Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 111

 

A576/05

OPINION OF LORD GLENNIE

in the cause

AP (on behalf of RP)

Pursuer

against

(FIRST) DR JANICE A DUNCAN, DR J S BUMBRA, DR K J THOMPSON, and DR A CROSBY, and (SECOND) DR PAULINE FLEMING

Defenders

 

Pursuer: McLean QC; Anderson Strathern LLP

Defenders: Jones (solicitor advocate); BTO Solicitors LLP, MDDUS

 

26 July 2016

Introduction

[1]        This is a note of objections to the report of the Auditor in an action of damages brought by the pursuer on behalf of her child against her GP practice (the first defenders) and the locum who attended her there on at least one relevant occasion (the second defender).

 

Background
[2]        In the action the pursuer sought reparation for medical negligence in connection with events occurring in 1996 and 1997, when she was pregnant with her son.  The action was raised in August 2005.  The only defenders at that time were the partners in her GP practice.  The action was, of consent, withdrawn from the procedure under Chapter 43 of the Rules of Court and appointed to proceed as an ordinary action.  The cause was sisted until August 2007.  Thereafter the defenders lodged defences. 

[3]        An account of proceedings in the action from that time onwards makes for unhappy reading. 

[4]        In June 2008 the cause was appointed to the procedure roll on the defenders’ preliminary pleas. 

[5]        On 5 December 2008, on the unopposed motion of the pursuer, and of consent, the diet of Procedure Roll fixed for that day was discharged with no expenses due to or by either party in respect of that discharge. 

[6]        There followed a period of amendment and adjustment which continued until 20 November 2009 when the court allowed the record to be amended in terms of the minute of amendment for the defenders and answers for the pursuer thereto with no expenses due or by either party. 

[7]        On 16 December 2009 the diet of procedure roll, which had been re-fixed for 18 December 2009, was again discharged on the unopposed motion of the pursuer.  On this occasion the court found the pursuer liable (as an assisted person) for the expenses of the discharge. 

[8]        The pursuer lodged a further minute of amendment on that day, initiating an amendment process which continued until 5 February 2010, when the court allowed the Record to be amended in terms of the minute of amendment and answers.  The court found the pursuer liable (as an assisted person) to the defenders in the expenses occasioned by the amendment.

[9]        The amendment of 5 February 2010 instructed a case against the second defender, who was brought into the action at that time.

[10]      On 21 September 2010, on the motion of the pursuer and of consent, the court withdrew the cause from the procedure roll and restored it to the adjustment roll for a period of 8 weeks. 

[11]      That initiated a further period of amendment and/or adjustment which came to an end on 2 March 2011 when the court, or the motion of the pursuer and of consent, allowed the further amended closed record to be received. 

[12]      The cause was again appointed to the procedure roll on the first and second defenders’ preliminary pleas.  The hearing was fixed for 11 November 2011.

[13]      On 10 November 2011, on the opposed motion of the pursuer, the procedure roll hearing due to take place the next day was discharged.  The pursuer was given twenty eight days to lodge a minute of amendment, initiating another amendment process.  The court expressed displeasure at yet another discharge of the procedure roll hearing, and made various orders for expenses to which I refer below.

[14]      The new amendment process came to an end on the 17 May 2012 when the court allowed the record to be amended in terms of the minute of amendment and answers.  The pursuer was found liable (as an assisted person) to the defenders in the expenses occasioned by the amendment. 

[15]      The cause was again withdrawn from the procedure poll and appointed to the by order (adjustment) roll.  

[16]      On 12 June 2012, on the motion of the first defenders, and of consent, the cause was again appointed to the procedure roll on the first plea-in-law of the first defenders. 

[17]      The hearing on the procedure roll took place on 2 November 2012.  By interlocutor of 8 March 2013 the first defenders’ motion seeking dismissal of the action was refused and parties were allowed a proof before answer of their respective averments on record.  On 2 April 2013 the first defenders were found liable to the pursuer in the expenses of the procedure roll diet of 2 November 2012.

[18]      A two week diet of proof before answer was fixed to commence on 13 January 2015.

[19]      On 17 November 2014 the pursuer sought to amend yet again.  A minute of amendment was lodged on her behalf.  However, that amendment process was never concluded.  

[20]      The action settled on 9 January 2015, the Friday before the proof was due to commence.

[21]      A joint minute was settled between the parties.  On 4 March 2015 the court pronounced an interlocutor giving effect to the terms of the joint minute and making a number of orders relevant to the question of expenses.

 

The relevant orders

[22]      As is apparent from the above narrative, the court has on a number of occasions made orders for expenses against the pursuer.  There are, however, five relevant interlocutors (court orders) which require to be considered in more detail.

 

Interlocutor of 10 November 2011
[23]      The interlocutor of 10 November 2011 was made in the context of an opposed motion by the pursuer to discharge the diet of procedure roll fixed for the following day.  After granting the motion to discharge and dealing with consequential procedural matters, the court:

(1)        reserved all questions of expenses as between the pursuer and the first defenders; but

(2)        found the pursuer liable (as an assisted person) to the second defender in the expenses of process since 5 February 2010 (including the expenses of the discharge of the procedure roll hearing) except insofar as already dealt with.

By way of explanation, I have already noted that 5 February 2010 was the date when the pursuer was allowed to amend to bring the second defender into the action.  The interlocutor of 10 November 2011 therefore found the pursuer liable to the second defender in the whole expenses to date of the process insofar as directed towards her.

[24]      It is clear from the minute of proceedings that the court expressed its displeasure at the need for yet another procedure roll hearing to be discharged and indicated that this should be reflected by way of awards of expenses.  The award of expenses as between the pursuer and the second defender had been agreed between the parties.  The court reserved the expenses as between the pursuer and the first defenders and appointed the cause to call by order in the New Year to deal, among other things, with any motion that might be made in respect of those expenses.

 

Interlocutor of 5 December 2011

[25]      The question of expenses as between the pursuer and the first defenders was dealt with of consent without waiting for the cause to call by order in the New Year.  In an interlocutor dated 5 December 2011, on the motion of the pursuer and of consent, the court found the pursuer liable (as an assisted person) to the first defenders in the expenses of the process from 1 July 2008 to 10 November 2011 (such expenses to include the expenses of the discharge of the diet of procedure roll on that day) except insofar as already dealt with.

 

Interlocutor of 17 May 2012

[26]      As narrated above, on 17 May 2012 the court allowed the record to be amended in terms of the minute of amendment for the pursuer and answers for the defenders.  The pursuer was found liable (as an assisted person) to the defenders in the expenses occasioned by the amendment. 

 

Interlocutor 2 April 2013

[27]      A discussion on the procedure roll eventually took place on 2 November 2012.  On 8 March 2013 the court refused the first defender’s motion for dismissal of the action and allowed parties a proof before answer of their averments on record.  On 2 April 2013 the court found the first defenders liable to the pursuer in the expenses of the procedure roll hearing of 2 November 2012.

 

Interlocutor of 4 March 2015

[28]      As already noted, the action settled in 2015.  Parties entered into a joint minute.  The interlocutor of 4 March 2015 gave effect to that joint minute and went on to make the following orders (some opposed, some of consent) relevant to the question of expenses:

(1)        it certified Dr Shaw, Dr Stanhope, Peter Davies, John Pollock, Dr Edward Charles Ward and Dr Hewitt as skilled witnesses for the pursuer;

(2)        it found the defenders jointly and severally liable to the pursuer in the expenses of process, including the expenses of the motion then before the court; and

(3)        it found the agents for the pursuer entitled to charge an additional fee in terms of Rule of Court 42.14 (3) under heads (a), (b), (e) and (g).

 

[29]      I should just make this comment about the order for expenses referred to in sub-para (2) above, in terms of which the defenders were found liable to the pursuer in the expenses of process.  It is trite law that, once made, an order for expenses cannot be altered say by way of appeal.  It follows that any subsequent order for expenses can only relate to expenses not already disposed of.  The qualification sometimes put in an order for expenses, dealing with the expenses of process “except in so far as already dealt with”, while providing helpful clarification and reassurance, is in fact unnecessary since that qualification is implied into the order as a matter of law.

 

Issues arising from the Auditor’s Report

[30]      The pursuer’s account of expenses was lodged on 26 March 2015, under reference to the order for expenses pronounced by the court on 4 March 2015.  Objections to that account were focused in a list of objections lodged on behalf of both defenders.  No distinction was made, as I understand it, between the positions of the different defenders, notwithstanding that the second defender had only been brought into the action on 5 February 2010. 

[31]      The Auditor produced his report on the pursuer’s Account of Expenses on 14 October 2015.  That report dismissed a number of the defenders’ objections but upheld some others.  

[32]      In her note of objections, the pursuer raises four discrete points arising from the Auditor’s report on her account of expenses.  I shall deal with them each in turn, identifying the issue and relevant arguments and giving my decision.

 

Issue 1

[33]      The Auditor disallowed a number of charges in relation to expert evidence.  These were:

(i)         charges in relation to the report of Dr Stanhope dated 1 July 2008;

(ii)        charges in relation to the report of Dr Edward dated 10 November 2008;

(iii)       charges in relation to the report of Dr Hewitt dated 1 November 2011; and

(iv)      Dr Hewitt’s charges in relation to a consultation with Senior Counsel on 8 November 2011.

The Auditor disallowed these charges on the basis that they fell within the period covered by the awards of expenses of process in favour of the defenders made by the court on 10 November and 5 December 2011.

[34]      On behalf of the pursuer, Mr McLean QC argued that the effect of certifying these witnesses as skilled witnesses (or experts), as was done in the interlocutor of 4 March 2015, was to award the pursuer the reasonable charges of those experts regardless of when the work was done by them during the course of the litigation and regardless of any other orders for expenses.  He submitted that the terms of Rule of Court 42.13A(1) were mandatory in this regard.  The orders for expenses in favour of the defenders made on 10 November and 5 December 2011 had no bearing on the pursuer’s entitlement in terms of that Rule to recover the reasonable charges or expenses of those experts.

[35]      I reject that submission.  The question of liability for expenses is a matter for the court to determine upon the motion of either party to the proceedings.  In its orders of 10 November and 5 December 2011 the court awarded the first defenders their expenses of process for a period from 1 July 2008 until 10 November 2011; and awarded the second defender her expenses of process from the commencement of the action against her until that same date.  It is a necessary inference from the terms of such orders that the pursuer, the paying party in terms of those orders, cannot recover her expenses for such periods from the defenders.  That is trite law, and I have never heard it suggested otherwise.  On that basis, the proper interpretation of the court orders of 10 November and 5 December 2011 is that the pursuer must pay to the defenders their expenses incurred by them during such periods and, more to the point, cannot recover from the defenders any of her expenses incurred during those same periods.

[36]      The effect of Mr McLean’s submission, were it to be correct, would be that once a party has persuaded the court to certify their expert or experts in terms of Rule of Court 42.13A, that party is entitled to recover the reasonable charges and expenses of that expert even in the absence of an order for expenses in his favour and even if, on top of that, he has been ordered to pay the other parties’ expenses of process.  Such a submission reads far too much into Rule of Court 42.13A.  That Rule provides as follows:

“42.13A. – (1) If, at any time before the diet of taxation, the court has granted a motion for the certification of a person as skilled, charges shall be allowed for any work done or expenses reasonably incurred by that person which were reasonably required for a purpose in connection with the case or in contemplation of the case .”

 

That rule has nothing to say about the incidence of expenses, i.e. which party should bear them.  It is concerned solely with the question whether, if the party is entitled to expenses, he can include within his account of expenses the reasonable charges and expenses incurred in instructing expert witnesses.

[37]      Mr McLean sought to rely upon the decision of Lord MacPhail in John Barrett v Thompsons [2005] CSOH 145.  That was a case where the pursuer’s expert had been certified in terms of the Rule in its then current form, and the action had settled by joint minute in terms of which the court had found the defenders liable to the pursuer in the expenses of process.  There was some argument about whether the uncompleted amendment process carried with it a liability on the part of the pursuer for expenses, but putting that point to one side the case was simply one in which the reasonable charges and expenses of the pursuer’s expert were part of the expenses which the pursuer was entitled to claim under the order for expenses in his favour.  It was not concerned with an argument that a party against whom an order for expenses was made could nonetheless recover the reasonable charges and expenses of his expert on the strength of that expert having been certified in terms of what is now Rule 42.13A.

[38]      In the course of argument Mr McLean sought to argue that the charges in relation to Dr Stanhope’s report dated 1 July 2008 must have related to work done before that date and therefore were not covered by the expenses orders in the interlocutors of 10 November and 5 December 2011.  I can see some force in that, but the note of objections lodged by the pursuer did not take that point and gave no opportunity for the Auditor to answer it and explain why he nonetheless disallowed the whole of that item.  For all I know the point was not even raised before him.  The process by which a party may lodge a note of objections to the report of the Auditor on a party’s account of expenses is designed to enable the Auditor to respond to the points made in the note of objections and, more importantly, to enable the court to have the benefit of the Auditor’s experience and explanations on such matters.  In the absence of that procedure having been followed, I am not prepared to sustain any part of the objection on this ground.

[39]      It follows that I repel this part of the note of objections for the pursuer.

 

Issue 2

[40]      As noted above, on 17 May 2012 the court allowed the record to be amended in terms of a minute of amendment for the pursuers and answers for the defenders and awarded “the expenses occasioned by said amendment” to the defenders.  In paragraph 4 of the note of objections, the pursuer complains that the Auditor has disallowed all charges claimed in her account of expenses for work done during the period from 16 November 2011 (when the relevant amendment procedure started) to 12 May 2012 (when amendment was complete).  The pursuer says that the Auditor has overlooked the fact that many of the pursuer’s expenses claimed during this period – though Mr McLean expressly excluded from this the fees of senior counsel which, he accepted, were largely incurred in relation to the amendment – were in relation to work that was not directly relevant to the amendment procedure, was not occasioned by it and would have had to be carried out whether or not the amendment was ongoing.

[41]      The Auditor responded to this in his minute by saying that he was satisfied, based on the information and documents made available to him, that all the charges which he deleted from the pursuer’s account of expenses in that period were “in respect of work occasioned by the amendment which was the subject of the court’s interlocutor of 17 May 2012 in the sense that the work was carried out for the purposes of or in connection with that amendment.”  He goes on to say that the fact that, as a consequence of the court allowing the record to be amended in terms of the minute of amendment and answers, the work then became important to the case generally is of no moment.  The expenses were occasioned by the amendment.

[42]      In paragraph [25] of his opinion in Marilyn Stuart & Others v Mrs Amanda Elizabeth Croucher or Reid and others [2015] CSOH 175 Lord Woolman identified certain propositions from the authorities regarding the respective roles of the Auditor and the court: the Auditor acts essentially as a valuer; he is expected to apply his knowledge and experience in carrying out his task of assessing a fair and reasonable fee; the court will be slow to disturb his decision if he has properly exercised his discretion; it will not substitute its own reviews for those of the Auditor; it will not attempt to tax an account itself;  the court, however, will intervene if the Auditor did not have sufficient materials on which to proceed or his decision is unreasonable.  I agree with those propositions.

[43]      In this case, the Auditor has explained the approach he has taken.  He has treated expenses incurred in connection with the amendment as expenses of and occasioned by the amendment even though that same work was subsequently necessary and/or useful for the purposes of preparation for the proof.  There is no challenge to this approach as a matter of law.  It is not suggested that the Auditor has applied the wrong test.  In the event, therefore, the challenge to the Auditor in respect of these disallowed items seems to me to be a challenge on fact.  The pursuer simply alleges that the Auditor was wrong as a matter of fact in regarding these items as being the costs of and occasioned by the amendment.  This court cannot interfere with such findings. 

 

Issue 3

[44]      Issue 3 combines elements of Issues 1 and 2 dealt with above.  The pursuer asserts that in so far as the charges incurred during this period – the period of the amendment running from 16 November 2011 to 6 May 2012 – relate to work carried out by experts, and there was mention in this regard of work carried out by Dr Shaw in April 2012, those charges should have been allowed because the experts were certified under Rule of Court 42.13A.

[45]      I reject this argument.  It is covered by my decision in respect of Item 1 above.

 

Issue 4

[46]      The final challenge to the Auditor’s report relates to the fees of senior counsel.  Senior counsel charged a commitment fee for the anticipated two-week proof of three days at £3,500 per day, amounting in total to £10,500.  It will be recalled that the proof settled only on the preceding Friday.  The Auditor taxed off £4,500 leaving a recoverable amount of £6,000, representing two days at £3,000 per day.

[47]      In the note of objections the pursuer says that it was reasonable in the circumstances for senior counsel to charge three days by way of commitment fee.  The cancellation came at a late stage and senior counsel had to pass on an eight-week case which he would otherwise have taken and was unable to secure significant alternative court work for the two weeks set down for the proof.  Three days was reasonable.  Further, so far as the daily rate of £3,500 is concerned, the defenders had in their objection to this item in the account of expenses conceded that that would be an appropriate daily rate for senior counsel’s commitment fee.  The Auditor should have accepted that concession. 

[48]      The note of objections put forward, in the alternative, a compromise position of £8,750, being 2½ days at £3,500 per day.

[49]      In the course of his oral submissions, Mr McLean said that he could not dispute the Auditor’s entitlement to choose two days rather than three.  But he did challenge his decision to reduce the daily rate.  He referred me to a number of authorities.  Caledonian Railway Co v Greenock Corporation 1922 SC 299 at 310-312 was authority for the proposition that a reasonable fee should be one which was in line with the general practice of agents in instructing counsel.  There was no fixed or inflexible rule.  Much would depend upon the magnitude and difficulty of the case under consideration: MacNaughton v MacNaughton 1949 SC 42 at 46-47.  The question was not what fees a particular counsel was justly entitled to receive for his services but what fees could properly be made a charge against an unsuccessful opponent.  In Malpas v Fife Council 1999 SLT 499 Lord Bonomy suggested at p 501E that the task of the Auditor was equivalent to that of the judge hearing a note of objections to the Auditor’s report: he should only disallow an item “if it could truly be said that to incur that expense was not reasonable, in the sense that a competent solicitor acting reasonably would not have incurred it.”  In that case he sustained the objection in the Note and ordained the Auditor to amend his report to reinstate certain items.  I was also referred to the opinion of Lord Carloway in Kathryn Jane Jarvie v Greater Glasgow Primary Care NHS Trust [2006] CSOH 42 at paras [41] and [42], to my own decision in Marshall v Fife Health Board 2013 SLT 1129, and to that of Lord Woolman in Marilyn Stuart v Mrs Amanda Elizabeth Croucher or Reid and others, supra.  In Marshall I adopted an approach similar to that of Lord Bonomy in Malpas.  In Marilyn Stuart at para [31] the Auditor is reported as having regarded himself as bound by my decision in Marshall but, nonetheless, took the view in that case that certain rates were reasonable and others not.  By contrast, in Jarvie Lord Carloway emphasised the wide knowledge and experience possessed by the Auditor which enabled him to make judgements of what was or was not reasonable and said that it was not for the court to start indicating to the Auditor what it thinks might be appropriate in respect of counsel’s fees for a proof or how many days should be allowed in the case of a settlement.

[50]      There is, so it seems to me, a difference of approach in the way in which the court has approached the assessment by the Auditor of what is or is not reasonable in a particular case.  The principle difference lies not so much in any difference in the degree of respect afforded to the Auditor’s wide knowledge, experience and expertise – that is a given – but in the starting point.  The approach exemplified in the opinion of Lord Carloway in Jarvie starts from the position that it is for the Auditor to allow what he considers reasonable; and that the court should only interfere if the Auditor has erred in law or in principle or has reached a decision which no reasonable Auditor could have reached.  The approach suggested by Lord Bonomy in Malpas, by contrast, places the Auditor in the position of an officer of the court excluding only what is unreasonable; so that the court may interfere if he has without proper explanation or justification excluded a charge claimed by a party as part of his reasonable expenses.  Having reconsidered the matter in light of the Auditor’s minute in the present case, and his references to passages in Rule of Court 42 which appear to place the primary judgment as to reasonableness with the Auditor, I am now persuaded that the court should not interfere without good cause with the Auditor’s judgment as to reasonableness.  It is not for the court to say that a particular level of fee is or is not reasonable.  That decision is, in the first instance at least, for the Auditor.  The court should interfere with that decision only if the Auditor has plainly gone wrong, in asking himself the wrong question, or taking irrelevant matters into account, or failing to take relevant matters into account, or simply reaching a decision which no reasonable Auditor could properly have reached.

[51]      In the present case the Auditor has concluded, based on his knowledge and experience of similar cases and accounts, that a rate of £3,500 per day was not within the band of reasonable rates which he would expect to see being charged by senior counsel by way of commitment fee at that time; but that, by contrast, a rate of £3,000 per day was reasonable in light of the complexity and importance of the proceedings.  I cannot interfere with that assessment.

[52]      Mr McLean pointed out that the defenders themselves, in their points of objection to the pursuer’s account of expenses, had not challenged the daily rate of £3,500.  That is correct as a matter of fact, but, as the Auditor points out, once the matter comes before him it is his duty, not that of the parties, to determine whether or not a charge is reasonable.

 

Disposal

[53]      For the reasons given above I repel the pursuer’s note of objections.