COSTS REDUCED BY 70% BECAUSE OF MISCONDUCT IN ASSESSMENT (AFTER BEING REDUCED BY 95% DURING THE ASSESSMENT): CLAIMANT’S APPLICATION FOR PERMISSION TO APPEAL REFUSED

The judgment of Mr Justice Murray  in AB v Secretary of State for Justice [2023] EWHC 72 (KB) is part of an extraordinary saga in relation to a costs assessment. Costs had been reduced by 95% on assessment and reduced by 70% again due to misconduct during the assessment process. However that is only part of a much longer story.

“As the Defendant states, and as this Court finds, no reasonable Solicitor and officer of the Court could properly have signed the certificate on the Claimant’s Bill. It has been reduced by approximately 95%.”

THE CASE

The claimant, a solicitor, had brought several actions and costs were being assessed.  The costs assessment process was lengthy and complex.  The costs judge reduced the claimant’s initial bill by 95% on assessment.  The bill was then reduced by a further 70% due to the claimant’s misconduct in the assessment process.

The claimant complained about the conduct of the judge, and has issued proceedings against her.  He appealed seven of the costs orders that had been made.

Mr Justice Murray refused permission to appeal, stating the applications were totally without merit.

MISCONDUCT ON ASSESSMENT

Mr Justice Murray set out the findings of the costs judge in relation to misconduct.

1. 1. On 23 April 2021, the Judge handed down her lengthy judgment on various issues relating to the detailed assessment of the bills, in particular the AB Bill (“the Misconduct Judgment”). Most of the Misconduct Judgment is concerned with the Judge’s findings of misconduct by AB throughout the proceedings. The Misconduct Judgment runs to 167 paragraphs and contains 3 appendices across 35 pages. In view of the anonymity order made by Jeremy Baker J in 2014, the public version of the Misconduct Judgment is anonymised.

1. 1. The Judge summarised her “Headline points” in the first five paragraphs of the Misconduct Judgment. The first paragraph notes the length of the unabridged judgment and that it deals with certain key legal principles, including as to misconduct, but also that a significant portion of the judgment consists of her findings of fact regarding misconduct. She directed that any appellate court asked to consider any application for permission to appeal the judgment should have the “complete and unabridged” version of the judgment.

1. 1. The reason that she felt the need to make a direction on this otherwise obvious point is clarified at paragraph 160 of the Misconduct Judgment where she mentioned that among what she found to be AB’s unreasonable and/or improper actions during the course of these proceedings was “his use of cut and paste to omit key phrases when seeking to challenge Costs Judge James’ previous Orders”. This was misleading and was her reason for the direction in the first paragraph of the Misconduct Judgment.

1. 1. The next four paragraphs of the Misconduct Judgment read as follows:

“2. AB acted for himself, initially through a law firm in which he is a Partner and subsequently through a limited company of which he is the sole Director. AB is both the Claimant and the Solicitor for the Claimant and has indisputably acted with the Claimant’s full knowledge and upon instructions. He is also a Solicitor Advocate bound by ethical and professional standards including the Code of Conduct for Solicitors. This matter has gone on for so long (the main Order for Costs was made as long ago as 28 November 2014) that the Code has changed during these proceedings; any references to the Code, are to the relevant Code at the time.

3. This Court made an Order for Directions on 2 November 2020, including Directions regarding written Submission in relation to Misconduct, which it did after both parties had accused each other of Misconduct, alleged to have occurred during both the underlying proceedings (‘the main action’) and the Detailed Assessment proceedings. The assertions by AB’s law firm in Points of Dispute on the Defendant’s second Bill that there had been ‘sharp practice and incompetence’ (Objection 2, items 1-3) and that the fees claimed, indicated ‘something ulterior’ (Objection 26, item 21) are two of the milder examples. AB stating in a Hearing held remotely via BT MeetMe (and audio recorded) on 14 September 2020 that Costs Judge James had fabricated matters and refusing to continue with the Hearing, and AB stating in Court 95 on 3 May 2019 that he had had ‘absolute shit’ from the Defendant (transcript, page 36, paragraph E) before walking out of Court several times, leading that Hearing to come to an equally abrupt end, are two of the more extreme examples; there are more below but this is not a comprehensive list.

4. Under AB’s fee structure as a Partner in his own law firm back in 2014, his charge-out rate was already £779.48 per hour. The 2014 Guideline Hourly Rate (‘GHR’) was £217.00 per hour. That is just under 28% of the rate claimed by AB in 2014. Had matters continued with his law firm under the same free structure, by 2021 AB’s hourly rate would have been £1,519.00 (see Appendix 1 below for calculation) 7 times the GHR. AB’s current fee structure as sole Director of his limited company is not known. In the Claimant’s Bill, 100% Success Fee was claimed on top of AB’s law firm’s hourly rates, despite (on the facts of this case) being irrecoverable. These, plus other matters including AB’s habitual sending of multiple letters in a single day to the same recipient (on one occasion sending 17 letters to Counsel within a 31-minute period) and charging each one at the full 6-minute unit Grade A rate plus 100% Success Fee, have led to egregious overcharging in a matter where costs were being claimed against the public purse, given that the Defendant is the Ministry of Justice.

5. As shown below, this Court finds that the actions of AB, his law firm and his limited company, have substantially lengthened and made these proceedings more complicated and expensive, with multiple breaches of professional standards and the Civil Procedure Rules in terms of wasting Court time alone. Worse, as the Assessment has gone on, AB, his law firm and his limited company have repeatedly alleged, in writing and at Hearings, that the proceedings, and/or the conduct of the Defendant, this Court and others, are causing the Claimant ongoing distress, which (he asserts) will lead to further litigation. The fully contested Trial in the main action resulted in damages of £2,251.00 for AB as Claimant and a Bill of £936,875.78 for AB’s law firm, who time spent is alleged to total 1,313 hours and 18 minutes. The man on the Clapham Omnibus might think, in the main action and in the proposed future litigation, that costs for AB, his law firm and his limited company (rather than damages for the Claimant) have been the true driver of this litigation.”

1. 1. In contrast to her extensive findings of misconduct against AB, the Judge notes at paragraph 84 of the Misconduct Judgment that AB had made assertions (in his points of dispute on the Second MoJ Bill) that there had been “sharp practice and incompetence” on the part of the MoJ and that the fees claimed by the MoJ indicated “something ulterior”. She noted that he had also used the term “fraud” to describe the MoJ’s conduct. However, AB had not filed any submissions or evidence to substantiate these assertions. She noted that she had seen nothing in the MoJ’s conduct to warrant the accusations made by AB. She therefore made no finding adverse to the MoJ in respect of its own conduct, pursuant to CPR r 44.11.

1. 1. At paragraphs 86 to 93 of the Misconduct Judgment, the Judge set out her reasons for concluding that it was reasonable and just to determine the issue of misconduct on the papers and recordings of hearings, without an oral hearing. At paragraphs 102-103, the Judge added the following:

“102. Due to the way in which Hearings in the Royal Courts of Justice are organised, every interaction between Costs Judge James and AB, AB’s law firm and AB’s limited company, has either been reduced to writing (via email or otherwise) or has been audio recorded in a Courtroom or via BT MeetMe etc. Likewise, the Emergency Injunction Hearing before Cavanagh J on 13 September 2020 was audio recorded.

103. There are more than sufficient recorded examples of unreasonable and improper conduct, upon which to reach a fair decision on this issue. Any perceived unfairness to the Claimant in respect of the lack of a Hearing on Misconduct has been weighed against the fact that every incident upon which this decision depends, can be read or listened to at the next tier if the need should arise.

104. In this Court’s judgment, the behaviour of AB, AB’s law firm and AB’s limited company constitutes Misconduct under CPR Part 44.11 in and of itself. More significant is the way in which such behaviour has manifested at times or in ways which appear calculated to turn matters in a particular direction. This Court has not enumerated each and every incident (AB’s conduct has been consistently poor) but has concentrated upon incidents where there is an underlying concern that the misconduct in questions, appears to have been deployed deliberately in an attempt to gain some advantage in the litigation.”

1. 1. The Judge set out her findings of fact on specific instances of misconduct for the purposes of CPR r 44.11 at paragraphs 105-153 of the Misconduct Judgment.

1. 1. At paragraphs 154-155 of the Misconduct Judgment, the Judge set out the impact of her findings on the assessment of the AB Bill as follows:

“154. The Claimant’s Bill as drawn, at £936,875.78, has been assessed to approximately £55,000.00. The disallowance of Success Fee (£368,929.95) and most of the Bill drafting (£162,010.42, not to double count the success fee) with VAT thereon, account for some £637,128.44 of the reduction and it is this Court’s Judgment that it was both unreasonable and improper to pursue both of these claims. There have been further reductions due to over-recording of time, claiming at 100% costs which were allowed at just 20% and other factors. Given that those reductions amount to nearly a quarter of a million pounds more, it is this Court’s Judgment that the decision to present the Claimant’s Bill in its original state was both unreasonable and improper and was Misconduct worthy of sanction under CPR Part 44.11.

155. As the Defendant states, and as this Court finds, no reasonable Solicitor and officer of the Court could properly have signed the certificate on the Claimant’s Bill. It has been reduced by approximately 95%. Had it been properly drawn, it would have been assessed on paper initially, by the process set out in CPR Part 47.15. The fact that it has unnecessarily gone to a full detailed assessment (with both live Hearings being abandoned due to AB’s actions on 3 May 2019 and 14 September 2020) is the fault entirely of AB, AB’s law firm and AB’s limited company. This Court agrees with the Defendant that, when all the relevant circumstances, instances of improper and unreasonable conduct and breaches of Rules and Practice Directions are taken into account, in the round, this matter is a paradigm case for a very substantial reduction for misconduct under CPR Part 44.11.”

1. 1. At paragraphs 156-160 of the Misconduct Judgment, the Judge gave her reasons for her decision under CPR r 44.11 to reduce AB’s assessed costs by reason of misconduct by 70%.

1. 1. In the remaining paragraphs 161-167 of the Misconduct Judgment, the Judge indicated next steps and noted that the anonymity order remained in place but that the MoJ had indicated an intention to apply for the anonymity to be lifted. Pending that, the anonymised version of the Misconduct Judgment would be made a document of public record in the normal way.

1. 1. On 4 May 2021, the Judge made an order to, among other things, give effect to the findings in the Misconduct Judgment. The order included 12 recitals, including in the second recital noting that, after a further small adjustment, the provisional assessment of the AB Bill was revised to £54,014.99 and summarising in the fifth recital, in general terms, her conclusion on the question of AB’s misconduct for the purposes of CPR r 44.11.

1. 1. In the order of 4 May 2021, the Judge, among other things:

i) ordered AB to pay the MoJ’s costs (together with accrued interest) of the following:

a) the MoJ’s application dated 6 April 2018 for a DCC, on the indemnity basis, summarily assessed in the sum of £4,500;

b) the hearing on 3 May 2019, on the indemnity basis, summarily assessed in the sum of £12,750;

c) the MoJ’s application for directions dated 19 December 2019 and the Set-aside Application, on the standard basis, summarily assessed in the sum of £15,000;

d) AB’s application dated 26 June 2020, on the standard basis, summarily assessed in the sum of £3,000;

ii) dismissed AB’s application to reduce under CPR r 44.11 the assessed costs on the First MoJ Bill and the Second MoJ Bill by reason of misconduct;

iii) allowed the MoJ’s application to reduce under CPR r 44.11 the assessed costs on the AB Bill by reason of misconduct, such that, the AB Bill, provisionally assessed in the sum of £54,014.99, was reduced by 70% to the sum of £16,204.50;

iv) ordered AB to make a further payment on account to the MoJ in the sum of £78,235.68, that sum to be paid, without any deduction or set-off, to the GLD as solicitors on the record for the MoJ, with payment to indicate that it is in relation to AB v MoJ and to bear the MoJ’s solicitors’ reference LT63583G, it being the case that payment otherwise than in accordance with this order would mean that the default provisions would apply as if the payment had not been made at all (see [32] above for the background that presumably explains this unusual provision);

v) ordered AB to pay the MoJ’s costs of paragraphs 3, 4 and 5 of the Judge’s order dated 2 November 2020, which provided for the written submissions following which the Misconduct Judgment was handed down, on an indemnity basis, to be summarily assessed at a further hearing on 12 July 2021; and

vi) varied the order of 2 November 2020 to list the matter for further hearing on 12 July 2021, to be conducted by Cloud Video Platform, to deal with various outstanding issues including the summary assessment of the costs referred to in (v) above and made related case management directions, including directing (in paragraph 10 of the order) that AB, not less than 14 days prior to the hearing on 12 July 2021, file and serve a skeleton argument that contains clear and concise reasons for each of his proposed challenges to each decision in the provisional assessments.

THE CLAIMANT’S UNSUCCESFUL APPEAL

An unusual aspect of this case is the personal allegations that the claimant made against the judge. These included complaints and issuing proceedings against the judge.

1. 1. In the consolidated grounds, AB alleges that the Judge exhibited actual bias against him on grounds of pecuniary and self-interest and becoming a judge in her own cause. These grounds are hopeless.

1. 1. AB has chosen to bring litigation against the Judge. She has legal representation in the case. As she noted herself in her ruling on 12 July 2021 refusing AB’s application that the Judge recuse herself from the costs proceedings in relation to Claim 6LV, Claim 7LV and Claim E11, it cannot be that a litigant can force a change of judge by the expedient of suing the judge. The fact that AB made a complaint about the Judge to the Judicial Conduct Investigations Office (JCIO) that was dismissed is also not a reason for the Judge to have recused herself. Any alleged breaches of data protection requirements or the anonymity order (none of which are admitted by the Judge and about which I am not in a position to make a judgment) are not evidence of bias. The fact that AB has made applications to the Judge about data handling does not make her now a judge in her own cause.

1. 1. AB also alleges that she exhibited apparent bias against him by, for example, having:

i) pre-determined issues before considering the arguments of AB;

ii) made offensive comments to or about AB;

iii) communicated unilaterally with the MoJ;

iv) had access to without prejudice material;

v) failed to consider all of the publicly available evidence,

vi) conducted proceedings in an irregular manner;

vii) treated AB differently from the MoJ to AB’s detriment;

viii) demonstrated animus toward AB;

ix) been incompetent; and

x) made factual errors.

1. 1. The bulk of AB’s submissions in his consolidated skeleton argument concern the ground of judicial bias, actual or apparent.

1. 1. Having reviewed each of the seven orders subject to a PTA Application and the written reasons for them, the transcripts of the hearings referred to in the grounds of appeal, relevant correspondence, the Judge’s rulings on various matters, the written and oral submissions of the parties and the other documents referred to in those submissions, I find no arguable example of judicial bias, actual or apparent, by the Judge.

1. 1. The documents, including the Judge’s orders, written reasons, and other rulings show, to the contrary, an experienced costs judge doing her best to manage costs proceedings in difficult circumstances, including those created by the Coronavirus pandemic, and doing so with considerable patience and fairness. A considerable part of the difficulty faced by the Judge throughout has been the conduct of AB, as she details in the Misconduct Judgment.

1. 1. In relation to the ground of alleged judicial bias, there are many assertions in the consolidated skeleton argument, but none is borne out by the documents. Some of the examples also appear to be off point. It is not made clear by AB, for example, how alleged incompetence or error in fact-finding could be examples of actual or apparent bias. I should add that in my review of the Judge’s orders, reasons and rulings I have not found any example of a material error, such that the Judge’s decision to make any of the orders appealed against was wrong in law, nor have I found any reason to doubt any of her findings of fact.

1. 1. As my summary of the course of the costs proceedings demonstrates, and in particular the summary of the Misconduct Judgment, the Judge has had occasion to criticise AB in robust terms. She has given detailed reasons for that criticism. Robust criticism is not evidence of bias. The transcripts of the hearings also, at times, include robust exchanges between the Judge and AB. That is not evidence of bias.

1. 1. In short, I have found nothing that supports AB’s case that the Judge has pre-determined issues before considering his arguments, made offensive comments to or about AB, conducted proceedings in an irregular manner, treated AB unfairly relative to her treatment of the MoJ, or demonstrated animus toward AB.

1. 1. As to unilateral communication by the Judge with the MoJ, there is no evidence of this relevant to these appeals. There is some discussion between the Judge and Mr Joseph recorded on the transcript after AB had abruptly left the in-person hearing on 3 May 2019 and before he joined (late) the telephone hearing on 14 September 2020. This was entirely natural, in the circumstances, and did not involve any detriment to AB. He was, in each case, voluntarily absent from hearings in open court. There was no substantive unfairness to AB as a result of those brief conversations, and they do not amount to evidence of bias.

1. 1. As to the without prejudice material that was inadvertently sent to the Judge, she made clear that she did not have regard to it. That is neither evidence of actual or apparent bias nor a reason why she should have recused herself from these costs proceedings.

1. 1. Finally, there is no requirement that a Costs Judge consider “all of the publicly available evidence” (rather than simply the evidence that the receiving party is required to provide in compliance with PD 47, paragraph 13.12), but even if there were, the failure to do so would not be evidence of bias, actual or apparent.

1. 1. At the hearing, Mr Pilling made the argument that, given the findings of misconduct made by the Judge in the Misconduct Judgment which concerned the costs proceedings arising out of Claim 6LV and Claim 7LV, a fair-minded and informed observer would consider there was a real risk that the Judge would have pre-determined views on the costs arising out of the Claim E11 proceedings. This, in my view, does not follow. In that regard, I note the following observation in Locabail (UK) Limited v Bayfield Properties Ltd [2000] QB 451 at [25]:

“… The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a sustainable objection. …”

1. 1. As may be self-evident, but in any event is clear from context, the Court of Appeal is speaking there of a sustainable objection on the ground of judicial bias.

1. 1. In short, the Judge was right to refuse AB’s various applications that she recuse herself. His grounds of appeal on the basis of judicial bias are, in my view, totally without merit.

1. 1. Challenges to specific orders on grounds of serious procedural irregularity

1. 1. There is nothing in the documents that raises an arguable ground of appeal on the basis that any of the seven orders appealed against was unjust on the grounds of serious procedural irregularity. AB makes much of a reference by the Judge to Claim 6LV and Claim 7LV being a “relatively simple GDPR claim” on the basis that the GDPR was not then in existence. In context, this was a minor imprecision in her use of language, not a substantive error, as it is clear that she simply meant to characterise Claim 6LV and Claim 7LV as relatively simple claims. He disputes that characterisation, but as nothing turns on it, it is not evidence of “serious procedural irregularity”.

1. 1. Most, if not all, of the procedural difficulties experienced during the costs proceedings arising out of Claim 6LV and Claim 7LV appear to have been down to the approach taken by AB to the proceedings, including his failure to comply with deadlines, particularly for the provision of written submissions (as discussed earlier in this judgment). This made it difficult for the Judge at a number of stages of the proceedings, and the record shows that she made a number of case management decisions that were intended to keep things, in her own words, “on track”. AB had ample opportunity to express his views and for those views to be considered by the Judge. The Judge’s case management decisions about mode of hearing were constrained at times by the conditions of the Coronavirus pandemic. There was nothing unfair in any of the case management decisions she made to ensure the progress of the costs proceedings despite those constraints. A good example of this was her order of 14 September 2020 (which has not been appealed), in which she provided for written submissions so that matters could make progress following the abandonment of the telephone hearing on 14 September 2020. Her order provided a fair and sensible way forward in the circumstances.

1. 1. Mr Pilling at the hearing described the nub of the appeal as being that the Judge had reached findings of fact, particularly in the Misconduct Judgment, on an improper basis because AB did not have the opportunity to provide evidence, as opposed to submissions, or to have his concerns addressed at an oral hearing. There was no arguable unfairness, however, in the approach taken by the Judge as reflected in her various orders, which, in each case, she was justified in making for the reasons she gave.

1. 1. Having carefully reviewed each of AB’s challenges to various orders on the basis that they were unjust on the ground of serious procedural irregularity, I consider that each is bound to fail as a ground of appeal and they are, therefore, in my view, totally without merit.

Challenges to specific decisions and findings

1. 1. In relation to AB’s various challenges to specific decisions and findings made by the Judge, for example, in relation to her decision in the provisional assessment of the AB Bill that he was not entitled to success fees, having carefully reviewed each challenge, I find that none of them is arguable. Each is bound to fail as a ground of appeal and therefore is totally without merit.

Summary and conclusion

1. 1. The bulk of this combined appeal against seven orders made by the Judge concerns case management decisions by the Judge or factual findings by the Judge. None of the challenges to her case management decisions or to her factual findings comes close to surmounting the relevant threshold for a successful challenge on either of those bases. Nor are any of the remaining grounds arguable.

1. Accordingly, I refuse each of the First PTA Application, the Second PTA Application, the Third PTA Application, and the Fourth PTA Application. I will certify each of them as totally without merit.