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England and Wales High Court (Senior Courts Costs Office) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Hornsby v Clarke Kenneth Leventhal (A Firm) [2000] EWHC 9012 (Costs) (16 June 2000)
URL: http://www.bailii.org/ew/cases/EWHC/Costs/2000/9012.html
Cite as: [2000] 2 Costs LR 295, [2000] EWHC 9012 (Costs), [2000] 4 All ER 567
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This summary of a judgment has been obtained from the Supreme Court Costs Office pages on the HM Courts Service web site. The citation used by BAILII is not an officially approved citation. The full text of the judgment may have an official Neutral Citation issued by the court, and may be available elsewhere on BAILII.
No.12 of 2000
Hornsby v Clarke Kenneth Leventhal (A Firm)
16 June 2000
Mr Justice Jackson Sitting With Assessors
The defendants were an unincorporated association of accountants who employed a Nicholas Young as their international executive officer, who, between 1978 and 1990, deceived well over 100 investors by persuading them to deposit money with him for investment in an "international fund". He told investors and prospective investors that that fund was available to him because of his employment with the defendants, that the fund was held by Standard Chartered Bank, and that the return on investments was structured so that they were tax free in the hands of the investors, thereby allowing a rate of return of between 21% and 30% per annum. In fact there never was an international fund, nor were the depositors’ monies held by Standard Chartered Bank. During the period of his fraud Mr Young used the money invested to subsidise his lavish lifestyle and to gamble on horses. The fraud continued for as long as it did because he was able to inveigle new investors into the scheme, as well as persuading existing investors to increase their stake, and he was thus able to pay the interest and any repayments sought, but in 1990 he was unmasked and convicted of obtaining property by deception and sentenced to 4 years’ imprisonment, and made bankrupt.
The appellants, who were legally aided, were two of 14 claimants who brought an action against the defendants on the grounds that they were negligent and vicariously liable for perpetrating the fraud. After a 25 day trial Mr Justice Dyson found for the defendants, and the Court of Appeal, in upholding that decision, stated that no satisfactory basis had been established for concluding that the defendants, who like the claimants themselves had believed Young to be trustworthy, should be found liable to make good their losses. The outcome was clearly a financial disaster for these claimants, who had handed over their life savings to Young, and had borrowed heavily to increase the size of their investment with him.
Between the trial and the appeal hearing, in respect of which 7 of the 14 claimants only appealed, these claimants, Mr & Mrs Hornsby, whilst retaining the same leading and junior counsel, changed solicitors.
Following the taxation by the Taxing Master, and written reasons, the Notice of Appeal set out 12 grounds of appeal, of which the Judge held that 9 did not raise any point of principle in respect of which the Master had erred, and adopting the reasoning of Mr Justice Buckley in Mealing McLeod v The Common Professional Examination Board (No.7 of 2000), the Judge refused to interfere with the Master’s decisions on those nine heads, though he did comment upon the difficulty involved when the court is assessing legal aid only fees, there being no adversary to challenge the items claimed. Nevertheless, though dismissing those nine grounds, the Judge did deal with them all individually.
The remaining three grounds related to counsel’s fees for the skeleton argument, brief and refreshers, and the care and conduct claimed by the solicitors.
In arriving at his figures the Taxing Master had, the Judge held, given disproportionate weight to the fees claimed and allowed by the other appellants’ leading and junior counsel, which were considerably lower than those claimed by leading and junior counsel for the Hornsby’s.
Agreeing with his barrister assessor, the Judge considered that counsel would have needed to spend a minimum of two weeks on the skeleton argument, which was 75 hours compared with the 150 claimed, and he accordingly increased the allowance for leading counsel from £6,000 to £15,000, but in the case of junior counsel, his fees would be increased for this skeleton only from £3,000 to £5,000.
The brief fee claimed by leading counsel was £30,000, and by junior counsel £20,000, compared with £8,500 and £5,660 for leading and junior counsel respectively for the other appellants. Again the Judge considered that the Master’s allowance did not provide sufficient remuneration to counsel for a case of this magnitude, and again disproportionate weight had been given to the level of brief fees claimed by the other appellant’s counsel. He thus increased the brief fee for leading counsel to £25,000, and for junior counsel to £15,000.
Turning to refreshers the Taxing Master had allowed £2,000 per day for leading counsel, and £1,333.33 for junior counsel for the trial, but in the Court of Appeal allowed only £1,500 and £750 respectively, on the basis that these were the allowances claimed by the other appellants’ leading and junior counsel, and allowed on their detailed assessment. The Master had found however that the work done by counsel during the hearing of the appeal was of a completely different nature than that which had to be done during the 25 day trial. The Judge held that whilst the work was different the level at which fees had been allowed in the court below would be a helpful guide as to what should be allowed in the Court of Appeal as representation in the Court of Appeal was onerous, and that the claimed fees of £2,000 and £1,333.33 should therefore be allowed.
Finally the Judge dealt with the percentage for care and conduct uplift allowed to the solicitors. In the court below the Master had reduced the solicitor’s claim for uplift from 150% to 110%, while in the Court of Appeal 95% was claimed by the Hornsby’s solicitors, as against 50% by the solicitors for the other appellants. The Taxing Master had allowed 50% to both firms. The co-appellant’s solicitors recognised that the most significant circumstance was that the appeal had been wholly unsuccessful, that the appellants had been ordered to pay the costs thereof, and that those costs were ordered to be paid by the Legal Aid Board, and this unhappy result had been recognised by restricting their claim for care and conduct of 50%, and it would illogical and wrong therefore to allow a higher uplift to the solicitors acting for the Hornsbys.
The Judge held that the Taxing Master had paid too much attention to that fact, and too little to the fact that different solicitors appeared in the Court of Appeal on behalf of the Hornsby’s, and following guidance laid down in Loveday v Renton and Brush v Bower Cotton & Bower the Judge increased the care and conduct uplift to 80%.
On the question of costs, although the Judge had upheld the Master on all three points, he decided that the appellant should have their costs of the appeal, and ordered a detailed assessment, because of course the appellants were legally aided.