COSTS BITES 86: COSTS OF INSTRUCTING LEADING COUNSEL IN A £115,000 CLAIM WERE NOT RECOVERABLE: A LITIGANT CANNOT “DEPLOY UNLIMITED RESOURCES TO FIGHT CASES AND EXPECT TO RECOVER THOSE COSTS FROM THE LOSING PART”

In Coram v D R Dunthorn & Son Ltd [2023] EWHC 731 (SCCO) Deputy Costs Judge Joseph affirmed his original decision on provisional assessment that the costs of instructing leading counsel to attend a three day trial were not recoverable from the defendant paying party.  The matter had settled prior to trial and the brief fee abated. Applying the test of whether it was reasonable and proportionate to instruct leading counsel the judge found that it was not.   The absence of any explanation as to why it was thought leading counsel was necessary in a case with a maximum value of £115,000 (and which settled for £75,000) was a factor in this decision.

“The days in which litigants could deploy almost unlimited resources to fight cases and expect to recover those costs from the losing party (absent an indemnity costs order) have long since gone with the advent of the Woolf and Jackson reforms. Costs which have been reasonably and necessarily incurred may still be reduced if they are considered to be disproportionate.”

THE CASE

The claimant brought an action alleging that his mother had died of mesothelioma as result of exposure through washing her husband’s overalls. The action settled for £75,000 gross shortly before trial.

THE DISPUTED ITEMS ON COSTS

The claimant had instructed both junior and leading counsel to attend the trial in March 2022.  The case had been settled on the 7th February 2022.  The bill of costs was largely agreed by the defendant with the exception of counsel’s fees, these included fees for leading and junior counsel to attend a three day trial.

THE DISPUTED FEES: LEADING AND JUNIOR COUNSEL

1. The Claimant presented a Bill of Costs which claimed costs in respect of the brief fees of both Leading and Junior Counsel. The Claimant stated that Mr Steinberg’s brief fee (item 703 in the Bill) was £50,000 and that it had been abated to £25,000 to reflect the settlement and the diary commitment for the trial. Similarly, Ms Scott’s brief fee (item 626 in the Bill) was stated to be £25,000. It had been abated to £12,500 for the same reasons. The Claimant had thereby incurred costs of £75,000 for the trial alone, had it gone ahead, albeit that when the detailed assessment proceedings were commenced, half of that sum was claimed to be recoverable from the Defendant. Neither Counsel appeared to charge separately for the conference on 3 February 2022.

THE PROVISIONAL ASSESSMENT

Since the only items in dispute were counsel’s fees and the sum in dispute was less than £75,000 the bill was subject to provisional assessment.  The defendant contended that the use of Leading Counsel was unwarranted and that junior counsel’s fees were too high.

1. On 4 October 2022, I carried out a provisional assessment. I disallowed Leading Counsel’s fees altogether and I allowed £10,000 for Junior Counsel’s fees. In relation to the instruction of Leading Counsel, in my brief reasons, I identified that the correct question to ask was not whether the case was well within the capabilities of junior Counsel (as per part of the Point of Dispute) but whether it was reasonable and proportionate to instruct Leading Counsel. I referred to the note at 47.14.13 of Vol 1 of the 2022 Edition of the White Book (page 1669) and R -v- Dudley Magistrates Court ex p Power City Stores Ltd [1990] 140 NLJ 361. The note in the White Book also referred to the case of Juby -v- London Fire and Civil Defence Authority (24 April 1990 unreported) in which Evans J (as he then was) set out the most likely factors relevant to the decision. I further commented that as this was a standard basis assessment, any doubt as to whether costs are reasonable or proportionate, or whether they were reasonably and proportionately incurred, must be resolved in favour of the Defendant.

THE CLAIMANT’S UNSUCCESSFUL ORAL REVIEW

The claimant sought an oral review of the hearing.

NEW “EVIDENCE” FROM THE CLAIMANT

The claimant put in further “evidence” in a witness statement from a solicitor  support of the review. (The phrase “evidence” is used with care since it appears that much of the statement was, in fact, submissions).

1. 1. Prior to the oral review and after the provisional assessment had been sent to the parties, the Claimant filed a witness statement signed by Mr Steinberg on 1 March 2023 in which, amongst other things, he gave some explanation as to his expertise in the area of asbestos litigation and his involvement in this particular matter. He also gave some evidence in paras 37–39 of his statement to the effect that it was common in all mesothelioma claims, whether or not there was an issue of principle, for the parties to instruct Leading Counsel and that this was not usually challenged by either side simply because the financial value of the claim was modest. He further asserted that where, as in this case, there was an issue of principle at stake, it would be exceptional for the parties not to use Leading Counsel in industrial disease litigation. Mr Steinberg finished this part of his evidence by asserting, “Accordingly, it is the norm to use Leading Counsel even where the individual value of the claim is modest.” He gave some specific examples of cases in which he had been instructed where the financial values had been low.

1. 1. Mr Latham objected to Mr Steinberg’s statement being adduced at this stage of the proceedings. Mr Latham submitted that the Claimant should have made an application under CPR Part 23 for permission to adduce the new statement and relied in that respect on para 13.7 of the Practice Direction to CPR Part 47. He also relied on para 13.2 of the same Practice Direction which set out the papers which the receiving party was required to file. His submission was that the court could consider at the oral review evidence which had come into existence prior to the provisional assessment, and additional evidence for which permission had been granted. As no permission had been granted for Mr Steinberg’s statement, and because it was made after the provisional assessment, it should not be allowed in.

1. 1. Mr Williams submitted that following Pamplin -v- Express Newspapers Limited [1984] 1 WLR 689 the court had power to consider new evidence and no prior permission was required. In any event, he told me that he would not be pursuing to any serious degree the contentions in paras 37–39 of Mr Steinberg’s statement.

1. 1. The starting point in relation to this is the rule which relates to provisional assessment. The relevant parts of CPR Part 47.15 state as follows:

(7) When a provisional assessment has been carried out, the court will send a copy of the bill, as provisionally assessed, to each party with a notice stating that any party who wishes to challenge any aspect of the provisional assessment must, within 21 days of receipt of the notice, file and serve on all other parties a written request for an oral hearing. If no such request is filed and served within that period, the provisional assessment shall be binding upon the parties, save in exceptional circumstances.

(8) The written request referred to in paragraph (7) must –

(a) identify the item or items in the court’s provisional assessment which are sought to be reviewed at the hearing; and

(b) provide a time estimate for the hearing.

(9) The court will then fix a date for the hearing and give at least 14 days’ notice of the time and place of the hearing to all parties.

1. 1. It follows that a provisional assessment is exactly that: a provisional assessment. It only becomes a final assessment if both parties do not file and serve any written request which complies with CPR Part 47.15(7) and (8), or at the conclusion of the oral review which is fixed because either or both of them has filed and served a written request.

1. 1. Mr Steinberg’s witness statement amounted to an amendment to the Claimant’s Replies. It contained evidence and/or submissions which could, and probably should, have been set out in the Replies to the Defendant’s Point of Dispute relating to items 626 and 703 of the Claimant’s Bill and it could have been served with them. The fact that this information was set out in a formal witness statement is largely immaterial. It is not uncommon for solicitors to produce witness statements in detailed assessments which are served with the Points of Dispute or Replies, as the case may be. The admissibility and relevance of material from Counsel in support of their fees was considered in Armitage -v- Nurse [2000] 2 Costs LR 231 by Lloyd J who has this to say at page 234:

“It would certainly be helpful to the court and wise from the point of view of counsel to furnish at least some substantial additional material at the stage of the detailed assessment as to why the substantial fees ought to be regarded as proper. It may, for example, be a useful practice for counsel to prepare a short note in the course of, or at the conclusion of the case, to be submitted to the solicitors with fee notes for purposes of the legal aid taxation.”

1. 1. In Ross -v- Stonewood Securities Ltd [2004] EWHC 2235 (Ch) at [39] Lewison J pointed out that Lloyd J’s comments in Armitage were not intended to create a legal duty to supply a note. Instead, Lloyd J was merely highlighting the fact that if Counsel does not supply a note, their fees may be at risk. See also Friston on Costs 3^rd Edition para 53.48. At para 53.49, there is set out the guidance issued by the General Council of the Bar in March 2000 as to the matters which that note might usefully address.

1. 1. Amendments to Replies are dealt with by para 13.10 of the Practice Direction to CPR Part 47 which states as follows:

i) If a party wishes to vary that party’s bill of costs, points of dispute or a reply, an amended or supplementary document must be filed with the court and copies of it must be served on all relevant parties.

ii) Permission is not required to vary that party’s bill of costs, points of dispute or a reply but the court may disallow the variation or permit it only upon conditions, including conditions as to the payment of any costs caused or wasted by the variation.

1. 1. It follows that a party is entitled to amend its Replies without first obtaining the permission of the court. I consider that the scope of para 13.10 is such that amendments can be made between receipt of a provisional assessment and an oral review of that provisional assessment because the assessment is not complete at the time the court sends out the provisional assessment. The more pertinent question is whether the power contained in para 13.10(2) should be utilised to disallow the amendments or to permit them only on terms, particularly as to costs.

1. I ultimately concluded that I should not exercise my discretion to disallow the amendment to the Replies in the form of Mr Steinberg’s statement. If there was any prejudice to the Defendant it was minimal. The expertise of Mr Steinberg in this area of litigation, and his pre-eminence in the field, are not matters which are disputed by the Defendant, nor by this court. Most of the statement amounted to submissions which could have been made by Mr Williams. Once Mr Williams had explained that he did not intend to pursue the assertion that Leaders were normally instructed in cases of this nature it seemed to me that the Defendant would be able adequately to respond and deal with the statement at the oral review. I indicated that I would hear any arguments as to costs at the conclusion of this oral review.

THE DECISION

The judge decided that the claimant had not established it was reasonable and proportional to instruct leading counsel.

Discussion and conclusion

1. 1. The decision as to whether to instruct Counsel, whether a Leader or junior, when to instruct, and whom to instruct is, of course, a decision for the client. He reaches a decision based on the advice, principally of the solicitor whom he has instructed to advise and act for him in the case. The conducting solicitor is required to use his skill, expertise, experience and judgment in giving advice to his client. He is entitled, if he wishes, to take advice from others, such as junior Counsel whom he has already instructed. That conducting solicitor may, as is clearly the case here, be a specialist in the particular discipline concerned.

1. 1. Some decisions made in the course of litigation are likely to be uncontroversial. An example might be a decision to incur the costs of issuing proceedings because the expiry of the applicable limitation period is imminent. Others might be contentious because they might have significant consequences for the client. An example of that might be the decision to instruct a Leader, particularly where a competent junior and specialist in the particular area concerning the case in hand has already been instructed, and for some time. Everyone knows, or ought to know, that the instruction of a Leader, quite properly, inevitably results in a significant, additional financial liability being placed upon the client, in the first instance. Sometimes, the solicitor will be able to advise with certainty that the financial liability which the client will incur, if he accepts the solicitor’s advice, is more than likely to be recovered from his opponent, if the client wins and obtains an order for the payment of his costs. On other occasions, there will be less certainty such that there might be a significant risk that the client will not be held entitled to recover all or part of the additional financial liability he is being advised to incur.

1. 1. The Defendant put in issue in the Points of Dispute the two items (626 and 703) which concerned Leading and junior Counsels’ brief fees, both incurred at the same time (28 January 2022) and both for the trial which was due to commence approximately one month later. Mr Steinberg’s brief fee was £50,000 and Ms Scott’s £25,000 thereby resulting in a total liability of £75,000, for the cost of Counsel alone, for the trial. It can fairly be said that by challenging those items, and particularly Mr Steinberg’s fees, those fees were “at risk“, as contemplated by Lloyd J in Armitage. At the time the briefs were delivered, no one could have said with any certainty that the case would settle prior to trial, let alone precisely when it might have settled.

1. 1. The substance of the Point of Dispute was clear (although the wrong test was stated in them) and Replies were served which were later supplemented by Mr Steinberg’s witness statement of 1 March 2023, made after the provisional assessment. The Replies did not explain the conducting solicitor’s thought process or his reasons for instructing Mr Steinberg at the time he was instructed. There was no witness statement from the conducting solicitor, and he did not attend the oral review. There was no evidence from Ms Scott or, indeed, any information placed before the court, as to precisely why and when she apparently advised that a Leader should be instructed in this case. The fact that the instructed junior Counsel had advised to that effect was a point which was relied on by Mr Williams to a considerable extent. Having spent 14 hours on the case on 1 July 2022, the Bill records at item 584 that on 30 November 2022, Ms Scott spent a further 1.5 hours, “Advising on further expert evidence from the engineer and the need for an additional expert“.

1. 1. I observed in argument that in the Senior Courts Costs Office the procedure is usually informal. Formal witness statements tend not be required and solicitors often give informal evidence at hearings about issues under challenge. Similarly, the court will consider and take into account contemporaneous attendance notes recording what might have happened and why they decided to go down a particular route. The solicitors will often charge for that work and seek to recover it from the paying party. My attention was not drawn to any specific attendance note which might have been prepared by the solicitor at the time he advised his client to instruct a Leader.

1. 1. The result is that I have nothing from either the conducting solicitor or from junior Counsel to help me understand the thought process which might have justified the instruction of a Leader. That, of itself, ought not to be fatal to the Claimant’s claim to recover Mr Steinberg’s brief fee but it is a factor which I consider I must take into account. I take into account Mr Steinberg’s evidence, but I do not consider that it helps me to any significant degree in deciding whether it was reasonable and proportionate for him to be instructed. In particular, the characterisation of the claim as a public liability claim, as opposed to an employer’s liability claim, seemed to me to take the matter on no further. The fact remained that the Claimant would have had the burden of proof to establish the necessary ingredients of a tortious claim which involved secondary exposure to asbestos. It ought to have been a relatively simple exercise for the conducting solicitor to have furnished both the court and the Defendant with his own explanation for advising his client to incur an additional liability of £50,000 about a month before the trial was due to commence.

1. 1. I do find it surprising, given the considerable significance and importance which the Claimant seeks to place on the case (in terms of it being novel, difficult, having complex medical and statistical evidence, the need for skilful cross examination and so on) that the Claimant’s solicitors appear to have been content, at the listing questionnaire stage, not to invite the court to change the category to which the case had been assigned by Master Davison. I remind myself that Master Davison is the specialist asbestos judge in the King’s Bench Division and of his decision to assign it to a category C Judge with a relatively short listing of three days. Whilst I do not consider that this is fatal to the Claimant’s position, again, I do consider that it is a factor which I must take into account.

1. 1. This case raised some issues which will have been difficult and which will have had some complexity. Claims arising from alleged secondary exposure to asbestos are by their nature likely to involve some complex issues and some difficulty. I accept Mr Latham’s submission that liability for secondary exposure to asbestos is not a new phenomenon. In paras [119–120] of the decision in Bannister, the Judge found as fact that Mr Bannister had not been exposed to asbestos dust and that on the evidence he had been exposed to other dust for a very short time. The claim therefore failed on the facts. The Judge went on, out of an abundance of caution, to address other matters raised, “albeit somewhat more briefly than might otherwise have been the case“. Although it was not strictly necessary for him to do so, because he had already dismissed the claim, the Judge considered the evidence of the two experts and set out why he preferred the evidence of Mr Stear (see paras [158] and [161]). Ultimately, he concluded (para [196]) that the claimant had not established on the balance of probabilities that any exposure suffered caused a material increase in the risk of him developing mesothelioma. That was a question of fact.

1. 1. It is possible, probably likely, that had this matter gone to trial, there would have been some argument or discussion about what is conceded by Mr Williams to be obiter dicta in Bannister in paras [121] onwards in the judgment. However, obiter dicta is precisely that and ought not to be elevated to something more significant or difficult to deal with. I also accept that there would have been a need for competent and probably detailed cross examination of the various witnesses, but that, of itself, does not justify the instruction of Leading Counsel.

1. 1. I am not persuaded that the speed with which Mr Steinberg assessed the matter following receipt of the expert medical statistics report demonstrated that it was reasonable and proportionate for a Leader to be instructed. Whilst the report is clearly technical and detailed in its nature, it was not lengthy, and I do not think it would have taken a great deal of time to evaluate it or to apply it. Whilst there was obvious benefit to the Claimant in instructing someone who was able to evaluate and apply it in about 70 minutes, I question whether the speed factor was really key to this. If the evaluation and/or application had taken say, a working day, i.e. approximately 5-6 times longer, it is difficult to see how the Claimant would be prejudiced by such “delay” or what material advantage he gained by having the answer in 70 minutes. I reject any contention that only a Leader could have assimilated, applied and advised on that information.

1. 1. I also take into account that from about three months after solicitors were first instructed, this was a claim which had a value of approximately £115,000. The original schedule of loss was later updated but the value did not change materially. The result is that at the time Mr Steinberg was instructed, the Claimant and his solicitors knew that the maximum sum which the Claimant could hope to recover at trial would be about £115,000, a significant sum of money for him, but not a huge sum in the general scheme of things. Mr Williams is correct in submitting that the Defendant should not be allowed to benefit from any “advantage” it might have gained through the timing of Mrs Coram’s death.

1. 1. I have no doubt of the importance of this claim to the Claimant, he having suffered the double tragedy of losing both of his parents to mesothelioma. The circumstances in which he lost his mother, in particular, must have been, to say the least, harrowing and devastating.

1. 1. Against all of the relevant background, I have to decide whether the briefing of Mr Steinberg on 28 January 2022, for the trial at the beginning of March 2022, at an additional cost of £50,000, was reasonable and proportionate, based on the Juby criteria (some of which clearly overlap with each other) and the relevant parts of the CPR. I remind myself, and forcefully so, that I must not fall into the trap (contained in the Points of Dispute) that I should disallow Leading Counsel’s fees because I might find that the case was well within the capabilities of a junior Counsel. I have no doubt that it was within the capabilities of the junior Counsel instructed in this case but that is not the test I have to apply. If there is a doubt in my mind, I have to resolve that doubt in favour of the Defendant.

1. 1. The days in which litigants could deploy almost unlimited resources to fight cases and expect to recover those costs from the losing party (absent an indemnity costs order) have long since gone with the advent of the Woolf and Jackson reforms. Costs which have been reasonably and necessarily incurred may still be reduced if they are considered to be disproportionate.

1. 1. Ultimately, after considering all of the relevant factors, including those I have set out above and weighing them all up together, I have not been persuaded that it was reasonable and proportionate for Leading Counsel to have been instructed. Whilst no single issue has had any precedence over any other, I remain troubled by the absence of any first hand explanation as to why advice was given to the Claimant which had such a significant financial impact so close to trial. In any event, there remains, having heard and read all the arguments, a doubt in my mind which I must resolve in favour of the Defendant.

1. The provisional assessment will therefore not be disturbed.