Costs assessment - costs of more than one firm of solicitors

Supreme Court Costs Office

Christopher Clarke J

20 December 2007

If the receiving party is entitled to recover his costs of instructing more than one solicitor, then he has to include the costs of each solicitor separately in the bill. If the receiving party fails to include the costs of his previous solicitor in the bill of costs, and the costs judge completes his assessment with­out regard to those costs and proceeds to a final certificate, the receiving party cannot claim a fur­ther assessment.

Martyn McLeish (instructed by RJ Hawksley & Co) for the claimants. Philip Glen (instructed by Dutton Gregory) for the defendant.

The appellants were partners. The second appel­lant was an assured tenant of property belonging to the respondent. The proceedings arose out of a possession order obtained against the second ap­pellant and an anti-social behaviour injunction against both appellants, in December 2004, which they appealed.

Over the course of the litigation were represented by different firms at different times. Up until 24 December 2004, they were both represented by one firm, RJH. From 24 December until 10 February 2005, the first appellant was represented by RJH but the second appellant instructed a different firm SWL. That was the position at the time of the hearing of the appeal against the anti-social behaviour injunctions. By the time the appeal against the possession order, which also involved the anti-social behaviour order, both appellants were represented by SWL.

The appeal succeeded in part and costs orders were made in the appellants’ favour. Proceedings were begun for detailed assessment of costs. The respondent’s solicitors, DG, agreed with SWL to pay the sum of £39, 298.00 + VAT plus £2,000 for counsel’s. At no stage in the correspondence leading up to the agreement was there any reference to another bill of costs being due to come from RJH. In August 2005, RJH purported to serve a further notice of commencement and bill of costs on behalf of both appellants, relating to the possession appeal. The master dismissed RJH’s request for assessment of their bill of costs, and RJH appealed.

MR JUSTICE CHRISTOPHER CLARKE:

In reaching his decision, the master had referred to Segalov’s Estates, Re, Hyman and Teff v Segalov [1952] 2 All ER 107. He held that, if he were to accede to the receiving party’s request to assess the August 2005 bill, he would be in great difficulty since he had no way of knowing what agreement was reached between the paying party and SWL in relation to the first bill of costs where there was evidently duplication in the bill before him.

The master had rejected the submission that a party was entitled to put in different bills at dif­ferent times if he chose to do so. The paying party was entitled to rely on the original notice of com­mencement which clearly indicated that SWL was acting on behalf of both defendants. It was not incumbent on the paying party to ask whether or not there were any more costs that were being claimed. The claim had been compromised on behalf of both appellants; the appellants and their representatives had to stand by the consequences.

The appellant submitted that, while the rules envisaged that only one notice or bill would be served, there was no rule or practice direction that stipulated that had to be so. Where a claim for costs was not included in the bill, a receiving party was not debarred from making an additional claim for the omitted costs before the procedure for de­tailed assessment commences.

His lordship held that the rules clearly provided that detailed assessment proceedings were commenced by the receiving party serving both a notice of commencement and the (not a) bill of costs. The bill was the receiving party’s statement of what he claimed was due to him pursuant to whatever order entitled him to costs. If the receiving party was entitled to recover his costs of instructing more than one solicitor, the practice direction required him to include the costs of each solicitor separately in the bill.

If he failed to include the costs of his previous solicitor, and the costs judge completed his assessment of the costs without re­gard to the previous solicitor’s costs and proceeded to a final certificate, the receiving party could not claim a further assessment. The detailed assessment proceedings had been completed and an amount ordered to be paid. The receiving party could not start again. The Civil Procedure Rules had intro­duced significant changes in relation to costs, both as to substance and nomenclature, but there was nothing in them which qualified the position as stated in Segalov.

Amount claimed

Segalov was not a case in which there was any agreement as to costs. If there was an agreement as to the costs payable, the critical question was: what had been agreed? If in this case, the appellants had, either in their notice or in the bills or other­wise, made clear that the amount claimed was only part of their claim to costs and that they would be claiming later in respect of the work of RJH; and the agreement was that the respondents would pay a sum in respect of the costs claimed, recognising that the costs in respect of RJH were still to be dealt with, the appellants would not be prevented from making a claim in respect of those costs.

However, what had been settled was the amount of the receiving party’s costs pursuant to a particular order or orders, the position would be different. If the receiving party had left out of his bill part of what he should have claimed and there had been a settlement of the bill, he could not recover more than the amount agreed. The omission was his misfortune.

This case fell within the latter category.