COSTS AFTER RELIEF FROM SANCTIONS: A SUMMARY ASSESSMENT
An earlier post looked at the decision of Mr Justice Edwards-Stuart in North Midland Construction plc -v- Geo Networks Ltd  2384 (TCC). Here we look at the subsequent order in relation to costs.
The claimant failed to serve particulars of claim in two actions on time. Relief from sanctions was granted in relation to one action but not for the other.
- The judge was willing to summarily assess those costs that the claimant had to pay the defendant in relation to the action where relief from sanction was not granted.
- The claimant was held liable to pay the costs of the application where it obtained relief from sanctions.
- The claimant’s conduct of the matter had not been exemplary.
- Given the history of the matter it was reasonable that the claimant pay the defendant’s costs of the applications.
THE JUDGMENT ON COSTS
In the judgment on costs in relation to the applications  EWHC 3063 (TCC)
This judgment concerns the costs of two applications by the Defendant to strike out the claim form in two actions brought by the Claimant, the Project Yellow claim and the Fibrespeed claim, for failure to serve Particulars of Claim within the relevant time limit. In each case there was a reciprocal application by the Claimant for relief from sanctions. In the Project Yellow claim I granted relief. In the Fibrespeed claim I refused relief and struck out the claim form.
Two questions remain in relation to costs. First, whether the costs of the application in the Fibrespeed claim should be the subject of detailed assessment and, if not, the amount in which they should be summarily assessed. Second, who should pay the costs of the application in the Project Yellow claim and, if the Claimant, the amount in which those costs should be summarily assessed.
The Fibrespeed Claim
I am prepared to assess the costs summarily. The Claimant complains that the rates charged are too high for solicitors in Sheffield and challenges both the number of fee earners involved and the amount of hours alleging, amongst other things, duplication. There is also a challenge to the fees of leading counsel.
I think that there is a little force in each of the first three points, but I bear in mind the fact that matters were complicated by the fact that the Claimant’s solicitors often referred to the wrong claim in correspondence and on occasion failed to explain clearly what they were doing. I do not consider that there is anything in the challenge to counsel’s fees.
The Project Yellow Claim
As I explain in paragraphs 39-43 of the main judgment, having been granted more than one extension of time for service of the Particulars of Claim, the Claimant took no steps to obtain a further extension until the day before the final deadline for service was due to expire. In the main judgment I described that as cavalier (paragraph 48).
Given the history, I am quite satisfied that the Defendant was fully entitled to make an application to strike out the claim form once the date for service of the Particulars of Claim had passed. By the time Particulars of Claim were eventually served, the costs of the Defendant’s application had been incurred and, subject to one point, a hearing on 21 July 2015 in relation to that claim was inevitable because the Claimant had to apply for relief from sanctions in any event. The Defendant’s application to strike out was simply the obverse of the Claimant’s application for relief from sanctions.
“TCC Claim No. HT-2014-000045 and HT-2015-000036
We are making an application for relief from sanctions in relation to your applications to strike-out the Claim Forms.
The purpose of this letter is to put forward an offer in relation to costs in the hope that the Applications can be compromised and Court time is saved.
In the event that our application for relief is agreed and your application is withdrawn we will:
1. Pay your reasonable costs of our application for relief from sanctions.
2. Bear our own costs of your application to strike out the claim.
In the event this offer is not accepted and the hearing proceeds, we reserve the right to draw this correspondence to the attention of the Court on the matter of costs.”
As is clear from its face, this letter did not distinguish between the two actions. It therefore did not address the possibility that the Defendant’s application to strike out might succeed in one case and fail in the other. It is also unclear as to whether the reference to the Claimant paying the Defendant’s “reasonable costs of our application for relief from sanctions” was intended to embrace also the Defendant’s costs of its own applications to strike out. On a fair reading of the letter, in my view it did not.
I have already concluded that the Defendant was fully entitled to make an application to strike out the Yellow Project claim at the time when it did. The Claimant was largely saved because it managed to serve its Particulars of Claim in the nick of time – having been jolted into doing so by the Defendant’s application.
When considering who should bear the costs of the Project Yellow applications, in my view the court is entitled to take into account the Claimant’s conduct overall – not just in relation to delay generally, but the manner in which it conducted correspondence (by frequently using incorrect claim numbers, for example) and, in particular, the way in which its solicitors used the signed consent to the extension of time in the Project Yellow claim in an attempt to obtain a similar extension of time for the Fibrespeed claim.
The pursuit of the Defendant’s application to strike out the claim form in the Project Yellow claim at the hearing on 21 July 2015 added very little, if anything, to the overall costs of the application or of that hearing. It was not until the Particulars of Claim were served, on the day before the hearing, that the Claimant was really in with a chance of resisting successfully the application to strike out the claim form.
I can deal briefly with the assessment of the Defendant’s costs because the Claimant makes exactly the same points in relation to them as it did for the costs in the Fibrespeed claim. It seems to me that I should follow the same course and reduce the solicitors’ costs in the same proportion. In round terms this involves reducing the figure of £10,505.60 to £9,400. As before, I regard counsel’s fees as reasonable given the importance of the applications. I therefore assess the costs in the Project Yellow claim in the sum of £18,750.88.
ON SUMMARY ASSESSMENT
- The summary assessment of costs: a primer
- The summary assessment of costs; useful links
- More on indemnity costs and the summary assessment of costs.
- Summary assessment of costs and proportionality
- Summary assessment of costs: say it with flowers
- Costs reduced from £201,000 to £96,465 on summary assessment.
- Summary assessment of costs: an important example
- Summary assessment: how it works in practice
OTHER GUIDES TO SUMMARY ASSESSMENT
- The Senior- Court Costs Office Guide to summary assessment is an essential starting point
- Clarion have a succinct summary of all the key points in a summary assessment
- Legal Costs Negotiators Ltd have a summary of recent case law on summary assessment
- This article by District Judge Letham on maximising costs on summary assessment is now 12 years old, but the points are still highly relevant
- There is an explanation of summary assessment in Jackson LJ’s 8th lecture in the implementation programme.
- Litigation Futures carries a report of a case where the costs were summarily assessed at £351,000
- The New Law Journal reports a case where the judge refused to summarily assess costs which were disproportionate.
- The price to pay for the absence of a costs schedule.