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Wednesday 2nd January 2008
Nicolas Crane and Canons Leisure Neutral Citation Number [2007] EWCA Civ 1352
Court of Appeal 19/12/07
Not only are the fees of an outside firm of costs draftsmen recoverable from the Paying Party as a proper profit costs item they can also attract a success fee where the solicitor had entered in to a CFA/CCFA with the client.
So held the Court of Appeal.
The matter involved the level of costs arising from a modest personal injury claim. The claim resulted in the claimant recovering £1,500.00 for damages.
Agreement had been reached and proceedings were issued to secure the agreement.
The Claimant was represented by solicitors with Trade Union backing and advised under a CCFA.
Costs could not be agreed and the matter proceeded to a detailed assessment before a costs officer of the Supreme Court Costs Office (SCCO). The bill presented sought in excess of £9,500.00. The overall costs were reduced to £6,572.70. The solicitor’s success fee was reduced from 50% to 45%. In addition the Claimant recovered £3,860.65 for costs of the detailed assessment including 45% success fee notwithstanding the Claimant was represented by a costs draftsman.
The Paying Party appealed the allowance to a costs judge who disallowed the success fee holding the draftsman’s fee to be a disbursement (he also reduced the overall amount allowed for costs).
The matter was appealed to the Court of Appeal (May LJ, Maurice Kay LJ and Hallett LJ sitting with the Senior Costs Judge, Chief Master Hurst). The question before the Court of Appeal was whether satellite costs of conducting the detailed costs assessment were to be regarded as profit costs or disbursements.
The significance of the question identified by May LJ was that the Solicitors would be entitled to recover a percentage success fee on the costs if they were profit costs but not if they were disbursements.
May LJ was of the view that the work undertaken by the costs draftsman was solicitors work, work the solicitor had undertaken to the client to do. “It was solicitors’ work”.
Further May LJ held there was “no reason of principle which compels the court to require parties who enter into CFAs to address at the outset the risk of costs proceedings separately, and in my judgment there are clear reasons of policy for the court not to require this”
The success fee allowed for conducting the detailed assessment was allowed at the same level as the allowance for the main dispute i.e. 45%
Maurice Kay LJ did not agree and “only after great hesitation” parted company with May LJ and disallowed the Appeal.
Lady Justice Hallett however considered the work undertaken by the costs draftsman was “undoubtedly solicitors’ work” the type of work the solicitors were retained to do. The solicitor’s “may have chosen to delegate their work, but they never relinquished control of it and had responsibility for it”
Her Ladyship held a success fee was payable on the work undertaken and that “the court should not require a different percentage uplift for the assessment of costs proceedings”
The Appeal was allowed.
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