served out of the jurisdiction, but action number 2 went to trial, despite various attempts by the defendants to stop it. When claim form number 2 was served, notice of issue of legal aid certificate was served with it, but this was not the case with the first claim form.


The claim was ultimately dismissed. The claimant was ordered to pay the costs of the second, third and fourth defendants, such costs to be determined by the costs judge. The judge also ordered that the claimant's costs payable by the Community Legal Service fund should be determined by the costs judge. An application on behalf of the defendants for a wasted costs order against the claimant and his legal advisers was dismissed with costs.



The costs judge ruled that the facts of the case were indistinguishable from Bridgewater v Griffiths [2000] 1 WLR 524, and therefore felt constrained to assess the costs payable to the claimant's various solicitors against the LSC at nil. The claimant appealed.



In a lengthy and detailed judgment, the judge analysed with care all the arguments that had been addressed to Mr Justice Burton in Bridgewater, and rejected all counsel's attempts to distinguish this case from that case on the facts.


However, he differed from Mr Justice Burton by concluding that regulation 46(3) of the Civil Legal Aid (General) Regulations 1989 - which reads, 'a certificate shall not relate to more than one action, cause or matter ...' - should be given a purposive interpretation, so that after the words quoted above the words 'in existence at any given time' should be deemed to be implied into it.


In those circumstances, the judge allowed the appeal, and remitted the matter to the costs judge to assess the costs against the fund in the usual way.



The Supreme Court Costs Office prepares summaries of recent costs appeals, copies of which are available from the Law Society library, tel: 0870 6062511, or can be accessed free on the SCCO Web site at: www.courtservice.gov.uk/3561.htm