COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
Cambridge County Court
His Honour Judge O'Brien
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE PATTEN
LADY JUSTICE BLACK
| KATHERINE MORGAN
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Mr Simon J Brown (instructed by Messrs Berrymans Lace Mawer) for the Respondent
Hearing dates : 15th December 2010
Crown Copyright ©
Lady Justice Black :
"23. In order, therefore, to save the parties from themselves….it seems to me that the appropriate way for me to do justice in respect of the costs is to look at this case principally as what should have been a fast track case, and to look at the damages recovered - £13,419 – and to consider what it is proportionate to expect the defendant to pay. Now, absent the question of contingent fee agreements, I would have thought the very limit of what is reasonable for a defendant who has conducted the case properly to pay to a claimant by way of costs in a straightforward case such as this – the absolute limit would be £20,000 (it is probably more like £15,000). Having regard to the fact that there are some contingent fee agreements, and not with a view to satisfying the increase which they may incur, but simply having regard to the fact that they are there, it seems to me that substantial justice is done in this case if I make an order that the defendant shall contribute the sum of £25,000 to the claimant's costs. That is the order which I make, which, as I say, is also to cover today's hearing."
CPR r 44.3
"(6) The orders which the court may make under this rule include an order that a party must pay-
(a) a proportion of another party's costs;
(b) a stated amount in respect of another party's costs;
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating only to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date, including a date before judgment."
Detailed and summary assessment: CPR r 44.7
"44.7 Procedure for assessing costs
Where the court orders a party to pay costs to another party (other than fixed costs) it may either-
(a) make a summary assessment of the costs; or
(b) order detailed assessment of the costs by a costs officer,
unless any rule, practice direction or other enactment provides otherwise."
The main thrust of the submissions
I-800 Flowers Inc v Phonenames Ltd
"114. In my judgment, it is of the essence of a summary assessment of costs that the court should focus on the detailed breakdown of costs actually incurred by the party in question, as shown in its statement of costs; and that it should carry out the assessment by reference to the items appearing in that statement. In so doing, the court may find it helpful to draw to a greater or lesser extent on its own experience of summary assessment of costs in what it considers to be comparable cases. Equally, having dealt with the costs by reference to the detailed items in the statement of costs which is before it, the court may find it helpful to look at the total sum at which it has arrived in order to see whether that sum falls within the bounds of what it considers reasonable and proportionate. If the court considers the total sum to be unreasonable and disproportionate, it may wish to look again at the various detailed items in order to see what further reductions should be made. Such an approach is wholly unobjectionable. It is, however, to be contrasted with the approach adopted by the judge in the instant case.
115. In the instant case, the judge does not appear to have focused at all on the detailed items in the Opponent's statement of costs. Rather, having concluded that the total of the detailed items was unreasonably high he then proceeded to apply his own tariff – a tariff, moreover, which appears to have been derived primarily from a case in which the Opponent had not been involved and about which it and its advisers knew nothing. In my judgment the jurisdiction to assess costs summarily is not to be used as a vehicle for the introduction of a scale of judicial tariffs for different categories of case. However general the approach which the court chooses to adopt when assessing costs summarily, and however broad the brush which the court chooses to use, the assessment must in my judgment be directed to and focused upon the detailed breakdown of costs contained in the receiving party's statement of costs."
SCT Finance v Bolton
"But paragraph (6) identifies seven types of order which the general discretion under paragraph (1), derived from s 51(1) of the Supreme Court Act 1981, is said only to "include". Para 1(b) provides that the court has discretion as to the amount of costs payable by one party to another; and I have no doubt that a court can properly identify the amount thus payable as being such costs as are calculated by detailed assessment but subject to a quantified ceiling. So in my view the judge had ample discretion to make the order which he did."
Lownds v Home Office: Practice Note
"31. ….what is required is a two-stage approach. There has to be a global approach and an item by item approach. The global approach will indicate whether the total sum claimed is or appears to be disproportionate having particular regard to the considerations which CPR r 44.5(3) states are relevant. If the costs as a whole are disproportionate then the court will want to be satisfied that the work in relation to each item was necessary and, if necessary, that the cost of the item is reasonable. If, because of lack of planning or due to other causes, the global costs are disproportionately high, then the requirement that the costs should be proportionate means that no more should be payable than would have been payable if the litigation had been conducted in a proportionate manner. This in turn means that reasonable costs will only be recovered for the items which were necessary if the litigation had been conducted in a proportionate manner.
32. The fact that the litigation has been conducted in an insufficiently rigorous manner to meet the requirement of proportionality does not mean that no costs are recoverable. It means that only those costs which would have been recoverable if the litigation had been appropriately conducted will be recovered. No greater sum can be recovered than that which would have been recoverable item by item if the litigation had been conducted proportionately."
Other aspects of the appeal
"The relationship between the total of the costs incurred and the financial value of the claim may not be a reliable guide." [my emphasis]
Lownds specifically requires a judge to take a global look at the costs to see whether the total sum claimed appears to be disproportionate and that is what the judge did. This was a ranging shot and total precision in the figures was not required. As to double jeopardy, this is an inevitable feature of certain aspects of the regime and something which the judge (in the case of a summary assessment) or the costs judge (where a detailed assessment is ordered) has to guard against when getting down to the individual components of the bill.
The defendant's position
Lord Justice Patten
Lord Justice Ward