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Decision not to allow the costs of leading counsel upheld (Coram v D R Dunthorn Ltd, 22.03.24)

The Court of Appeal has upheld a SCCO decision to disallow leading counsel’s fees, finding that the costs judge had correctly applied the relevant test, despite the appellant arguing that it was “manifestly reasonable” for leading counsel to be instructed.

The underlying claim arose out of the appellant’s mother’s death from mesothelioma. It was the appellant's case that his mother had been subjected to secondary exposure to asbestos via contact with her husband and/or his clothing when he returned from work. A claim on her behalf was intimated before she died but proceedings were not commenced until after her death. The parties agreed a settlement in the total sum of £75,000, a month before trial, with the appellant's costs to be assessed on the standard basis if not agreed.

Following the settlement, the appellant's solicitors presented a bill of costs which included abated brief fees for leading and junior counsel. The fee charged for leading counsel was £25,000 plus a success fee uplift of 27.5% and VAT. The fee claimed for junior counsel was £12,500 plus uplift and VAT. Both fees had been calculated on the basis that they represented 50% of the brief fees for trial and reflected the stage at which settlement was achieved. The total costs claim net of VAT was £178,207.

The appellant's solicitors contended that when the claim was commenced it had a value in excess of £200,000 but had been reduced in value by the deceased's untimely death. It was said that the claim was important and complex, and raised an issue of significant public importance which had ramifications for other cases involving low level exposure which was likely to require determination at appellate level. This was relied upon in justifying the amount of work done by an experienced Grade A fee earner and the instruction of leading and junior counsel for trial.

The costs judge conducted a provisional assessment, by which time the only items remaining in dispute were counsel's fees. The costs judge disallowed leading counsel's fees altogether and allowed a fee of £10,000 plus uplift and VAT for junior counsel.

The appellant exercised his right pursuant to CPR 47.15(7) to seek an oral review. This led to Deputy Costs Judge Joseph confirming his original decision on provisional assessment (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 receiving party appealed that decision. The appeal was not successful.  While holding that she was in no doubt that the subject-matter of this claim was of the utmost importance to the appellant and his family, Mrs Justice Yip was clear that a case concerning a death will not justify the instruction of leading counsel per se. She went on to say (at para 49):

“In my judgment, the costs judge was entitled to weigh the absence of any explanation from the Appellant's solicitor or junior counsel as to the thought process which justified the significant and costly decision to instruct leading counsel. As he made clear, the judge did not treat this as decisive but it left him without clear insight into the reasoning behind the decision to instruct a leader in a case which had been conducted to that point as one requiring significant management by an experienced Grade A fee earner and the instruction junior counsel alone. At the point at which leading counsel was instructed both had already done much work, contributing to the overall costs. The reasonableness and proportionality of also instructing leading counsel had to be viewed in that context.”

In upholding the decision, Mrs Justice Yip concluded (at para 55): “Standing back and looking at the judgment below as a whole, it is clear that the costs judge correctly identified the legal principles he had to apply. He carefully analysed the competing submissions and weighed all relevant circumstances. He recognised the need to consider whether the cost of instructing leading counsel was reasonable and proportionate in all the circumstances and that any doubt should be resolved in favour of the paying party. I have not identified any material flaw in his reasoning. This was a careful and balanced judgment in which the costs judge arrived at a decision that was reasonably open to him.”

Takeaway

Mrs Justice Yip was at pains to point out that the judgment was not to the effect that it will never be appropriate to instruct leading counsel to appear at first instance in an action of relatively modest value. There have been and will continue to be many examples of such cases where it is entirely appropriate for leading counsel to be instructed having regard to the issues which are likely to arise. If a claim is contemporaneously identified as one raising an important point of principle, it may very well be reasonable to instruct leading counsel. Of course, consideration would also need to be given to managing the proportionality of costs overall.  As always, each case will fall to be determined on its own circumstances and in light of the material placed before the judge carrying out the assessment.

Link to judgment: Coram v DR Dunthorn & Son Limited [2024] EWHC 672 (KB) (bailii.org)

 Author: Sean Chaffe, Costs Lawyer at Denovo

Details

Decision not to allow the costs of leading counsel upheld (Coram v D R Dunthorn Ltd, 22.03.24)

The Court of Appeal has upheld a SCCO decision to disallow leading counsel’s fees, finding that the costs judge had correctly applied the relevant test, despite the appellant arguing that it was “manifestly reasonable” for leading counsel to be instructed.

The underlying claim arose out of the appellant’s mother’s death from mesothelioma. It was the appellant's case that his mother had been subjected to secondary exposure to asbestos via contact with her husband and/or his clothing when he returned from work. A claim on her behalf was intimated before she died but proceedings were not commenced until after her death. The parties agreed a settlement in the total sum of £75,000, a month before trial, with the appellant's costs to be assessed on the standard basis if not agreed.

Following the settlement, the appellant's solicitors presented a bill of costs which included abated brief fees for leading and junior counsel. The fee charged for leading counsel was £25,000 plus a success fee uplift of 27.5% and VAT. The fee claimed for junior counsel was £12,500 plus uplift and VAT. Both fees had been calculated on the basis that they represented 50% of the brief fees for trial and reflected the stage at which settlement was achieved. The total costs claim net of VAT was £178,207.

The appellant's solicitors contended that when the claim was commenced it had a value in excess of £200,000 but had been reduced in value by the deceased's untimely death. It was said that the claim was important and complex, and raised an issue of significant public importance which had ramifications for other cases involving low level exposure which was likely to require determination at appellate level. This was relied upon in justifying the amount of work done by an experienced Grade A fee earner and the instruction of leading and junior counsel for trial.

The costs judge conducted a provisional assessment, by which time the only items remaining in dispute were counsel's fees. The costs judge disallowed leading counsel's fees altogether and allowed a fee of £10,000 plus uplift and VAT for junior counsel.

The appellant exercised his right pursuant to CPR 47.15(7) to seek an oral review. This led to Deputy Costs Judge Joseph confirming his original decision on provisional assessment (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 receiving party appealed that decision. The appeal was not successful.  While holding that she was in no doubt that the subject-matter of this claim was of the utmost importance to the appellant and his family, Mrs Justice Yip was clear that a case concerning a death will not justify the instruction of leading counsel per se. She went on to say (at para 49):

“In my judgment, the costs judge was entitled to weigh the absence of any explanation from the Appellant's solicitor or junior counsel as to the thought process which justified the significant and costly decision to instruct leading counsel. As he made clear, the judge did not treat this as decisive but it left him without clear insight into the reasoning behind the decision to instruct a leader in a case which had been conducted to that point as one requiring significant management by an experienced Grade A fee earner and the instruction junior counsel alone. At the point at which leading counsel was instructed both had already done much work, contributing to the overall costs. The reasonableness and proportionality of also instructing leading counsel had to be viewed in that context.”

In upholding the decision, Mrs Justice Yip concluded (at para 55): “Standing back and looking at the judgment below as a whole, it is clear that the costs judge correctly identified the legal principles he had to apply. He carefully analysed the competing submissions and weighed all relevant circumstances. He recognised the need to consider whether the cost of instructing leading counsel was reasonable and proportionate in all the circumstances and that any doubt should be resolved in favour of the paying party. I have not identified any material flaw in his reasoning. This was a careful and balanced judgment in which the costs judge arrived at a decision that was reasonably open to him.”

Takeaway

Mrs Justice Yip was at pains to point out that the judgment was not to the effect that it will never be appropriate to instruct leading counsel to appear at first instance in an action of relatively modest value. There have been and will continue to be many examples of such cases where it is entirely appropriate for leading counsel to be instructed having regard to the issues which are likely to arise. If a claim is contemporaneously identified as one raising an important point of principle, it may very well be reasonable to instruct leading counsel. Of course, consideration would also need to be given to managing the proportionality of costs overall.  As always, each case will fall to be determined on its own circumstances and in light of the material placed before the judge carrying out the assessment.

Link to judgment: Coram v DR Dunthorn & Son Limited [2024] EWHC 672 (KB) (bailii.org)

 Author: Sean Chaffe, Costs Lawyer at Denovo