Jersey Unreported Judgments

[2004]JRC179

royal court

(Samedi Division)

8th October 2004

Appeal, under Rule 15/2 of the Royal Court Rules, 1992, from the Greffier'a Costs Taxation decision of 22^nd June, 2004

Advocate D F Le Quesne for the Plaintiff/ APPELLANT.

Advocate J Martin for the First and Second Parties/ RESPONDENTS.

The other parties did not appear and were not represented.

judgment

THE bailiff:

1.        This appeal raises a short but interesting point as to whether the fees of an English solicitor who has been struck off the roll of solicitors in England and Wales should have been disallowed as a disbursement on taxation.

2.        On 14th August 2002 the Royal Court, following a six weeks' trial, gave judgment in favour of Blenheim Trust Company Limited ("Blenheim") and ordered the 1st, 2nd and 5th defendants and the 1st and 2nd parties cited (collectively referred to as "Osiris") to pay Blenheim's costs on the standard basis.  On 24th October 2003 Blenheim submitted its bill of costs to the Judicial Greffier for taxation.  The costs amounted to some £360,000 plus disbursements totalling some £70,000.   Blenheim's advocates subsequently requested the return of the bill of costs as being incomplete.  On 24th November 2003 it was re-submitted with an additional disbursement noted "Paid Simon Easton fees for assistance throughout [see schedule D] £521,640".

3.        Objection was raised to payment of that disbursement and a taxation hearing took place before the Deputy Judicial Greffier on 22nd June 2004.  Argument was heard on the question, inter alia, whether the fees of Mr Easton were recoverable.

4.        The decision of the Deputy Judicial Greffier was to disallow the fees altogether.  He concluded that the fees did not fall into the category of legal costs because Mr Easton was not a solicitor.  The Deputy Judicial Greffier categorised him as "a lay person assisting Viberts [the legal advisers of Blenheim] in the litigation.  The costs of such a person are not recoverable as a disbursement on taxation as a matter of general principle."  The Deputy Judicial Greffier stated that he had given consideration to treating Mr Easton as if he had been an unqualified fee earner employed by Viberts but had declined to do so because that was not the factual position.  He continued -

"On 1st August, 1995, the solicitor disciplinary tribunal constituted under the Solicitors Act 1974 struck Mr Easton off the role [sic] of solicitors for life.  Advocate Le Quesne advised me that Mr Easton was acting as English solicitor in all but name in connection with the Jersey litigation and that that work (which included dealing with draft affidavits for approval by English witnesses) was undertaken in England.  As a matter of general principle, I am not prepared to authorise payment of Mr Easton's fees in view of the fact that, in practice, he was carrying out the work as a solicitor in England whilst struck from the role [sic] of solicitors."

5.        The Deputy Judicial Greffier concluded by stating that he recognised that his decision would confer a significant and arguably undeserved financial benefit upon Osiris which had used Mr Easton's services in connection with earlier English litigation after he had been struck off as a solicitor.

6.        It is against that decision of the Deputy Judicial Greffier that Blenheim appeals.  Both parties agree that I must consider the matter de novo, while paying due regard naturally to the decision of the taxing officer.

7.        Rule 9A/4 of the Royal Court Rules provides:-

"On a taxation of costs on the standard basis there shall be allowed a reasonable amount in respect of all costs reasonably incurred and any doubts which the Greffier may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the paying party."

8.        It is clear from the very wording of the rule that the test to be applied on a taxation of costs is one of reasonableness.  Was it reasonable, in the interests of the client, for the solicitor or advocate to take that step and to incur that cost?  In referring to 'cost', I include fees, charges, disbursements, remunerations and expenses paid or incurred.

9.        Mr Le Quesne for Blenheim referred me to a passage from the Supreme Court Practice [1999] volume 1 at p 1246 in the following terms -

The meaning of "costs"

(a)       The word "costs" is defined in RSC, O.62, r.1(4).  Costs normally fall into two categories:

(i)        expenses of a type which solicitors frequently incur when acting on behalf of clients (such as counsel's fees, Court fees, witness expenses, etc.).  These are known as "disbursements".

(ii)       The fees which a solicitor charges to his own client.  These are known as "solicitors' profit costs".

The terminology needs adaptation in Jersey to take account of the quasi-fused nature of the legal profession.  Nonetheless the distinction drawn between profit costs and disbursements is as valid here as it is in England.

10.      Counsel for Blenheim did not contend that Mr Easton's fees should be regarded as profit costs.  He suggested that it was arguable that the fees should be subject to a percentage uplift as if they were profit costs, but he did not wish to advance that argument.  He agreed with the Deputy Judicial Greffier, as do I, that Mr Easton was clearly not an employee of Viberts.  The question for me is whether, having regard to all the circumstances, Mr Easton's fees are properly to be regarded as a reasonable disbursement.

11.      What then did Mr Easton do?  Counsel for Blenheim told me that Mr Easton acted as his legal assistant.  Mr Easton was an experienced litigation lawyer who had, moreover, wide experience and knowledge of the dispute which was being litigated.  He had been employed by some of the Osiris parties in the context of the related English litigation.  Counsel submitted that the litigation as a whole had been prolonged, complicated and hard-fought.  Mr Easton had distilled 120 lever arch files of documents stored in London and Jersey to produce approximately 50 lever arch files of relevant documents for the Jersey action.  Counsel's preparation for examination and cross-examination of the witnesses, and for his oral submissions had been greatly assisted by the work of Mr Easton whose close knowledge of the factual background was virtually unrivalled.  In particular counsel had been able to use Mr Easton's knowledge to procure the disclosure of certain documents which had not been disclosed by the Osiris parties.  Generally counsel submitted that Mr Easton had done the work and provided the assistance which would otherwise have been furnished by an experienced legal assistant working in Viberts, or by counsel himself.

12.      None of these submissions was in substance challenged by Miss Martin for Osiris.  She advanced two principal contentions supporting the decision to disallow Mr Easton's costs.  First, she submitted that Mr Easton was retained by Blenheim and not by Viberts.  This does not seem to me in itself to be material.  Counsel however further submitted that he was not just retained but was an employee of Blenheim and in effect its alter ego.  Counsel submitted that he was the client.  On ordinary principles counsel submitted Blenheim was unable to claim for his costs just as a party who has instructed lawyers cannot generally claim his own costs.  The costs incurred by Mr Easton were therefore the costs incurred by the client in progressing the litigation.

13.      Miss Martin conceded however that Mr Easton had no beneficial interest in Blenheim.  It seems to me that there is no substance in this objection.  Mr Easton was retained by Blenheim on a fee-paying basis.  Whether those fees are recoverable on taxation is another matter, but there are no grounds for the assertion that Mr Easton was the alter ego of Blenheim and in effect the client.

14.      The second objection advanced by counsel for Osiris was essentially the ground upon which the Deputy Judicial Greffier relied, viz that Mr Easton was carrying out solicitor's work having been struck off as a solicitor by the Law Society in England.  It seems clear to me that the work which Mr Easton performed was work which would ordinarily have been done by a solicitor in the context of litigation.  Mr Le Quesne's submission before the Deputy Judicial Greffier was that Mr Easton was an instructing solicitor in everything but name.  It is not surprising therefore that the Deputy Judicial Greffier's decision reflected that submission when he stated that Mr Easton "was acting as English solicitor in all but name in connection with the Jersey litigation".

15.      The affidavit evidence of Mr Richard Martin (one of the principals of Blenheim) upon whose evidence Mr Le Quesne relied in making the submissions recorded at paragraph 11 above, asserted that the Deputy Judicial Greffier was factually incorrect in concluding that "in practice [Mr Easton] was carrying out the work as a solicitor in England whilst struck from the role [sic] of solicitors".  While it is possible to quibble that Mr Easton was carrying out the work of a solicitor rather than as a solicitor, it seems to me that this is in substance exactly what Mr Easton was doing.  Indeed it is what Mr Le Quesne candidly told the Deputy Judicial Greffier was the position.

16.      It is important however to emphasize that there is no evidence that Mr Easton was doing anything wrong.  He was convicted of offences unrelated to this litigation and sentenced to twelve months' imprisonment.  Subsequently he was struck off.  It may seem curious, I observe in passing, that in England a solicitor may be struck off the roll for gross misconduct yet continue to practise from the firm of solicitors which bears his name as an "international legal consultant".  Be that as it may, the undisputed evidence before me is that Mr Easton enquired of the Law Society as to what was permissible, and was told that he could continue to offer legal services provided that he did not hold himself out as a solicitor nor do anything which could only be performed by a solicitor.

17.      Counsel for Blenheim submitted that, in relation to a person giving legal assistance to an advocate, there was no difference between a solicitor who had retired, or who had surrendered his practising certificate or who had been struck off.  In any of these cases, the question was whether it was reasonable in all the circumstances to obtain the assistance of the individual concerned and whether the cost had been reasonably incurred.

18.      In my judgment this submission is correct.  What conclusion should be drawn then from the application of that principle to the facts of this case?  It is true that Mr Easton has been convicted of serious offences and as a consequence has been struck off the roll of solicitors.  He has now paid his debt to society, and he retains the legal knowledge and experience built up over a period of years.  He may not practise nor hold himself out as a solicitor in England, but he is entitled to offer legal services.  His experience as one who has given advice to a number of the principals involved in this long-running dispute over many years made him particularly suitable to act as a legal assistant.  I conclude therefore that it was reasonable for Blenheim to retain the services of Mr Easton to act as an assistant to their advocate.  As to whether this was a case where it was reasonable for an advocate to have the services of an assistant, there seems little doubt that it was relatively complex litigation.  The trial lasted six weeks and the judgment of the Royal Court ran to 218 paragraphs.  There were a number of interlocutory issues to be argued.  I have no doubt that it was reasonable and in the interests of the client that counsel for Blenheim should have had legal assistance.

19.      I therefore allow the appeal and quash the decision of the Deputy Judicial Greffier that the costs of Mr Easton should be disallowed.  I remit to the Deputy Judicial Greffier the assessment of the proper amount to be allowed on taxation.  That assessment should include the reasonableness of the amount of time charged and of course the hourly rate to be applied to Mr Easton, both of which will be a matter for the taxing officer's discretion.  The hourly rate should clearly however be lower than the amount allowable for a qualified and practising English solicitor assisting an advocate in the conduct of litigation.

Authorities

Royal Court Rules 1992: Rule 9A/4.

R.S.C. [1999] Vol. 1: p.1246