ON APPEAL FROM THE HIGH COURT OF JUSTICE
MRS JUSTICE PROUDMAN
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
MRS JUSTICE ANDREWS
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SALES
SIR BERNARD RIX
(Sitting with Senior Costs Judge Gordon-Saker as Assessor)
| Wilsons Solicitors LLP
|- and -
|Serena Bentine (Acting by her Litigation Friend,
The Official Solicitor)
|- and -
|The Official Solicitor
Case No. A2/2014/0557
|IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
MRS JUSTICE ANDREWS
Stone Rowe Brewer LLP
- and -
Just Costs Limited
Mr Michael Kent QC & Mr Simon J Brown (instructed by the Official Solicitor)
for Serena Bentine and the Official Solicitor
Mr John Foy QC & Mr Simon Butler (instructed by Berlad Graham LLP) for Stone Rowe Brewer LLP
Mr PJ Kirby QC & Mr Rupert Cohen (instructed by Just Costs Solicitors) for Just Costs Limited
Hearing dates : 28 and 29 July 2015
Crown Copyright ©
Lord Justice Sales:
"70 - Assessment on application of party chargeable or solicitor.
(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in subsection (1), then, on an application being made by the solicitor or, subject to subsections (3) and (4), by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment), order—
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
(3) Where an application under subsection (2) is made by the party chargeable with the bill—
(a) after the expiration of 12 months from the delivery of the bill, or
(b) after a judgment has been obtained for the recovery of the costs covered by the bill, or
(c) after the bill has been paid, but before the expiration of 12 months from the payment of the bill,
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit.
(4) The power to order assessment conferred by subsection (2) shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill.
(5) An order for the assessment of a bill made on an application under this section by the party chargeable with the bill shall, if he so requests, be an order for the assessment of the profit costs covered by the bill.
(6) Subject to subsection (5), the court may under this section order the assessment of all the costs, or of the profit costs, or of the costs other than profit costs and, where part of the costs is not to be assessed, may allow an action to be commenced or to be continued for that part of the costs.
(7) Every order for the assessment of a bill shall require the costs officer to assess not only the bill but also the costs of the assessment and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the assessment.
(8) If after due notice of any assessment either party to it fails to attend, the officer may proceed with the assessment ex parte.
(a) the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment, or
(b) the order for assessment or an order under subsection (10) otherwise provides,
the costs of an assessment shall be paid according to the event of the assessment, that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs.
(10) The costs officer may certify to the court any special circumstances relating to a bill or to the assessment of a bill, and the court may make such order as respects the costs of the assessment as it may think fit.
(12) In this section "profit costs" means costs other than counsel's fees or costs paid or payable in the discharge of a liability incurred by the solicitor on behalf of the party chargeable, and the reference in subsection (9) to the fraction of the amount of the reduction in the bill shall be taken, where the assessment concerns only part of the costs covered by the bill, as a reference to that fraction of the amount of those costs which is being assessed."
As originally enacted, section 70(9) was in these terms:
(a) the order for taxation was made on the application of the solicitor and the party chargeable does not attend the taxation, or
(b) the order for taxation or an order under subsection (10) otherwise provides,
the costs of a taxation shall be paid according to the event of the taxation, that is to say, if one-fifth of the amount of the bill is taxed off, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs."
(Emphasis added to indicate the differences from subsection (9) as it stood at the relevant time and currently).
"(4) The certificate of the costs officer by whom any bill has been assessed shall, unless it is set aside or altered by the court, be final as to the amount of the costs covered by it, and the court may make such order in relation to the certificate as it thinks fit, including, in a case where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs."
Bentine v Bentine: factual background
Bentine v Bentine: discussion
"… no Attorney or Solicitor of [certain specified courts] shall commence or maintain any action or suit for the recovery of any fees, charges or disbursements at law or in equity, until the expiration of one month or more, after such attorney or solicitor respectively shall have delivered unto the party or parties to be charged therewith … a bill of such fees, charges and disbursements …; and upon application of the party or parties chargeable by such bill … unto the … Lord High Chancellor, or the Master of the Rolls, or unto any of the Courts aforesaid, or unto a Judge or Baron of any of the said courts respectively, in which the business contained in such bill, or the greatest part thereof in amount or value, shall have been transacted; and upon the submission of the said party or parties … to pay the whole sum, that upon taxation of the said bill shall appear to be due to the said Attorney or Solicitor respectively, it shall and may be lawful for [those specified judges], and they are hereby required to refer the said bill, and the said Attorney's or Solicitor's demand thereupon … to be taxed and settled by the proper officer of such court …; and upon the taxation and settlement of such bill and demand, the said party or parties shall forthwith pay to the said Attorney or Solicitor respectively … the whole sum that shall be found to be or remain due thereon …; and in default thereof the said party or parties shall be liable to an attachment or process of contempt, or to such other proceedings, at the election of the said Attorney or Solicitor, as such party or parties was or were before liable unto; and if, upon the said taxation and settlement, it shall be found that such Attorney shall happen to have been overpaid, then in such case the said Attorney or Solicitor respectively shall forthwith refund and pay unto the party or parties intituled thereunto … all such money as the said officer shall certify to have been overpaid; and in default thereof the said Attorney or Solicitor respectively shall in like manner be liable to an attachment or process of contempt, or to such other proceedings, at the election of the said party or parties, as he would have been subject unto, if this Act had not been made; and the said respective courts are hereby authorized to award the costs of such taxations to be paid by the parties, according to the event of the taxation of the bill (that is to say) if the bill taxed be less by a sixth part than the bill delivered, then the Attorney or Solicitor is to pay the costs of the taxation; but if it shall not be less, the court in their discretion shall charge the Attorney or Client, in regard to the reasonableness of unreasonableness of such bills" (emphasis added).
"… no Attorney or Solicitor … shall commence or maintain any action or suit for the recovery of any fees, charges or disbursements for any business done by such Attorney or Solicitor, until the expiration of one month after such Attorney or Solicitor … shall have delivered unto the party to be charged therewith … a bill of such fees, charges and disbursements …; and upon the application of the party chargeable by such bill within such month it shall be lawful, in case the business contained in such bill shall have been transacted [in certain specified courts] for the Lord High Chancellor or the Master of the Rolls [or any judge of such courts], and they are hereby respectively required, to refer such bill, and the demand of such Attorney or Solicitor … to be taxed and settled by the proper officer of the court in which such reference shall be made …; and … the costs of such reference shall, except as hereinafter provided for, be paid according to the Event of such taxation; that is to say, if such bill when taxed be less by a sixth part than the bill delivered … then such Attorney or Solicitor … shall pay such costs; and if such bill when taxed shall not be less by a sixth part than the bill delivered … then the party chargeable with such bill [i.e. the client] … shall pay the costs; and every order to be made for such reference as aforesaid shall direct the officer to whom such reference shall be made to tax such costs of such reference to be so paid as aforesaid, and to certify what, upon such reference, shall be found to due to or from such Attorney or Solicitor … in respect of such bill … and of the costs of such reference, if payable; provided also, that such officer shall in all cases be at liberty to certify specially any circumstances relating to such bill or taxation, and the court or judge shall be at liberty to make thereupon any such order as such court or judge may think right respecting the payment of the costs of such taxation …" (emphasis added)
"But, since [the 1843 Act] came into operation, it has been considered that the distinction between items to be struck out and items to be taxed off no longer exists. The new Act, instead of reserving the costs of taxation for the subsequent order of the court, directs them to be taxed and paid at once according to the event, and not merely the costs of the 'taxation', as provided in the repealed [1729 Act], but the costs of the 'reference'. The words of the Acts, and of the common orders thereon, are express, that if the bill, when taxed, be more or less by one-sixth than when delivered, the solicitor or client, as the case may be, is to pay the costs of the 'reference'; and as a bill, if one sixth-part of it be disallowed, is equally within the words of the statute, and is equally less by one-sixth, as taxed, than it was when delivered, whether such one-sixth be deducted or struck out; and as, in such case, the solicitor is to pay the costs of the reference, the question of striking out or taxing off has become a mere arrangement of figures, without any practical effect, while the provision that the taxing officer is to have power to make a special report relating to the bill and taxation was considered to have been introduced for the purpose of enabling either party to obtain relief, if the justice of the case should require the strict rule laid down in the former provision of the Act to be departed from. Since the passing of [the 1843 Act], therefore, the practice of the taxing masters' offices has been uniform not to strike anything out of the bill, but to tax off all items disallowed, and to include the amount of such disallowed items in the computation …"
"(3) Every order for the taxation of a bill shall require the taxing officer to tax not only the bill but also the costs of the taxation and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the taxation.
(5) Unless –
(i) the order for taxation was made on the application of the solicitor and the party chargeable does not attend the taxation; or
(ii) the order for taxation otherwise provides,
the costs of the taxation shall be paid according to the event of the taxation, that is to say, if one-sixth of the amount of the bill is taxed off, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs:
Provided that the taxing officer may certify any special circumstances relating to the bill or the taxation thereof to the court, and the court may make thereon any such order they think fit respecting the payment of the costs of the taxation."
The first part of subsection (5), which sets out the relevant rule (then a one-sixth rule, which has now become the one fifth rule), is expressed in language which is, so far as material, in identical terms to section 70(9) of the 1974 Act as originally enacted, but which is different from the language which now appears in section 70(9). Section 70(9) now uses the simple and ordinary terminology of the amount of a bill being "reduced" by one fifth, rather than the amount of a bill being "taxed off" by one sixth.
"unless the process of consolidation, which involves much labour and careful work, is to become nothing but a work of mechanical convenience, I think this tendency [to look back through the history of a consolidation Act's various provisions, and the cases decided upon them, and minutely trace the language from Act to Act] should be firmly resisted: that self-contained statutes, whether consolidating previous law, or doing so with amendments, should be interpreted, if reasonably possible, without recourse to antecedents, and that the recourse should only be had when there is a real and substantial difficulty or ambiguity which classical methods of construction cannot resolve. This is particularly true of Acts such as the Rent Act 1968 which have to be applied by county courts, and which have to be understood or at least explained to great numbers of citizens."
"I think the proper course is, in the first instance, to examine the language of the statute, and to ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law, and not to start with enquiring how the law previously stood, and then, assuming that it was intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view. If … treated in this fashion it appears to me that its utility will be almost entirely destroyed and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it, the law should be ascertained by interpreting the language used, instead of, as before, by roaming over a vast number of authorities …"
What is common to the two kinds of statute, consolidating and codifying, is that Parliament intends thereby to lay down a new legislative statement of the law which citizens may safely rely upon where its ordinary linguistic meaning is clear. In both cases, Parliament intends that they should be spared the time, effort, expense and uncertainty involved in researching the position under previous legislation and in earlier case-law.
Stone Rowe Brewer LLP v Just Costs Limited
"1. As far as Stone Rowe Brewer is concerned, 15 bills were sent for detailed assessment. So far today the parties have managed to agree all of those save the costs of assessment. I understand the total of those bills was in the order of £33,000 and the aggregate reduction is in the sum of just 70% of that. In respect of those 15 bills five of them totalled about £20,000 in value and there were allegations of repudiatory breach which if established would reduce those bills to zero. Of the other ten, the challenges were of a more commonplace nature as to quantum. In applying what we call the one-fifth rule, one ordinarily looks at the aggregate reductions to get the reduction per court hearing rather than per bill, and on that basis the one-fifth rule would indicate [SRB] should receive their costs unless there are special circumstances, and special circumstances have been advanced by [Just Costs]. They point out that as to the majority of these costs where 100% reduction was sought [Just Costs] not [SRB] are victors. On the majority of costs they have achieved a high percentage of recovery. I am not quite sure if it is as high as 80% - it probably is not – but nevertheless they have achieved far more than half the value of those five bills. And on the other bills although they have lost on those things nevertheless I am told that most of their costs and most of the paperwork in this bill would have related to the difficult allegations of repudiatory breach.
2. It seems to me that most of the argument in this case and therefore most of the costs incurred in this case is likely to relate to the first five bills [i.e. those in relation to which repudiatory breach was alleged] in respect of which [Just Costs] have been victors in four of them [i.e. the four apart from the King bill, which had been conceded by Just Costs prior to the hearing]. I do not think the other ten bills would have generated costs in the same way. They would not have generated counsel's fees; they would not have generated witness statement costs; they would not have generated a hearing longer than one day with costs lawyers on each side. In fact the costs claimed by each side exceed the costs in dispute … in these bills, and [Just Costs'] claim for costs in fact exceeds the full costs claimed in these bills. I think I ought to take an issues-based approach. I accept that special circumstances are shown. By taking an issues-based approach, I should look at who was the victor in different parts and in order not to make an issues-based order, then evaluate those different parts and make an order which gives one side or the other the relevant percentage. I think the overall victor in this case is [Just Costs]. I think they are the victors as to four out of five of the bills and most of these proceedings were about those. [SRB] is the victor as to that one bill and also as to the ten others, ten others in value lower then the first five and the ten others leading to an assessment of a more commonplace kind. I therefore think I ought to allow [Just Costs] their costs of the hearing but reduce those costs in two ways. I reduce them first in respect of their loss on the King bill by 10%. I have not made it simple and given them four-fifths of their costs. I have assumed that a lot of these costs would have been incurred anyway on the others, and I ought to allow them their costs less 10% in respect of the King bill. I ought to make a further reduction in respect of the other ten bills and I think that reduction is a further 20% so overall I think in the special circumstances of this case [Just Costs] are entitled to their costs of these proceedings but limited to 70% of those costs. I think the commonplace arguments would have led – whether it was ten bills or 15 - … to a hearing without counsel, without witness statements and a one-day hearing, and these things often crack, especially where, as here, there are very experienced costs professionals on both sides. This is not the ordinary solicitor/client dispute. This is a solicitor/client dispute where the client is also a solicitor. I am content that my figures are the ones at which I want to arrive."
"Whether special circumstances exist is essentially a value judgment. It depends on comparing the particular case with the run of the mill case in order to decide whether a detailed assessment in the particular case is justified, despite the restrictions in section 70(3). In Re Cheeseman  2 Ch 289 the Court of Appeal held that it would not interfere with the decision of the first instance judge on whether special circumstances existed except in a strong case. All the more so, in my judgment, where the value judgment has been made by a specialist costs judge. …"
"That approach is of limited assistance in the context of Section 70(10) because that subsection deals with circumstances justifying depriving the party regarded as the overall winner of the prescribed benefit of his success, whereas a finding of "special circumstances" under Section 70(3) operates so as to confer the right to a detailed assessment upon someone who would not ordinarily be entitled to it. In the context of subsection (10), and on the normal understanding of the language of the phrase, it would appear that there should be grounds which would make it unfair for the normal consequences prescribed by the Statute to apply; and those grounds would have to be exceptional. Therefore, the question that the costs judge has to ask himself is whether or not there is something that has happened in the case which, exceptionally, makes it unfair that the claimant should not get the costs to which it is presumed he is entitled because he has succeeded in reducing the overall bill by more than 20%."
Sir Bernard Rix:
Bentine v. Bentine
"We think that the phrase "taxed off" contained in the Solicitors Act, 1932, means a reduction of the bill by the Taxing Master where the business involved is within the retainer, and not where the client says: "This is business with which I have no concern, it ought never to have been in the bill at all.""
Stone Rowe Brewer LLP v. Just Costs Limited
" Based on these findings the judge said that he was satisfied that the making and pursuit of the actual total loss claim substantially lengthened and increased the costs both of the action and of the trial. It was simply inconceivable that a claim for a constructive total loss alone would have generated costs on anything like the scale which had in fact occurred. This conclusion did not involve a finding that the owners had acted unreasonably or improperly but the judge referred to his view of the owners expert evidence 'should such considerations be relevant'."
"2. It seems to me that most of the argument in this case and therefore most of the costs incurred in this case is likely to relate to the five bills in respect of which the Defendants have been victors in four of them. I do not think the other ten bills would have generated costs in the same way. They would not have generated counsel's fees; they would not have generated witness statement costs; they would not have generated a hearing longer than a day with costs lawyers on each side…I think I ought to take an issues-based approach. I accept that special circumstances are shown."
"111. Like the trial judge in Kastor Navigation Co Ltd v. AGF MAT ("The Kastor Too")  2 Lloyd's Rep 119, as it happens me, the judge here did not start from the general rule that the successful party is entitled to its costs. Adopting the approach of the Court of Appeal in that case, it was in my view "an error of approach simply to visit the mathematical outcome of the issue by issue approach" on the claimant – see per Rix LJ at page 149. One needs to stand back from the mathematical result and ask whether in all the circumstances it is the right result."
"2…By taking an issues-based approach, I should look at who was the victor in different parts and make an order which gives one side or the other the relevant percentage. I think the overall victor in this case is in fact the Defendant [ie the solicitor]. I think they are the victors as to four out of five of the bills and most of these proceedings were about those. The Claimant is the victor as to that one bill and also as to the ten others, ten others in value lower than the first five and the ten others leading to an assessment of a more commonplace kind. I therefore think I ought to allow the Defendants the costs of the hearing but reduce those costs in two ways. I reduce them first in respect of their loss of the King bill [one of the five] by 10%...I ought to make a further reduction in respect of the other ten bills and I think the reduction is a further 20% so overall I think that in the special circumstances of this case the Defendants are entitled to their costs of these proceedings but limited to 70% of those costs."
Lady Justice Arden DBE:
Summary of my conclusions on both appeals
Farrell v Alexander and the interpretation of consolidation statutes where there is a prior binding decision on the statute consolidated (the other ground of Sales LJ's decision in the Bentine appeal)
Stone Rowe Brewer LLP v JustCosts Ltd: can this Court set aside the decision of Master O'Hare regarding the costs of assessment?
i) where the solicitors' bill is reduced by 20% or more, the claimant will receive his costs of the assessment, unless the costs judge finds that there are special circumstances; and
ii) if the costs judge finds that there are special circumstances, he may make such order "as it may think fit."
"Take an issues based approach but not make an issues-based order."
"By taking an issues based approach, I should look at who was the victor in different parts and in order not to make an issues based order, then evaluate those different parts and make an order which gives one side or the other the relevant percentage."