A claimant firm has been spared paying assessment costs after the High Court refused a defendant’s request for a non-party costs order.
Mr Justice Freedman upheld the previous decision of Costs Judge Leonard and rejected the submission from the Scout Association that London firm Bolt Burdon Kemp (BBK) was the real party to the litigation.
The substantive personal injury claim had settled in 2017 for £29,500 but a subsequent offer to settle the claim for costs at £22,500 was rejected by the firm. The claimant was ordered to pay detailed assessment costs over the next two years, but the defendant stated it had no intention of attempting enforcement and instead sought an order that BBK pay all of those costs.
The Scouts’ case was that as BBK acted on a conditional fee agreement where any client contributions had been exhausted by the success fee deduction, the firm was now the only party with an interest in the costs proceedings and therefore the ‘real party’. It was submitted that BBK had funded the assessment proceedings, controlled them and stood to benefit from them.
The claimant remained fully protected by qualified one-way costs shifting, it was argued, but this did not allow for their solicitors to make a ‘one-way bet’ when it came to assessment of costs.
BBK said it was ‘fundamental’ that in successful claims these costs may be recovered from the opponent. The firm had worked on something close to a ‘CFA lite’ where there were no circumstances in which the client would have to draw upon their own resources to meet fees and expenses. It was argued these arrangements would be ‘simply unworkable’ if the judge agreed to the defendant’s application.
In The Scout Association v Bolt Burdon Kemp, Freedman J concluded it would not be just or consistent with established authority to make a non-party costs order against the firm.
‘Any solicitor for a successful personal injury client will have to address the recovery of costs,’ he said. ‘If acting under a CFA lite or a capped CFA that solicitor may well be pursuing the costs of the claim largely, if not exclusively, for the solicitor’s own benefit.’
The judge added that even if adverse costs orders were made as a result of a solicitor’s efforts to maximise costs recovery – and clients were still protected by costs – it did not follow that the solicitor should pay instead.
Sam Hayman, partner and head of costs at BBK, said the application had been a ‘thinly veiled attempt to circumvent’ QOCS protections.
He added: ‘The decision represents an important protection to firms who offer CFA funding and goes some way to ensuring that access to justice is not hindered by fear of NPCOs for solicitors doing no more than conducting claims on behalf of seriously injured claimants or victims of sexual abuse, whom my firm represent, on favourable CFA terms.’
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