England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		28th October 2005

Mr Justice Warren:

Introduction

1. Following my Judgment handed down (subject to corrections) on 9 September 2005, the parties now ask me to decide a point of principle which will arise in the detailed assessment of costs.
2. A great deal of time was spent by the office-holders and their colleagues at KPMG in dealing with the proceedings. As between the office-holders and the estates, the office-holders are entitled to receive payment in respect of the time spent by KPMG subject to the usual constraints on charging and the payment of fees and disbursements which apply generally under the Insolvency Rules. The office-holders themselves are entitled to recover payment from the estates for their time as remuneration. Although KPMG is an LLP, and thus has a legal personality separate from those of the partners individually, it is accepted by the officeholders that payment in respect of the work done by their colleagues at KPMG also falls to be recovered as remuneration and not as a disbursement. I am asked to proceed on that basis and to ignore the possibility that KPMG might have been able to bill the office-holders for the work undertaken by KPMG's employees, the payment of such bills being recoverable from the estates as proper disbursements. I shall, like counsel, refer to the totality of all these costs, both of the office-holders themselves and of their colleagues at KPMG as "the KPMG costs".
3. The KPMG costs relate to a variety of tasks some of which may have called for special expertise, for instance, the financial modelling, or at least some aspects of it, undertaken during the course of the proceedings. But the KPMG costs relate also to time spent on some matters which, if undertaken by a litigant (or his employees) who instructs solicitors and counsel, would not ordinarily give rise to a liability to a paying party under a costs order, for instance, time spent in reviewing documents for disclosure, in assisting in the preparation of witness statements and in attending court hearings.
4. Mr Briggs, for Mr Spratt and Mr O'Connell (whose submissions are adopted by Mr Crystal, for Mr Tucker and Mr Wallace) submits that the entirety of the KPMG costs should, subject to detailed assessment, be recoverable. In summary, he says that the term "costs", and the indemnity intended to be provided by an order for costs, is broad enough to encompass a litigant's expenditure of time just as much as his expenditure of money subject to the qualification that the court must be able to quantify the amount of money which the expenditure of time gives rise to. In a case such as the present where the litigants (the office-holders) are professionals and where the insolvency code itself provides controls on remuneration, quantification gives rise to no problems so that the costs should be allowed. Essentially, it is submitted that time is money (whether the time is that of the office-holders themselves or of KPMG personnel) and that the cost of that time can be quantified: the office-holders can and should therefore be indemnified for that cost.
5. Mr Davies, for the Applicants, says, in summary, that there is no authority for such a novel approach and that it would have far-reaching consequences pushing up yet further the cost of litigation, although he does accept that there is an exception in relation to in-house expert advice the cost of which may be recovered.
6. Before addressing the arguments, I propose to consider the authorities which have been cited. In doing so, I bear in mind that many of them pre-date the introduction of the CPR and note at this point that I will need to deal with rival submissions about the difference, if any, in the meaning of "costs" in the RSC on the one hand and the CPR on the other.
7. The London Scottish Benefit Society v Chorley (1884) 12 QBD 452; 13 QBD 872 (CA) was a case against a litigant in person who was himself a solicitor. He succeeded in his defence. It was held, both in the Divisional Court and the Court of Appeal, that he was entitled on taxation to the same costs as if he had employed a solicitor, except in respect of items which the fact of his acting rendered unnecessary. Since the litigant was a solicitor, it is not surprising that the question of recovery of costs was addressed in the context of the costs which would have had to be incurred if the solicitor had not acted for himself but had instructed another solicitor; and in that context, it is clear that, subject to proper assessment, such costs would have been recoverable.
8. Since Mr Briggs relies heavily on this case, I should deal with it in some detail. Three passages from the judgments of Denman J (at p455), Manisty J (at pp456-7) and Watkin Williams J (at p459-60), in the Divisional Court are of relevance:

"[Denman J] …..treating the costs as being in a reasonable sense of the word equivalent to an indemnity, I am not aware of any principle which ought to prevent a successful party who is a solicitor, and who does solicitor's work, from being indemnified not merely for the time he must necessarily expend as a witness in his own case, but also for the pains, trouble, and skill which he has to incur and to exercise in order to bring it to a successful conclusion. …….the solicitor's time is valuable: he applies his skill to a suit or action in which he is obliged to spend his time and exercise his skill in consequence of the wrongful act of his opponent; and therefore it is not an unreasonable view that the word "costs," in the sense of an "indemnity," should be held fairly to include a reasonable professional remuneration for that work which, if he did not do it himself, would have had to be done by another solicitor and paid for by his unsuccessful opponent."

"[Manisty J] ……. It is said that because he [the solicitor] is a party to the action, no costs, except costs properly so called, that is, money out of pocket, ought to be allowed him; and that there is no difference between a party who is a solicitor and one who is not a solicitor. It seems to me that the observation may be answered at once, and conclusively answered. The reason why costs are allowed to a solicitor being a party, and not to another person who is not a solicitor, is simply this, that the one is a solicitor and the other is not. For instance, what a strange thing it would be that a person who is not a solicitor should be allowed solicitors' charges. …… Time is money to a solicitor; and why should he not be as much entitled to his proper costs, if he affords the time and skill which he brings to bear upon the business where he is a party to the action as he is where he is not a party?"

"[Watkin Williams J] It seems to me that the word "costs," though a technical term now, may very well have been used to include, not merely money expended, but any real expenditure, whether of time or money, incurred by the party in defending himself against an unjust claim. If that expenditure takes the form of employing skilled persons to do the work necessary to insure success, this would fall within the expression "costs" in its primary sense: but, if the defendant be himself a person of skill, and devotes that skill and valuable time and legal knowledge to the doing of that for which he would otherwise have been obliged to employ and pay some one else, it seems to me both upon principle and on the ground of expediency that time so spent, and skill so devoted, and professional knowledge so applied, should be compensated for under the name of "costs."…."

9. Then, in the Court of Appeal, Brett MR (at p 875) and Bowen LJ (at p 877) said this:

" [Brett MR] ……It was contended for the plaintiffs that there is no difference as regards the right to costs between a solicitor and an ordinary person; and for the defendants it was contended that the costs of a solicitor, who is party to a suit, ought substantially to be taxed as if he had been acting for a different person. I think neither contention correct. I cannot think that any privilege of a solicitor exists. I am wholly unable to agree to any argument standing upon that footing. I should have thought that a person wrongfully brought into litigation ought to be indemnified against the expenses to which he is unjustly put; but there cannot be a perfect indemnity, because it is impossible to determine how much of the costs is incurred through his own over-anxiety. When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit. When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket. He has to pay the fees of the court, that is money paid out of pocket; but for loss of time the law will not indemnify him. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. There are things which a solicitor can do for himself, but also he can employ another solicitor to do them for him; and it would be unadvisable to lay down that he shall not be entitled to ordinary costs if he appears in person, because in that case he would always employ another solicitor. If a solicitor does by his clerk that which might be done by another solicitor, it is a loss of money, and not simply a loss of time, because it is work done by a person who is paid for doing it. It is true, however, to say that the costs of a solicitor appearing in person must be taxed differently from those of an ordinary litigant appearing by a solicitor. The unsuccessful adversary of a solicitor appearing in person cannot be charged for what does not exist, he cannot be charged for the solicitor consulting himself, or instructing himself, or attending upon himself. The true rule seems to be that when a solicitor brings or defends an action in person, he is entitled to the same costs as an ordinary litigant appearing by a solicitor, subject to this restriction, that no costs which are really unnecessary can be recovered."

"[Bowen LJ] [Lord Coke's] meaning seems to be that only legal costs which the Court can measure are to be allowed, and that such legal costs are to be treated as expenses necessarily arising from the litigation and necessarily caused by the course which it takes. Professional skill and labour are recognised and can be measured by the law; private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual. Professional skill, when it is bestowed, is accordingly allowed for in taxing a bill of costs; and it would be absurd to permit a solicitor to charge for the same work when it is done by another solicitor, and not to permit him to charge for it when it is done by his own clerk. The question before us does not depend on the privileges of a solicitor. My judgment is the same as that of the Master of the Rolls; the costs claimed, subject to the exceptions which have been mentioned, ought to be allowed, because there is an expenditure of professional skill and labour."

10. The principle which this case is taken as establishing is that set out in the head-note viz that a litigant in person who is a solicitor can recover costs as if he had employed a solicitor, except in respect of items which the fact of his acting directly renders unnecessary: see most recently the decision of the Court of Appeal in Malkinson v Trim [2003] 1 WLR 463 (CA) at p 468 paragraph 9. It also lends support to the proposition that a litigant in person who has some other professional skill can recover in respect of the time spent exercising that skill (a result consistent with the next case I consider, Nossen).
11. The next case in time is Re Nossen's Letter Patent [1969] 1 WLR 683 (Lloyd-Jacob J sitting with assessors). This concerned costs incurred in-house rather than the costs of a litigant in person. In defending an application for patent infringement (an application which was dismissed on the applicant failing to provide security for costs), the Respondent, the UK Atomic Energy Authority, incurred expenditure on research and experimentation. Part of that work was carried out by experts in the Authority's employ using the Authority's materials on its own premises. In considering that expenditure, Lloyd-Jacob J stated that the established practice of the courts was to disallow any sums claimed in respect of the time spent by the litigant personally in the course of instructing his solicitors but that, in the case of litigation by a corporation, that practice had not been strictly applied, it being recognised that, if expert assistance is properly required, it may well occur that the corporation's own specialist employees may be the most suitable or convenient experts to employ and that the direct costs incurred, but not a contribution to overheads, should, in principle, be recoverable. He expressed (at p 644) his conclusion this way:

"when it is appropriate that a corporate litigant should recover, on a party and party basis, a sum in respect of expert services of this character performed by its own staff, the amount must be restricted to a reasonable sum for the actual and direct costs of the work undertaken."

12. Like Stanley Burnton J in Admiral Management Service Ltd v Para-Protect Europe Ltd [2002] 1 WLR 2722 (see 18 to 22 below) at paragraph 28, I find it curious that a more liberal principle should, apparently, be applied to a corporation than to a partnership or an individual. In the present case, KPMG is an LLP and I would be inclined to treat it as a corporation for the purposes of the Nossen exception. In any event, Mr Davies accepts, as I understand his position, that the KPMG costs are, in principle, recoverable to the extent that the costs relate to what can properly be described as the exercise of expert skills.
13. In Buckland v Watts [1970] 1 QB 27, it was held that a litigant in person (who had claimed for his time in looking up the law) but who was not a solicitor was not entitled to claim costs in respect of the time spent preparing his case, but only his out-of-pocket expenses. Danckwerts LJ (and John Stephenson J who agreed with him) adopted a conventional approach according to which it is only a solicitor who, as a litigant in person, is able to recover any costs in respect of the work which would ordinarily be done by a solicitor. Since the work in relation to which the litigant claimed costs was legal research he could not, as a non-lawyer, recover in respect of it.
14. However, Sir Gordon Willmer went further. In an interchange with counsel (see at p34D) he observed that Bowen LJ in the London Scottish Benefit Society case had said that professional skill can be measured and recognised by law. In his judgment, at pp37-8, he said that costs are "intended to cover remuneration for the exercise of professional legal skill" [my emphasis]. That remark is understandable in the context of a case concerning work which would ordinarily be done by a lawyer; indeed, as he shortly thereafter observed, the Court was not concerned with the exercise of other professional skills. In relation to other skills, he says this:

"Other professional people, who become involved in litigation and conduct their own cases, may recover something in respect of their own professional skill in so far as they qualify as witnesses and are called as such. Nobody else, however, except a solicitor, has even been held entitled to make any charge, as I understand it, in respect of the exercise of professional legal skill….".

15. I do not read Sir Gordon Willmer as saying that a professional person, other than a solicitor, can only recover in respect of his own professional skill only to the extent that they qualify as witnesses and are called as such. Rather, he gives that as an example. What he relies on (as can be seen from the interchange mentioned) is the judgment of Bowen LJ and the reasoning of that, as I have said, applies to the exercise by any professional of the skill which he has. I leave aside the difficulty which Mr Davies referred to of deciding who is and who is not a "professional" for this purpose in the early years of the 21st century. Unfortunately, Sir Gordon Willmer can be read in a different sense ie as saying that a non-legal expert can claim only if he is a witness in the case. I think that Stanley Burnton J must have read him in that sense in the Admiral case. However, if that is the correct reading, then I agree with Stanley Burnton J's reasoning and would prefer, if it is necessary to chose between them, to follow the decision in Nossen rather than the statement of Sir Gordon Willmer.
16. The next case in time is Re Andrew [1999] 1 WLR 1236, a decision which is relied on by Mr Davies. In that case, the defendant was charged with certain offences under the Criminal Justice Act 1988 and a receiver was appointed over certain assets. The defendant was acquitted and awarded costs out of central funds. The taxing officer held that the costs of the receivership proceedings were not included in that order. The receiver eventually released the property which had been seized but retained a little over £10,000 to cover the expenses of the receivership, including her remuneration. The defendant's application in the receivership proceedings to recover the costs of the receivership from the prosecutor (which had initiated those proceedings), including that remuneration, was dismissed by the Judge and by the Court of Appeal. It was held that such remuneration was not a cost "of and incidental to [the] proceedings" as would have been required under section 51 Supreme Court Act 1981 if they were to be recoverable.
17. The case is not, however, authority for the proposition that the expenses of the receivership (including the remuneration of the receiver) did not fall within the meaning of "costs": it only establishes that such expenses were not expenses "of and incidental to" the receivership proceedings. Nor is it authority in the present case for the proposition that the KPMG costs are not "costs" in relation to the Applications to discharge the EGO BV and EH3 CVAs; nor, if they are costs, is it authority for the proposition that they are not costs of and incidental to those Applications.
18. Decisions in the next two cases were given within a short space of time but, unfortunately, neither was cited in the other. I start with Admiral, a decision to which I have already referred. This case concerned the question whether the costs of and incidental to a search and seize order included the cost of investigations carried out by the Claimant's in-house computer experts. It was held that, in principle, such costs were recoverable but actual entitlement depended on whether the employees were truly experts and on the nature of the work they carried out.
19. It is to be noted that the judge, Stanley Burnton J, proceeded on the basis of a concession (see paragraph 13 of the judgment) that in the ordinary way a company cannot recover by way of costs any payment for the time of its employees in investigating or prosecuting its claim. Accordingly, the Claimant relied on the exception to the general rule described in Nossen. It claimed that some of its employees were experts in the field of computers and that it was entitled to recover sums for their work in connection with the claims against the defendants. It also contended that its employees provided expert service in determining whether documents found on the defendants' computers were the claimants' documents or copied or derived from its documents or contained the claimants' confidential information.
20. Stanley Burnton J plainly thought that the concession I have referred was correct: at paragraph 34 of his judgment, he says this:

"…..Costs do not provide a complete indemnity to a claimant in a case such as the present. There is conflict between on the one hand the principle of requiring an unsuccessful defendant to pay comprehensive remuneration for the time reasonably spent by a claimant's employees on its well founded claim and on the other hand the consequences of so increasing recoverable costs as to render litigation even more prohibitively expensive than it is now. To permit recovery of a reasonable sum for the work of employee experts which, if done by someone who was not an employee, would be recoverable as an item of costs, is a relatively minor inroad into the general principle that payment for work done by employees of a litigant is not recoverable as costs; it does not strike me as unjust or as imposing an unfair burden on the paying party."

21. Stanley Burnton J emphasises the narrowness of the decision in Nossen (ie that for the costs referable to an in-house expert to be recoverable, the individual must truly be an expert and that the work must be such as to require the exercise of his particular expertise) by referring to the unreported decision of Bingham J in Richards & Wallington (Plant Hire) Ltd v A Monk & Co Ltd 11 June 1984. As explained by Stanley Burnton J, the case concerned a claim made by a contractor against a county council for building costs. The claim had been formulated and the necessary information obtained by a non-executive director who was paid a daily fee for his work and was an employee of the claimant. The claimant also retained an outside expert in the presentation of claims of the kind in question. Bingham J rejected the claimant's claim to have the cost of the work included in the costs recoverable from the county council. A substantial quote from Bingham J's judgment can be found in paragraph 40 of Stanley Burnton J's judgment. I set out only a short part of it:

"The dividing line between expert and factual evidence is never an easy one….But essentially, I think, these two gentlemen were engaged on a factual exercise; they were certainly not independent experts; they were not, in truth, acting as experts at all and, in my judgment, these costs fall within the ordinary costs that a litigant must bear of digging out his own factual material, through his own employees, to prove his own case. Had outside experts been introduced to carry out this work then it by no means seems to me to follow that it would in any event have been recoverable as a cost of the litigation….."

22. There is one further passage in the judgment of Stanley Burnton J which is helpful and instructive in the present case. At paragraph 43 he says this:

"It was submitted on behalf of the claimant that the familiarity of the claimant's employees with the documents, clients and information of the claimant qualified them as experts for the purposes of analysing information obtained from the defendants' computers, including information obtained by the execution of the search order. I do not agree. There is no distinction between the examination of documents on or derived from a computer and the examination of hard copies of documents. Familiarity with a party's business does not make a witness into an expert either for the purpose of testimony or for the purpose of the recovery of costs. Work in this category is indistinguishable from that considered by Bingham J in Richards & Wallington (Plant Hire) Ltd v A Monk & Co Ltd 11 June 1984. In this connection it seems to me to be irrelevant that the work might have been done at greater expense by employees of the firm of solicitors instructed by the claimant. It is the nature of the work in question that qualifies for inclusion of a costs order, not the amount of cost incurred or saved. Doubtless a considerable amount of analysis of information obtained from computers and on execution of the order was carried out by the claimant. That work does not seem to me to qualify for an order for costs under the principle in In re Nossen's Letter Patent [1969] 1 WLR 638." [my emphasis]

23. Next comes the decision of HH Judge Thornton QC sitting in the Technology and Construction Court. He took a very different approach from Stanley Burnton J who had applied the principles established over the years prior to the introduction of the CPR. HH Judge Thornton QC had this to say:

"8. A further factor concerns the weight to be placed on costs cases decided under the Rules of the Supreme Court such as Re Elgindata No 2 [1992] 1 WLR 1207, CA and [Nossen]….. Such cases have little or no bearing on the interpretation and application of the CPR costs code. These cases were decided under the RSC and, in AEI Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507, CA, a case decided under the RSC, Lord Woolf MR pointed out that the CPR are much more specific as to the matters to which the courts should have regard in deciding what costs order should be made than the predecessor RSC, even thought the overall discretion provided to the court under both costs regimes is equally broad.

9. It follows that I do not accede to Amec's submission that Re Elgindata No 2 afford some guidance as to how I should deal with costs in this case nor to Stork's submission that [Nossen] has any significant relevance to the question of how the costs of personnel employed by Amec who assisted in the claims, documents and evidence preparation exercised should be dealt with under the CPR."

Then later in his judgment, at paragraphs 112 to 114, the Judge deals with these costs.

" Amec engaged its own personnel and agency staff to undertake much of the work involved in collecting, analysing and presenting the primary evidence and the supporting evidence of Mr Prudhoe. These personnel also undertook much of the preparation of visual evidential aids such as isographs, histograms, graphs, bar charts, photographs, tables, as built programmes and overlays. Had this work been undertaken, at greater expense and with the use of many more hours of time, by legally qualified personnel employed by Masons, as Amec's solicitors, this work would in principle be recoverable. However, Stork maintains that it is irrecoverable in principle because of the impact of the Richards & Wallingford case decided in 1984 and the even older case of [Nossen]. Both cases, having been decided under the RSC, are of no assistance in determining this question under the CPR, even if the wording of the relevant rules is similar.

CPR 43.2(1)(a) defines costs as including:

"fees, charges, disbursements, expenses, remuneration…..".

In principle, the time charges involved in employing these personnel fall within each of these categories of costs. It is a matter for detailed assessment whether the tasks performed, on an hour by hour basis, the numbers of hours claimed, the personnel involved and the hours rate or other disbursement were incurred at all and, if so, were properly and reasonably incurred. However, it would be contrary to the overriding objective if necessary expenditure which was incurred at less expense than would have been involved had Amec's solicitors' employees undertaken work, was not recoverable in principle."

24. This is in stark contrast to the approach of Stanley Burnton J. Although the decision in Admiral may have reflected the concession made to which I have referred, I am left in no doubt that the judge thought it was properly made. Indeed, his comments in paragraph 43 of his judgment show that he considered the approach in Richards & Wallington and Nossen to be correct. It would, of course, be idle to suggest that he had simply overlooked the possibility that the CPR had effected a fundamental change in the approach which the court should adopt to costs of this type. I shall return to this point after completing my review of the cases.
25. Mr Briggs relies on the decision in R (Factortame Ltd) v Transport Secretary (No8) [2003] QB 381 to show that the expense incurred by a litigant on forensic accountancy and other advice can fall within the ambit of "costs" and suggests this recognises a continuing advance in the attitude of the courts to what can fall within that ambit. Grant Thornton agreed to prepare and submit the Claimants' loss claims in return for 8% of any settlement figure arrived at. Pursuant to that agreement, Grant Thornton appointed and funded an independent fisheries expert and an independent accountant with whom they worked to create a computer model for calculating the losses claimed. They also provided other services, ancillary to the conduct of the litigation by the Claimants' solicitors, including the collection of documentary evidence, liaising with the Claimants in Spain and advising offers to settle. Following settlement, Grant Thornton were paid 8% of the settlement proceeds. The Master held that Grant Thornton's contingent fee arrangements were not champertous. The Court of Appeal agreed with the Master that the agreements were not champertous. Although the headnote states that the Master also decided that the Claimants could recover the 8% from the Secretary of State, that does not appear to be correct: what he had ordered on the trial of the preliminary issue he had ordered (ie whether the fee agreement was champertous) was a payment on account of costs.
26. The Court of Appeal was concerned only with the question whether the fee agreement was champertous. It did not have before it any question concerning the principles on which any detailed assessment should be conducted. It is certainly true that the Court regarded the fee agreement as having been a very sensible way for the Claimants to have proceeded, indicating in paragraph 28 of the judgment the nature of the services provided by Grant Thornton as described in the solicitors' bill of costs. But, in paragraph 86, the Court says this:

"Our view of the 8% agreement was that it would have appeared attractive not merely to the claimants but to the Government, who would ultimately be liable to pay the costs if the claims succeeded. The Government would, in any event, only be liable to pay reasonable costs, which would be likely to be assessed on an hourly rate basis. Thus, for the Government, the 8% would be likely to operate as a cap."

27. The Court says nothing about how those reasonable costs are to be assessed, and cannot, in my judgment, be treated as indicating any new approach to the assessment of costs. In particular, it does not follow from the decision that all of the activities carried out by Grant Thornton were ones in respect of which the Claimants could recover a proper hourly rate. Indeed, if the principles applied in Richards & Wallington and Nossen remain applicable, the reasonable costs would not include an hourly charge in relation to a number of the tasks which Grant Thornton carried out. Accordingly, I do not find this decision of assistance in resolving the issue before me.
28. The last case to which I refer (and which I have already mentioned) is Malkinson v Trim, a case decided under the CPR. In that case, the principle established in the London and Scottish Benefit Society case, that a solicitor acting in person could charge for his own time and for the time of his employees, was held to apply equally where he carried on business in partnership and some or all of the work was carried out by one or more of his partners or by employees of the partnership.
29. At paragraph 11 of his judgment (with the entirety of which the other members of the court agreed), Chadwick LJ considered the reasoning in the London and Scottish Benefit Society case. He derived six elements in the reasoning underlying the decision (see at paragraph 11 of his judgment). These are:

a. First, that a person wrongfully brought into litigation ought to be indemnified against the expense to which he is unjustly put.

b. Second, the need is for indemnity, not punishment or reward; costs are allowed only by way of indemnity, in the sense that a party cannot be allowed to recover by way of costs expenditure which he has not incurred.

c. Third, application of those two principles leads to the conclusion that a person can recover the cost of employing a solicitor to assist him in the litigation.

d. Fourth, an ordinary litigant - that is to say, a litigant who is not a solicitor - cannot recover, as costs, compensation for the expenditure of his own time and trouble because, "it is impossible to determine how much of the costs is incurred through his own over-anxiety" and because "private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual".

e. Fifth, those considerations are of no weight where the litigant is himself a solicitor. "Professional skill and labour are recognised and can be measured by the law".

f. And, sixth, a rule of practice which enables a litigant who is a solicitor to recover, as costs, compensation for his own time and trouble is beneficial, because it is likely to lead to a reduction in the amount which the unsuccessful opponent will pay under an order for costs.

30. In identifying the fourth element of the reasoning, it is to be noted that Chadwick LJ takes the reference to "an ordinary litigant" as being to "a litigant who is not a solicitor". I think that he includes the words to indicate what the judges in the London Scottish Benefit Society case meant by "an ordinary litigant". It was not necessary for him to address whether, in the 21st century, a litigant who is a professional person other than a solicitor, is in all respects to be treated in the same way as an "ordinary litigant" in that sense; nor did he do so.
31. At paragraph 22 of his judgment, Chadwick LJ said this:

"……As I have sought to point out earlier in this judgment, the basis of the principle that a solicitor who acts for himself in litigation is entitled to compensation, by way of costs, for his time and trouble is a recognition that he (in common with any other litigant) ought to be indemnified against the expense to which (on the hypothesis that he has been successful in the litigation) he has been unjustly put. The special position of a solicitor is that he does not need to employ others to provide professional skill and knowledge in the conduct of litigation. He can provide that skill and knowledge himself. Further, there is no difficulty in measuring what it costs him to do so; and there is a potential saving in costs if he is not discouraged from doing so….".

32. Although the London Scottish Benefit Society case and Malkinson v Trim were both cases concerning solicitors, Mr Briggs submits that the reasoning is equally applicable to other professionals who act in person. It is, he says, because, and only because, the court could not measure the expenditure of time and trouble by a layman that allowance could not be made for such expenditure. But the court recognised that for a solicitor time was money, something which is true, as Mr Briggs says, for any other professional. The courts, in the context of costs assessment, can control the amounts recoverable in respect of experts' fees where an expert has been properly and reasonably instructed to prepare a report or attend court to give evidence; there is no reason in principle, he says, why it could not similarly assess an amount which is properly chargeable in relation to the time spent by a litigant who is a professional other than a solicitor. Even if that goes too far, the position of an officeholder, whether an administrator or a liquidator, is different since the office-holder's remuneration is controlled by the Court under the insolvency regime.
33. Further, so far as concerns the time spent by a professional's own employees, it is said that it should follow that, if the professional himself can charge for his own time, so too he should be able to charge for the time of his staff. Alternatively, the decision in Amec shows that the CPR mark a shift in the approach of the courts and that, in the present case, it would be fair to allow all of the KPMG costs (as remuneration of the office-holders which has to be borne by the estates) incurred in relation to the litigation as costs recoverable (subject to detailed assessment) against the Applicants.
34. Ignoring for the moment the decision in Amec (which I will consider later), I see no reason to apply a different approach in the application of the CPR from that which applied to the RSC in determining what expenditure, whether or time of money, could in principle be brought into account on a detailed assessment. The principles derived from the authorities, and the reasoning of those authorities, applies equally to the CPR as to the RSC. That is the approach which Stanley Burnton J applied without hesitation in Admiral; and there is not a hint that that approach was in any way qualified or affected by the CPR in the judgment of Chadwick LJ in Malkinson v Trim in circumstances where I would have expected to see some mention of it if there had been a change of approach.
35. Applying that approach, I reject Mr Briggs' submissions. His starting point is that costs are intended to represent an indemnity to the successful litigant and that it was only because "it is impossible to determine how much of the costs is incurred through his own over-anxiety" or because "private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual" to adopt the phrases used in the judgments in the London Scottish Benefit Society case. In relation to solicitors it was said in that case that "Professional skill and labour are recognised and can be measured by the law" but, says Mr Briggs, that is true today of any professional person or, if that goes too far, it is certainly true of office-holders in the course of carrying out their duties.
36. However, I consider that the starting point is not quite as I have just described it. Since the decision in the London Scottish Benefit Society case, the rule of practice which it established has been applied only in the context of litigants in person who are solicitors. Chadwick LJ himself describes the principle by reference to solicitors and, it is correct to say, that the decision in that case applied in its terms only to solicitors. The principle has been applied consistently on that basis for many, many years; and there are many judicial dicta to the effect that, generally speaking, a litigant in person cannot recover for his time.
37. I make the obvious point that, where a litigant is in fact represented by solicitors, he cannot, so far as concerns his own time, be in any better a position than if he were a litigant in person. It would be absurd to allow a litigant to make a charge for his own time where he could not do so if acting in person (although I leave open whether a solicitor litigant could charge for his own time where he undertakes work which could have been done by his own solicitor thus saving his own solicitor chargeable time). Accordingly, unless Mr Briggs can show that a litigant in person who is a professional other than a solicitor, can recover for his time spent, he will be unable (subject to a submission based on their particular status as office holders) to show that the office-holders can recover for their own time.
38. Now, it is clear that, prior to the introduction of the litigant in person costs provisions, a litigant in person who did not carry on a profession could not recover costs in respect of his time: that, indeed, was precisely why the litigant in person provisions were introduced. The decision of the Court of Appeal in Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 identified a similar problem in relation to a company represented by a director: it was not possible to recover for time spent because the Court had no power to make such an award. CPR 48 now deals with litigants in person: special provision is made for solicitors under CPR 48.6(6) read with 48PD 52.5. There is no similar provision in the case of other professionals. CPR 48.6 and 48PD 52.5 draw no distinction between a litigant who happens to be a professional other than a solicitor (or other person entitled to conduct litigation) and an ordinary litigant in person; they reflect the approach that the London Scottish Benefit Society case is restricted in its operation to solicitors. In my judgment, that is a correct approach: and it would be an inadmissible extension of that case to treat the principle established by it to other professionals.
39. I reach the same conclusion by another route also. The reasoning in the London Scottish Benefit Society case (see the first three elements discussed by Chadwick LJ) shows that a solicitor acting in person can only recover for certain costs which he would have been able to recover had he instructed an independent solicitor. It would seem to me that another professional (such as an accountant) should similarly be able to recover as a litigant in person at most for items which he would have been able to recover had he instructed an independent professional (accountant). Whilst he would be able to recover for the cost of any expert advice given by that independent professional, he would not be entitled to recover for the cost of general assistance in the conduct of the litigation. The litigant in person, even if a professional, cannot recover in respect of his time spent other than on matters within his own professional expertise and requiring the attention of an expert.
40. Further, the position of an office-holder is, in my judgment, no different. It may be the case that, in the fulfilment of his duties as an office-holder, he has to bring or defend litigation. The fact that he does so does not mean that it is part of his profession to conduct litigation in the way that it is part of the profession of a solicitor to do so. An office-holder in not unique in this respect: trustees of family trusts or of pension funds have fiduciary duties, the fulfilment of which may require them to bring or defend proceedings. That sort of duty on the part of an office-holder or other fiduciary does not, in my judgment, afford any basis for a difference in treatment, vis a vis the payment of costs by an opposing party, from any other litigant.
41. Nor, in my judgment, does the fact that an office-holder's remuneration is ultimately under the control of the insolvency court make any different to the result. The real reason he cannot recover is, I consider, because he is not a professional seeking to recover costs for time spent in respect of his own area of expertise.
42. Accordingly, I do not consider that the fundamental basis of Mr Briggs' submissions is sound. Without an extension of the principle in the London Scottish Benefit Society case, there is no basis on which the office-holders can recover for their own time. In my judgment, they cannot do so save to the extent that their activities can be brought within the Nossen principle.
43. So far as the KPMG costs, other than the costs of the office-holders themselves, are concerned, there is no reason to depart from the established practice in Nossen. I adopt everything which Stanley Burnton J said in paragraph 34 of his judgment in Admiral (see paragraph 20 above). It would, in any case, be a very great departure from previous practice to allow a litigant who is represented by solicitors to charge for the time of his employees in undertaking the sort of factual investigation to which Bingham J alluded in the Richards & Wallington or many other types of work. But if such allowance is to be made in the case of a litigant who is a professional, I can see no reason for not allowing in the case of any other litigant carrying on business of any sort or, indeed, who does not carry on business at all but employs a personal assistant to help him with the case. I see no logical stopping point short of permitting an allowance for all time spent by any employee or assistant on any part of the litigation concerned.
44. That brings me to Amec. Should the decision in that case lead me to a different conclusion? It is no doubt true, as HH Judge Thornton QC points out, that the CPR are more specific than the old RSC as to the matters to which the courts should have regard in deciding what costs order should be made. That is not to say, however, that the meaning of "costs" is any different; nor is it to say that, under the CPR, a different approach should be taken to ascertaining in principle what items which fall literally within the definition should be allowed on an assessment.
45. I have some difficulties with the decision in Amec. First of all, the judge dismisses earlier cases, in particular Nossen as having little or no bearing on the CPR costs code. I do not understand why the judge dismissed Nossen, since that case goes not to the factors which determine what costs order should be made, but to what are comprised in "costs" so that AEI Ltd v Phonographic Performance Ltd is not really to the point.
46. Secondly, in relation to Amec's personnel employed in the tasks identified in the passage quoted at 23 above, HH Judge Thornton QC said that, in principle, the time charges involved in employing these personnel fall within each of these categories listed in the definition of costs. He does not, however, explain why he considers that to be so. He seems to be saying that, as a matter of construction, the time charges fall within the definition but in doing so he gives no reasons for rejecting a construction which reflects the arguments which led to the conclusions in Nossen and other relevant case. Had he considered such reasoning, starting with the London Scottish Benefit Society case, rather than rejecting the cases as having no bearing, he might well have come to a different conclusion. I would only add that, if the judge's conclusion is correct in the case of a corporate employer, the position should, logically, be the same in the case of an individual who carries on business as a sole trader and who uses his staff, for instance his personal secretary, to carry out tasks in the course of litigation. It is but a small step then to say that the cost of the time spent by the litigant himself should be allowed in all cases: but that is simply not a possible construction of the CPR and would render the litigant in person provisions otiose.
47. The decisions of Stanley Burnton J and of HH Judge Thornton QC are, I consider, inconsistent. Although the decision in Admiral may be said to be based on a concession, much of what the judge says in support of his conclusion goes beyond the concession. I do not consider that I could follow Amec without at the same time saying that Admiral was wrong and wrong in a way which went beyond the concession. Faced with conflicting authorities, I prefer to follow Admiral. The result accords with my perception of the policy of the CPR, one of the driving forces of which was the desire to reduce the costs of litigation; it would be surprising if, without clear and express provision, the range of recoverable costs had been extended in the way that Amec suggests and Mr Briggs submits. Even if I am wrong in thinking that the actual decision, rather than the concession, in Admiral is in conflict with Amec, I do not consider that I should follow Amec.
48. Accordingly, in my judgment it is only those part of the KPMG costs which fall within the Nossen principle which can be brought into account on the detailed assessment. I do not understand that any part of the costs which are, on that basis, to be brought into account have arisen as a result of time spent by the office-holders personally. However, for my part, I can see no difference in principle between time spent by an employee of KPMG and time spent by the office-holders personally and would allow time spent by the office-holders personally on truly expert matters to attract the same costs treatment as time spent by employees.