Hugh Cartwright & Amin v Devoy-Williams & Anor  EWHC 1692 (QB)
(4 July 2018)
A Law Firm has won the appeal against a detailed assessment of proceedings brought to recover their costs from their former clients.
The matter related to a solicitor and own-client assessments where the Appellant’s former Clients, who were themselves barristers and property developers, had their Bill of costs assessed.
The costs were assessed by Master Rowley at a Detailed Assessment. However, Master Rowley’s detailed assessment was challenged by the Appellant on four grounds, two of which succeeded.
FIRST SUCCESSFUL GROUND OF APPEAL: COUNSEL’S BRIEF FEE
Counsel’s Brief fee had been claimed at £6,500.00. At assessment this fee was reduced to £3,000.00 on the grounds that the matter had settled the day before the Trial was due to start.
Mrs Justice Nicola Davies MBE (sitting with an assessor) overturned the decision of Master Rowley. She said: “In the context of this “high temperature” litigation the case was not settled until it was finally settled, which was not until 10:30pm on the night before the jurisdiction hearing. Counsel’s brief fee had been incurred. No counsel properly observing his or her duty would stop working on this case until he or she had been informed of a final settlement. All the preparation work had been done. The barrister was entitled to be paid his or her fee. The Master erred in finding that the brief could have been cancelled on the previous afternoon and that some of the preparation could have been avoided. The Master originally accepted that the fee per se was reasonable but reduced it for reasons which do not stand up to scrutiny… Whether or not the barrister could find something else to do is not relevant to the brief fee which was payable on a brief properly delivered. There were no good grounds to reduce the brief fee. There is no evidence before this Court to support an argument that the lower fee was appropriate. Accordingly this Ground of Appeal succeeds both as to the exercise of discretion and to the sum claimed.”
SECOND SUCCESSFUL GROUND OF APPEAL: RESPONDENT’S OFFER MADE IN JANUARY 2017
On 20 January 2017 the Respondents made an offer to settle the Claimant’s costs for £29,500.00, inclusive of the costs of the assessment, conditional upon the Appellant agreeing that the Respondents could set off against that sum their entitlement to damages and costs in the negligence action (a negligence claim was issued separately by the Respondents). At assessment it was ordered that the Respondents do pay the Appellant’s costs up to 20 January 2017 and thereafter the Appellant do pay the Respondents’ costs.
The Appellant argued on Appeal that they were unable to accept that offer as the negligence action was being conducted by Solicitors on behalf of the Firm’s Insurers and the Respondents were aware of that.
Master Rowley accepted that the offer as made was incapable of acceptance, however he ruled that “the quantum might have been accepted and the conditions either varied or an agreement reached to have a hearing before me to deal with the set off”.
Mrs Justice Nicola Davies accepted the Appellant’s argument that the quantum offer was linked to conditions and therefore the Appellant was unable to accept this offer. She said: “In highly contested proceedings agreement as to conditions was unlikely. In order to rely upon this offer for Calderbank purposes it had to be an offer which was acceptable upon its stated terms, not one which contemplated further attempts to negotiate… The effect of the Master’s reasoning is to place the burden on the receiving party to negotiate a settlement of the conditions or to make a counter-offer. This does not reflect the wording of the Rules, nor the nature of a Calderbank offer, namely that it is either acceptable or it is not. Accordingly the Master erred in relying upon the respondents’ letter of 20 January 2016 and ordering the appellant to pay the respondents’ costs from that date. This Ground of Appeal succeeds.”
Mrs Justice Nicola Davies went on to record that, since drafting her judgment, the parties had agreed the costs: the post-20 January 2017 costs of the detailed assessment to be paid by the Respondents. These costs were assessed at £3,000 and the Respondents would also pay £3,500 in respect of Counsel’s fees.
TWO UNSUCCESSFUL GROUNDS OF APPEAL
Another ground of appeal concerned a pre-action offer of £14,873.00 that the Appellant had made.
The Appellant argued that Rowley was wrong to disregard this pre-action offer. However, Mrs Justice Davies said: “The offer was in the substantive proceedings. It was not made in respect of the costs of the assessment proceedings. The hearing before the Master was in relation to the assessment of costs. The Master was aware of the offer in the substantive proceedings but directed his mind to the offer in the costs proceedings. For the purpose of the assessment proceedings this was the relevant offer. The Master did not err.”
The last challenge related to hourly rates.
In the Bill of Costs the Appellant claims rates of £250 per hour for two conducting solicitors with more than eight years relevant post-qualification experience. However, Master Rowley described the Appellant’s claim as a modest value claim. He had ruled that this was a Grade C-type matter and therefore he made allowance for the limited involvement of a Grade A Partner and for the instruction of Counsel.
Mrs Justice Davies said: “The essence of the Appellant’s appeal is that this is a “high temperature” case. In this context the Master failed to attach sufficient weight to the fact that allegations of fraud, misrepresentation and deceit were made by the Respondents against the Appellants together with threats to damage the Appellant’s business and report the Appellant to the police and regulatory authorities. The management of the litigation would have required a solicitor of more experience than that represented by Grade C.”
However, she dismissed this challenge on the basis that the relevant proceedings had not been provided. She said: “The Master was better placed than this Court to assess the nature of the allegations contained in the pleadings as he had sight of them and this Court has not. If this was a point which the appellant sought to make it should have provided the relevant pleadings.”
Whilst the outcome of this case clearly is a victory for the Solicitors, this Judgment also shows that Law Firms could benefit from providing the relevant documentation with their Appeal in order to justify the reasonableness of the utilisation of a Grade A fee earner throughout.
Tanya Bland, Law Costing Ltd
10th July 2018