THE COSTS JUDGE OVER YOUR SHOULDER: A WORKING EXAMPLE: THE DETAILED ASSESSMENT OF COSTS: HOURS, SUPERVISION AND THE USE OF COUNSEL

The judgment of Master Rowley in  Lyle & Anor v Bedborough & Anor [2022] EWHC 1628 (SCCO) gives an insight into the process of detailed assessment of costs. The Master considered the complexity of the case, the use of counsel and the need for supervision.

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THE CASE

The Master was assessing a bill of costs following a successful application for an order that there had been a transaction at an undervalue.  The bill totalled £169,523.16.

THE CHALLENGES

A flavour of the challenges can be seen here.  Significantly there was an absence of attendance notes and a reliance on time records.

1. 1. By the time Mr Fairburn came to make submissions specifically on the documents schedules, he was aware that there were no attendance notes before the court to support the times claimed. The timings were taken from the applicants’ solicitors’ time recording systems. In the absence of attendance notes, Mr Fairburn suggested that there was no way of knowing for certain whether entries during the period in which the specific disclosure application was being contemplated or actioned were in fact wholly or partly to do with that application and as such should be excluded from the bill.

1. 1. Mr Fairburn referred specifically to the time of approximately 16 hours being claimed for the pre-action letter. He described it as picking up correspondence that had already occurred between the trustees and CJJ Law (Mr Fairburn’s firm). In his view, it should have taken no more than one hour to draft that letter.

1. 1. Mr Fairburn also relied upon the bundle that was produced for the specific disclosure application and said that it required little or no amendment in order to convert it into the trial bundle. The applicants did not have the costs of producing the specific disclosure bundle and therefore the time spent on the trial bundle ought to be of very little time or cost as far as his client was concerned.

1. 1. In addition to his oral submissions, Mr Fairburn relied upon the extensive challenges set out in the annotated schedules. It is impossible for me to precis those challenges without regurgitating them at some length. They continue the theme of there being extremely long periods of time claimed for little work done. At the end of the first schedule, the second respondent’s position is set out in summary as follows:

“R2 will say that a total of 31 hours 42 minutes is agreed. R2 accepts a level of supervisory partner input is reasonable but taking into account that much of the work with counsels’ input throughout; service of documents; diary entries; bundles; indexing and engrossing counsels drafts; routine correspondence; agreeing extensions and reporting progress could have been undertaken at a junior level. R2 proposes national level solicitor’s rate of £185×30.7 hours = £5627.70…”

1. 1. There is a very similarly drafted summary at the end of the second schedule. The agreed time is 40 hours rather than 31 hours 42 minutes. There is also mention made of the instruction of counsel and the management of the legal issues by counsel together with the taking of instructions which were said not to be complex. At 40 hours multiplied by £185 per hour, the second respondent offered £7,400.

1. Accordingly, the second respondent offered a total of 71 hours 42 minutes as against the 391 hours 36 minutes claimed.

THE JUDGMENT

1. When the chronology of events in this case is looked at in the bill, it is striking as to how few procedural steps there actually are. It seems to me that there is a good deal of force in Mr Fairburn’s submission that, other than the application to transfer to the High Court and the failed application for specific disclosure, there was little in this case save for witness statements prior to a hearing of the evidence. At first blush therefore the number of hours claimed is surprising.

DOCUMENTS

1. Each document runs to four or five pages. More than 15 hours has been claimed for drafting each of these documents. Having reviewed them, I cannot see that such times can possibly be considered reasonable between the parties. These are not isolated documents since I could quite easily have taken the draft response to the second respondent’s reply to the letter of claim, for example. These four items contain the great majority of the work claimed in the first four pages of the first schedule.

ROUTINE CORRESPONDENCE

1. When assessing the bill at the hearing, I took the view that the routine communications were very largely recoverable. They did not seem to me to be particularly numerous and the ones that I reviewed were required for the running of the case. Similarly, I allowed a good deal of the timed attendances that had been claimed. It is unusual in my view for the approach to time spent on documents to be completely different from the time spent on timed and routine communications, but it is by no means unique.

RIGOROUS RECORDING DID NOT AMOUNT TO RECOVERABLE COSTS

1. 1. Judging by the entries, there seems to have been a rigour imposed by all fee earners make sure that time on the file was amply recorded whenever it was opened. This applies to the minor fee earners as well as the major ones. For example, Ms Gallop drafted a certificate of service on 8 January 2019. The following day she amended that certificate and then drafted correspondence to file the certificate (along with the certificate relating to the first respondent). A claim of 12 minutes for drafting the certificate is not unusual but ultimately 30 minutes is claimed for dealing with the certificate. These are only modest entries in themselves, but they highlight the fact that it is not simply the longer times claimed which are surprisingly high.

1. The rigour of recording time spent is not matched, in my view, with a rigorous consideration of whether all of the time ought to have been recorded, or at least sought from the paying party. For example, 5 hours 24 minutes is claimed by Ms Farmer in November 2017 for what is obviously reading into the file. Such time is a matter between the solicitors and their client. It is not for the opponent to have to pay.

THE SIGNIFICANCE OF THE ABSENCE OF ATTENDANCE NOTES

1. 1. There is obviously some conjecture involved in considering the time claimed in the absence of any attendance notes but that is a matter for the receiving party. In the absence of such notes, then inevitably any doubt goes towards the paying party on the standard basis. It may not matter a great deal however since the time claimed for documents such as those that I have highlighted are undoubtedly unreasonable, at least as between the parties.

THE USE OF COUNSEL, SUPERVISION AND TIME SPENT

1. 1. The alternative approach is to take something of an impressionistic broad brush to the times that have been claimed bearing in mind everything that I have seen and heard during the course of the hearing and my subsequent review of the documents. I take into account the fact that this case was essentially run by a junior fee earner and that she could be expected to take longer to accomplish tasks than Mr Caldicot would be expected to have taken. The fact that Ms Farmer was the main fee earner also means that if she were involved in the same task as another fee earner, then it would be her time that would be allowed if there was any duplication. Consequently, the proportion of her time that is recoverable in my view is rather higher than either Mr Caldicot’s or Mr Bowen’s.

1. 1. A, Is far as Mr Caldicot is concerned I do not accept that the involvement of counsel negates the need for supervision by a partner in the firm. Whilst both counsel and Mr Caldicot might provide Ms Farmer with an experienced view, those views come from different perspectives and they are not mutually exclusive. Nor do I accept Mr Fairburn’s argument that because counsel has drafted documents, there was no need for the solicitors to review such documents or alternatively provide drafts on which counsel was to work. Clients expect solicitors to be able to discuss and advise them on such issues as well.

1. 1. Nevertheless, in relation to the first schedule, it seems to me that a good deal of Mr Caldicot’s work relates to the period before Ms Farmer was involved. As such it is non-supervisory work but instead it is in the guise of the main fee earner at the time. In the second schedule, it does appear that his time is more accurately described as supervisory and recoverable to a greater extent.

1. In relation to Mr Bowen, I am afraid I simply cannot comprehend the amount of time that he has recorded in the first schedule. It is often the fate of the most junior fee earner to do work that is not always recoverable between the parties. But there is a stark difference between the time recorded by Mr Bowen for the work he did in the first schedule and the entries for Ms Gallop and the others in the second schedule.

THE HOURS ALLOWED

This shows the breakdown between the hours claimed and the time allowed.

REDUCTION OF TIME CLAIMED FOR CHECKING THE BILL

1. Finally, I deferred dealing with the bill checking time of 5 hours claimed as part of item 65 in the bill. I would not have expected more than an hour to be claimed for checking and signing a bill of this size. The need to answer the bill drafter’s queries is not usually time recoverable between the parties. The question at the time of the hearing was whether I should disallow all of the time given the extent to which the bill had not been drafted in accordance with the order and the checking had not picked up that fact. Having now been through the documents schedules, I take the view that a complete disallowance of the bill checking time would not be appropriate and I therefore allow one hour of Ms Farmer’s time under this item.