ON APPEAL FROM THE SUPREME COURT COSTS OFFICE
(DEPUTY COSTS JUDGE HOFFMAN)
CH/2002/PTA/817
Royal Courts of Justice
Strand
London WC2A 2LL
Thursday, April 10, 2003
Before
MR JUSTICE LAWRENCE COLLINS
Between
JOHN REGINALD DOUGLAS ORWIN
Claimant/Appellant
and
BRITISH COAL CORPORATION
AND OTHERS
Defendants/Respondents
Mr John Fitzgerald (instructed by Martineau Johnson) for the Claimant/Appellant
JUDGMENT
Approved by the Court for handing down
<B>Mr Justice Lawrence Collins:</B>
This is an appeal, with the permission of Deputy Costs Judge Hoffman, against his decision of October 7, 2002, in relation to the amount allowed by him for the brief fee of the claimant's counsel, Mr John Fitzgerald, under the detailed legal aid assessment carried out pursuant to the Order of Master Bowles dated May 18, 2001 in accordance with the Legal Aid Act 1988 and Regulation 107A of the Civil Legal Aid (General) Regulations 1989.
Regulation 113(2) provides:
"Subject to the following paragraphs of this regulation, a client's solicitor may appeal against at decision in detailed assessment proceedings in accordance with rules of court, and, if counsel acting for the client notifies the solicitor that he is dissatisfied with the decision, shall do so, but the costs of any such appeal shall be deemed to be costs to which the client's certificate relates only to the extent that the court hearing the appeal so orders."
The Lord Chancellor's Department was given notice of the appeal, and by letter of April 7, 2003 indicated that the Department did not wish to appoint a solicitor to intervene in the case. The letter also indicated that as from July 1, 2003 the requirement to notify the Lord Chancellor under the 1989 Regulations will be removed, although it would remain open to a judge to approach the Lord Chancellor's Department or the Legal Services Commission in a case which merited their involvement.
The present action was an action for infringement by British Coal Corporation and other defendants of copyright in drawings manufactured by Mr Orwin's company relating to conveyor equipment. On May 22, 2000 the main defendants applied to strike out the claim, and the application was heard by Master Bowles on July 24, November 17, December 18, 2000 and May 18, 2001. Master Bowles dismissed the application and ordered the defendants to pay 75% of the costs.
Mr Orwin was legally aided and counsel's fee note for the action against British Coal Corporation and others for the period from 1994 to 2001 amounted to a total of £72,755. Mr Fitzgerald told me that about £40,000 of that was allowed on a detailed assessment.
Only one item is the subject of this appeal, and that is a brief fee of £15,500 for the hearing of the application to strike out, which the Deputy Costs Judge reduced to £5,000. The striking out application was originally listed for 1 day or less. The item in the fee note for the brief fee indicated preparation time of 9.5 days. There were also two items for settling draft chronology on July 7 and July 19 for £1850 (9.25 hours) and one item for settling skeleton argument on July 21 (3.5 hours) for £750.
The Deputy Costs Judge disallowed the fees for settling the chronology and skeleton argument, and allowed £5,000 for the brief fee. Mr Fitzgerald produced a note of the judge's reasons:
"I am satisfied that Counsel carried out all the work claimed for and spent the time asserted and discharged his obligations and carried out the work punctiliously but I believe that the brief fee sought in respect of the strike out application by the defendants was extraordinarily high and not reasonable or justified. Accordingly I will not increase the amount allowed on the provisional assessment in respect of the brief fee. Otherwise I amend and increase the costs allowed for the items and assess the costs as marked by me on the Bill so that the Claimant can lodge the entire Bill of Costs with permission to complete sections 3&4 and for a certificate to issue in respect of sections 3 and 4.
…
On application made on behalf of the Claimant's counsel permission is granted to appeal the detailed assessment in respect of Counsel's fees save that I doubt whether I am the person with the power to give permission since I believe it should be the local area legal aid (services commission) office but I am willing to grant permission if I have the power."
The appeal is brought on the grounds that the Deputy Costs Judge
failed properly or at all to take account of all relevant circumstances in making his decision to disallow and reduce the fees claimed by counsel for the work done in preparing for the important and substantial strike out application by the defendants;
failed to take account of all the preparation work carried out by Counsel for the application to strike out, for which counsel was not otherwise properly remunerated, being work which is normally or should in this case be included and allowed for within the brief fee;
made a perverse and wrong and unfair decision to disallow and reduce the fee claimed by counsel in that, having accepted and confirmed that counsel had spent the time claimed, had carried out the work claimed and carried it out punctiliously, the Deputy Costs Judge decided that the amount claimed was wholly unreasonable;
failed, in disallowing and reducing counsel's fees appealed against, to properly exercise his discretion in exercising his power to determine and allow a reasonable and just and fair remuneration for counsel.
Mr Fitzgerald submitted:
The brief fee should have included and more properly reflected the various skeleton arguments produced for the strike out hearing and the non duplicative work in producing them. To the extent that such items were disallowed as separate chargeable items they should have been included in the brief fee so as to increase the allowed sum of the brief above the £5,000 allowed.
The brief fee should have included and more properly reflected the work carried out in producing the chronology. The judge should have recognized the fact that the chronology played an exceptional and important role in the preparation for the strike out application and required a great deal of time to prepare.
The brief fee should have more properly reflected the fact that this application was effectively equivalent to a trial of the consolidated action. Many of the issues to be decided in the action were put in issue by the extensive and expansive nature of the application to strike out.
The brief fee should have included and more properly reflected the fact that the action was particularly complex. It related to infringement of copyright in a substantial number of technical drawings relating to conveyor machinery used in the mining of coal. The brief fee allowed should have more properly reflected the fact that the strike out application concerned the issue of prospects of success and therefore necessarily involved a time consuming but necessary analysis of the legal and factual issues including, lengthy consideration of the drawings themselves and preparation of argument relating to the plethora of both legal and factual issues in dispute.
The brief fee as allowed should have more properly reflected the fact that in preparing for the strike out application there were a significant number of technical drawings which required to be analyzed and considered.
The brief fee should have included and more properly reflected the time required to prepare for the hearing of the application, given the manner in which it was brought on for hearing.
The Deputy Costs Judge should have included and more properly reflected in the allowed brief fee the time spent in preparing for the hearing and the necessary additional and re preparation required to conduct the application. The fee note clearly identified the time spent as 9.5 days and identified how it was split. Those days did not include the time spent on preparing the skeletons and the chronology and the preparation on May 22 and 23, 2000.
The Deputy Costs Judge should have included and more properly taken account in the allowed brief the fact that he accepted that counsel had spent more time and done more work, in connection with this matter and the strike out, than was claimed for, by him, in the fee note.
The judge should have taken proper account, in determining whether the brief fee sought was reasonable and proportionate in amount, and in determining whether the work done, which fell within the scope of the brief fee, was itself reasonable, proportionate and necessary, of the fact that the defendants' application to strike out failed on all the grounds, and that the defendants were ordered to pay 75% of the claimant's costs of the application.
The result justified the time and effort put in by counsel in preparation for the hearing and also tends to show that the brief fee sought was reasonable and proportionate in the circumstances of the case.
The Deputy Costs Judge also failed to properly take out account (in determining whether the amount of preparation and work and time, devoted to the application, falling within the ambit of the brief fee was reasonable and proportionate) of the importance of the application to the claimant.
The Deputy Costs Judge wrongly failed to properly take account (in determining and allowing a reasonable and proportionate brief fee and in determining whether the work done by counsel was reasonable and proportionate) of the fact that the sum of damages being sought and expected by the claimant was more than £300,000 and potentially as much as a million pounds.
Although he was made aware of the fact, the Deputy Costs Judge failed to take due account in assessing whether the brief fee was reasonable and proportionate, of the fact that counsel was charged with an exceptional amount of responsibility and extra work in preparing for the hearing of this strike out application for a variety of reasons, namely because: (i) the consolidated actions which were sought to be struck out had been on foot for a considerable period of time (since 1995) and counsel had been involved since the start as the claimant's primary counsel; (ii) although the claimant was a highly qualified industrial designer he was an individual, who had little or no financial resources or secretarial or administrative back up, and who relied heavily on his legal advisers in pursuing this claim against a large national corporation, its substantial successor in business and other company defendants, who individually and together, had substantial funds and administrative back up available to defend the action; (iii) counsel was the only thread of continuity amongst the claimant's legal advisers.
The action and the application to strike out were of such a nature and of such importance that it required the services of counsel who was of senior call (1972) specialized in the field of copyright in industrial drawings and the sum claimed in the brief fee in the circumstances of this case was reasonable and proportionate.
The first question is the approach I should take in hearing this appeal. I consider that the right approach is set out in <I>Mealing-McLeod v Common Professional Examination Board</I>, March 30, 2000, unreported, where Buckley J said:
Broadly speaking, a judge will allow an appeal such as this if satisfied that the decision of the Costs Judge was wrong: Civil Procedure Rules 1998 Pt 47.26(2). That is easy to apply to matters of principle or construction. However, where the appeal includes challenges to the details of the assessment, such as hours allowed in respect of a particular item, the task in hand is one of assessment or judgment rather than principle. There is no absolute answer. Notwithstanding that the Judge to whom the appeal is made may sit with assessors, as I did here, the appeal is not a rehearing and given the nature of the Costs Judge's task and his expertise I would, usually, regard it as undesirable for it to be so: compare CPR 47.26(1)(a) with 47.26(2).
I do not think it would be helpful or even legitimate for me to add phrases or adjectives to the approach I have identified. But since the appeal is not a re-hearing, I would regard it as inappropriate for the judge on appeal to be drawn into an exercise calculated to add a little here or knock off a little there. If the judge's attention is drawn to items which … he feels should, in fairness, be altered, doubtless he will act. That is a matter for his good judgment. Permission to appeal should not be granted simply to allow yet another trawl through the Bill, in the absence of some sensible and significant complaint. If an appeal turns out to be no more than such an exercise the sanction of costs may be used."
The basis on which the costs of the legally assisted person (which includes the brief fee) was to be assessed was the standard basis of assessment. Those costs must be proportionate in relation to the matters in issue and reasonable in amount: CPR 44.4(2); 44.5 (1). I am satisfied that there was no error of principle, or other error which justifies the intervention of the appeal court.
In the present case the Deputy Costs Judge asked what the brief was for the defendants' counsel. He was informed that the total fee for the hearing so far as known was £6,500. He was told that the defendants had changed their counsel three times in relation to the application to strike out with two different counsel appearing at different times in the course of the hearing, and that counsel for the claimant played a more important role than normal. Mr Fitgerald relied on the statement of Pennycuick J in <I>Simpsons Motor Sales (London ) Ltd v Hendon Corp (No 2)</I> [1964] 3 AER 833 that it was not a sound principle of taxation to treat the fee paid by the other party as the appropriate yardstick. But Pennycuick J did accept that it was a factor of weight, although not conclusive. In these days, where summary assessment has proved a very useful tool in doing justice and preventing unnecessary applications, I am sure that looking at the fees incurred by the opposing party has become a more important factor (although still in no way conclusive) in the assessment process than it was in 1964. I see no reason why this should not also be true in the process of detailed assessment.
Overall the essence of the matter is that counsel spent almost 12 days preparing for the application, and the Deputy Costs Judge was fully entitled to come to the conclusion that that was a disproportionate effort, and that a fee of £5,000 for the brief, including chronology and skeleton argument, was appropriate.
The fact that it is perfectly possible for experienced professionals to spend a disproportionate amount of time is underlined by the fact that in preparing this appeal, including consideration of the question whether the Deputy Costs Judge was the appropriate person to give permission to appeal, Mr Fitzgerald has spent about 45 hours, and the solicitors have spent more than 36 hours, notwithstanding that the amount in issue is only £10,500.
The appeal will therefore be dismissed. Under Regulation 113 the solicitor is bound to take steps to appeal if counsel notifies the solicitor that he is dissatisfied with the decision, and the court may order that the costs of any such appeal shall be deemed to be costs to which the client's certificate relates. But if the solicitors wish me to make such an order, I will invite the Lord Chancellor's Department to make representations.