APPELLANT’S COSTS OF APPEAL WERE “MANIFESTLY UNREASONABLE” : COURT OF APPEAL REDUCES £71,072 SCHEDULE TO £13,000
A short postcript to the Court of Appeal judgment in Jofa Ltd & Anor v Benherst Finance Ltd & Anor [2019] EWCA Civ 899 makes some telling remarks about the cost of appeals.
“the amount of costs claimed by the appellants – for an appeal against a costs order for £23,000 – is £71,072. To say, as counsel for the appellants does, that this figure “may be seen as slightly higher than anticipated” is a mastery of understatement.”
THE CASE
The Court of Appeal allowed an appeal against an order that the appellants pay a proportion of the respondent’s costs in applying for a “Norwich Pharmacal” order. Replacing the judge’s order with no order for costs.
THE COSTS OF THE APPEAL
Lord Justice Leggatt made some observations about the successful appellant’s schedule of costs.
“Postscript on costs
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As the successful party, the appellants should be paid their costs of this appeal which, as the preparation was straightforward and the hearing lasted less than two hours, should be summarily assessed. For the purposes of summary assessment, the appellants have filed a statement of costs with the court in the usual way and each party has made brief written submissions on costs after receiving the judgment in draft. Remarkably, the amount of costs claimed by the appellants – for an appeal against a costs order for £23,000 – is £71,072. To say, as counsel for the appellants does, that this figure “may be seen as slightly higher than anticipated” is a mastery of understatement.
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Counsel’s own fees for advice on the appeal and for the hearing amount to £6,662.50 in total, and in my view are reasonable and proportionate. The costs claimed by the appellants’ solicitors, AMZ Law, however, include very large sums which appear, on their face, to be manifestly unreasonable as between themselves and their clients, let alone as costs claimed from the respondents. To give some glaring examples, costs are claimed for: (i) three solicitors each attending on Mr Farah for 5 hours; (ii) 15 hours spent “considering” the witness statement filed by the investors in support of their Norwich Pharmacal application, most of which was of little relevance to the issues on this appeal; (iii) 14 hours of “legal research” by two solicitors; (iv) another 14 hours spent preparing a 5 page witness statement from Mr Farah, although no application was ever made (or could realistically have been made) to introduce this statement as evidence on the appeal; (v) 18 hours spent preparing a straightforward bundle of documents (of some 200 pages), with a further 14 hours then spent “reviewing” the bundle; and (vi) 8 hours of attendance by each of two solicitors at a hearing for which the time estimate was one hour, with a further two hours each of travelling time.
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As indicated in the Guide to the Summary Assessment of Costs, para 65, where both counsel and solicitors have been instructed on a short appeal, the reasonable fees of counsel are likely to exceed the reasonable fees of the solicitor, the main element of the solicitor’s work is to instruct counsel and prepare the appeal bundle, and there is usually no reason for the solicitor to spend many hours perusing papers or to work on legal submissions when the legal argument is being handled by counsel. In my view, a reasonable allowance for the costs incurred by the appellants’ solicitors on this appeal is £4,500 (representing 20 hours of work at an hourly rate of £225). Taking into account court fees of £1,727 and some other minor expenses incurred, I would summarily assess the costs recoverable by the appellants in a sum of £13,000.”