THE ASSESSMENT OF COSTS: LIABILITY FOR COSTS LAWYER’S ACTS: THE COURT OF APPEAL DECISION IN GEMPRIDE -v- BAMRAH

June 22, 2018 · by · in Appeals, Applications, Assessment of Costs, Costs

Yesterday I gave a short summary of the decision in Gempride Ltd v Bamrah & Anor [2018] EWCA Civ 1367. This is a case worth looking at in detail.   The substantive case settled for £50,000 shortly after issue. The question of the  costs of the action predominated. As a result of some of the osts being disallowed  there was  a 13 day long appeal before the circuit judge.  The claimant’s costs rose to £950,000 and the defendant was ordered to pay these (and more).  The defendant then won, comprehensively, in the Court of Appeal.

“it seems to me to be an important matter of principle that solicitors on the record – and other authorised litigators and “legal representatives” for the purposes of the CPR – understand that they remain ultimately responsible for the acts and omissions of those to whom they delegate parts of the conduct of litigation, particularly where those to whom such work is delegated are not authorised. It is only in that way that the supervisory jurisdiction of the court can be effectively maintained. “

THE CASE

The claimant is a solicitor and was a sole practitioner.  After being injured she instructed her own firm to represent in a personal injury action .  The work was done under a Conditional Fee Agreement. The case settled for £50,000. The defendant was to pay the costs.  Assessment proceedings were started.  The defendant queried the hourly rate and whether before the event insurance was available. An application was made by the defendant in relation to the claimant’s costs.

THE FINDINGS OF THE MASTER

The assessment came before Master Leonard, sitting as a District Judge.  The Master considered that there had been issues relating to a failure to disclose the availability of before the event insurance and the hourly rate.

    1. On 18 December 2013, Gempride issued an application seeking (i) to resile from their concession regarding the unavailability of alternative funding, and (ii) an order that Ms Bamrah’s claim for costs be dismissed or alternative relief granted under CPR rule 44.11 on the basis of that, in certifying her hourly rate throughout as £280 and replying to the Points of Dispute to the effect that she had no alternative funding, her conduct was “unreasonable or improper” within the meaning of rule 44.11.
    2. The application was heard by Master Leonard on 13 January 2014. As I have indicated, Ms Bamrah was represented by Mr Ocego of Lawlords. Unfortunately, Ms Bamrah appears not to have been told of the hearing date by Lawlords, and Lawlords did not think fit to lodge any evidence on her behalf or even ask Ms Bamrah if she wished to rely upon any evidence although the Master’s Order of 18 November 2013 expressly gave her the opportunity to do so (see paragraph 70(iv) above).
    3. In a reserved judgment handed down on 5 March 2014, the Master allowed the application on each of the two grounds. In relation to the hourly rate, he noted Mr Ocego’s explanation (at [44] and [46]) that:
“[Ms Bamrah] took the view that the difficult work undertaken merited a higher rate and decided retrospectively to revise [Falcon Legal’s] hourly rates upwards to £280 for the entire period covered by part 1 of the bill…
… [She] had taken the view that the hourly rates agreed between her, as the client, and [Falcon Legal] could be adjusted at will. If that were the case there would be no contractual agreement binding upon [Ms Bamrah] to pay any particular hourly rate, and so no proper basis for the certification of an hourly rate of £280.”
    1. The Master thus found that Ms Bamrah had certified a misleading bill of costs, because, on the most favourable interpretation of her actions, she took the view that the hourly rate payable by her to Falcon Legal was adjustable at will (see [70]). As a result, Gempride made an offer on hourly rates that, assuming there was a valid contract between Ms Bamrah and Gempride, was higher than Ms Bamrah was obliged to pay, which Ms Bamrah purported to accept (see [72]).
    2. In respect of the accuracy of the replies on alternative funding, he noted (at [47]) that Ms Bamrah was “responsible both as client and as solicitor for the factual accuracy of her replies to [Gempride’s] Point of Dispute”. He continued:
“49. It is not open to [Ms Bamrah] to record for her own purposes, as she did, that BTE funding was available to her but to tell the paying party, as she did, that it was not. Nor can she say that because it was not available to her on terms acceptable to her, it was not available at all.
50. I am reminded by Ms Scott for [Gempride] that there is no process of disclosure in detailed assessment proceedings. A paying party cannot expect to inspect as of right a receiving party’s [CFA] or his records of enquiries as to alternative sources of funding. Unless there is good reason to conclude that replies such as those served by the [receiving party] may be inaccurate the paying party will be expected by the court to accept them.
51. The clear and obvious purpose of an enquiry such as that at general point 3 is (a) to allow a paying party to ascertain whether a receiving party claiming the cost of a CFA and an ATE premium made a choice not to use an alternative, less expensive method of funding and (b) to take a position on whether that choice was reasonable. The equally clear statement in [Ms Bamrah’s] reply to general point 3, to the effect that BTE cover was unavailable, was not true and no amount of sophistry can make it true.”
    1. The Master found that Ms Bamrah’s answer to the Point of Dispute was untrue; and that, “as a personal injury practitioner she was in a position to understand the significance both of general point 3 and her answer to it” (see [73]). On the basis of that answer, Gempride had originally conceded that it would pursue no alternative funding point; and it might have settled the claim for costs on the basis of the inaccurate representation before disclosure was ever given (see [74]-[75]). Disclosure was not given for the purpose of correcting the previous misrepresentation (see [76]). Ms Bamrah had taken active control of the preparation and certification of Part 1 of the bill and replies, and she was directly responsible for the misleading information supplied to Gempride upon which concessions were secured (see [77]). He concluded (at [77]):
“If [Ms Bamrah’s] conduct admits of a reasonable explanation, in the absence of some evidence from her I have no idea what it might be.”
  1. The Master made no express finding that Ms Bamrah had been dishonest – in relation to either alleged misconduct – although he clearly regarded her conduct as more than “an honest mistake” which is how he characterised Stinsons’ conduct in relation to their response to Points of Dispute 39 concerning alternative funding.
  2. Having found Ms Bamrah’s conduct to have been “unreasonable or improper” in these two respects, the Master considered that complete disallowance of her costs would be unduly harsh, but that, if there were any binding contract between Ms Bamrah and Falcon Legal, she had forfeited any right to rely upon it. In the circumstances, he disallowed the claimed profit costs in Part 1 of the bill insofar as they exceed the fixed hourly rate recoverable by litigants-in-person.”

THE APPEAL TO THE CIRCUIT JUDGE: AN EPIC SAGA

Moving on (and remember this is a case that settled for £50,000 shortly after issue).  We now have a thirteen day hearing before the Circuit Judge and an assessor.  At that hearing the claimant blamed her cost lawyers.  The Circuit Judge held a re-hearing. He found that there had been no dishonesty on the part of the claimant and t and ordered that the defendant pay the claimant’s costs on an indemnity basis. The claimant’s costs now stood at around £950,000.  The Circuit Judge also ordered that the defendant pay the claimant’s personal costs of attending court.

THE APPEAL

I have dealt with the judgment of the Circuit Judge relatively briefly because it was overturned, comprehensively, by the Court of Appeal.

THE JUDGMENT OF THE COURT OF APPEAL

    1. Gempride sought to appeal to this court on eleven grounds, some of which related to Judge Mitchell’s findings of fact. Ground 11, as amended on 15 February 2017, was as follows:
“Generally, in the event the Appellant succeeds in reversing the court’s findings, the court will be invited to reverse… the costs order to ensure they follow the event of the outcome of the appeal.”
    1. On 26 July 2017, Jackson LJ gave permission to appeal in these terms:
“Granted on grounds 1, 3, 7, 8 and 10 only.
Reasons
1. The appellant has a real prospect of success on those five grounds and they raise important points of principle.
2. The judge’s findings of fact, in particular his rejection of dishonesty, must stand. The judge was entitled to make those findings and the Court of Appeal will not go behind them.”
    1. In response to a request for clarification in relation to Ground 11, Jackson LJ replied through a letter from the Civil Appeals Office on 7 March 2018 as follows:
“The appellant can ask the court to re-open the costs order, in the event that the appeals [sic] succeeds on any of grounds 1, 3, 7, 8 and 10”.
    1. Rationalising the order of the grounds (and, for convenience, relabelling them), the extant grounds of appeal before us are therefore as follows.
Ground A (originally Ground 8): Agency
The judge erred in finding Ms Bamrah was not liable for the conduct of Lawlords on the conventional principles of agency.
Ground B (originally Ground 1): Dishonesty/Intention to Deceive
The judge erred in proceeding on the basis that, before being satisfied that Ms Bamrah had been guilty of unreasonable or improper conduct for the purposes of CPR rule 44.11, Gempride was required to prove that she had had an intention to deceive the court and/or Gempride.
Ground C (originally Ground 3): Hourly Rate
Given the hourly rate claimed exceeded that which Ms Bamrah was contractually obliged to pay Falcon Legal, the judge erred in finding that there was no unreasonable or improper conduct by Ms Bamrah in certifying the bill of costs.
Ground D (originally Ground 7): Availability of BTE Insurance
The judge erred in finding that there had been no misrepresentation (and thus no unreasonable or improper conduct) by Ms Bamrah with regard to the availability of BTE Insurance.
Ground E (originally Ground 10): Costs of Attendance
The judge erred in ruling that the costs recovered by Ms Bamrah should include “her costs of personal attendance at the appeal hearings”.
Ground F (originally Ground 11): Costs Below
The ground is set out above (see paragraph 89).
    1. In addition, in her Respondent’s Notice, Ms Bamrah relied upon additional reasons for upholding Judge Mitchell’s order, namely that Gempride’s conduct in “ambushing” her over the date of the CFA (see paragraphs 84-85 above) in itself warranted the CPR rule 44.11 application being dismissed.
Ground A: Agency
    1. Soon after the Master’s findings of unreasonable or improper conduct on the part of Ms Bamrah, it became apparent that Ms Bamrah blamed Lawlords for the inclusion of the incorrect hourly rate in the bill. Gempride’s case was clear: even if Lawlords may have been blameworthy, Ms Bamrah was responsible both for her own conduct and for the conduct of Lawlords under conventional agency principles.
    2. Judge Mitchell held that she was not liable as Lawlords’ principal because they did not act in accordance with her instructions and indeed acted contrary to those instructions (see [102]). Mr Bacon submits that that was a fundamental error of law. By the close of his submissions before us, as I understood them, Mr Singh conceded that to have been the case. He was right to do so.
    3. As expressed by the learned authors of Bowstead and Reynolds on Agency (21st Edition) (2018) at paragraphs 8-010 and 8-011, it is well-established that:
“Where a person, by words or conduct, represents or permits it to be represented that another person has authority to act on his behalf, he is bound by the acts of that other person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had the authority that he was represented to have, even though he had no such actual authority.
… Under this doctrine a principal may be bound by the acts of an agent which he has not authorised, and has even forbidden…”.
The authorities for that proposition, going back to the early nineteenth century, are set out in footnotes. I need not tarry with them here.
    1. Lawlords were retained by Falcon Legal as their agents for the purposes of the costs assessment; and, a result of conventional agency principles, Falcon Legal as principal remained liable to third parties outside the agency relationship (such as Gempride) for the conduct of Lawlords, even if Lawlords acted contrary to their instructions. Furthermore, as I have described (see paragraph 25 above) and as was common ground before us, for the purposes of the supervisory jurisdiction of the court, solicitors remain responsible for the conduct of anyone to whom they subcontract work that they (the solicitors) are retained to do, a principle of particular importance where the subcontractor is not a legal representative and so does not himself owe an independent duty to the court.
    2. There was nothing to suggest that Lawlords’ authority to make representations in the costs assessment on behalf of Falcon Legal was in any way curtailed. Third parties were entitled to rely upon representations made by them as if made by Falcon Legal on behalf of Ms Bamrah.
    3. The application of those conventional agency principles to circumstances such as this – namely, the relationship between independent costs draftsmen and the solicitors who have retained them to do the work on a costs assessment – was considered by this court in Crane v Canons Leisure Centre [2007] EWCA Civ 1352; [2008] 1 WLR 2549; [2008] 1 Cost LR 132, which concerned the issue of whether, in the context of a CFA, the independent draftsmen’s costs were properly profit costs (which would have attracted a success fee uplift) or a disbursement (which would not). The court (May and Hallett LJJ, Maurice Kay LJ dissenting) held that they were profit costs, because, although the solicitors chose to delegate it, the relevant work was “solicitors’ work” (i.e. work of a type which the solicitors were retained as solicitors to do) over which the solicitors retained control, supervision and (crucially) responsibility (see [12]-[15] per May LJ, and [35]-[36] per Hallett LJ). Given the statutory scheme (then under the Courts and Legal Services Act 1990), the costs draftsmen could not perform “solicitors’ work” (including the conduct of litigation) themselves, as they were not authorised and would be committing a criminal offence if they did so. It was vital for the integrity of the statutory scheme that the solicitors (as a person authorised to conduct litigation) remained responsible for the acts of the costs draftsmen who were not authorised. Indeed, the court found that the ability of the costs draftsmen to appear in court as advocates was founded upon the fiction that they were temporary employees of the solicitors (see [13] and [36]). In any event, the corollary of the costs assessment being “solicitors’ work” for which the solicitors remained responsible despite the delegation to the independent costs draftsmen was that the fees charged by the solicitors to the client for the costs draftsmen’s work were profit costs upon which the success fee uplift attached. That case was determined under the Courts and Legal Services Act 1990, but the same principles apply under the 2007 Act.
    4. The circumstances of this case are materially the same as those in Crane v Canons Leisure. Falcon Legal, as a firm of solicitors, were of course authorised litigators. Indeed, they were on the court record as acting for Ms Bamrah. Lawlords were not authorised litigators. They were only able to work on the costs assessment as agents of Falcon Legal, and only on the basis that Falcon Legal maintained responsibility for the work that they did. Thus it was that Mr Owen and Mr Ocego appeared before Master Leonard on behalf of – indeed, as “deemed employees” of – Falcon Legal.
    5. In my view, not only did Judge Mitchell err in holding that Falcon Legal ceased being liable for the acts of their agents Lawlords because Lawlords failed to comply with their instructions and indeed acted contrary to those instructions, but he unfortunately failed properly to grapple at all with the legal relationship between Falcon Legal and Lawlords. He considered the fact that Mr Owen was described as a “costs lawyer” in the preamble to the Order arising out of the 18 November 2013 hearing at which he appeared for Ms Bamrah (see [63]), and the fact that Mr Shaw and Mr Ocego “were not only holding themselves out as costs draftsmen, but also as costs lawyers” (see [98]), were important because they gave force to Ms Bamrah’s submission that she was reasonably relied upon them for advice in relation to the cost assessment. Of course, they held themselves out as having some experience and expertise in costs matters; but the judge did not make any finding as to whether Lawlords were actually or apparently authorised litigators. Indeed, he does not appear to have considered that issue. In fact, it is common ground that they were not authorised; and there appears to have been no evidence that Lawlords held themselves out as being such.
    6. Judge Mitchell said that, if Mr Owen had been at the hearing on 13 January 2014, “it simply would have been unarguable to say that [he] was not her ‘legal representative'” (see [100]). That is so; but not because he was a “costs lawyer”. He had the ability to conduct the litigation (the costs assessment) only because he was acting as an agent for Falcon Legal, and was able to appear for Ms Bamrah only as a “deemed employee” of that solicitors’ firm.
    7. Although only an extension of the conventional principles of agency into the particular statutory field with which we are concerned, at a time when new business practices mean that solicitors are more frequently subcontracting work out to the unauthorised, it seems to me to be an important matter of principle that solicitors on the record – and other authorised litigators and “legal representatives” for the purposes of the CPR – understand that they remain ultimately responsible for the acts and omissions of those to whom they delegate parts of the conduct of litigation, particularly where those to whom such work is delegated are not authorised. It is only in that way that the supervisory jurisdiction of the court can be effectively maintained. Although an order under CPR rule 44.11 cannot be made against someone who is neither a party nor a legal representative, for the purposes of that rule the conduct of someone who is not an authorised litigator may be attributable to a legal representative on agency principles as explained in the authorities to which I have referred.
    8. The reverse side of that coin is that, because the solicitor has responsibility for the conduct of those to whom he subcontracts work for which he as a solicitor has been retained, then he is able to charge for that work at an appropriate rate as profit costs (together with any success fee uplift under a CFA) and not simply as a disbursement; as Falcon Legal did in respect of Lawlords’ work on the costs assessment in this case (see paragraph 62 above).
    9. Of course, where a legal representative is found to have been responsible for the conduct of an agent, particularly if not personally guilty of any unreasonable or improper conduct, that may be relevant to sanction. For example, in a particular case the court may consider it is appropriate to disallow all or part of the costs attributable to that agent.
    10. In any event, for the reasons I have given, I consider that Ground A is made good: the judge did err in law in finding that, if and insofar as they did not comply with her instructions and/or acted contrary to those instructions, Ms Bamrah could not be liable for the conduct of Lawlords by the principles of agency.
Ground B: Dishonesty/Intention to Deceive
    1. It has been well-established since Ridehalgh that conduct may be “unreasonable or improper” without any finding of dishonesty. Mr Bacon submitted that Judge Mitchell erred in proceeding on the basis that, as a matter of law or at least in the circumstances of this case given the way in which Gempride put its application, Gempride was required to prove that Ms Bamrah was dishonest, i.e. that, in relation to the hourly rate and/or the availability of BTE insurance, she had an intention to deceive Gempride and/or the court.
    2. In response, Mr Singh emphasised that, at [15] (with specific reference to Ridehalgh) and [50] of his judgment, the judge correctly directed himself that, to make a finding that conduct is unreasonable or improper, it is not necessary to establish dishonesty; and, Mr Singh submits, it is inconceivable that he did not follow that direction when considering the allegations made here. It was true that one basis upon which Gempride grounded their application was that Ms Bamrah had been deliberately dishonest in respect of each if these matters – and the judge could not be criticised for referring to and dealing with that submission – but that, he submitted, does not mean that he applied the wrong legal test. Indeed, the judge went further than he was required to do to dismiss Gempride’s application (the burden of proof being upon Gempride), because he expressly found that Ms Bamrah was “blameless” (see [103]), and that she had “proved her innocence in respect of these allegations…” (see [109]).
    3. Notwithstanding Mr Singh’s submissions, looking at Judge Mitchell’s judgment as a whole in the context of the issues before him, I am persuaded that unfortunately he did fall into error as Mr Bacon contends.
    4. The context is crucial. Although Gempride clearly suspected that Ms Bamrah had been dishonest – and dishonesty was one interpretation of her conduct that it urged on the judge – dishonesty on her part was never an essential element of its allegations. The CPR rule 44.11 application was on its face made on the basis that the representations made by Ms Bamrah were “not true”, “misleading” and “at best reckless”. Whilst not excluding dishonesty, the application did not suggest that a finding of dishonest was necessary for its own success. Gempride’s case on misconduct at the start of the appeal was set out in Mr Cory-Wright’s skeleton argument below, especially at paragraphs 87-94. Dishonesty was not mentioned at all. That was consistent with the evidence of Mr Hines who, in his various statements in support of the application, did not suggest that the Gempride colours had been pinned exclusively to the mast of dishonesty. Importantly, Gempride’s case at the end of the appeal as set out in Mr Cory-Wright’s written closing submissions, particularly at paragraph 4, made clear that Gempride contended that Ms Bamrah knew or should have known that the representations she had made as to hourly rate to which she was entitled and to the availability of BTE insurance were untrue; and that that misconduct was that of Ms Bamrah personally “whether by reason of deliberate act or recklessness (as Gempride maintains)…” (emphasis added) or alternatively she was responsible for the conduct of Lawlords as her agents.
    5. Mr Singh submitted that Ms Bamrah had put forward an explanation – he submitted, a reasonable explanation – for each representation, which Gempride could not gainsay. Ms Bamrah was entitled to rely on the advice of Lawlords, as experts in costs proceedings and in costs advocacy. It was Mr Singh who submitted below that, on that basis and in the circumstances of this case, unless Gempride could prove an intention to mislead on Mr Bamrah’s part, the CPR rule 44.11 application could not succeed. That submission was made in express terms in paragraphs 10.6 and 10.11 of his closing written submissions.
    6. Reading his judgment as a whole, it seems that Judge Mitchell accepted Mr Singh’s submission on this issue. That is clearest at [50]-[52] of his judgment. Having set out the respective submissions of Mr Cory-Wright for Gempride and Mr Singh for Ms Bamrah – and having referred to Clydesdale Bank plc v Workman [2016] EWCA Civ 73, which does not appear me to have been greatly to the point – he continued at [52], in relation to the hourly rate issue:
“The improper conduct alleged in this case amounted to an allegation by Gempride of dishonesty i.e. Ms Bamrah inflated her hourly rate to a rate to which she knew she was not entitled, thus gaining a substantial financial advantage. This is the sort of conduct Lord Bingham had in mind in Ridehalgh v Horsefield… when he said ‘… conduct which would ordinarily be held to justify… striking off, suspension from practice, or other serious professional conduct…”. The above observations show the importance of proving that the conduct was deliberately misleading and anything else will not suffice…”.
    1. In relation to the hourly rate, that approach is reflected throughout the judgment, e.g. at [107], where the judge said that Ms Bamrah indicating to Lawlords that the bill was wrongly inflated in any respect “would seem to be completely at odds with the allegation that she wilfully misled the court and Gempride in order to inflate her bill”. The judge concluded at [108]-[109]:
“108. We pause there to set out our conclusions on the factual issues concerning the hourly rate. We are quite satisfied that Ms Bamrah did not make any (or any false) representations about the hourly rate to the court or to Gempride about the hourly rate in part 1 of the bill. Any representations that were made, were made by Lawlords and were quite contrary to her instructions. At the very least they failed to clarify their instructions from Ms Bamrah. We have heard 7 days of evidence and we still have no explanation (which could only come from Lawlords) why Lawlords presented a bill which was unlawful and unsustainable. Indeed Ms Bamrah was unaware of what was going on, and they made no effort to tell her. She was quite literally kept in the dark. Further we are quite satisfied that she did not sign the bill with any intent to mislead Gempride, or the court.
109. Although Gempride made allegations of misconduct, they have failed to prove them. We are satisfied that Ms Bamrah has not committed any act which could be described as misconduct, or any act which could be said to be ‘improper conduct’ within the meaning of Ridehalgh. As we have been at pains to point out, such ‘improper conduct’ involved an allegation by Gempride that Ms Bamrah was dishonest, in that she tried to claim an inflated hourly rate. As Gempride have manifestly failed to prove that, we agree with Mr Singh that an attempt has been made to water down the allegations. This case was never about “unreasonable conduct” and, for the avoidance of doubt, we are quite satisfied that Ms Bamrah is not guilty of any unreasonable conduct. Indeed, on the evidence, Ms Bamrah has proved her innocence in respect of these allegations…”.
    1. I will return to consider [108], which I do not find an easy paragraph, in relation to Ground C (see paragraph 118 and following below). However, taken in context, in my view these paragraphs amounted to a clear finding that the allegation that the certifying of the bill of costs with an hourly rate exceeding that to which Falcon Legal were entitled from Ms Bamrah was not unreasonable or improper conduct by Ms Bamrah was not proved because she did not sign the certificate with an intention to mislead Gempride or the court, i.e. she did not do so dishonestly. The same sentiments appear to have been expressed with regard to both issues at [102]-[103].
    2. In my view, in approaching the scope of “unreasonable or improper” as he did, the judge did err. He approached the issue on the basis that, if Gempride had not proved that, in making the representations she made, Ms Bamrah did not intend to mislead Gempride itself or the court, then it had necessarily failed to prove that her conduct fell within CPR rule 44.11. That was not the case; because “unreasonable or improper” conduct does not have dishonesty as a necessary ingredient, and Gempride had not restricted its allegations to ones necessarily involving dishonesty on her part. The judge regrettably failed to consider whether Ms Bamrah’s conduct, although not dishonest, was nevertheless “unreasonable or improper”. That was an error of law.
Ground C: Hourly Rate
    1. Basing his submissions on the errors of law which he alleged and I have described in Grounds A and B, Mr Bacon submitted that the judge erred in law in finding that, in certifying the bill of costs with an hourly rate that was in excess of the rate for which Ms Bamrah was obliged to pay Falcon Legal, Ms Bamrah was not guilty of “unreasonable or improper” conduct for the purposes of CPR rule 44.11. Relying on cases such as Watt v Thomas [1947] AC 484 and the more recent judgment of Lewison LJ in FAGE UK Limited v Chobani UK Limited [2014] EWCA Civ 5; [2014] CTLC 49 at [114], Mr Singh submitted that this was essentially a challenge to the judge’s findings of fact, including findings he made which involved evaluating and drawing inferences from primary facts, with which this court should be slow to interfere. Post-hearing, he referred us to the judgment of Leggatt LJ (with whom Gloster and Coulson LJJ agreed) in JSC BTA Bank v Ablyazov [2018] EWCA Civ 1176, in which judgment was handed down on 22 May 2018, where at [40] he re-emphasised the reluctance of appeal courts to interfere with facts involving an evaluation of primary facts as found by the judge.
    2. However, whilst endorsing the observations of Leggatt LJ in that case, I cannot agree that this ground of appeal is merely a challenge to a finding of fact.
    3. As I have indicated, I find [108] of the judgment – and other paragraphs which reflect the same point – difficult to construe. At the heart of the difficulty lies two different interpretations of Ms Bamrah’s own evidence.
    4. Before Judge Mitchell, it was Ms Bamrah’s case that she was charging £232 per hour until 22 June 2012 when she increased it to £280 “on the basis of what she perceived as unnecessary requests for disclosure by Gempride’s solicitors” (paragraph 55 of his judgment of 4 November 2016). She said that the letter of instruction to Lawlords was intended to convey a prospective change in rate from June 2012. Mr Ocego maintained that he took the letter to mean that Ms Bamrah wanted to charge £280 for the whole of Falcon Legal’s part of the bill. Judge Mitchell found that “the letter was saying quite clearly that [Ms Bamrah] had charged £232 per hour pursuant to the CFA and as of 22 June 2012 she had increased her rate [to £280]” (see paragraph 58), and that Mr Ocego’s interpretation was “unsupportable” (see paragraph 59). He found that, contrary to Ms Bamrah’s instructions, Lawlords (through Mr Ocego) unilaterally took it upon themselves to use the £280 per hour rate throughout, as evidenced by their emailed letter of 8 July 2013 (referred to in paragraph 52 above). Thus, Judge Mitchell said (at [58] and [62]):
“…. It is the view of both of us that the letter [of instruction] was saying quite clearly that [Ms Bamrah] charged £232 per hour pursuant to the CFA and as of 22 June 2012 she had increased her rate.
…
… Ms Bamrah had made it plain in her letter of instruction that she was acting under a CFA with a recorded hourly rate of £232. Why on earth were Lawlords concluding £280 was an appropriate rate when the CFA said otherwise?”
    1. Having referred to an email from Ms Bamrah to Lawlords on 20 December 2013 (in which she referred to the fact that the higher charging rate “was not applied until much later as the matter became more complex due to the historical fishing of the documents by [Gempride]”), the judge continued (at [81]):
“It is quite clear from the tenor of this email, and indeed other documents that Ms Bamrah was concerned to ensure she was not accused of charging a higher rate than that permitted by the CFA until the date the hourly rate was increased, which she identifies as 22 June 2012. By virtue of the fact this email was sent we are inclined to the view she did speak to Mr Shaw on or about 9 July 2013 about the rates being billed, because it was something which concerned her and offended the indemnity principle, of which she was all too well aware. However, we entirely agree with Mr Singh’s submission that even if the telephone call was not made, it does not affect the position.”
    1. Thus, it seems that the judge found that Ms Bamrah’s consistent instructions were for Lawlords to use the rate of £232 until June 2012, but, contrary to those instructions, they used the rate of £280 throughout Part 1 of the bill. When she telephoned Mr Shaw on 9 July 2012, it seems that the judge understood her evidence to be that Mr Shaw understood that the use of £280 from the outset was an error, but he would explain to Gempride the true position (i.e. that the correct rate to June 2012 was £232 and not £280 as shown in the bill itself) during the course of the costs negotiations with them so that they were not misled. Thus, the judge went so far as saying (at [108] of his judgment) that “Ms Bamrah did not make any (or any false) representations about the hourly rate to the court or to Gempride…”.
    2. However, even if the judge’s understanding of the evidence had been correct, in my view Ms Bamrah would clearly have been guilty of improper or unreasonable conduct, most obviously because, when she received Gempride’s offer of £241 per hour throughout, she ought to have realised that the error in the bill had not been explained to Gempride who, for the period to June 2012, had offered more than she was contractually liable to pay Falcon Legal. Her acceptance of that offer is incapable of any sensible explanation. Indeed, no competent solicitor would have considered that an explanation of the error could have been given. At least from that point in time, Ms Bamrah ought to have known that the indemnity principle had been compromised, and Gempride misled.
    3. In his skeleton argument for this court, apparently in line with the findings of the judge, Mr Singh refers to the “error” in the bill and to its explanation. But, in his oral submissions to us as I understood them, Mr Singh said that Judge Mitchell had in fact got the wrong end of the stick so far as Ms Bamrah’s evidence was concerned. In her statement dated 6 March 2014, Ms Bamrah said that, on 9 July 2013, as she had various concerns with the bill, she telephoned Mr Shaw.
“11.9 Amongst other things, I specifically said to Mr Shaw that the hourly rate should be split as it was £232.00, then increased to £280.00. Mr Shaw told me not to worry, and that Lawlords would deal with it, and would leave the hourly rate as it was in the bill, but that he/Lawlords would sort this out with Gempride in the negotiations which Lawlords were going to have with Gempride (in an effort to reach settlement).
11.10 I understand from what Mr Shaw said that Lawlords were advising me that it was proper to claim an hourly rate of £280.00 throughout for Part 1 of the Bill of Costs, but that Lawlords would provide an explanation to Gempride which set out the factual position about the hourly rates of £232.00 and £280.00, and which explained that the rate of £280.00 had been applied by Lawlords in July 2013 when preparing the Bill, and which explained the reasons for Lawlords having applied such rate for all of the period in part 1 of the bill (the “explanation”).
11.11 Until some time after about 23 February 2014 [i.e. until after Master Leonard’s ruling], I believed that Lawlords had provided the explanation to Gempride. The thought that Lawlords would file and serve the Bill of Costs without having provided the explanation, or that Lawlords would mislead Gempride (or the court) never occurred to me until after I received the draft judgment of Master Leonard on or about 23 February 2014.”
    1. That is clear enough; but Ms Bamrah’s cross-examination before Judge Mitchell (at page 28 of the 19 May 2016 transcript) put her evidence on the point beyond doubt. Ms Bamrah understood that Part 1 of the bill of costs was going to include an hourly rate for her time of £280 throughout, as Mr Shaw told her on the telephone on 9 July 2013 that it was appropriate and proper to claim that rate throughout – even retrospectively – because of the complexities in the matter. She approved and signed Part 1 of the bill on that basis. But for Mr Shaw’s assurance as to the propriety of claiming £280 throughout, she would have insisted that the rate of £232 was used for the first period of the bill to 22 June 2012. She understood that, during the course of negotiations with Gempride, Lawlords would explain, not that the rate claimed for the earlier period was in fact only £232 and the bill was wrong, but rather why the higher rate had been used throughout, i.e. because of the complexity of the case and the Gempride’s requirement for especially extensive disclosure.
    2. Indeed, on her case before Judge Mitchell, it was that understanding that (e.g.) explained why she did not query, but rather accepted, Gempride’s offer of a rate in excess of the £232. As I have indicated, in the counterfactual scenario suggested by [108] of the judgment, it is clear that Ms Bamrah would have known, or ought to have known, that an improper rate had been maintained so far as Gempride was concerned; and it would have been unreasonable or improper conduct on her part to have accepted the rate offered in those circumstances.
    3. Without making an express finding, Judge Mitchell seems to have been inclined to accept that the 9 July 2013 conversation between Ms Bamrah and Mr Shaw occurred; and, for present purposes, I am prepared to accept in Ms Bamrah’s favour that it took place as she recalled it. Ms Bamrah therefore knew that the £280 rate was being submitted to Gempride as an appropriate rate, because she had been advised by Mr Shaw that it was proper to claim it “throughout” including retrospectively. I also of course accept in her favour that, in agreeing to that course, Ms Bamrah was not being dishonest or intending to mislead, as the judge found.
    4. Nevertheless, I consider her conduct in certifying the bill in these circumstances was unreasonable or improper. She certified Part 1 of the bill of costs as accurate and as complying with the indemnity principle. As emphasised in Bailey (see paragraph 10 above), that certificate was of considerable moment, because Gempride were entitled (and, in the ordinary course of events, bound) to accept the matters certified as being true and accurate. As one would hope, Ms Bamrah was well aware of the indemnity principle – Judge Mitchell made an express finding to that effect (see [81]). It is therefore not easy to understand how, as a result of her conversation with Mr Shaw, she could sensibly have believed that it was proper retrospectively to increase the hourly rate in the bill. However, we are bound by the finding of fact of the judge that she did genuinely maintain that belief. Nevertheless, in my view, her conduct in allowing Part 1 of the bill to be submitted and then maintained with a rate which she knew was in excess of the contractual rate was at least reckless. The analysis which led her to that conclusion has certainly never been explained. I consider that her conduct permitted no reasonable explanation and, in the light of the indemnity principle, no competent solicitor acting reasonably would have certified Part 1 of the bill of costs in the circumstances in which Ms Bamrah did so. For those reasons, her own conduct was unreasonable or improper for the purposes of CPR rule 44.11
    5. In any event, for the reasons I have given under Ground A, in respect of the costs assessment, Falcon Legal are responsible for the conduct of Lawlords; and Lawlords conduct as agents of Falcon Legal has to be judged as conduct of a legal representative because it is “solicitors’ work”.
    6. In my view, the judge erred in his consideration of the legal position of Lawlords in a number of ways. I have already dealt with the agency issue. He also apparently proceeded on the basis that “the court has power under CPR 44.11 to impose sanctions on Lawlords because it is a party to the appeal”, as well as the power to make an order against it under section 51 of the Senior Courts Act 1981 and as a non-party (see [103]). However, although making findings and harsh comments about Lawlords, he made no express finding that their conduct would have been “unreasonable or improper” had it been the conduct of a legal representative. In my view, it was clearly so, for the reasons I have already given.
    7. In all the circumstances, on the basis of Ms Bamrah’s own case, I consider that in certifying that Part 1 of the bill of costs was “accurate” and that “the costs claimed… do not exceed the costs which the receiving party is required to pay me/my firm” Ms Bamrah’s conduct was unreasonable or improper conduct within the scope of CPR rule 44.11.
    8. I consequently find Ground C made good.
Ground D: Availability of BTE Insurance
    1. Mr Bacon submitted that the judge erred in finding that the statement made by Ms Bamrah in response to Point of Dispute 3, that BTE insurance was not available to her, was an accurate statement.
    2. In his skeleton argument, Mr Singh submitted that Gempride could not in practice pursue this ground, because it was dependent upon original Ground 6, which read as follows:
“BTE Insurance Allegation: Error of fact: Contrary to the evidence and the facts, the learned judge erred in finding that BTE insurance had not been available to [Ms Bamrah]”.
Ground D (originally Ground 7) was as follows:
“BTE Insurance Allegation: Error of law and/or fact: In the premises the learned judge erred in finding that there had been no misrepresentation as to the BTE position, and (in the circumstances) in failing to find misconduct.” (emphasis added).
Mr Singh submitted that the italicised words made clear that, without Ground 6, this ground must fail.
    1. Mr Singh did not pursue this argument orally; and, in my view, his reticence was warranted. In giving permission to appeal, Jackson LJ clearly intended this ground to have some substance. This ground stands on its own feet: it is a mixed matter of law and fact as to whether the statement that Ms Bamrah did not have BTE insurance available was true.
    2. The judge proceeded on the basis that, in this context, where an actual or proposed litigant has BTE insurance but chooses not to use it because the firm that he wishes to instruct will only do so upon terms that the policy does not cover, it can properly be said that BTE insurance is “not available” to that litigant. I am persuaded that the judge erred in finding that the statement was accurate on this basis.
    3. The question posed to Ms Bamrah in Point of Dispute 3, as to what other methods of financing costs were available without incurring additional liabilities, is a common question posed in detailed assessments where additional liabilities are claimed; and for obvious reasons. Where such alternative funding was available, but not taken up, that gives rise to the issue of whether the litigant acted reasonably in funding the litigation with prospective additional liabilities. That secondary issue is one which, again for obvious reasons, the paying party may wish to investigate with some care; but of course that question is not reached if alternative funding was not available. The receiving party cannot exclude the possibility of that investigation by himself assessing that he had acted reasonably in not choosing to fund the litigation by that alternative means. With respect to the judge, I do not consider that it is reasonably arguable that “availability” in this context can be construed differently.
    4. In any event, in this case, Ms Bamrah appears to have known full well what “availability” meant, because in the Funding Options Checklist which she completed at the outset of the CFA, in response to the question, “Is any ‘other funder’ available?”, Ms Bamrah responded, “Yes”, clearly a reference to the BTE insurance with ARC; and, in response to the follow up question, “If yes why has it not been used”, she said, “Refuse to fund until proceedings issued”. To the question, “Is a Before the Event Legal Expenses Insurance policy available?”, she responded, “Yes”, but indicating that permission to use it had been requested but refused.
    5. Nor do I consider the fact that on 11 June 2011 Falcon Legal wrote to AXA referring to pursuit of legal expense insurers (see paragraph 40 above) to the point. That letter does not deal unambiguously with the question of availability of insurance; but, in any event, it is clear that, whatever they had gleaned from that correspondence over two years previously, Gempride was misled by the response to Point of Dispute 3 because as a result of it they agreed not to pursue any point about the availability of alternative funding – which they immediately sought to retract when they were told that such an alternative had been available.
    6. I again of course accept the judge’s finding that, in making that response to the Points of Dispute, Ms Bamrah did not intend deliberately to mislead Gempride or the court; but as I have indicated there is the clearest evidence that Gempride was in fact misled. It was almost inevitable that it would be. As the Master commented, although the position was rectified when the CFA documents were later disclosed, costs could have been compromised on the basis that there was no alternative funding available without Gempride being any the wiser.
    7. I find this ground also made good.
Ground E: Costs of Attendance
    1. Mr Bacon submits that paragraph 7 of Judge Mitchell’s Order of 19 December 2016 is wrong in law, in that it ordered Gempride to pay Ms Bamrah her costs of personal attendance as a party to the appeal at the appeal hearing below. As she by then had other solicitors representing her, he submits that such costs are not recoverable.
    2. Mr Singh had no submission to make on the merits of this ground. He accepted that there was no authority in favour of a party to an appeal being able to recover the costs of his attendance at the hearing of that appeal; and, as I understood him, he accepted the well-established principle that a party cannot recover the costs of his own attendance at a hearing. However, he submitted that this court should not consider the ground of appeal, because the judge gave overt permission to apply in his Order of 19 December 2016, and the appropriate course would be for Gempride to apply to the county court to amend the order to exclude that part of paragraph 7, if it can be shown that it is wrong in principle.
    3. However, Jackson LJ gave permission to appeal on this ground, and I do not consider that it would be appropriate or proportionate to send this issue back to the county court for further consideration. This matter has gone on for quite long enough.
    4. In my judgment, there is no answer to this ground. Mr Singh suggested none. Ms Bamrah had solicitors on the record. She was represented in court by Leading Counsel, as well as those solicitors. She attended the appeal as a party, not as a legal representative. In those circumstances, the fact that she is a lawyer does not entitle her to claim her costs of attendance, let alone to do so at her own professional rate.
    5. I would allow the appeal on this ground.
Ground F: Costs Below
    1. As I have indicated, in paragraph 6 of his Order of 19 December 2017, Judge Mitchell ordered Gempride to pay the costs of the appeal before him and half of the costs of the appeal below. The costs claimed by Ms Bamrah under that order are apparently just short of £1m.
    2. In the usual case, if and insofar as an appellant is successful in an appeal, consequential orders are made in relation to costs including the costs below. Unless a specific point is taken in relation to costs, it is not necessary to plead a specific ground of appeal in relation to costs.
    3. In this case, although (subject to Ground E above) they only asked for the costs order below to be reconsidered as a consequence of any success it might have in respect of the substantive grounds of appeal, Gempride put that forward in a distinct ground of appeal, Ground 11 (set out above: see paragraph 89).
    4. Jackson LJ granted permission to appeal on identified grounds, which did not include Ground 11, and expressly dismissed the appeal on the other grounds. Relying upon authorities including the recent judgment of this court in R (Goring-on-Thames Parish Council v South Oxfordshire District Council [2018] EWCA Civ 860, Mr Singh submitted that, in these circumstances, this court has no jurisdiction to revisit the refusal of permission to appeal and no jurisdiction to vary the costs order below. In particular, he submitted that the court should not exercise its powers under CPR rule 52.30 to reopen the appeal in relation to that ground.
    5. I am entirely unmoved by these submissions. Without any express ground of appeal, this court has jurisdiction to make orders consequential upon the result of the substantive appeal, including orders in relation to the costs of the appeal and the costs below. We have jurisdiction to do so in this case. It is clear from Jackson LJ’s clarification of 7 March 2018 that he did not intend to exclude that jurisdiction, and indeed he confirmed that it would be open to Gempride to seek a consequential variation of the costs order below dependent upon the outcome of the substantive grounds of appeal. There is therefore no need for this court to have recourse to CPR rule 52.30.
    6. Were that recourse necessary, I would have had no hesitation in restoring Ground 11 on the basis that (i) it is necessary to do so to avoid real injustice; (ii) the circumstances are exceptional and make it appropriate to reopen the appeal; (iii) there is no alternative remedy; and (iv) the court in its discretion should allow Gempride to argue for a consequential variation of the costs order below on the basis of the success it has achieved in this court.
    7. However, for the reasons I have given, without any amendment to the formal grounds of appeal, I would allow Gempride to seek a consequential variation of the costs order below.
The Respondent’s Notice
    1. In the Respondent’s Notice, it is submitted on Ms Bamrah’s behalf that, irrespective of the merits of Gempride’s grounds of appeal, Judge Mitchell’s order to dismiss the CPR rule 44.l1 application should be upheld on the ground that Gempride, its solicitor (Mr Hines) and its Leading Counsel (Mr Cory-Wright) deliberately misled Ms Bamrah and the court below by concealing the fact that one of the issues in dispute (or not agreed) which it wished to raise was the date on which the CFA was made, i.e. the “ambush” to which I have referred above (see paragraphs 84-85).
    2. The judge dealt with this issue at [110] and following in his judgment. He referred to a submission from Mr Cory-Wright that the CFA must have been concluded after 4 January 2011 because of the VAT rate set out in it (see [110]). Mr Cory-Wright had explained that it was not until he had started to cross-examine Ms Bamrah about Part 2 of the CFA that he was able to justify raising the date of the CFA as an issue (see [113]); but, the judge concluded, this was an “ambush” and the point had been pursued in a way outside the spirit of the CPR (see [114]). However, the judge said he had dealt with the point to avoid a cloud hanging over Ms Bamrah about the possibility of this further potential misconduct (see [115]-[116]). He “unhesitatingly” accepted Ms Bamrah’s evidence that her computer would have updated the VAT automatically in all her documents in January 2011 (see [113]).
    3. It is noteworthy that Judge Mitchell, who made robust findings in relation to conduct which he considered to have been particularly inappropriate, did not greatly criticise the manner in which this point had been taken by Gempride. Indeed, I have some sympathy for Mr Cory-Wright and those instructing him. Any further allegation of dishonesty on the part of Ms Bamrah would undoubtedly have been met with a vigorous and perhaps ferocious response; and they were not satisfied that, on the basis of the evidence they had before cross-examination, they could properly allege dishonesty against Ms Bamrah in this regard. Even if they may have made an error of professional judgment – as Judge Mitchell apparently considered it to be – in my view the allegation in the Respondent’s Notice that Gempride and their legal representatives were “deliberately dishonest” goes substantially too far.
    4. In any event, any such error of judgment is unrelated to, and does not significantly detract from, any misconduct for which Ms Bamrah was responsible. It was, if anything, no more than a marginal error of judgment. The ambush may have led to Ms Bamrah being momentarily discomforted; but she quickly gave an explanation for the curious VAT rate which the judge accepted. The prejudice to Ms Bamrah was itself marginal, and it seems to me to have been restricted to the additional time and effort in dealing with the point without notice. However, the issue took very little time, of the thirteen days spent in court.
    5. Whilst in exercising its general discretion as to costs under CPR rule 44.2, the court is bound to take into account the conduct of the parties (see CPR rule 44.1(4)(a) and (5)) – and, having regard to the outcome of that issue, this is conduct that may possibly warrant some modest reflection in the costs order made – I do not consider that it is such as to result in any eradication or even diminution of any order that would otherwise be appropriate against Ms Bamrah under CPR rule 44.11.
Conclusion and Disposal
    1. For those reasons, I would allow this appeal.
    2. In those circumstances, each party urged us not to remit the matter, but to make an appropriate order under CPR rule 44.11 ourselves. Given the history of this matter, I agree that that is the appropriate course.
    3. Although we must proceed on the basis that Ms Bamrah was at no time dishonest, and the misconduct did not in the event result in costs being determined or settled on a false basis, in my view her conduct was serious even within the parameters of “unreasonable and improper“. As this court made clear in Bailey (see paragraph 10 above), a solicitor as a legal representative holds a particular position of trust; and, on the basis of that trust, when a solicitor signs a bill of costs, he certifies that the contents of the bill (including the hourly rates due from the client) are correct. The court and the receiving party are entitled to rely upon that certificate; indeed, unless there are circumstances such as to raise suspicion, the paying party cannot go behind the certificate. It is bound to accept it. In this case, although not doing so with any intention to deceive, in certifying Part 2 of the bill, Ms Bamrah certified an inaccurate bill with essential recklessness – appreciating the indemnity principle, but being persuaded by Lawlords on some unexplained basis that a retrospective increase in the claimed rate did not breach it – which led to Gempride offering to settle at an hourly rate higher than that which Ms Bamrah was obliged to pay Falcon Legal.
    4. With regard to the representation concerning the availability of BTE insurance, although made without any intention to deceive, the misrepresentation did mislead Gempride into initially conceding the availability of alternative funding as an issue. Again, Gempride made that concession because it was entitled – and, in effect, bound – to accept the representation made by Falcon Legal on trust.
    5. In the circumstances, I am in no doubt that the court should make an order under CPR rule 44.11, reducing the level of costs recoverable by Ms Bamrah in the personal injury action. Of course, those costs will in any event now be significantly reduced because of Ms Bamrah’s acceptance that the CFA was invalid: she will presumably not be able to recover any additional liabilities (such as the success uplift, or ATE insurance premium), and her claim will in effect be restricted to a quantum meruit. I leave aside all of those factors, which will be dealt with, if not by agreement, on the detailed assessment of costs.
    6. I have carefully considered whether it would be appropriate to maintain the Master’s order, that Ms Bamrah be prevented from recovering profit costs at any rate greater than the rate appropriate to a litigant-in-person. However, in all the circumstances (and notably in the light of the express finding below that Ms Bamrah was not dishonest), I consider that such an order would be disproportionate. In my view, it would do justice to the case if the half the profit costs in Part 1 of the bill as otherwise assessed by the court be disallowed under CPR rule 44.11.
    7. Therefore, subject to my Lord, Davis LJ, I would allow the appeal. I would quash the Order of Judge Mitchell dated 19 December 2016; and I would vary paragraph 2 of the Order of Master Leonard dated 5 March 2014 by deleting the first sentence thereof and replacing it with the following:
“Half of the profit costs that would otherwise be payable in Part 1 of the Claimant’s bill of costs shall be disallowed under CPR rule 44.11”.

AND NOW READ THE POSTCRIPT

    1. In his judgment, Judge Mitchell was particularly critical of Master Leonard for proceeding with the CPR rule 44.11 application without evidence from Ms Bamrah. He may have had in mind the general requirement to allow an individual an appropriate opportunity to respond to any case against him; or the observation of Sir Thomas Bingham in Ridehalgh to the effect that in wasted costs applications “a solicitor against whom a claim [for wasted costs] is made must have a full opportunity of rebutting the complaint” (see page 229D); or the particular requirement of CPR PD 44 paragraph 11.1 which provides that, before making an order against a legal representative under rule 44.11, the court must give the representative a reasonable opportunity to make written submissions or, if the representative so desires, to attend a hearing.
    2. In any event, in my respectful view such criticism was unjustified. In his directions of 18 November 2013, the Master expressly gave Ms Bamrah the opportunity to file and serve evidence. For the reasons I have given, the Master was entitled to proceed on the basis that Lawlords would consider with Ms Bamrah whether any evidence was appropriate; and, Lawlords not seeking any adjournment or further time to prepare and file evidence, he was entitled to go ahead with the 13 January 2014 hearing on the basis that Ms Bamrah, having been given a proper opportunity, did not wish to rely upon any evidence in defending the application.
    3. Of course, the judge has a flexible discretion as to how to proceed with a CPR rule 44.11 application; but, in the parallel wasted costs jurisdiction, it has long been emphasised that it is a summary jurisdiction that is only sensible and appropriate in cases where the scope of the application is narrow and clear, and may not be appropriate where there are allegations of dishonesty or breach of professional rules (see, e.g., Turner Page v Torres Design cited at paragraph 20 above, and Regent Leisuretime Limited v Skerrett[2006] EWCA Civ 1032). In Ridehalgh at page 238G-H, Sir Thomas Bingham said that the procedure must be “as simple and summary as fairness permits”, words which are reflected in CPR PD 46 paragraph 5.6 which requires the procedure to be “fair and as simple and summary as circumstances permit”.
    4. It seems to me that those observations are equally applicable to the CPR rule 44.11 jurisdiction. I appreciate that the competence and even integrity of a legal representative may be brought into issue in such an application – but that is equally the case in wasted costs applications. It is noteworthy that, in similar terms to CPR rule 46.8(2) which applies to wasted costs applications, CPR PD 44 paragraph 11.1 provides that the court must give the relevant legal representative no more than an opportunity to make written submissions or, if the representative so desires, to attend a hearing.
    5. The substantive hearing of this application took thirteen days before Judge Mitchell with a District Judge assessor, and Ms Bamrah is claiming nearly £1m of legal costs for the CPR rule 44.11 proceedings before the Master (as to half of the costs only) and then the judge. I find that a matter of considerable concern. It is essential that the courts ensure that the approach to such applications – as well as any sanction imposed under rule 44.11(2) – is reasonable and proportionate.

THE SHORTER JUDGMENT: LORD JUSTICE DAVIS

This is worth reading in itself.

Lord Justice Davis:

  1. I also would allow the appeal for the reasons given in the comprehensive judgment of Hickinbottom LJ, with which I entirely agree.
  2. I add some observations of my own, however, not least because of the scale of these costs proceedings.
  3. The original claim, a tripping claim, was settled for a sum of £50,000 (albeit at one stage £900,000 had been claimed). Thereafter the focus shifted to the quantification of the costs of the proceedings payable by Gempride. Thereafter again, it is difficult not to conclude that the focus has in reality since further shifted to the costs of the costs proceedings. At all events, it is very regrettable that the hearing below developed into a hearing taking up some thirteen days of court time. The costs of each side are said to run into many hundreds of thousands of pounds. Given the nature of the original claim, as compromised, this protracted costs litigation has been unfortunate in the extreme. But there it is.
  4. Mr Singh understandably emphasised that no challenge to the primary findings of fact is available to Gempride. He also pressed on us the advantages the judge had in conducting the trial and evaluating the evidence: in the context, moreover, of a case on a matter of costs where the court’s jurisdiction is pre-eminently an essentially discretionary and evaluative jurisdiction. He carefully took us through the relevant authorities indicating the relatively limited circumstances in which an appellate court is entitled to interfere in circumstances such as these.
  5. In the present case, however, with all respect to the judge, I am in no doubt that the judge in a number of ways adopted a wrong approach as a matter of principle; and, having done so, he ended up with a conclusion that was plainly wrong. That being so, this court is not only entitled to interfere: it should interfere.
  6. Although the judge towards the beginning of his judgment (at [16]) recited the principles set out in the case of Bailey and although later (at [50]) he said that the accepted that there was no need for the alleged misconduct under CPR rule 44.11 to be dishonest, he thereafter, as I see it, failed to give any proper application of those principles to the case in hand.
  7. In this regard, it is evident from his judgment, read as a whole, that the judge had been persuaded into error in taking it that, in the circumstances of this particular case, the improper conduct alleged must amount to dishonesty; and that, once it was concluded that there was no dishonesty, it followed that there was no impropriety for the purposes of the rule. But that reflects neither the true scope of the rule nor the nature of Gempride’s own case, which by no means rested solely on dishonesty.
  8. In this respect, moreover, the judge clearly was wrong in principle (as explained by Hickinbottom LJ) in effect to disassociate Ms Bamrah from responsibility under CPR rule 44.11 by reason of the conduct of Lawlords. The judge clearly misunderstood and misapplied the law on ostensible authority in this regard. (Contrary to a suggestion made at one stage in argument, whether or not Lawlords had been made party to the proceedings by this stage is irrelevant for this purpose.) This error then, as I see it, infected the judge’s whole approach to certification and to the indemnity principle.
  9. It may be (as Ms Bamrah had been concerned to emphasise in her witness statement) that Ms Bamrah relied entirely on Lawlords for costs advice and assistance. But she was the solicitor who signed the certificate. It was on her certificate – the certificate of an officer of the court – that the paying party and the court itself would rely. The paying party and court would have no way of knowing of any deficiencies in the advice she may have been receiving: and she had (with regard to the paying party and court) to bear responsibility for the signed Bill: a Bill she in fact had herself spent one and a half hours in considering. She cannot entirely disassociate herself (vis-à-vis the paying party and court) from responsibility for her certificate by seeking to cast all the blame on her costs draftsmen. Indeed to adopt such an approach would, in my opinion, represent an unfortunate erosion of the underpinning rationale for a signed certificate in a Bill.
  10. Mr Singh pointed out that there was evidence that – as here – solicitors did sometimes sign off certificates to Bills before they were finalised. Maybe that is so. But such a practice will usually be unwise; and in any event it cannot derogate from the ultimate responsibility for the signed Bill as served. Besides, it is absolutely plain on the evidence that thereafter Ms Bamrah knew that an hourly rate of £280 throughout had continued to be claimed (and indeed an offer of £241 per hour was thereby procured). This, overall, in my view, was in truth a serious case of breach of the indemnity principle, even though (as found) there was no dishonesty on her part. It plainly amounted to improper and unreasonable conduct for the purpose of the Rule.
  11. It is true that in the rather confused paragraph 109 of his judgment the judge did, ostensibly, deal with the alternative scenario of whether her conduct was “unreasonable”, once the allegation of improper conduct (in the sense of dishonest conduct) was rejected. But it is evident that the judge had misunderstood Gempride’s case on this: for it is simply wrong to say that the case was “never about unreasonable conduct”. Besides, the cursory and unreasoned conclusion that she was “not guilty” of unreasonable conduct cannot accord with the circumstances of the case: indeed the language here used and in the following sentence (“has proved her innocence”) indicates that the judge’s thinking still was wholly dominated by considerations of dishonest misconduct.
  12. On the issue of BTE insurance, it is of note that the Answer given, as signed off by her, of “Not available” did in fact mislead. That Answer, moreover, was completely contrary to the answer she had herself previously given internally in the Funding Options Checklist. As found, she had not intended deliberately to mislead. So be it. But such an answer at the least was “calculated” to mislead (cf. paragraph 11.2 of CPR PD 44). The Answer clearly in its effect operated to mask the actuality. The judge’s conclusion that the answer given was “accurate” is completely untenable. BTE funding demonstrably had been available. The fact that Ms Bamrah, for her own reasons, had then chosen not to avail herself of it cannot rebut that point. This Answer, in my opinion, unquestionably was improper or unreasonable, within the meaning of the Rule.
  13. As to Ground E, in common with Hickinbottom LJ, I can see no proper basis for awarding Ms Bamrah her own costs of attendance at the hearing. She attended as client, not solicitor. There could not be, in effect, double recovery of solicitors’ attendance costs.
  14. As to the costs point constituting the original Ground 11, it is clear that Jackson LJ had both the power and the entitlement to correct his previous order in this regard: as does this court. It would be a monstrous injustice not to do so, in the circumstances.
  15. The points raised in the Respondent’s Notice also cannot avail Ms Bamrah. First, no formal objection was raised by Mr Singh at the time to the line of questioning being developed by Mr Cory-Wright. Second, the judge did not intervene to stop it altogether. Third, and not least, it had no causative impact on the outcome: since the judge accepted Ms Bamrah’s explanation and accepted that there had been no dishonesty or backdating. But in any event I totally reject the argument that there had been any misconduct on the part of Mr Cory-Wright or that Mr Hines’ statements had been deliberately misleading. They were entitled to the view that this was not an issue, as such, to be identified prior to the hearing: whatever their (very understandable) suspicions as to the true dating of the CFA. I am not sure there was any error or fault at all in their approach. But even if there was then it was an entirely venial error of professional judgment. There was, I conclude, no professional misconduct or deception on their part.
  16. I have to say that I found the judge’s remarks on this aspect to be very high-minded: in a way perhaps also reflected in his strong criticisms of Master Leonard. In fairness to Master Leonard, I should state that I too consider those criticisms of him to have been misplaced. The Master had by his previous order given Ms Bamrah the chance to put in evidence. In a case crying out for explanation, Ms Bamrah at that stage gave none. It is now known that she apparently did not even know of the hearing and had not been advised of the need to put in evidence. Further, Mr Ocego declined an adjournment of the hearing; and what he then said, purportedly on instructions, at the hearing if anything made matters even worse. But Master Leonard could not know any of this. In such circumstances, I consider it entirely unsurprising that he both proceeded with the hearing as he did and reached the conclusion that he did, on the materials then before him.
  17. In the result, therefore, I agree that the appeal should be allowed. I also agree that, in the circumstances of this particular case, the appropriate sanction to be applied should mean that Ms Bamrah should recover one-half of her profit costs (as to be assessed) under Part 1 of the Bill: the other half of such profit costs are to be disallowed.
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