England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE SUPREME COURT COSTS OFFICE
DEPUTY COSTS JUDGE ROWLEY

		Royal Courts of Justice Strand. London. WC2A 2LL
		17/07/2008

Mr. Justice Teare:

1. This is an appeal from the decision of Deputy Costs Judge Rowley dated 5 September 2007 in which he assessed the costs recoverable by the Claimant on the standard basis in the sum of (approximately) £145,000. There is only one challenge on the appeal, namely, whether the Deputy Costs Judge was right to conclude that a reasonable litigant would have instructed a solicitor in Sheffield rather than in London. The Claimant in fact instructed the firm of Bhatt Murphy, a London firm. Had costs been assessed on the basis that a reasonable litigant would have instructed a London firm it is agreed that the costs recoverable by the Claimant on the standard basis would have been in the sum of (approximately) £195,000.

The claim

2. The Claimant alleged that on 29 April 1998 police officers in Sheffield unlawfully searched and detained him and thereafter maliciously prosecuted him for affray, assault and criminal damage. He claimed that as a result of those wrongful actions he developed paranoid schizophrenia. Evidentially, there were difficulties in proving the wrongful conduct alleged against the police. They stemmed from the fact that the allegations were based upon the word of the Claimant against the word of several police officers. There were also considerable difficulties in proving that the claimant's schizophrenia was caused by the alleged wrongful conduct. Those difficulties stemmed from a conflict between the expert psychiatrists as to whether the alleged wrongdoing could have caused the schizophrenia.
3. The claim as formally presented was for a sum in excess of £lm. However, in settlement negotiations those advising the claimant said he would settle for a sum in the region of £325,000. In the event the claim was settled in the sum of £300,000.
4. The claim form had been issued in London but management of the case had been transferred to the Sheffield District Registry.

The decision to instruct Bhatt Murphy

5. The Claimant had instructed a local firm, Peel and Co., to represent him in his defence of the criminal charges brought against him. Before the conclusion of those proceedings the Claimant's partner contacted the firm of Birnbergs on 31 July 1998 and spoke to Fiona Murphy who was then a solicitor in that firm. They appear to have spoken about a possible claim and the Claimant's partner said she would contact Ms. Murphy after the criminal proceedings. In the event the Claimant successfully resisted the criminal charges. On 19 August 1998 there was further contact between the Claimant's partner and Ms. Murphy. The likely recoverable damages in a civil claim were discussed as were other matters concerning a possible civil claim. On 27 September 1998 there was a further discussion. The Claimant's partner expressed a wish to instruct Ms. Murphy and the latter mentioned that she was moving to a new firm. Sometime later there was a further discussion concerning the grant of legal aid and the wish of the Claimant and his partner to have it transferred to Ms. Murphy. On 15 January 1999 the Claimant's partner wrote to Ms. Murphy at Bhatt Murphy asking whether that firm could represent the Claimant. Questions were asked about costs and whether legal aid would be transferred to Bhatt Murphy. On 22 February 1999 the Claimant instructed Bhatt Murphy to represent him in his claim against the Defendant. His reasons were stated to be that Peel and Co. were not specialists in litigation against the police and he considered it vital that he receive "appropriate specialist counsel to maximise the potential for success of my case against South Yorkshire Police."
6. It is common ground that the Legal Aid certificate was transferred to Bhatt Murphy. The governing principle
7. CPR 44.5 provides that on the standard basis of assessment those costs which are "proportionately and reasonably incurred" may be allowed.
8. There are several cases, decided both before and after the introduction of the CPR, in which the question whether the liability of the unsuccessful party to pay costs should be restricted to what a reasonably competent solicitor practising in the area of the court, or in the area where the successful party lived, might have charged or whether the successful party should be entitled to recover the sums claimed by the solicitor who was in fact instructed to act on his behalf.
9. In Wraith v Sheffield Forgemasters Ltd. [1998] 1 WLR 132 (a case decided under the RSC) the Court of Appeal held that in deciding whether the successful party had acted reasonably in instructing his solicitor it was necessary to have regard all relevant circumstances and not just to the circumstance that the rates charged by that solicitor were higher than those charged by a solicitor in the locality of the court or in the locality where the successful party lived. The Court of Appeal suggested that in that case the judge should have had regard to (i) the importance of the matter to the successful party, (ii) the legal and factual complexities of the case, (iii) the location of his home, his place of work and of the court, (iv) his dissatisfaction with the solicitors originally instructed, (v) advice received as to whom to instruct, (vi) the location of the solicitor in fact instructed and (vii) what, if anything, he might reasonably have been expected to know of the fees likely to be charged by the solicitor in fact instructed as compared with the fees of other solicitors whom he might reasonably be expected to have considered.
10. In Sullivan v The Co-Operative Insurance Society Ltd. [1999] 2 Costs LR 158 (also decided under the RSC) the Court of Appeal said that the question "is whether objectively the plaintiff.....acted reasonably in engaging the lawyers in question". In answering that question, "the court takes account of and balances a wide range of relevant circumstances."
11. In Gazely v Wade and News Group [2005] 1 Costs LR 129, [2004] EWHC 2675 (a case decided under the CPR) it was common ground that it was appropriate to have regard to the principles discussed in Wraith v Sheffield Forgemasters Ltd. Eady J. observed that the assessment of reasonableness was to be made as at the time the relevant decision was taken, rather than with the benefit of hindsight.

The decision of the Deputy Costs Judge

12. The Deputy Costs Judge was referred to Wraith v Sheffield Forgemasters Ltd. He made references to some of the factors mentioned in that case and in particular noted that it was common ground that the claim was "a complex matter in relation to liability." He then commented that "the vast majority of this claim was in relation to a personal injury claim establishing that the claimant's psychological problems were caused by the trauma of the event of him being involved in a confrontation with the police." The essence of his decision is to be found in paragraphs 6 and 7 of his reasons:

"6. It seems to me, on balance, that a solicitor dealing with actions against the police could competently have dealt with this, using counsel if necessary in relation to the finer points of it, but the vast majority of this is a personal injury claim and, indeed, there is a note that says the claimant's solicitors decide they need to go to PI counsel presumably as opposed to a specialist in matters relating to the police. As a result I have come to the conclusion that the claimant had in essence a personal injury claim to be brought and that somebody who was used to dealing with police matters ought to have been able to deal with this case properly and secure the same sort of level of damages.

7. On that basis I have come to the conclusion that it was incumbent upon the claimant to make some efforts in relation to looking for a different or specialist firm in the locality rather than simply the only firm that perhaps he had heard of. I stress that I am struggling in the absence of a great deal of evidence and, if necessary, I tilt towards the doubt being resolved in relation to the paying party. So I deal with the first part of the hourly rates issue as being that I think that a local firm should have been instructed and that, as a result, the rates ought to be dealt with for a firm in that area."

Fresh Evidence

13. The Claimant wished to introduce evidence from Ms. Murphy which had not been adduced before the Deputy Costs Judge. Ms. Murphy had not been able to attend the hearing below because her mother was critically ill at the time and sadly died shortly afterwards. In fact most of her evidence, though not all, took the form of submissions on material which had been before the Deputy Costs Judge. In the event, it was agreed that the evidence could be adduced so long as the Respondent could also put in evidence essentially in reply.

The appeal

14. Although many grounds of appeal have been pleaded the essence of the grounds of appeal, as presented most helpfully by counsel in his oral submissions, was:

(a) that the Deputy Costs Judge

(i) wrongly characterised the claim as a personal injury claim,

(ii) failed to appreciate that the special nature of the claim required a solicitor with expertise in bringing claims against the police, in establishing claims for psychiatric injury and in understanding the significance of racist action in the causation of psychiatric harm and

(iii) failed to appreciate that Ms Murphy was an experienced solicitor in each of those areas in 1999; and

(b) that there was no sound evidential basis for thinking that such a solicitor could be found in Sheffield in 1999.

15. Reliance was placed in particular on the fact that those responsible for legal aid approved the transfer of legal aid from Peel and Co. to Bhatt Murphy. It was said that they must have considered that there was good reason to permit the instruction of a London firm whose hourly rates would exceed those of the Sheffield firm.
16. The appeal is a review of the Deputy Costs Judge's decision. It is not a re-hearing; see Gazely v Wade and News Group at paragraph 2. Thus the appeal can only succeed if the Deputy Costs Judge has failed to apply the correct principles, taken into account irrelevant matters, failed to take into account relevant matters or reached a decision which no reasonable tribunal properly directed could have reached.
17. In considering the criticisms made of the Deputy Costs Judge's decision it is first necessary to analyse the essence of the judge's reasons. Counsel directed the court's attention to paragraph 6 in particular but it is necessary to take the previous paragraphs into account. In paragraph 1 the judge asked the question "was it reasonable for the claimant to choose to change his solicitors from Peel and Company (who had dealt with his criminal proceedings) to move to Bhatt Murphy, who .........are a very specialist form of solicitors in London who deal with actions against the police." In paragraph 2 he referred to the evidence of the circumstances in which Bhatt Murphy were instructed. In paragraph 3 he said that the "crux of this issue is whether it is reasonable for the claimant simply to go with the first firm of which he is aware, or whether he is obliged to make some sort of search - this was probably pre-intemet days- of local solicitors who might be able to deal with the claim on his behalf against the police." In paragraph 4 the judge noted that he had been referred to the factors listed in Wraith and proceeded to consider those he thought relevant to this case. Significantly, he said: "I think it is agreed that it was a complex matter in relation to liability insofar as there were various statements by various people at various times which did not gel and, as such, the question of liability was uncertain.
    ........The claim for damages is clearly a complicated one dealing with a young musician having to establish what his loss of earnings might be." In paragraph 5 he said that "the vast majority of this claim was in relation to a personal injury claim establishing that the claimant's psychological problems were caused by the trauma of the event of him being involved in a confrontation with the police." One then comes to paragraphs 6 and 7 which I have already quoted and set out the essence of his decision.
18. I would summarise the decision in this way. The Deputy Costs Judge concluded that, because the issue on liability was "complex", it was reasonable to instruct a solicitor with experience of bringing claims against the police. In dealing with the difficult matter of establishing that the claimant's psychological injury was caused by the actions of the police that solicitor would have been able to instruct counsel experienced in the personal injury field to assist him. Whilst the claimant had instructed the first specialist solicitor he had come across (Ms. Murphy, initially at Birnbergs and then in her own firm of Bhatt Murphy) it was reasonable to have expected him to have made efforts to locate a firm with experience of actions against the police in Sheffield. It is implicit in the decision of the Deputy Costs Judge that he considered that such a firm could have been found in Sheffield. He assessed the reasonable costs of such a firm at a rate which was somewhat greater than the rate ordinarily to be expected in Sheffield, presumably to reflect the somewhat higher rates charged by a firm with experience of clams against the police.
19. I do not consider that the Deputy Costs Judge wrongly characterised the claim, or the greater part of it, as a personal injury claim. On the contrary he was well aware that he was dealing with a claim against police officers for wrongful conduct. Thus he appreciated that establishing liability required a solicitor with experience of bringing claims against the police. He described that part of the claim which was concerned with proof of damage and causation as a personal injury claim. That was not an unfair or unreasonable description because many claims for psychiatric injury involve difficult questions of proof of damage and causation.
20. It is true that the Deputy Costs Judge did not regard the case as one which required a solicitor with a three-fold expertise in (i) bringing claims against the police, (ii) establishing claims for psychiatric injury and (iii) understanding the significance of racist action in the causation of psychiatric harm. Nor did he say that Ms. Murphy had that three-fold expertise. However, whilst such a solicitor would have been advantageous it does not follow that the Deputy Costs Judge's conclusion that the case required a solicitor with experience of bringing claims against the police who could instruct counsel experienced in the personal injury field to assist him with proving damage and causation was unreasonable or wrong.
21. In support of the appeal reliance was placed upon a statement by Robin Oppenheim QC who had been instructed by Ms. Murphy in the Claimant's claim against the police. He described the case as of "exceptional complexity" and said that "any solicitor undertaking this claim would require to have a fairly unique combination of skills: namely an intimate understanding of actions against the police, psychiatric damage cases, diversity issues (this was a claim by an Afro-Caribbean man in relation to white police officers and with significant issues about the incidence of and causality of schizophrenia within the Afro-Caribbean community) and personal injury law and practice." He said that Ms. Murphy had that combination of skills and that it was doubtful that a local firm in Sheffield would be able to provide the same combination of skills in one fee -earner. He said that he did not have the experience of police actions that Ms. Murphy had.
22. Counsel for the Chief Constable dismissed this statement as mere advocacy for which Mr. Oppenheim had been paid. I am not sure that it can be so dismissed. Mr. Oppenheim has expressed his opinion which I have every reason to assume (and none to doubt) that it is his honest opinion. It was then said that it was expert opinion and inadmissible. However, its admission was not challenged and counsel invited me to read evidence of opinion from Simon Hills. In any event Mr. Oppenheim's statement is not solely of opinion but of mixed fact and opinion. Since he was counsel instructed in the very case he is able to give evidence of the difficulties he experienced in the case and the assistance he received from Ms. Murphy in dealing with the case.
23. However, if and in so far as Mr. Oppenheim is to be taken as saying that the Deputy Costs Judge could not reasonably have reached the conclusion that it was reasonable to instruct a solicitor with experience of bringing claims against the police who was able to instruct counsel experienced in the personal injury field to assist him in dealing with proof of damage and causation, the Court is not obliged to accept Mr. Oppenheim's opinion. That is the very question which the Court must decide itself. Further, it is to be noted that when describing the experience he lacks, Mr. Oppenheim does not say that he lacks the experience of cases in which it is necessary to prove psychiatric damage and causation. I consider that experienced personal injury counsel such as Mr. Oppenheim would have been well able to deal with the issues concerning psychiatric damage and causation in this case. In so far as diversity issues had a bearing on such issues that aspect would doubtless be covered by the psychiatric experts and experienced personal injury counsel would be able to deal with such issues also. I do not doubt that Mr. Oppenheim was assisted by Ms. Murphy's experience not only of police actions but also of psychiatric damage cases and of diversity issues but I do not accept that experienced personal injury counsel instructed by a solicitor with experience of actions against the police would not have been able to bring this claim to a successful conclusion.
24. I therefore consider that the Deputy Costs Judge was right to conclude that the case required a solicitor with experience of bringing claims against the police.
25. The remaining limb of the appeal, as presented to the court orally, was that there was no sound evidential basis for finding that in 1999 there were in Sheffield solicitors with the three-fold experience of Ms. Murphy. However, since the case did not require such a solicitor in order to bring it to a satisfactory conclusion but only a solicitor with experience of bringing claims against the police, the correct question is whether the Deputy Costs Judge was right to find that such a solicitor could be found in Sheffield in 1999. It is to be noted that in the "Points of Dispute to the Claimant's Bill of Costs" the Claimant submitted that "the claim could have been handled by a large number of solicitors in the Sheffield area, several of whom specialise in exactly this type of case, amongst others Irwin Mitchell Solicitors and Howells LLP." The Claimant, in his reply, said "it was not accepted that this case could have been dealt with by most Grade A fee earners specialising in personal injury matters and the contention reflects a complete lack of understanding of the specialist nature of proceedings against the Police and in this particular case the psychiatric as well as physical injury sustained by the Claimant." No specific point was made in relation to the firms named by the Defendant.
26. I do not consider that on an assessment of costs evidence is required to establish the proposition that in 1999 there were in Sheffield solicitors with experience of bringing of claims against the police. Indeed, Counsel for the Claimant appeared to accept that on an assessment of costs I was entitled to have regard to my own view and that of my assessors on such a matter. It was common ground that Irwin Mitchell had offices in Sheffield in 1999. It is my view, and that of my assessors, that that firm was likely to have had experience of bringing claims against the police. Moreover, that view is supported by the evidence adduced on this appeal from Simon Hills, who has dealt with Irwin Mitchell for over 15 years. He describes them as employing "extremely competent police law lawyers". Mr. Oppenheim expressed the opinion that Irwin Mitchell would not have been "an appropriate referral because of the combination of skills required." However, he did not say that Irwin Mitchell had no experience of bringing claims against the police.
27. Ms. Murphy gave evidence that the Claimant's partner told her on 17 October 2007 that she and the claimant believed that Howells (in whom they did not have confidence because of advice received from them shortly after the Claimant's release from custody) was the only firm in Sheffield that undertook police misconduct cases and that they were unaware that Irwin Mitchell undertook that type of work. However, the question is whether a reasonable litigant ought to have made enquiries and whether, had he done so, he would have been able to learn in 1999 that Irwin Mitchell undertook such work. The reasonable litigant would have made enquiries. Indeed the claimant went to Peel and Co. after being dissatisfied with Howells, not only for criminal defence work but also for the initial stages of the civil proceedings. A bleak picture was painted of the world in 1999 "when the internet was not as widely accessible as it now is or as developed as it now is". But a reasonable person in the position of the Claimant in 1999 would surely have been able to inquire about solicitors in Sheffield with experience of bringing claims against the police from the local Law Society, from the Citizen's Advice Bureau or from any local solicitor including Peel and Co. Such enquiries would have brought Irwin Mitchell to his attention.
28. Counsel for the Claimant also relied upon the fact that Legal Aid had been transferred from the Sheffield firm of Peel and Co. to the London firm of Bhatt Murphy. It was said that the Legal Aid authorities must have done so with knowledge that the appropriate rates would be higher and must have considered that there was justification for doing so. The difficulty with this submission is that the reasons for the Legal Aid decision were not in evidence and so there is a limit to the weight that can fairly be attributed to this factor. I do not consider that such weight as can fairly be given to it enables the Claimant to say that the decision of the Deputy Costs Judge was wrong or otherwise unreasonable.
29. I have therefore reached the conclusion that the criticisms of the decision of the Deputy Costs Judge, as advanced in oral submissions, should be rejected.
30. The written grounds of appeal asserted in several different ways that the Deputy Costs Judge had failed to have regard to the matters set out in Wraith v Sheffield Forgemasters Ltd. It was said that had he done so he would have concluded that the claimant acted reasonably in instructing Bhatt Murphy. The Deputy Costs Judge expressly referred to the factors in Wraith but said that some of them were not "terribly relevant". Whilst the Deputy Costs Judge did not set them all out and deal with each in turn Counsel accepted that those factors are so well known to costs judges that they do not have to set them out and comment specifically on each. I am satisfied that the Deputy Costs Judge had the Wraith factors well in mind. I am also satisfied that a detailed consideration of each such factor does not show that his decision was one which he could not reasonably have reached having considered those factors.
31. So far as "the importance of the matter" to the Claimant is concerned the Deputy Costs Judge said that most claimants would regard their claim as being important to them. This comment mirrors that of May LJ in Sullivan (at p. 166). So far as the "legal and factual complexities" of the case he described the case as "complex" in relation to liability. He said the claim for damages was "a complicated one". (Although it was said that the court must consider how the claimant might reasonably be expected to view the legal and factual complexities, rather than how the legal and factual complexities might appear to the Deputy Costs Judge (for which there is support in Wraith), it does not seem to me that the claimant would have understand the case as other than complex both with regards to liability and to damages.)
32. The Deputy Costs Judge did not specifically mention the location of the claimant's home, his place of work and the location of the court where the proceedings had been commenced. However, no complaint was made of this. Although the Claim Form had been issued in London it was a "Sheffield" case having regard to where the events occurred, where the Claimant lived at the time and the identity of the Defendant. In due course the management of the case was transferred to the Sheffield District Registry. Thus although not mentioned this was a factor which favoured the conclusion reached by the Deputy Costs Judge.
33. As to the claimant's "dissatisfaction" with Peel and Co. and his preference for Bhatt Murphy as a specialist firm the Deputy Costs Judge had in mind the attendance notes disclosed by Ms. Murphy which describe the events leading up to the instruction of Bhatt Murphy. He was aware of the Claimant's wish for a specialist firm. As to any "advice as to whom to consult" this was not a case where such advice had been received. The Deputy Costs Judge did not mention "the location" of Bhatt Murphy, and "their accessibility and readiness to attend at the relevant court". However, no complaint is made of this. It is obvious that he knew the location of Bhatt Murphy, that they were accessible at their offices and would attend the relevant court.
34. Finally, one comes to the question of fees and what the claimant might reasonably be expected to know of the fees likely to be charged by Bhatt Murphy compared with a firm in Sheffield. The Deputy Costs Judge does not specifically address the knowledge that the claimant could reasonably be expected to have of the comparative fees in London and Sheffield. It was submitted that it was unreasonable to expect the claimant to have an awareness of such matters. In assessing whether the reasonable litigant might reasonably have been expected to be aware of the comparative level of fees it seems to me that one must put to one side the fact that this particular claimant was legally aided and assume that the reasonable litigant is funding his legal representation himself. Otherwise the question of cost would not feature in the analysis of what a reasonable litigant would have done. Such a litigant would clearly inquire into the level of fees charged by Bhatt Murphy before instructing that firm. He would also compare that level of fees with the level of fees charged by a Sheffield firm with experience of bringing actions against the police. Indeed, the attendance notes manifest the claimant's concern with the comparable charges because he was anxious to know how much his contribution to his legal expenses would be. The reasonable litigant would make himself aware of the comparative charges by consulting the Sheffield firm and the London firm. He would have appreciated that there was a substantial difference in rates. The rates approved by the Deputy Costs Judge were £190 per hour and the rates claimed by Bhatt Murphy were £265 per hour. It is agreed that the choice of Bhatt Murphy has led to a difference in the final bill of £50,000 (£195,000 compared with £145,000).
35. A reasonable litigant might well consider it advantageous and beneficial to instruct a solicitor such as Ms. Murphy with the three-fold experience of actions against the police, claims for psychiatric damage and of the significance of racist action in the causation of psychiatric harm. However, a reasonable litigant would not necessarily require such a solicitor. There is no evidence that the claimant had identified (or that a reasonable litigant would have identified) that three-fold experience as something which he needed. His letter of instruction to Bhatt Murphy indicated that he did not want Peel and Co. because Mr. Peel was a "general practitioner who does not specialise in litigation against the police". He wanted "appropriate specialist counsel to maximise the potential for the success of my case against the South Yorkshire Police." For the reasons already given, and as found by the Deputy Costs Judge, the case could have been brought to a satisfactory conclusion by instructing a solicitor in Sheffield with experience of bringing claims against the police who would be able to instruct counsel with experience of proving psychiatric damage and causation. Such a solicitor would satisfy the requirements indicated in the claimant's letter of instruction. Moreover, he would be available at substantially less expense than Bhatt Murphy. The reasonable litigant would inevitably consider whether, in those circumstances, it was reasonable and proportionate to instruct Ms. Murphy. In my judgment he would have considered that it was not, because of the added substantial cost of doing so.
36. For the reasons which I have endeavoured to express the appeal must be dismissed.