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OUTER HOUSE, COURT OF
SESSION
[2009] CSOH 18
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A111/07
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OPINION
OF
LADY
CLARK OF CALTON
in
the cause
'A',
c/o Balfour & Manson, Solicitors, 54-56 Frederick Street, Edinburgh, EH2 1LS
Pursuer;
against
(FIRST)
British Broadcasting Corporation, a corporation established by Royal Charter
and having a place of business at Broadcasting House, Queen Margaret Drive,
Glasgow, G12 8DG; and (SECOND) Saltire Film and Television Productions
Limited, a company incorporated under the Companies Acts with its Registered
Office at the Yacht Harbour, Inverkip, Greenock, Renfrewshire, PA16 0AS
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Pursuer: A Clark; Balfour and
Manson LLP
Defenders: Hamilton; Burness
11 February 2009
Introduction
[1] The pursuer raised an action of
interdict against the defenders following upon intimation of the first defenders'
intention to broadcast a television programme containing footage of the
pursuer. The second defenders edited the
film footage and produced a series, in three programmes, to be broadcast by the
first defenders. The first programme of
the series was screened on 19 February 2007. At the end, a trailer for the second part
briefly showed the pursuer. The second
part was due to be broadcast on 26 February 2007. Following upon urgent
consultation with counsel, the summons was lodged for signet on 23 February 2007. A hearing on the pursuer's
motion for interdict ad interim was
arranged to take place on 23 February. My
understanding is that the first defenders alone took an active part in opposing
the motion. The first defenders provided
an appropriate undertaking, following upon which a continued hearing was
arranged to take place on 27 February 2007. After further discussions on 26 February 2007, the hearing of the motion was further continued to 13 March 2007. Following upon negotiation and
adjustment of a suitable undertaking on 12 March 2007, the continued hearing was restricted to the issue of
expenses. The first defenders were found
liable to the pursuer for the expenses of process, including the expenses of
the hearing on 13 March, by interlocutor dated 13 March 2007.
[2] Thereafter a judicial account of
expenses was prepared and a diet of taxation took place on 9 October 2007 before the Auditor of the Court of Session (hereinafter referred to
as "The Auditor"). The Auditor heard
detailed submissions. Thereafter the
Auditor taxed the pursuer's judicial account of expenses (no 10 of process) and
made abatements totalling £12,196.96.
[3] On 20 December 2007, the note of objections for the pursuer (13 of process) was
allowed. The Auditor was ordained to
state by minute, the reasons for his decision in relation to items to which
objection is taken in the note. The
minute by the Auditor is 14 of process.
The account of expenses is 10 of process.
[4] At the hearing in respect of the
pursuer's note of objections the pursuer and first defenders were
represented. There was no appearance on
behalf of the second defenders.
Note of objections and minute by the Auditor in
response thereto
[5] The note of objections listed ten
objections (a) - (j). At the hearing counsel
for the pursuer did not insist in objections (a) and (c). The objections which were maintained by
counsel for the pursuer relate to some of the fees claimed by junior and senior
counsel. I list the items in the order
set out in the note of objections.
[6] Objection (b) relates to:
Paid junior counsel, "considering additional papers and commencing
drafting of detailed summons - engaged 5 hours (Voucher 2) - £1,000 plus VAT."
In response, the
minute by the Auditor stated:
"On 12 February junior counsel sought a fee of £1,000.00 for
discussions with senior counsel, considering additional papers and commencing a
draft detailed summons. On the same
date, junior counsel was allowed by the Auditor £850.00 for preparation for and
attendance at a consultation. Junior
counsel sought a further fee on 22 February 2007 of £1,400.00 for considering further papers, discussions with
senior counsel and continuing preparation of detailed summons. The Auditor
allowed fees of £850.00 for the consultation, £1,000.00 for framing the summons
and £2,000.00 for preparing for and attending the hearing on 23 February. It is unreasonable to burden the paying party
with charges for "his discussions with senior counsel". A fee for consultation has been allowed at
which all matters would have been canvassed.
The charges allowed are reasonable on a party and party basis."
[7] Objection (d) relates to:
Paid senior counsel, "re extensive preparation for Interim Interdict
and Hearing including revisal of lengthy draft Summons, engaged all day to 7.30
pm (Voucher 1) - £2,750 plus VAT."
In response
thereto the Auditor of the Court of Session stated:
"Senior counsel sought a fee of £2,750.00 on 22 February 2007 for
preparation for an interim interdict
hearing the following day and revising the summons drafted by junior. A further fee of £3,000.00 is sought for
further preparation and attendance at the hearing on 23 February 2007. The hearing lasted no more
than one and a half hours when the defenders provided an undertaking and the
hearing was continued to a later date.
The Auditor allowed a fee of £3,000.00 for the hearing on 23 February. This is a substantial fee to reflect the
difficulties, complexities and urgency of the case. It subsumes preparation undertaken by senior
counsel. In Jarvie (supra) para [37] Lord Carloway states, "If preparation is charged
separately, that is a factor which ought, it should follow, to be taken into
account in determining the daily rate....".
The Auditor has allowed senior a fee of £2,250.00 for a consultation
three days before the hearing. A daily
rate of £3,000.00 is awarded only in the most complex and valuable cases. The total fee of £5,250.00 for the consultation,
preparation and conduct of the hearing is wholly reasonable on a party and
party basis. It is unreasonable to
burden the paying party with the cost of revising the draft summons."
[8] The remaining objections are dealt with
together by the Auditor and include:
(e) Paid senior counsel, "re preparation for Continued Motion -
engaged 5 hours (Voucher 1) - £1,500.00 plus VAT."
(f) Paid junior counsel "re preparation for Continued Hearing -
engaged 2 1/2 hours (Voucher 2) - £500 plus VAT."
(g) Paid senior counsel, "advising re Undertaking (Voucher 1) -
£150.00 plus VAT."
(h) Paid senior counsel "considering proposed Undertaking and
discussions with defenders' Counsel regarding same (Voucher 1) - £300 plus VAT."
(i) Paid senior counsel "attending Continued Interdict Hearing
including all preparation and revisal of draft Undertaking - Diet set down for
three days and concluded in one - 1.5 days charged (Voucher 1) - £1,500.00 plus
VAT."
(j) Paid junior counsel "preparing for and attending Continued
Hearing (Voucher 2) - £1,000.00 plus VAT."
In response the Auditor
stated:
"On 26 February 2007
senior counsel sought a fee of £1,500.00 and junior counsel of £500.00 for
preparation for a continued hearing set down for 27 February 2007. This continued hearing followed
the initial calling of the case on 23 February.
At the hearing on 23 February 2007 the defender had given an undertaking to the court that for all
time coming subject to any order of the court, they would not broadcast any
film or videotape of the pursuer. From
the minute of proceedings it is clear that this hearing on the 27 February 2007 did not call but a hearing did take place on 13 March 2007. Both senior and junior
counsel had already been allowed significant fees by way of preparation and attendance
at the hearing on 23 February 2007,
namely £3,000.00 for senior counsel and £2,000.00 for junior counsel. On the 26 February 2007 the defender had approached the pursuer indicating they wished the
hearing continued until a later date in order that they could fully consider
the position. As a result, the case did
not call on 27 February 2007. On 2 March the defence was withdrawn but the
undertaking was not produced until the day before the continued hearing. The only live issue on 13 March was expenses. The Auditor has approached counsels' fees for
the hearing in the same way as the hearing on 23 February. The fees awarded of £3,000.00 to senior and
£2,000.00 to junior are reasonable to cover all the work done on a party and
party basis from the hearing on 23 February until the close of the hearing on
13 March. In taxing the account the
Auditor was fully aware of the complexity and urgency of the proceedings. The fees allowed to counsel fully reflect
this and are reasonable on a party and party basis."
[9] The Auditor dealt separately with items
(b) and (d) and gave a cumulative response to items (e) - (j). In his minute, the Auditor stated that he
referred to and received guidance from the following authorities. Cooper
and Wood v North British Railway Co. (1863) 2M. 346; Caledonian Railway Co. v Greenock Corporation 1922 S.C. 299; Macnaughton, 1949 S.S.C. 42; Wood v Miller 1960 S.C. 86 at pp97-98; Ahmed's
Trustees v Ahmed (No. 1), 1993
S.L.T. 390 at 394; City of Aberdeen
Council v W.A. Fairhurst and Others
2000 C.L.R. 392 and Kathryn Jane Jarvie
v Greater Glasgow Primary Care NHS Trust 2006 CSOH 41. The Auditor did not give further explanation
about what guidance he relied on from the authorities cited.
The submissions on behalf of the pursuer
[10] Counsel for the pursuer explained that the
background to the case was unusual. The
case involved complex issues at the interface of freedom of expression and
privacy relating to a child aged 13.
Counsel required to deal with the matter urgently. The summons involved difficult issues and
urgent preparation was required for the hearing which was due to be held on 23
February. An undertaking by the first
defenders was given when the motion for interim interdict was continued until
27 February and this involved further work by counsel for the pursuer. On 26 February, it was agreed that there
would be no appearance on 27 February and there was a continuation to a
three day hearing on 13, 14 and 15 March.
That three day diet was marked in the diary of both junior and senior
counsel for the pursuer. On 3 March an
undertaking in the appropriate terms was requested from the first
defenders. There was no response from
the first defenders during the period 2-12 March. On 12 March the matter was resolved and an
undertaking in acceptable terms to the pursuer was made available by the first
defenders. The outstanding matter of expenses
was to be dealt with on the 13 March. Counsel for the pursuers had been instructed
for the three day hearing throughout the period up to 12 March. At that date, it became clear that a proof
would not be necessary and that a hearing on expenses only would take place on
13 March.
[11] Counsel for the pursuer made some
reference to the cases referred to by the Auditor in particular Ahmed's Trustees v Ahmed and City of Aberdeen Council v W A Fairhurst
&c. In relation to the former
case he submitted that the Court is entitled to interfere if after scrutiny of
the reasons given by the Auditor, it clearly appears that he has misstated,
mistaken or misunderstood the material put before him. That is different from a criticism of the
relative weight to be attached to the various elements involved. On the facts of the case, the Auditor did
misdirect himself in failing to consider the question of counsel's entitlement
to remuneration for work of preparation properly instructed. The Auditor expected that prior to and at the
pre-proof consultation, counsel would have reviewed all the evidence to be led
at the proof and discussed it. This was
not the correct approach. If work was properly
instructed and carried out and was reasonable for the proper conduct of the
case, the work will qualify for appropriate remuneration. Referring to the City of Aberdeen Council v W A Fairhurst,
counsel for the pursuer submitted that unlike the present case, that case
contained a comprehensive statement of the reasons for the Auditor's
decision. That case concerned specialities
about commitment fee which did not arise in the present case. Under reference to Magee v Glasgow City Council
2003 SLT 777, he emphasised that it is necessary to examine the detail of each
individual item claimed as a fee in order to identify whether the Auditor had
truly erred in the exercise of his discretion.
Magee v Glasgow City Council illustrated a situation in which the Auditor
had erred in taxing off the whole of senior counsel's fee for revising the
summons. Such revision was a well
established practice in appropriate circumstances which included cases of importance
to the client, cases of complexity and difficulty and with a higher potential
value. Counsel emphasised that the
Auditor had to give relevant reasons for his decisions about individual claims. In the present case counsel for the pursuer
submitted that the reasoning of the Auditor was not clear. In his submission, some of the reasoning
appeared to be background narrative and there was a failure to give reasons as
required by the relevant Rule of Court 42.4(2)(b)(ii). Counsel for the pursuer referred to Jarvie v Greater Glasgow Primary Care NHS Trust which the Lord Ordinary
considers Ahmed's Trustees v Ahmed in paragraphs 36 to 39 in relation
to fees for preparation for a proof and instructions to appear at the
proof. The Lord Ordinary was of the
opinion that it is not necessary for the Auditor to provide a detailed analysis
of his reasoning about how he reached the particular figure, for days of
preparation. It was submitted that the
Auditor was applying his knowledge and experience to the case as disclosed on
record and in the account and supporting voucher. There is no need for the Auditor to repeat
the content of these documents to set out what the parties already know about
the nature of the case and the work carried out in connection with it. The Auditor is expressing a view, based on
his knowledge and experience, that he considers that a particular number of
days is reasonable for a case of the particular type and complexity. That view will normally be respected by the
court, unless some misunderstanding or other defect in reasoning is apparent."
In paragraph 42
the Lord Ordinary expressed some disagreement with the approach adopted by the
temporary judge in Magee v Glasgow City Council. The Lord Ordinary stated that the task of the
Auditor is not to assess "compensation" for counsel. The task of the Auditor is to decide what in
all the circumstances is reasonable to have charged as an outlay by agents
against an unsuccessful opposing party in respect of the instruction of
counsel.
[12] Turning to the particular items, various
points of detailed criticism were made by counsel for the pursuer. In summary it was submitted that the problem
was the absence of any detailed explanation given by the Auditor. The Auditor dealt with the various claims in such
a broad and brief way that it was not possible to work out clear reasons for a
particular decision. As a result the
pursuer is unable to understand what approach has been adopted and whether the
approach of the Auditor is justified.
[13] In relation to objection (b), it was
submitted that the reasons given were not clear.
[14] In relation to objection (d), it was
submitted that the length of the hearing on 23 February was shortened
because the defenders provided an undertaking in the course of the hearing. The Auditor does not explain why he excludes
the preparation fee for 22 February and the fee for revising the summons
bearing in mind he accepts that this is a complex case. It was submitted that his approach does not
make sense.
[15] In relation to items (e) and (f), it was
submitted that the Auditor should have accepted that there had been further
developments in the case up to the 27 February.
Counsel had to prepare to run the case on 27 February. In so far as the reasoning can be understood,
the Auditor appears to give a fee for preparation for the earlier hearing on 23
February. That does not explain
the Auditor's refusal to accept that further preparation thereafter required to
be done. The Auditor should have been
slow to reach the conclusion that senior counsel spent 5 hours on completely
unnecessary work. It was plain that
there were telephone calls and other matters occurring and that further
information was being gathered. In
relation to objection (g), the Auditor does not deal with this as a
separate item and no specific reason is given for excluding this work. The same applied to objection (h). In relation to objection (i) and (j), the
Auditor requires to address whether one day is a reasonable fee for a three day
hearing that was discharged the day before.
The Auditor has not considered the question whether a competent
solicitor would have engaged and instructed senior and junior counsel for the three
day hearing and whether payment is due.
Submissions on behalf of the first defenders
[16] Counsel for the first defenders set out
some general propositions to this effect.
He submitted that it is not the function of the Court of Session to
review an exercise of a discretion by the Auditor to substitute its own view of
the material or come to a different view about the relative weight to be
attached to the various elements. The Court
should always be slow to intervene. The
Court is not engaging in a re-hearing of the debate in front of the
Auditor. The Court may legitimately
interfere with the Auditor's decision in the following circumstances. If the Auditor has (a) proceeded on the basis
of irrelevant material; (b) left relevant material out of account; (c)
misunderstood the material; (d) misdirected himself on that material or the law
or (e) made an unreasonable decision.
The exercise of reasonableness in the Auditor's judgment is informed by
his skill and experience and reference to case law. The central function of the Auditor's role is
to moderate fees which it would be excessive for one party to pay another. In support of the general propositions, the
first defenders prayed in aid Wood v Miller 1960 SC 86 at 98; Malpas v Fife Council 1999 SLT 499 at 500; The City of Aberdeen Council v W
A Fairhurst [1999] Scot CS 176; Macnaughton
v Macnaughton 1949 SC 42 at 46; Cooper Wood v North British Railway Co (1863) 2M 346 at 347; Kathryn Jane Jarvie v Greater
Glasgow Primary Care NHS Trust 2006 CSOH 41 para 34-37.
[17] Having dealt with the general context in
which the Auditor operates and the limited circumstances in which the Court of
Session was entitled to interfere with the Auditor's decision, counsel for the
first defenders made submissions in relation to the specific items.
[18] In relation to objection (b), counsel for
the first defenders submitted that the present case is different from Ahmed's Trustees v Ahmed. In the present case
the Auditor had plainly allowed for preparation in a variety of different
ways. In relation to objection (d), it
was submitted that there was no authority that revision of a summons by senior
counsel must be reflected in the fee.
The approach of the Auditor was to look at the matter generally and at
the overall fees. The Auditor has not
left preparation out of account. He has
approached the matter broadly as he is entitled to do.
[19] In relation to objections (e) and (f), it
was submitted that parties knew the day before that the hearing on 27 February
would not take place. The fee note
submitted contains sums for preparation.
There is no fee note in which a cancellation fee is sought. Similarly in relation to objection (g) and (h),
it was fair for the Auditor to wrap up these small matters. The consideration and revising of the
undertaking was central to the continued hearing. In relation to objections (i) and (j) which
are the fees in respect of senior and junior counsel for the 13 March, it was
submitted that on 2 March it was plain that the case would not proceed to
proof. The questions for discussion at
the hearing on 13 March were the content of the undertaking and expenses. There was an e-mail from the agents of the first
defenders to the pursuer's agents to the effect that they need do no more
preparation. The Auditor had allowed a
second fee for all the work up to 13 March. Counsel for the defenders referred to the
approach of the Lord Ordinary in Jarvie
v Greater Glasgow Primary Care NHS Trust at
paragraphs 34 to 39. That explained what
it is reasonable for the Auditor to do.
In conclusion it was submitted that
the pursuer's motion to remit back to the Auditor should be rejected. It is for the Auditor to use his skill and
experience to set an appropriate fee according to the Rules of Court. The Auditor did so and gave reasons for that
in his minute. The reasoning of the
Auditor may be brief but the matter was fully explored and considered at
taxation.
Further submissions in response on behalf of the
pursuer
[20] Counsel for the pursuer submitted that the
Lord Ordinary's opinion expressed in Jarvie
v Greater Glasgow Primary Care NHS Trust requires to be put in context. The Auditor had given detailed reasons at
some length in that case. It was the
absence of such detailed reasoning in the present case that caused the
problem. It was not sufficient for the
Auditor to repeat the words of the Rule of Court and claim reasonableness. Counsel referred to Helen McLean McIntosh or Petrie &c v North Co-operative Limited 24 March 2005 paragraph 25. In that case
the Lord Ordinary stated
"Those reasons appear to me to give rise to uncertainty as to
whether he directed himself properly as to the interpretation of rule
42.14. The reasons which he gives, in
accordance with Rule 42.4(2)(b), should enable the court to be satisfied that
he reached his decision on a proper basis...."
[21] Counsel for the pursuer submitted that the
pursuer's account of expenses should be remitted to the Auditor for further
consideration and explanation in the light of the objections lodged.
Discussion
[22] I am satisfied that the appropriate test
to be applied by the Court in considering the reasons of the Auditor is
reflected in Wood v Miller 1960 SC at page 98 and Malpas v Fife Council at pages 500-501.
The Auditor is required to apply the terms of Rule of Court 42.10(1) to
consider in an objective manner whether the relevant expense was "reasonably
incurred for conducting the cause in a proper manner". The Auditor is also required to give reasons
for his decision in terms of Rule of Court 42.4 (2)(b)(ii). That does not mean that every individual item
of work or preparation done by a reasonable counsel anxious to best present his
case is an expense which must be borne by the opposing unsuccessful
litigant. It was accepted by counsel for
the parties that the Auditor when exercising his function requires to exercise
his own judgement and that the Court would be slow to interfere with the
Auditor's decision bearing in mind his specialist role and expertise.
[23] I do not consider that any significant
point of principle arises in this case in relation to the approach of the
Auditor. Counsel for the pursuer criticised
the adequacy of the reasons given by the Auditor in response to the note of
objections. I accept in some cases the
Auditor has given more extensive and detailed reasoning than in the present case
but that does not mean that the reasons given are insufficient in the context
of the present case. I accept that it is
appropriate to consider the reasons given by the Auditor in respect of each
item of expense which is in dispute.
[24] In relation to objection (b), I do not
consider that the submissions on behalf of the pursuer are well founded. In my opinion, the reasons given by the
Auditor are clear. He has approached the
matter broadly as I consider that he was entitled to do. The Auditor has allowed a substantial fee for
the drafting of the summons which involves consideration of papers against the
background of discussions which have taken place. He has considered all the items of work
claimed and applied his judgement. In my
opinion the same applies to objection (d).
The Auditor has approached the matter, as is plain from his response, on
the basis that he has included preparation in the fee allowed for the hearing
on 23 February. I accept that in some
cases it may be reasonable to allow a fee to senior counsel for revising the
draft summons. I consider that in this
case the Auditor is approaching the matter broadly, as he is entitled to
do. On that broad approach he excludes
certain items including the cost of revising the draft summons. I do not read his response as indicating that
he excludes any item because it could never be properly chargeable on a party
and party basis. If that was his
approach, I accept that his decision might be subject to challenge.
[25] I summarise the remaining objections (e) -
(j) and the response of the Auditor thereto in paragraph 8. I do have some difficulty with the reasoning
of the Auditor in relation to the said items. The Auditor takes a broad approach in relation
to the items feed and concludes "the fees awarded of £3,000 to senior and
£2,000 to junior are reasonable to cover all the work done on a party and party
basis from the hearing on 23 February until the close of the hearing on 13
March". My difficulty with this is that
it is plain that the fees rendered relate to two separate hearings in respect
of which counsel were instructed, namely the continued hearing of 27 February 2007 and the hearing on 13 March.
The hearing on 27 February did not take place, following discussions
on 26 February
2007, when the hearing was continued for the
three days until 13 March 2007. The Auditor in dealing with this does not
express any view as to whether or not he considers that the pursuer's solicitor
was justified in maintaining instructions for counsel for three days commencing
13 March. On one reading of the
Auditor's response, the Auditor does not appear to accept that counsel for the
pursuer were properly continually instructed for a three day hearing until 12
March. If there was proper instruction until
12 March for a three day hearing, issues about a "disappointment fee" arise and
that may have an impact on the way in which the other fees claimed are dealt
with by the Auditor. To that extent
therefore I consider that there is merit in the criticisms of counsel for the
pursuer which I have summarised in paragraph 15. It is plain from the submissions on behalf of
the defenders which I have summarised in paragraph 19 that the defenders'
position in relation to expenses is that from 2 March it was clear that a three
day hearing on the merits would not be required on 13 March. That is not accepted on behalf of the pursuer. It is an issue which requires in my opinion
to be resolved by the Auditor and in respect of which reasons should be given
by him. As it is unclear from the general
way in which the Auditor has dealt with objections (e) - (j) to what extent his
views about the disputed issue may affect his approach to the other items
claimed, I consider that also requires to be clarified.
[26] For these reasons, I conclude that the
pursuer's account of expenses should be remitted to the Auditor for further
consideration and explanation in respect of objections (e) - (j). I reserve the question of expenses.
