THE CHORLEY PRINCIPLE APPLIED TO A SOLICITOR WHO DID NOT HAVE THEIR OWN “FIRM”: DEFENDANT HAD TO PAY CLAIMANT’S COSTS ON THE USUAL BASIS

A post earlier this week considered the “Chorley” principle in relation to a solicitor litigating and recovering their costs. I am grateful to my colleague Matthew Smith for sending me a copy of the judgment of Master Rowley in the case of Poole -v- Scott-Moncrieff (17/11/2020) where important observations are made about a solicitor recovering costs.  A solicitor acting on his own, without a firm on the record, was still entitled to recover the costs in full, without discount. A copy of the judgment is available here Judgment Poole v Scott Moncrieff (corrected) (1)

 

… where a practising solicitor represents his or herself, it seems to me that there is no distinction in principle between a solicitor in practice on their own account, or in partnership, or as here acting on their own account as a consultant. The same professional obligations apply to the prosecution of the case, and the same use of professional skill and experience is employed, regardless of the precise description of the nature of the practice.”

THE CASE

The claimant solicitor had been a consultant with the defendants’ practices.  After the arrangement ended there was a dispute about the remuneration that the claimant was entitled to.  This led to litigation and a four day trial after which the claimant was awarded the sum of £85,313.04 together with costs.

WHAT COSTS WAS THE CLAIMANT SOLICITOR ENTITLED TO

The trial judge made an order “required the parties to apply for a preliminary hearing before a costs judge to rule on the question of whether
the claimant was entitled to claim costs as a solicitor representing himself or alternatively as a litigant in person”.

In fact that order was not followed fully and there was more in the way of a fuller assessment.

THE WAY IN WHICH THE CLAIMANT REPRESENTED HIMSELF

The claimant solicitor had worked as a consultant at various firms but these firms had never represented him during the course of the litigation.

THE ARGUMENTS FOR EACH SIDE

The claimant argued that the Chorley principle applied. The defendant argued that it could not apply where the solicitor did not have their own practice.

22. Mr Smith’s submissions were straightforward. The Chorley principle applied to Mr Poole who was acting on his own behalf and was bringing the necessary skill and experience to the litigation to be entitled to charge fees as if he had instructed another firm of solicitors rather than done the work himself. The decision in EMW had said in terms that nothing in either Malkinson or in the various incarnations of the CPR had restricted the Chorley principle. Consequently, any infelicitous drafting of rule 46.5(6) did not stand in the way of recoverability.
23. Mr Restall’s submissions were, given the broad terms of the Chorley principle, inevitably more involved. In essence, Mr Restall required me to find that, whilst the broad Chorley principle might apply, the terms of CPR could not be ignored and had to be interpreted in the light of the more recent decisions which contemplated the circumstances in which a solicitor could recover costs over and above those of a litigant in person. It could not be the case that every solicitor who was involved in litigation could simply claim their hourly rates. That would mean that the wording of CPR 46.5(6) included solicitors as potential litigants in person for no purpose. Furthermore,  it did not deal with the distinction drawn by Chadwick LJ and which, though not
approved by Malkinson, was not overruled either.
24. This led Mr Restall to submit that a solicitor who wished to come within the terms of the Chorley principle, needed to have his own practice as a solicitor. This might be as a sole practitioner or in partnership with others. The authorities referred to the loss of money to the solicitor who acted on his own behalf and therefore was unable to act on behalf of clients. This was a loss to the practice.
25. In Mr Restall’s submission, the claimant could not demonstrate any of these requirements. He did not run his own firm. He was not instructed by clients as such but was a consultant to other firm’s clients. There was nothing to show that he was unable to carry out any other work in order to be able to run his own case. Furthermore, the claimant’s practice was as a personal injury and clinical negligence lawyer. The contractual dispute with the defendants did not utilise his skill and experience.
26. For these reasons, Mr Restall argued that the true nature of the claimant was as a solicitor litigant who ran the case in his own time rather than as part of his practice, to use the distinction set out by Chadwick LJ. As a result, he ought only to be entitled to the prescribed litigant in person rates, or if he demonstrated a financial loss, then potentially up to 2/3 of a solicitor’s fees.
27. Finally, in order to draw a comparison with a sole practitioner, Mr Restall pointed out the lack of overheads for which the claimant would be liable. Despite this, and even though he would only receive a percentage of fees that he earned in the firms with which he was consulting, he would be receiving 100% of the fees if the claimant’s argument was right regarding the Chorley principle.

THE MASTER’S DECISION: CHORLEY APPLIED: CLAIMANT SOLICITOR ENTITLED TO RECOVER HIS COSTS ON THE USUAL BASIS

The Master accepted the claimant’s submissions.  The Chorley principle applied. The claimant was entitled to recover his costs in full.

28. Prior to 21 December 2002, a partnership could have no more than 20 members. Consequently, solicitors’ firms only ranged from sole practitioners to 20 partner firms and were much more similar in terms of their structures than is now the case. Since 2002, limited liability partnerships and alternative business structures of all kinds have made their appearance. It is easy to see in such circumstances that a concept such as the Chorley principle, where a solicitor acts in his own action, appears to be from a different age redolent of individual practice or small partnerships.
29. However, as Mr Smith pointed out, the redrafting of the costs rules only occurred in  2013 and there was no rewriting of the rule encapsulating the Chorley principle in any material fashion. Instead, as business structures evolve, the case law has confirmed that such evolution remains compatible with the rationale of the principle originally espoused in 1884.
30. When the practice of solicitors was as sole practitioners or in small partnerships, it is easy to imagine that most solicitors would represent themselves or use managing clerks or other employees within their firm to deal with the litigation. It is in that context that the Chorley principle came into being. A solicitor could either represent himself or instruct another to represent him. In the latter case, it would be more expensive since instructions et cetera would need to be taken. The Chorley principle is a pragmatic one of recognising the likely outcome if a solicitor was involved in proceedings.
31. Nowadays, however, there are many solicitors who are employed in other fields besides the law. Such non practising solicitors would in my view come within the definition of a litigant in person as set out in CPR 46.5(6). Whilst they might have learned professional skills and knowledge to equip them to deal with the litigation on their own account when they qualified, a non-practising solicitor would rather more easily fit within the category of dealing with litigation in their spare time rather than in whatever field they were employed during working hours.
32. In my judgment this is the explanation of where a solicitor would be a litigant in person under CPR 46.5(6). However, where a practising solicitor represents his or herself, it seems to me that there is no distinction in principle between a solicitor in practice on their own account, or in partnership, or as here acting on their own account as a consultant. The same professional obligations apply to the prosecution of the case, and the same use of professional skill and experience is employed, regardless of the precise description of the nature of the practice.
33. Furthermore, I do not think that the fact that the claimant practises in one form of civil litigation precludes him from claiming professional fees if the case in which he himself was involved relates to a different sphere of civil litigation. The CPR is the same and it is, in my view, far too narrow approach to the Chorley principle.
34. It is self-evident that a practising solicitor could represent himself in proceedings, whether he brought them or was defending them. It is only if he gets into unusual circumstances, such as the solicitor defending himself in the Crown Court in the case of in re Sharpe, where a solicitor is unable to represent himself professionally, which prevents the recovery of solicitors fees.
35. The Chorley principle does not suggest that there should be some forensic accounting to determine how much of the fees claimed should be deducted to reflect overheads et cetera. In the case of Robinson v EMW Law LLP [2018] EWHC 1757 (Ch) Roth J allowed the claimant’s hourly rate without deduction saying:
“40. Accordingly, I consider that Mr Robinson is entitled to
recover costs for his own time spent as a solicitor on his case.
The rate for assessment is not the rate which Fidelity would
charge out specifically for Mr Robinson’s services, or the net
amount Mr Robinson would receive in such an event pursuant to
the consultancy agreement. He was not here acting under that
agreement, which I therefore regarded as irrelevant. The rate is
to be assessed as the reasonable rate for the litigation services
which were carried out by Mr Robinson instead of being carried
out by Fidelity.”
36. It seems to me that the position is the same in respect of the claimant here. There is no reason to embark upon any enquiry as to his consultancy terms with the various practices with which he has consulted. He is representing himself and should receive a reasonable rate for so doing.”