COST BITES 234: A REMINDER THAT A SOLICITORS ACT ASSESSMENT CAN SOMETIMES BE AN EXPENSIVE PROCESS FOR A CLAIMANT
A central aim of this series is to look at what actually happens when costs are assessed. We see an example in the case we are looking at here. It was the claimant’s application for a Solicitors Act assessment of bills totalling £316,464.42. The assessment was compromised and we do not know the result. However the fact that the claimant was paying the costs gives a strong indication that any reduction on the bills was less than 20%. The claimant paid the defendant £58,750 in costs. It is a reminder that Solicitors Act assessments can be an expensive process.
“I remind myself that this is a summary assessment because the challenges by the claimant are lengthy and detailed and the written response by the defendant runs to more than nine pages. I do not propose to deal with the detail set out by the parties. If a detailed assessment was required, then the parties ought to have agreed that approach.”
KEY PRACTICE POINTS
The very act of challenging the bills has here has cost the claimant £58,750. The defendant made a contribution towards the claimant’s costs of £6,000, however it is clear that this action, in itself, was an expensive enterprise. We do not know but it appears extremely likely that the claimant was considerably out of pocket. It is prudent to question the economics of issuing any action, including Solicitors Act proceedings.
THE CASE
In The Imaging Centre Mobile Ltd v Morr & Co LLP [2025] EWHC 1039 (SCCO) Costs Judge Rowley carried out a summary assessment in relation to costs in relation to a Solicitors Act application. The claimant issued proceedings seeking an assessment of costs under the Solicitors Act. Those proceedings were compromised. The terms of the compromise were that the claimant was to pay the defendant’s costs. There was an exception in relation to the claimant’s costs relating to a special circumstances application.
The costs could not be agreed and the judge carried out an assessment of (i) the claimant’s costs of the special circumstances application; (ii) the defendant’s costs of the action.
ASSESSMENT OF THE CLAIMANT’S COSTS
3. These costs are claimed in the sum of £6,657.50. I have very little to say about them and it seems to me that the defendant’s criticisms were also relatively limited. I do not accept the argument that, in some way, the need for special circumstances at all was caused by a failure on the part of the claimant to act sufficiently quickly. The Solicitors Act 1974 sets out a timetable of the hoops through which the client has to jump when bringing proceedings depending on how quickly they do so. In the circumstances of this case, the claimant was entitled to bring proceedings provided it could show special circumstances existed. Those circumstances were originally opposed by the defendant and then conceded prior to the hearing and that is not a promising set of facts on which to argue that the claimant was somehow at fault.
4. I was not particularly attracted either to the suggestion that the first draft of the witness statement of Mr Kleanthous, the guiding mind of the claimant, should be drafted by him rather than either Mr Goodwin or his daughter, who is a solicitor. Having reviewed Mr Kleanthous’ witness statement for the purposes of this decision, it is a detailed document and I have little doubt that more time was in fact spent than the capped time actually claimed, by some margin.
5. There is no challenge to the hourly rates claimed and, in my view, there is little to be challenged in respect of the time claimed either. I had concluded that a modest reduction to Mr Goodwin’s time to 20 hours in respect of documents was appropriate – and that therefore roughly £6,000 ought to be allowed – when I noticed the claimant’s counterproposal of that figure in any event. I therefore allow the claimant’s costs of the special circumstances’ application in this sum and, as agreed by the parties, it will be set off against the defendant’s costs.
ASSESSMENT OF THE DEFENDANT’S COSTS
6. I remind myself that this is a summary assessment because the challenges by the claimant are lengthy and detailed and the written response by the defendant runs to more than nine pages. I do not propose to deal with the detail set out by the parties. If a detailed assessment was required, then the parties ought to have agreed that approach.
7. The defendant’s claim for costs amounts to £85,725.50. There is no claim for VAT as the defendant is providing its own services and the VAT of others, such as counsel, can be recovered as input tax. There is also no time claimed for attendances upon the defendant as an entity. Since Ms Fisher has been the lead fee earner in these proceedings and is also the Managing Partner, that is also perfectly understandable.
8. These proceedings settled after the preliminary issues were dealt with and we did not reach the point of any decision regarding hourly rates. They are challenged as being far in excess of the guideline hourly rates for “London 3”. That is undoubtedly the case in relation to the two Grade A fee earners who appear on the schedule and also the two Grade D fee earners. The Grade C work is claimed at rates which are closer to the guidelines.
9. I do not, as a general rule, take the view that the hourly rates claimed in the detailed assessment proceedings ought to differ from the rates allowed in the substantive proceedings. In this case, those rates have been compromised and so there is more weight to be given to the Samsung guidelines of the Court of Appeal in respect of a summary assessment than may sometimes be the case. Whilst the underlying proceedings would, in my view, justify the sort of hourly rates claimed by the Grade A’s, that is not the case for the hourly rates claimed for the lower grades, and in particular the Grade Ds, and I take that into account.
10. I do not think there is anything remarkable in relation to the time claimed on opponents. The time claimed on others, which no doubt relates to counsel and in particular the costs lawyers, is substantial. Some of that time, no doubt, relates to the fact that supplemental replies were allowed in the directions and that there were directions hearings and without prejudice meetings that would involve counsel and the costs lawyers as well as the defendant’s own fee earners.
11. In relation to attendance at the hearing, the time claimed by Mr Cox is not really challenge, albeit there is some query over the travelling and waiting time. I do not understand why Ms Fisher has claimed her travelling and waiting but not her attendance. Either she was entitled to all of this or none at all, in my view. She attended to give evidence and, it seems to me, that the time claim should be seen in that light. As such I do not think the travelling time is recoverable.
12. The solicitors’ charges come to £44,177.50. Nearly £30,000 of that sum is contained in the documents schedule which, as is usually the case, is the largest item. The most striking aspects in my view are the amount of time claimed in respect of Ms Fisher’s witness statement and the preparation of the N260. Ms Fisher has spent 29.6 hours on that statement herself and grade C fee earners have spent up to 19 hours (albeit that some of the 14 hours claimed initially appears to relate also to the costs draftsman and counsel.) Even if all that Grade C time did not relate to the witness statement, the time still seems to me to be rather longer than appropriate. In relation to the schedule of costs, 4.2 hours at any grade seems to me to be much too long.
13. A great deal of the documents’ item is challenged by the claimant. In addition to the elements I have mentioned above, almost all of it is challenged as being either excessive or unnecessary. Whilst I accept some of the challenges, it does not seem to me that items such as the provision of trial bundles can really be criticised. Where witnesses are giving evidence, it is not sufficient simply to provide electronic bundles and that is not what the practice direction regarding “electronic working” says in any event.
14. In order to consider the documents item properly, a view also has to be taken of the work undertaken by counsel and the costs lawyers. In relation to Mr Cohen, it seems to me that an advice on the merits as well as the brief fee are reasonable to be claimed (the latter being agreed by the claimant) but the additional work seems to me to be irrecoverable between the parties.
15. In relation to Kain Knight, the claimant offers 70 hours at £170 per hour without the benefit of a breakdown. The breakdown was subsequently provided in the claimant’s written document and which confirms that the hourly rate actually claimed is £195. That rate seems to me to be sufficiently similar for there to be little argument about it. But taking that hourly rate and dividing it into the fees charged provides a time of approximately 134 hours and that, in my view, is much too high, particularly where there was little advocacy carried out by the costs lawyers in addition to producing the breakdown and replies and attending the WP meetings. I allow 100 hours at £195 per hour.
16. Taking into account these reductions in respect of counsel and the costs lawyers, I take the view that £20,000 in respect of the documents item is reasonable. To that sum I add £4,000 in respect of attendance at the hearing and £7,500 regarding attendance on opponents and others. Consequently, I reach the following figures:
Profit Costs – £31,500 (7,500 + 4,000 + 20,000)
Counsel – £13,750
Costs Lawyers – £19,500
TOTAL – £64,750
17. Whilst the defendant has encouraged me to consider the reasonableness and proportionality of the individual items as I have carried out the summary assessment, and appreciating that authorities such as West versus Stockport NHS Foundation Trust refer to this approach, I find it to be very difficult to consider proportionality on an individual item basis. Consequently, I have taken the approach of allowing what I consider to be the costs which are reasonable before stepping back and deciding whether the figure I have now reached of £64,750 bears a reasonable relationship to the factors set out in CPR 44.3(5).
18. The six factors in CPR 44.3(5) are the sums in issue, any non-monetary relief, the complexity of the litigation, any additional work generated by the conduct of the paying party, any wider factors involved in the proceedings and any extra work caused by vulnerability of a party or any witness. The eight bills which formed the substance of these detailed assessment proceedings amounted to £316,464.42. There was no non-monetary relief sought by the claimant and I am not convinced that any of the other factors that I have identified weigh particularly heavily in the scales. The issue of estimates and retainers always contains a certain amount of complexity in unravelling the parties’ histories of events and the effect they say those histories had upon them. Nevertheless, it seems to me that looking at the sum involved in this case, it is clear that the reasonable costs that I have allowed for proceedings which reached a two-day hearing requiring a written reserved judgement bears a reasonable relationship to the sums in issue as well as the other factors set out in CPR 44.3(5). Consequently, I conclude that the sum that I have allowed is both reasonable and proportionate.
19. In accordance with the agreement of the parties the £6,000 owing to the claimant needs to be deducted from the £64,750 payable to the defendant leaving a balance of £58,750 to be paid.