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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 >> Sarwar v Alam [2003] EWHC 9001 (Costs) (7 March 2003)
URL: http://www.bailii.org/ew/cases/EWHC/Costs/2003/9001.html
Cite as: [2003] EWHC 9001 (Costs)
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SCCO Ref: 0208020 |
SUPREME COURTS COST OFFICE
Clifford Inn Fetter Lane London EC4A 1DQ | ||
B e f o r e :
____________________
| IMRAN SARWAR | Claimant | |
| - and - | | |
| MUHAMMAD ALAM | Defendant |
____________________
Mr David Holland (instructed by C.I.S Solicitor) for the Defendant
Hearing date : 11 February 2003
____________________
Crown Copyright ©
- This is an important test case in the developing law on CFAs and is fully reported at inter alia [2002] 1 COSTS LR 37 (CA). Although, as indicated, a test case which went from a District Judge to a Circuit Judge and thence to the Court of Appeal who delivered a reserved judgment on 19th September 2001, it was, so far as the Claimant was concerned, a very small case in which he was involved in a relatively minor accident which he was prepared to settle for £2,250 damages. In the circumstances, the Claimant's bill for £255,745.30 was not well received by the paying party/Defendant.
- It was balloted to me and there was a preliminary hearing on 18th October 2002 when the same counsel who appeared before me on this aspect of the case were also present, namely Mr Nicholas Bacon for the Claimant and Mr David Holland for the Defendant. I decided, after hearing full submissions, that the circumstances surrounding the Claimant's CFA, disclosed to me pursuant to an order to that effect, did not raise in my mind any suspicious or other circumstances that ought to be disclosed to the Defendant. I therefore refused to allow the Defendant's advisers to see the relevant paperwork, nor did I put the Claimant to his election under CPD 40.14. At the same hearing, I decided in favour of the Defendants that the costs appeared on their face to be disproportionate and accordingly, the "necessary test" laid down by Lord Woolf LCJ in Home Office v Lownds [2002] 2 Costs LR 279 had to be applied to the detailed assessment.
- Those decisions were the subject of an extempore judgment which was of course recorded but in respect of which there has been no appeal by either party. After delivering that judgment and at the request of both parties, I gave directions for a further preliminary hearing relating to three matters namely:
- These issues, which were preceded by skeleton arguments in accordance with my directions, were fully and helpfully argued by Mr Bacon and Mr Holland. I was supplied with a wealth of authority to some of which I will need to refer in this judgment. I would like to record my debt to both counsel for their helpful yet concise submissions on what were difficult points.
- As already indicated, a case which was a costs only case came before a District Judge who found that the Defendant was correct in his submissions that the Claimant should have relied on the Defendant's LEI insurance rather than taking out an ATE policy with the additional expenditure that such a claim involved.
- That adverse decision from the Claimant's point of view was appealed to Judge Halbert who heard the appeal on 5th July 2001, which was between the conclusion of the hearing in the Court of Appeal in Callery v Gray [2001] 2 COSTS LR 163 and formal delivery of judgment therein by their Lordships on 17th July 2001. In a reserved judgment, Judge Halbert upheld the decision of the District Judge, adverse to the Claimant. During the arguments in Callery v Gray and the preparation of Master O'Hare's report in relation to the second Callery v Gray Appeal [2001] 2 COSTS LR 205, its importance to the insurance industry was recognised and arrangements for it to be heard as an expedited appeal with a number of interested parties being allowed to make representations were made. Accordingly judgment was delivered by the Court of Appeal in Sarwar v Alam on 19th September 2001, allowing the Claimant's appeal.
- I mention this chronology, not just as a matter of record, but because Mr Bacon relied on it as a justification for the level of the insurance premium which is claimed at £62,500. In the courts below the Claimant was covered by a CFA backed by a standard Temple policy but after the second adverse hearing, that policy was not extended and those representing the Claimant had to do much hard work in a very short time to try to find an alternative policy.
- I have seen some of the relevant correspondence in relation to the first hearing in October and although I did not consider it necessary to allow Mr Holland and his clients to see that correspondence, I can state that it does indeed confirm, as must be obvious from the chronology, that considerable efforts had to be made during that period to arrange any cover at all. Ultimately, a policy with Lloyds was effected and this has usefully been put in evidence before me.
- It is I think important that I should quote certain paragraphs from that policy.
- The schedule includes the following:
- Mr Holland vigorously attacked the level of this insurance premium on a number of diverse but connected grounds. His primary argument was that his clients should not be liable for more than £31,250 because of the no claims bonus. He sought to analyse the clauses I have quoted above as suggesting, on their proper interpretation, that in the event of no claim being made (no claim had yet been made), there must be an automatic refund to the Claimant of £31,250 and it was in some sense an agreement which at the very least should be "held up to the pure light of judicial examination".
- There was considerable debate between counsel as to the exact extent of the cover and in particular, whether the cost of the premium itself was covered by the policy. Under the Temple policy there is no doubt about that but whilst it is not self evident in respect of this policy, I incline to accept the submissions made to me on this point by Mr Bacon, though it is not strictly necessary for me to come to any concluded decision. It is certainly agreed between the parties that since the decision in Halloran V Delaney [2002] 3 COSTS LR 503 (CA) the policy does extend to cover the costs of the detailed assessment proceedings.
- Mr Holland submitted that it was a wholly unattractive argument that the Defendants should in effect be told that if they did not object to any of the Claimant's disbursements in the bill, then there would be a refund of £31,250. As a result of the skeletons submitted to me in advance of this hearing, it became apparent that the solicitors had paid the whole £62,500 out of their own funds on behalf of the Claimant and this raised further points in the mind of Mr Holland which he urged upon me as grounds for saying that his client should not be liable for more than half the insurance premium claimed. For instance, he submitted that it was prima facie evidence that there was a breach of the indemnity principle. He said that there was no evidence at all that the Claimant was a wealthy man or could afford to pay the sort of premium, whether it be £31,250 or £62,500, and he asked me to infer that there must have been an agreement between the Claimant and his solicitors, Messrs Amelans, that in no circumstances would they look to him for any part of the premium which they had paid on his behalf.
- As a result, a substantial number of cases on the indemnity principle were put before me and reference was made to a number of these. At the end of the day however it seemed to be accepted by Mr Holland that the true test of whether there was a breach of the indemnity principle is whether there is unequivocal evidence that in no circumstances will the Claimant be liable for the costs involved.
- Mr Holland further submitted that the Claimant in this case had absolutely no interest in the costs aspect of the case and therefore I ought to draw the inference that he would never be asked to pay the costs.
- However, it seems to me that the matter is well put, as always, by Lord Denning MR in the case of Lewis v Averay [1973] WLR 510 where the successful unassisted party, Mr Averay, was backed by the Automobile Association. On page 513D Lord Denning says this:
- That case can be contrasted with the case of British Waterways Board v Norman (1993)26 HLR 232. That was a Housing Act case where the findings of fact by the lower court were that in no circumstances would the solicitor seek payment from Mrs Norman but they nevertheless held that she was entitled to recover costs having won her case. The Divisional Court consisting of Lord Justice McCowan and Mr Justice Tuckey however reversed that finding. The concluding paragraph of Lord Justice McCowan's judgment reads:
- I was acutely aware of the likelihood that this issue would be raised at some point during the detailed assessment proceedings and, therefore, prior to the first hearing before me, called for documents which were privileged, which would satisfy me one way or the other. And as already indicated, they did satisfy me that there was a residual liability on the Claimant for legal costs, including the insurance premium. I therefore find both on the facts and the law there is in this case no breach of the indemnity principle
- Mr Holland argued however that that was not necessarily the end of the matter because the fact that the solicitors had advanced to the client a sum of money, which it was very unlikely that he would be able to repay, was in some way a champertous agreement which this court ought to condemn. In that connection, reference was made to the case of Regina (Factortame Ltd and others) v Secretary of State for Transport, Local Government and the Regions (No 8) a direct appeal to the Court of Appeal from Master Wright. The question in that case was whether accountants who advised foreign fishermen who had substantial claims of damages against the British Government, were entitled to charge for their services on a contingency fee basis, they of course not being lawyers. In a lengthy judgment, the Master of the Rolls did conclude that as a general rule the policy of the courts should lean against allowing such arrangements, but on the particular facts of the case, the arrangement was not improper.
- Paragraph 91 of the judgment reads as follows:
- It is clear from the recent and not yet fully reported Court of Appeal decision in Times Newspapers Ltd v Keith Burstein [2002] EWCA Civ 1739 that solicitors are not to be condemned for financing their potentially impecunious clients' litigation. In that case the Claimant in defamation proceedings entered into a CFA with his solicitors and the Defendants went to great lengths to seek to satisfy the Deputy Costs Judge that he should further investigate the issue of whether or not there was ever any true liability on the Claimant to pay costs. The Deputy Costs Judge having considered material put before him which did raise a prima facie case, nevertheless refused to allow cross examination and the Defendant's appeal to the Court of Appeal was dismissed without counsel for the respondent (who happened to be Mr Holland, the same counsel who appeared before me in this case) being called on. The judgment of the Court of Appeal was delivered by Lord Justice Latham and paragraph 21 thereof reads as follows:
- Valiantly though the points were put by Mr Holland, at the end of the day I am afraid that he did not satisfy me that there was anything improper in the payment by the solicitors of the premium of £62,500 but that of course leaves outstanding the question of whether it is a reasonable premium to have paid.
- Mr Holland suggested that for cover of £125,000 a premium of £62,500 was excessive. Of course, in the ordinary minor P.I. cases in which CFAs are routinely used, the costs are very unlikely to come to anything approaching £125,000 which is why the premiums for those cases are relatively modest.
- There are few reported cases on the level of the insurance premium. One case that was cited to me in argument was the decision of Master Wright in Ashworth v Peterborough United Football Club Ltd., a case that is not reported but which is available on the SCCO page of the Court Service website. In that case the Claimant took out insurance some six weeks prior to his action for wrongful dismissal as football manager of the Defendants and paid a premium therefor of £45,937.50. That case differs from this, not only in respect of the nature of the claim, but also in the fact that the relevant background material was placed before the paying party as well as before the Costs Judge.
- Master Wright sets out the relevant correspondence in detail in his judgment from which it is apparent why the premium was so high and he quoted the submission of Mr Friston for the paying party in paragraphs 60 to 72 of his judgment and giving his decision in paragraphs 105 to 109.
- In Inline Logistics Ltd v UCI Logistics Ltd [2002] 2 COSTS LR 304, the question Mr Justice Ferris had to decide was whether a premium of £40,000 plus insurance tax was recoverable by virtue of the transitional provisions in regulation 39 of the Civil Procedure (Amendment No 3) Regulations 2003 and section 37 of the Costs Practice Direction.
- It does not appear from the report that the level of the insurance premium in that case was in issue, but simply whether on the proper interpretation of the regulations it was recoverable. But it is nevertheless another indication that a "tailor made" insurance premium is likely to be very substantially higher than a standard premium.
- Mr Bacon referred me to the correspondence which I had seen, which showed the difficulties of obtaining suitable cover. He pointed out that the Claimant had failed before the District Judge and the Circuit Judge and it was very much a risky case where it was not at all unreasonable to pay a premium of approximately half the total liability for costs should the case be lost in the Court of Appeal. By way of emphasis for his submission, he said that whilst invited to do so, he had declined the chance to enter into a CFA in respect of his own fees, because he thought that the case was too risky to be run in that way.
- Mr Holland conceded this was far from a run of the mill case and even though the costs for those instructing him were considerably less than the Claimant's costs, he did accept that there was a substantial risk which had to be covered.
- I have come to the conclusion that although the premium was high, it was unlikely that the Claimant's advisors could have obtained an alternative quotation at a lower rate. They tried but they were unsuccessful. Law and practice were in a state of flux and insurers were understandably reluctant to commit themselves to a large potential liability. Accordingly, I hold on the facts and on the law the full amount of the insurance premium is recoverable in these detailed assessment proceedings.
- The success fee claimed in this case is one of one hundred percent. Mr Holland conceded that a substantial success fee was appropriate because of the uncertainties and difficulties of the case and under pressure from me during the course of argument, suggested that the appropriate level should be seventy-five percent.
- Again, there is a dearth of authority on the level of success fees, it being conceded that the Callery v Gray twenty percent, now downgraded to five percent by the Court of Appeal in Halloran v Delaney, is not the appropriate level for this case.
- I was handed at the hearing a decision of Chief Master Hurst sitting as a Judicial Taxing Officer in the House of Lords in the case of Designer Guild Ltd v Russell Williams (Textiles) Ltd (trading as Washington DC). In that case the appellant succeeded in the House of Lords and the question was whether a success fee of one hundred percent was reasonable. Master Hurst said this in paragraphs 14 to 16 of his judgment:
- He continues in paragraph 20 quoting CPD 11.9:
- I accept Mr Bacon's submissions that this case was very finely balanced and that the solicitors were assuming a substantial risk in entering into a CFA and that therefore the claim success fee of one hundred per cent was justified and again, I find in favour of the Claimant on this point.
- The Claimants solicitors, Messrs Amelans, have their offices in Didsbury on the outskirts of Manchester. For work in the county court, both before the District Judge and the Circuit Judge, rates appropriate to that area were claimed and are not disputed. However for the hearing in the Court of Appeal, a much higher hourly rate of £350 is claimed. This of course is well above the rate set out in the Guide to Summary Assessment of Costs (2001 edition), which would suggest a rate of £140 for outer Manchester at the relevant time. In their original points of reply, the Claimant offered £225 as a compromise. In their amended points of reply however that concession was withdrawn.
- A substantial number of cases were referred to me in relation to hourly rates and the case of Jones v Secretary of State for Wales and Another [1997] 1 WLR 1008 appeared to be relied upon by the Claimant. It was said that Amelans are a niche firm specialising in this sort of work and therefore entitled to charge more than the norm for solicitors in their area who did not have the expertise. Certainly, I take judicial notice of the fact Amelans are rapidly acquiring a reputation for dealing with this sort of case and have always had a reputation for dealing with a large volume of P.I. cases but when the Jones v Secretary of State for Wales (in which coincidentally I sat as the Master Assessor) is analysed, it is clear that Mr Justice Buckley held that whilst a solicitor can claim higher rates than other local firms because of a speciality, he does have to produce evidence to justify a higher rate. This is apparent from the quotation below from page 1012 letters B-C of his Lordship's judgment:
- Mr Bacon conceded that the claimed rate of £350 was too high. He did not seek to rely on my decision in Higgs v Camden and Islington Health Authority which was affirmed on appeal by Mr Justice Fulford. In that, so far unreported, case I allowed an hourly rate of £300 for a senior partner in Messrs Leigh Day (a Central London firm) for conducting preparations for what would have been a very lengthy trial in a serious clinical negligence case which settled for £3.25 million but which might have resulted in a payment to the Claimant of £6.5 million. But using my experience of other cases and, previous to my appointment, in private practice, I had concluded that the claimed rate was not unreasonable, and, as a test, I applied the old A + B principles to check my decision. Mr Justice Fulford said this:
- Having carefully analysed the rival arguments on this point, Fulford J expressed his conclusion in paragraph 51(x):
- I fully accept that this case is a long way on its facts from Higgs. I do however accept that although an appeal to the Court of Appeal does involve less work by solicitors than preparing a heavy trial, nevertheless there was some helpful input by the solicitors in the sense that they obtained from the insurance industry very helpful information which counsel were then able to deploy in their submissions to the Court of Appeal. I do not accept Mr Holland's dismissal of this exercise as their being merely a conduit passing on to counsel information obtained by telephone calls to various contacts in the insurance industry.
- I conclude that the appropriate level of hourly rate for these solicitors for the Court of Appeal aspect of the case should be £215 and I so find.
- Since preparing this judgment the Court of Appeal has handed down its reserved judgment in the case of Claims Direct Test Cases [2003] EWCA Civ 136 but having read the judgment of Brooke LJ, and in particular, paragraphs 91-101, I see no reason to alter or modify my judgment.
- I have also seen the decision of Chief Master Hurst in Veronica Pirie v Doreen Violet Ayling (unreported but available on the SCCO page of the Court Service Website) and decided as recently as 18 February 2003, but, again do not consider that that case should cause me to alter or modify my judgment.
Master Rogers
THE BACKGROUND
a) The insurance premium for the CFA in respect of the Court of Appeal hearing;b) The level of the Claimant's success fee under that CFA; and
c) The Claimant's solicitors' hourly rate
THE LEVEL OF INSURANCE PREMIUM FOR THE CFA, IN RESPECT OF THE COURT OF APPEAL HEARING
"Assured: Imran SarwarAddress: 4A Chester Square
Ashton under Lyne
Lancashire
OL6 7NS
Appointed Representative: Messrs Amelans Solicitors
Address Barlow House
708-710 Wilmslow Road
Didsbury
Manchester
M20 2FW
Underwriters' Representative Prentis Donegan & Partners Limited"
Address: 6 Alie Street
London
E1 8DD
Period of Insurance: 18th July 2001 until conclusion of insured proceedings
Premium: £62,500 subject to 50% No Claims Bonus
Insurance Premium Tax: Payable in addition to the Premium at the rate currently prevailing at inception of the Period of Insurance
Limit of Indemnity: £125,000
………
The Legal Proceedings: The proceedings currently pending in the Court of Appeal of England and Wales in respect of which the Assured is the Appellant
……..
Conclusion
The conclusion of the Proceedings shall be either the date when a settlement in the Proceedings has been agreed between the parties, or the date when the Proceedings have been concluded by judgment or order of the Court or the date when the Proceedings have been discontinued or withdrawn with the Underwriters' prior written consent, such consent not to be unreasonably withheld.
Conditional Fee Agreement
An enforceable agreement in writing between the Assured and the Appointed Representative entered into as defined in Section 58 of the Courts and Legal Services Act 1990. …..
Respondent's Costs
The legal costs which have been incurred by the Respondent from the date of the commencement of the dispute giving rise to the Proceedings and which are payable to the Respondent by the Assured either pursuant to any order of the Court made during the Proceedings or pursuant to a settlement entered into as part of the terms of a compromise, discontinuance or withdrawal of the Proceedings and to which, if the Underwriters will in consequence be liable to indemnify the Assured for any legal costs and disbursements incurred by the Respondent, the Underwriters' Representative has given its prior written consent, such consent not to be unreasonably withheld. Respondent's Costs shall include the costs of any interim applications assessed at the date of the hearing of the application.
Own Disbursements
Disbursements together with any value added tax (if irrecoverable from any other source) reasonably and properly incurred by the appointed Representative in the conduct of the Proceedings on behalf of the Assured. These shall include, but are not limited to, Court fees, Counsel's fees, fees payable to experts for the provision of experts' reports and for attendance in Court for the purpose of providing evidence to the Court during the course of the Proceedings, as well as photocopying charges and postage, but shall not include fees payable in respect of time expended by the appointed Representative or counsel which is the subject of a Conditional Fee Agreement …
Premium
The amount to be determined by the Underwriters as specified in the Schedule …
LIMIT OF INDEMNITY
The maximum liability of the Underwriters under this Policy is limited to the amount specified in the Policy Schedule.
SECTIONS OF COVER
SECTION A RESPONDENT'S COSTS
The Underwriters agree to indemnify the Assured against Respondent's Costs provided that if in the Proceedings an order is also made by the Court for the payment of costs by the Respondent to the Assured, such costs shall be separately computed and set off against the amount of Respondent's Costs otherwise payable by the Underwriters so that the Underwriters will only provide an indemnity for the net amount, if any, payable by the Assured.
SECTION B OWN DISBURSEMENTS
The Underwriters agree to indemnify the Assured against Own disbursements if the Insured becomes liable to pay Opponent's costs by order of the Court or because the Proceedings have been withdrawn with the prior approval of the Insurers or the Proceedings have been discontinued with the prior approval of the Insurers or settled in the Opponent's favour.
EXCLUSIONS
The Underwriters shall not be liable to indemnify the Assured hereunder in respect of:
1. Proceedings where the Assured is, or would but for the existence of this Policy be, entitled to indemnity under any other insurance.
This exclusion shall not apply to the Policy issued by CIS/DAS to the Assured, subject to underwriters having the right to seek contribution to costs directly from CIS/DAS in the event that the Appeal fails.
2. Own Disbursements where these are payable by the Respondent either as result of an order of the Court in favour of the Assured or pursuant to a settlement agreement between the Assured and the Respondent whether or not such costs are actually paid by the Respondent."
"Mr Hames has appeared for the legal aid fund and has been as helpful as ever. In the first place, Mr Hames stresses the words "costs incurred by him." Those words appear in the Act in two or three places. Mr Hames suggests that in this case the costs were not incurred by Mr Averay, but were incurred by the Automobile Association; because the Automobile Association undertook the appeal and instructed their solicitors and paid them. I cannot accept this suggestion. It is clear that Mr Averay was in law the party to the appeal. He was the person responsible for the costs. If the appeal had failed, he would be the person ordered to pay the costs. If the costs had not been paid, execution would be levied against him and not against the Automobile Association. The truth is that the costs were incurred by Mr Averay, but the Automobile Association indemnify him against the costs. This is borne out by a letter of April 11, 1972 , from Amery-Parkes & Co., the A.A. solicitors, to the area secretary of the Law society. They say:" … we had made it clear that Mr Averay was indemnified in all respects by the Automobile Association so that no part of the cost of the appeal has or would have fallen on him."The litigant, Mr Averay, is the person who is legally responsible vis-à-vis the other party; but he is indemnified by those standing behind him. That is sufficient to satisfy the requirement that the costs were "incurred by him." "
"These were not, in my judgment, findings of fact at all. They are essentially conclusions of law on the facts proved before them. In my judgment, for the reasons I have expressed, the conclusions were wrong. I would therefore answer the question posed for our opinion by holding that the evidence did not justify the finding that the respondent had properly incurred the costs in question. I would accordingly allow the appeal"
"The costs judge concluded that the 1998 agreements lacked the characteristics that might have rendered them contrary to public policy under the vestigial remnants of the law of champerty. As we considered the evidence and heard the argument unfold we became increasingly convinced that he was correct. Reflection after reserving our judgment has not shaken that conclusion. The Claimants had been brought low by the initial wrong done to them and by the costs and stress of prolonged litigation in which no quarter was given. They were faced with an extraordinarily complicated task in proving the damage that they had suffered and there was a real risk that lack of funds might result in their losing the fruits of their litigation. The 1998 agreements ensured that they continued to enjoy access to justice. They did this without putting justice in jeopardy. The 1998 agreements were not champertous."
"Although, clearly, Lloyd J was there [the reference is to R v Miller & Glennie [1983] 1 WLR 1056] dealing with a different type of problem from the one with which we are concerned, these passages nonetheless seem to us to be helpful in identifying the true nature of the question which has to be asked in all cases, where for one reason or another, it is suggested that there was no true liability on the litigant to meet his solicitor's costs. Whilst the client's impecuniousity may be relevant to determining what the true nature of the agreement was, the mere fact that the solicitor may have been conducting the action on credit or continuing an action in the knowledge of his client's lack of means does not justify a conclusion that he was unlawfully maintaining the action."
"105. I therefore conclude that on the evidence before me as provided by the insurers, insurance probably would not have been available at the outset. Accordingly this ground of dispute fails.106. The second contention is that it is not reasonable for the Claimant to be reimbursed for this premium because the amount of the premium is disproportionate and excessive, given the risks applicable in this case.
107. I do not accept the Defendant's contention that it is relevant that the premium in this case is disproportionate when measured against the total sum insured. The Defendant would have to establish that the premium was not proportionate "to the matters in issue" (see CPR 44.4.2)
108. I accept the statement made in Saturn's letter of 26 November 2001 (paragraph 103) that they would not have provided a policy for any less.
109. Since I am satisfied as to that point, I would have to conclude that the Claimant should not have taken the policy out at all if I were to decide to disallow the premium. "
THE SUCCESS FEE
"14. With regard to the solicitors claim a success fee of 100% is sought. Mr Bacon produced to us the opinion of Leading Counsel prior to the CFA being entered into which put the chances of success at no more than evens. That opinion was given against a background in which the appellant company had been successful at first instance and lost in the Court of Appeal. It is quite clear that the issues were finely balanced. It is generally accepted that if the chances of success are no better than 50% the success fee should be 100%. The thinking behind this is that if a solicitor were to take two identical cases with a 50% chance of success in each it is likely that one would be lost and the other won. Accordingly the success fee (of 100%) in the winning case would enable the solicitor to bear the loss of running the other case and losing.15. There is an argument for saying that in any case which reached trial a success fee of 100% is easily justified because both sides presumably believed that they had an arguable and winnable case. In this case we have no doubt at all that the matter was finely balanced and that the appropriate success fee is therefore 100%.
16. Mr Morris argues that allowing any more than a 50% uplift would produce a wholly unreasonable and disproportionate result. As we have already said he proposes that a total rate of £195 per hour be adopted and suggests that this would be ample reward for the risk taken. He reaches his figure by applying a 50% uplift to a basic rate of £130 per hour or by adding 30% to £150 per hour, the rate claimed in the bill."
"Paragraph 11.9 deals directly with the argument raised by Mr Morris, namely that the Solicitor's base costs as claimed, plus a 100% success fee, produces a total which appears disproportionate."
and concludes:
"21. For the reasons which we have given we are satisfied that it is proper to allow a 100% success fee in respect of the conditional fee agreement between the solicitors and the client. The success fee recoverable will of course be based on the amount of base costs allowed in this assessment."
HOURLY RATES
"The first important point arising from this passage is that the master does not appear to base his figure on any evidence of Pitmans' overheads at all. It is true that Mr Valentine had reminded him of an earlier taxation of Pitmans' costs, which the master recalled, in which he had allowed an hourly rate of £92. However, there is no indication that that figure was based on evidence. I am certainly not suggesting that in routine taxations the solicitor must attend with evidence of all his overhead expenses. If he did, it should cut little ice because the touchstone is usually the local average or comparable rate as was underlined in Johnson v Reed Corrugated Cases Ltd. [1992] 1 All E.R. 169, L. v L. (Legal Aid Taxation) (1996) 140 S.J.L.B. 58: Court of Appeal (Civil Division) Transcript No. 80 of 1996 and many other cases. However, where a solicitor wishes to challenge what may have become the going rate in any area, or, as here, to make a special case, he certainly should be required to produce evidence. The master's apparent acceptance of Mr Valentine's assertion that "the expertise which his firm held itself out as providing inevitably created higher expense rates," without evidence was wrong. It also seems to me that the matters he appeared to rely on relating to Mr Valentine's skill and expertise, should properly have been considered in the percentage mark up and not in the hourly rate.Of course, I can accept that a specialist firm such as Pitmans, acting for commercial clients will probably have higher overheads than the average Reading firm. They may have to pay their assistant solicitors and other staff higher salaries. It may be reasonable to provide extra facilities for demanding clients. More sophisticated equipment may be required. However, if the master is to assess a reasonable figure he will need sufficient evidence of these matters. There was none in this case."
"7. Permission to appeal was granted by Bell J on 26th June 2002 in respect of grounds 1, 2, and 4 which are these:
a) the allowance of an hourly rate of £300 for the Claimant's solicitor (ref AW);
b) the degree of delegation by the Partner;
c) The allowance of an hourly rate of £350 in respect of Leading Counsel.
The Decision of the Costs Judge
8. The Costs judge heard oral argument on these issues, spanning some 3¼ hours. His decision can be subdivided conveniently, following the headings identified by the Learned Judge.
a) the Solicitors Hourly Rate
9. The team deployed were as follows:
- Miss Anne Winyard, senior partner at an hourly rate of £300
- SC, an assistant solicitor admitted 4 Jan 1999 at an hourly rate of £225
- An in-house nurse/midwife at an hourly rate of £215
- A highly experienced legal executive at an hourly rate of £230
- Trainee solicitor/para-legals at an hourly rate of £150"
"In conclusion, although £300 was a high figure, I do not consider, on the material before me, that the learned Judge was wrong at arriving at that hourly rate for Miss Winyard in this particular case."