Sibley & Co v Reachbyte Ltd & Anor

This is an appeal brought by Sibley & Co Solicitors (“the Appellant”) against part of the decision of Deputy Master Hoffman on the assessment of their costs as between themselves and their former clients the Defendants (“the Respondents”).

The judgment was delivered on 16th January 2008 after a two day hearing in May 2007 and a three day hearing in September 2007

The appeal is made with the permission of Mr Justice David Richards.

The appeal is limited to the assessment of Counsels’ fees by Deputy Master Hoffman.

The appeal relates to the 3 days in September essentially. The bill was the subject matter of a detailed assessment with an amount of £479,380.07. Previous bills rendered to the Respondents by the Appellant totalled £356,283 which were not the subject of an assessment.

The bills are in respect of fees of Michael McClaren QC (“MM QC”) and his junior Giles Wheeler (“GW”). The total amount sought on MM QC’s behalf was £151,070 and the amount allowed on assessment was £64,835. The total sought on behalf of GW was £77,230 and the amount allowed on assessment was £31,625. Those figures are exclusive of VAT.

The appeal, therefore relates to £86,235 (MM QC) and £45,605 (GW) totalling £131,840.

Those figures are quite large for Counsel’s fees but it has to be borne in mind that the cost of the assessment was some £200,000 (on both sides together) and the Appellant’s primary case is that the award on the assessment should be set aside and there should be a further hearing. Had I allowed the appeal it would have led inevitably to the result that the parties would have not been fighting over the principle but over avoiding paying costs.

At the outset of the appeal Mr Woolgar who appears for the Appellant provided me and my Assessors with a useful table showing the amount of fees that he was seeking to reinstate on the appeal under each heading. This was largely down to his efforts. I say that because whilst MM QC provided a note for some aspects of the costs he never provided a detailed statement of the time he spent on any case. GW also provided comments but they largely followed MM QC’s notes.

Although the first work done was on 4th March 2004, neither MM QC nor GW provided any fee notes before 23rd June 2004. By that time, the bulk of the work, the subject matter of the claim, had been done. The Appellant had never negotiated terms in advance or a limit to Counsel’s fees. By the date of the fee notes the only fees that were subsequently incurred of a substantial nature were the adjournment fees incurred when the trial was adjourned.

That adjournment application was made by Mr Hill-Smith who appears for the Respondents in fact. It was made at the behest of the Respondents. After the adjournment the Respondents changed their legal team. The Respondents have brought proceedings against the Appellant for negligence and breach of contract. That remains to be heard. The trial of the original action against Brewin Dolphin was abandoned shortly before it was due to commence in March 2007 (by which time the Respondents had a fresh legal team) with a drop hands settlement.

At the conclusion of Mr Woolgar’s submissions I indicated that I did not need to hear Mr Hill-Smith on behalf of the Respondents and would give reasons for my decision in writing. This judgment sets out the reasons.

The First Respondent (“Reachbyte”) is a company incorporated for the purpose of share dealing. The Second Respondent (“Kris Motors”) is a company set up for the purpose of the export of motor parts although it had in the past engaged in share dealing to a limited extent. The principal director and moving force behind both companies is Mr CD Krishnani. He was the person who gave all instructions to Mr Sibley on behalf of the Respondents. He admitted that he was a temperamental character and the Deputy Master in paragraph 44 of his judgment recognised this.

Reachbyte and Kris Motors operated share dealing accounts through the well known stockbrokers Brewin Dolphin. The arrangement had a number of unusual aspects to it. Apparently the volume of trade was exceptionally high. Also the trading instructions were placed through an agent who it transpired to be less than honest. The relationship between Reachbyte and Kris Motors and Brewin Dolphin ended acrimoniously in June 2000.

Reachbyte consulted the Appellant not long after the breakdown of relations. At that time they were acting as Solicitors for a Mrs Mehta who was involved in the share transactions and ultimately became a Defendant in the proceedings brought by Reachbyte and Kris Motors. Reachbyte was also seeking advice from Clyde & Co. Early on Mr Krishnani obtained a short opinion from Mr Swainston QC giving a general overall view of the merits for which he was paid £4,500. This opinion was the model of the type of opinion that Mr Krishnani believed was being sought in relation to MM QC.

The claim against Brewin Dolphin was professionally estimated at about £7,000,000 to £8,000,000 but Mr Krishnani believed it to be in excess of £30,000,000. The claim was intimated at that level after the Appellant’s retainer was terminated. Later allegations of fraud were made against Brewin Dolphin. Mr Sibley had refused to contemplate alleging fraud against Brewin Dolphin. This created increased tensions in the relationship between Mr Sibley and Mr Krishnani and the expert retained by the Respondents a Mr Symes. There were other tensions over the choice of MM QC which were gone into at the assessment; they feature in the judgment and I will refer to them further.

The costs in issue start as I say in March 2004. By this time it had become known that the trial would commence on 5th July 2004.

Between 4th March 2004 and 7th July 2004 Counsels’ fees were incurred under a number of heads:-

MM QC provided no detailed notes identifying what he had done during this period. Attached to his comments dated 27th June 2007 are some examples of his narrative notes for fee notes (B266 for example). These merely record the hours that were done but do not identify what was precisely being done. These were prepared for internal purposes and then were incorporated into the fee notes issued on 24th June 2004. He has not provided any of these workings save the later ones commencing on 18th June 2004. It follows, therefore, that Mr Woolgar’s schedule whilst helpful, is largely one of reconstruction by him by examining fee notes and is speculative. As I have said however the fee notes do not provide any clear indication of what was done for each area covered beyond a recitation of daily work. Even then the hours are not actually broken down on the fee notes although it is possible to discern approximately the number of hours because MM QC charged £350 per hour and GW charged £150 per hour.

As I have said what is stark is that the Appellant made no attempt to discuss let alone fix the level of fees Counsel were incurring on behalf of the Respondents and there was no discussion between the Appellant and the Respondents as to any level of fees. Thus by the time of the conference on 30th March 2004 GW had accumulated £15,500 worth of fees and MM QC £42,535. Neither the Respondents nor (more significantly) the Appellant knew this level of fees had been incurred by that time.

As I have said the Deputy Master heard evidence over 5 days. He heard evidence from Mr Sibley and his assistant Mr Cramer for the Appellant and from Mr Krishnani, Mr Craze and Mr Symes for the Respondents. He was also presented with a mass of documentation and detailed opening and closing skeletons. In addition he was provided with all of the drafts of Mr Symes’ Expert Report. Due to lack of time he was not provided with any assistance in analysing those reports. The purpose of the reports being provided was apparently to enable him to determine which part or parts Counsel had been involved in. They were given to him to peruse on his own unaided after the submissions had been provided. When the Deputy Master’s papers were returned apparently there were no markings on his copies of the Experts Report. It is not proper in my view to record in an appeal what markings there might or might not have been made by the Judge below on the papers. It is not possible to draw a conclusion from that. However it is quite clear that the Deputy Master was not provided with any kind of analytical assistance to enable him to begin the exercise of trying to analyse the reports in an attempt to see what Counsel had done. I can understand why he did not do this (assuming he did not). Towards the close of his submissions Mr Woolgar invited me to embark on a similar exercise. This was done without warning either in his skeleton argument or notification to Mr Hill-Smith who objected to the exercise. I declined to do it. It seemed to me to be wholly inappropriate to expect me (even assisted by assessors) to carry out an analysis of the Experts Reports in an attempt to find out (by divination or some other stochastic process) which part or parts had input from Counsel. All of this was to attack a sentence in paragraph 51 of the judgment that Leading and Junior Counsel had drafted or redrafted the report 14 times. It is apparent that they did not embark in anything like that number of drafts because some drafts were in existence before they were retained.

This is obviously an error on the part of the Deputy Master because in paragraph 48 he identifies that 8 drafts had been prepared by 9th March 2004. Instructions to consider the draft Experts Reports were sent out on that date. He therefore clearly knew the extent of Counsel’s involvement in the reports. In fact as will appear he disallowed the costs primarily because he formed the opinion (absolutely correct in my view) that the work that was carried out by Counsel was unusual in nature and amount and that there was no evidence that the Appellant told their client that as a result they might not recover all of them from the other party contrary to CPR 48.8 (2) (c). He clearly formed an adverse view as to the costs incurred and the manner of the involvement of all lawyers in the preparation of the Experts Report. He was right in my view to be critical. This is a good example of the approach of the Appellant in this case. No stone is left unturned in the criticism of the Deputy Master’s judgment.

In fact the Deputy Master reserved his judgment for 4 months and then delivered a 20 page judgment which to my mind shows that he clearly understood all the issues and came to the conclusions that he did without any significant errors on his part.

The result of his determination was that the Respondents have overpaid £77,296.74 including VAT. Repayment of that by the Appellant (possibly with accrued interest) has been stayed because there are doubts about the solvency of the Respondents. If that sum were therefore paid to them and the appeal were to be allowed it might be the case that the Respondents would not be able to repay it and thus the Appellants would be out of pocket. By reason of the judgment that I indicated at the conclusion of the Appellant’s submissions however, that will not arise. There may be other issues arising out of the negligence proceedings brought by the Respondents against the Appellant but I will hear further argument on that when I hand down this judgment.

The Appellant’s Notice was supported by a comprehensive skeleton argument which went to 32 pages. This amounted to a root and branch attack (save in one legal respect) on the factual findings of the Deputy Master.

The appeal is governed by CPR 52.11 (3) (a). The Court will allow an appeal only when the decision is wrong. Guidance to what is meant by “wrong” in this context is given at paragraph 52.11.14 of the White Book. Further CPR 52.11 provides that an appeal is limited to a review of the decision of the Lower Court. These principles are equally applicable to the appeal before me from the Deputy Master.

It must be remembered that the judicial process in England and Wales gives (quite rightly in my view) prominence to the trial. Unlike other jurisdictions where there is a tier of appeals the appeal process in this jurisdiction is intended to be more limited. This flows from the Common Law approach of the accusatorial system. A case is tried by a Judge where the evidence is confronted and tested by cross examination in front of the Judge. He is therefore uniquely equipped to assess witnesses’ credibility. It cannot usually be done by an examination of transcripts. They do not begin to convey the entirety of the demeanour of a witness in the witness box, his demeanour in Court and the overall impression a witness gives when he gives his evidence and he is tested on it in cross examination. It is in my view impossible to understate the value of the trial Judge’s assessment of evidence after cross examination as a tool for determining the truth of disputes between parties.

The Appeal Courts should interfere with this exceptional exercise of the first instance Judge’s ability only in rare circumstances.

The Judge at first instance needs to assess witnesses performance and his assessment of the witness as a whole, see EPI Environmental Technologies Inc v Symphony Plastic Technologies Inc [2004] EWHC 2945 (Ch) (affirmed by the Court of Appeal [2006] 1WLR 495, [2006] EWCA Civ 3).

The Appeal Court should not come to a different conclusion on the evidence where there is no question of misdirection unless it is satisfied that any advantage enjoyed by the trial Judge by reason of his having seen and heard the witnesses could not be sufficient to explain or justify the trial Judge’s conclusion (Thomas v Thomas [1947] AC 484, 487-8 Lord Thankerton).

In Biogen Inc v Medeva PLC [1997] RPC1 Lord Hoffman said:-

“The need for Appellate caution in reversing the Judge’s evaluation of the facts is based upon more solid grounds than professional courtesy. It is because specific findings of fact even by the most meticulous Judge are inherently an incomplete statement of impression which was made upon him by the primary evidence. His expressed findings are always surrounded by penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance…. of which time and language do not permit exact expression but which play an important part in the Judge’s overall evaluation”.

Lord Hoffman returned to this theme in Piglowska v Piglowska [1999] 1 WLR 1360 at 1372 where he said “the exigencies of daily Court life are such that reasons for judgment will always be capable of having been better expressed. This is particularly true of an unreserved judgment such as the Judge gave in this case but also of a reserved judgment based upon notes such as were given by the District Judge. These reasons should be made on the assumption that unless he has demonstrated to the contrary the Judge knew how he should perform his functions and which matters he should take into account”. The Deputy Master was extremely experienced and clearly conducted a thorough and careful review of the evidence. That is not to say that he dealt with every point. I must however approach the appeal with the assumption that his findings are to be afforded the greatest respect.

In Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 at 274H-265A Lord Steyn said “the principle is well settled that where there has been no misdirection from the issue of fact by the trial Judge the presumption is that his conclusion on the issue of fact is correct. The Court of Appeal will only reverse the trial Judge on an issue of fact when it is convinced that his view is wrong. In such a case if the Court of Appeal is left in doubt as to the correctness of the conclusion it will not disturb it”.

Sometimes the Court of Appeal interferes but it should only do so exceptionally. The decision of the Court of Appeal in Lynch v Lynch Transport (Chanf/1998/0656/A3) is such a case where the Court of Appeal interfered in a judgment where it was clear that the Judge had reconstituted his own evidence to come to the conclusion that he did. In Attorney General of Zambia v Meer Care & Desai [2008] EWCA Civ 1007 the Court of Appeal felt able to overturn the findings of a Judge who saw the witness in question being cross examined for six days, although it is unclear how they felt able to substitute their own view of the evidence from that of the trial Judge (see the unanswered 31 page criticism of the judgment lodged by the Attorney General in support of his application for permission to appeal to the House of Lords).

In the EPI Environmental Technologies case the Court of Appeal initially allowed the Appellants an attempt to dislodge the judgment’s conclusion by producing 5 court files containing the pleadings, judgments, witness statements and an abridged version of the trial together with very full skeleton arguments. They then supplemented that with the whole of the transcripts of the trial below extending to 1800 pages and a further 11 files containing exhibits and materials. This led to a further 5000 pages of documents together with further extra material resulting in the application for permission to appeal extending to some 900 pages. The attempt was simply to challenge the factual findings of the Judge and seek in effect a re-hearing. The Court of Appeal clearly repented of their decision to allow the Appellant to reproduce all of this material and in effect to try to start the trial again. Lord Justice Jacob reviewed the challenges and in each case rejected all of them because there was no material which led him to conclude that the findings of the Judge at first instance could not be said to be wrong. The Appeal was dismissed.

These principles have been around for a considerable time. However they have been complicated by two decisions by the Court of Appeal. In Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 the Court of Appeal allowed an appeal on the grounds that the Judge had failed to give reasons for his preference of the expert evidence of one party to that of the other. In English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605; [2002] 1WLR 2409 the Court of Appeal enumerated why a trial Judge must give adequate reasons.

These decisions have caused great difficulty for first instance Judges. It has long been held that a Court does not have to deal with every point presented by Counsel in support of his case. It is sufficient if what he says shows that the parties and if need be the Court of Appeal the basis on which he acted (Eagil Trust Co Ltd v Piggott-Brown [1985] 3 All ER 119 at 122 per Griffith LJ (as he then was)). This was expressly approved of by the Court of Appeal in English (paragraph 18) for all judgments. That is a point which is regularly overlooked. However as the Court of Appeal said in English, the Flannery decision led to a cottage industry developing of challenges to first instance judgments. This involved a detailed analysis of the judgments compared with each and every submission and point that was taken at the trial and an attempt to find that the Judge failed properly to discharge his primary functions in a reasonable way because he failed to deal with points which were taken in the Court of Appeal and said to be of great significance. Part of this is financial and tactical. The bulk of costs are incurred at the trial. This appears to be continuing unabated.

In this case for example as I have said some £200,000 worth of costs were incurred at first instance. By contrast the Appellant’s statement of costs was just under £20,000. Even discounting the figures of the principal it is well worth chancing an appeal on the Henry of Navarre principle (“Paris Vaux bien messe”). On appeal a judgment is then extensively pored over in the skeleton arguments in the appeal to give the impression that the Judge got it all hopelessly wrong. This is a process that is to be deplored. It fails to give true effect to the significant advantage the Judge had at first instance. Lord Hoffman identified the advantages that the Judge had and it is quite wrong by analysing transcripts and nit picking over the judgments in the light of detailed submissions that are made to use that as a vehicle to overturn a judgment based on a clear evaluation of witnesses by an experienced Judge.

An Appellate Court should only interfere with factual findings of a Judge at first instance if it can be shown that no reasonable Judge could have come to the conclusion he did based on the facts that were laid before him. It may be that a Judge does not fully set out his reasoning. The Flannery and English cases overlook in part in my view that difficulty. Often when dealing with witnesses having seen them in the witness box give contradictory evidence it is impossible to say anything more than “I believe x in preference to y”. The Appellate Court should consider the judgment as a whole in the light of the material before the Judge and should not be tempted into a detailed analysis of each and every reason or argument put forward by an Appellant at first instance and allegedly not dealt with by the Judge at first instance.

The present appeal (save in one point on law which I can deal with quite shortly) is such an appeal in my view.

The Deputy Master clearly had a grasp of the details of the case as his judgment shows. He might not have given (for example) reasons for conclusions on factual matters in every case. Paragraph 15 is such an example. Nevertheless he clearly was able to discriminate between the credibility of the witness and the witness’ failings because of his personality. Thus he acknowledged Mr Krishnani had to apologise for the explosive nature of his temperament and that he was not an easy client. That did not lead him to conclude that he should reject everything that Mr Krishnani said. Sometimes he accepted his evidence (paragraph 15). Other times he rejected his evidence (paragraph 44). Equally he had the benefit of the evidence of Mr Symes the expert by video link (paragraph 46) and he clearly impressed him and rejected the Appellant’s categorisation of him.

On reading the judgment and reading the documentation referred to in the judgment I do not find that it can be said that the Deputy Master could not reasonably have come to the conclusion that he did based on that material. Nor do I find the material that he alluded to is selective or in any way unfair to the Appellant. It is simply that he did not accept the Appellant’s case on a variety of matters and was critical of them. In my view he was justified in coming to that conclusion in any event. However even if I were of the view that I would come to a different conclusion it would clearly be inappropriate for me to interfere on that ground alone. That is not the function of the Appellate Court. To interfere without there being any valid criticism of the first instance Judge merely because a different view is entertained on appeal on the same material fails to give true effect to the primacy of the factual findings of the first instance tribunal.

That is enough in my view to dispose of the appeal save in the respect of the legal issue. I will however out of deference to the very careful and extremely well articulated arguments put forward by Mr Woolgar give reasons why in my view the Judge was entirely correct on each ground of challenge.

It is submitted by the Appellant that the Deputy Master fell into serious error in misunderstanding the effect of the judgment of Rougier J in Gray & Anr v Buss & Merton (a firm) [1999] PNLR 882. In paragraph 5 of his judgment the Deputy Master said:-

“where there is a dispute between a solicitor and his client as to the terms of any retainer, prima facie it is the client’s version that should prevail – see Gray& anr v Buss Merton (a firm) [1999] PNLR 882 at 892”.

It is submitted by the Appellant (paragraph 5 of the skeleton argument) that there is no such principle and Gray is not an authority for the proposition. It is submitted that Gray is limited to a proposition where a solicitor is consulted by a lay client in such precise non legal terms the solicitor ought to recognise a possibility of misapprehension between him and seek clarification. If a solicitor fails so to do he will have been held to have been retained in accordance with the client’s understanding of the extent and nature of the retainer.

Rougier J actually said this:-

“It must, surely, be up to the solicitor to take the appropriate steps to clarify precisely the extent of his retainer, and this, sadly, Mr Lightfoot failed to do when, in my judgment, the circumstances demanded that he should. This view is, if not analogous, at least consonant, so it seems to me, with that line of cases such as Crossley v Crowther (1851) 9 Hare 384, and Re Payne (1912) 28 T.L.R. 201, to the effect that, where there is a dispute between solicitor and client as to the terms of any retainer, prima facie it is the client’s version which should prevail. It seems to me that the underlying basis for this principle must be that it is the client who actually knows what he wants the solicitor to do, and so it is the solicitor’s business to ascertain the client’s wishes accurately, bearing in mind the possibility that the client, through ignorance of the correct terminology, may not have correctly expressed it”.

Neither the Crossley case or the decision of Re Payne which are extremely succinct and give no basis for their reasoning are of any authority in this area in my view. However I do not see that Rougier J is saying anything other than something which is obvious common sense. When a Judge is faced with a factual dispute as to the extent of a retainer all he is saying is that prima facie in the absence of other clear evidence the client’s view as to what was to be the retainer ought to prevail. That is self evidently the case in my view because it is up to the solicitor to satisfy himself correctly to what he intended to do. Further this analysis is supported by the observations of Denning LJ in Griffiths v Evans [1953] 1 WLR 1424 at 1428 where he said “on this question of retainer I would observe that where there is a difference between a solicitor and his client upon it, the Courts have said, for the last 100 years or more, that the word of the client is to be preferred to the word of the solicitor”.

Rougier J was of course a very experienced trial Judge and I do not find his observations as being anything other than practical observations concerning how a Judge can come to a conclusion in the light of disputes on questions of fact over a retainer. To confine them to the areas identified by the Appellant is in my view wrong.

Equally in any event I do not accept the Appellant’s contention that the application of Gray led the Deputy Master to conclude erroneously in favour of the client. The example put forward for this is paragraph 9 of the judgment. There he refers implicitly to Gray but correctly identifies the analysis as showing that the client’s version prima facie prevailed. He does not say that the client’s version has to prevail. As I have already set out earlier in his judgment (paragraph 44) the Deputy Master did not accept every version put forward by the Respondents. In passing I should say that there is a difficulty about the last sentence of that paragraph as it is difficult to see the reference to CPR48.8 (2) (c) (i) and (ii). Nevertheless I do not think that has any significant impact because it is clear from his findings that he analysed the competing evidence of Mr Sibley and Mr Krishnani and in the light of cross examination came to various factual conclusions as to which part of the witnesses’ evidence he preferred on different issues.

Accordingly I do not accept that the Deputy Master made any error as to law. Equally even if he did the examination of the evidence shows that he was entitled to come to the conclusion that he did.

In paragraph 3 of his judgment the Deputy Master referred to the other proceedings and the decision of Openshaw J in Nicholas Drukker & Co v Pridie Brewster & Co [2005] EWHC 2788. In that judgment Openshaw J stated in the context of that case that the Master did not have jurisdiction under section 70 of the Solicitors Act to hear wholesale allegations of professional negligence and wide ranging criticisms of a solicitor’s conduct which affected not just the individual items in the bill of costs but went to the heart of the retainer. The Deputy Master therefore said that he “refrained from trespassing in to that territory and approached the case in accordance with CPR 48.8 (2)”. I do not accept Mr Hill-Smith’s submission in paragraph 63 of his skeleton argument that the Deputy Master took a deliberate decision to be economical with his reasons so as not to trespass on the negligence proceedings. If he were to do that that would actually be quite wrong in my view. He must discharge his functions for which he is appointed to carry out. If the presence of the negligence proceedings inhibits him then he should not go on to determine the issues with that inhibition present in his mind. I do not see paragraph 3 of his judgment has the effect contended for by Mr Hill-Smith. It merely means that the Deputy Master rightly decided not to make any finding as to negligence that might be relevant to the other proceedings. He confined himself to the determination of the issues as to costs only.

I go on now to consider the grounds of challenge.

The Deputy Master found that the Respondents wanted initial advice where upon they would give further instructions. The Appellant contends that the instructions were a general instruction to instruct Leading Counsel to prepare for trial, redraft and approve witness statements, attempt to obtain an adjournment and if not successful proceed with the hearing. Instructions were sent to Leading and Junior Counsel on 3rd March 2004 and Mr Sibley agreed in evidence that they were sent without Mr Krishnani’s express consent and further that he had not yet approved MM QC as choice of Leading Counsel. On 12th March 2004 Mr Krishnani wrote to Mr Sibley and in particular expressed reservations about the choice of MM QC and requested Mr Sibley to get in touch with Mr Craze as he had a few names who might be suitable. The Deputy Master found no reply was sent to that letter of 12th March 2004 and he simply preferred Mr Krishnani’s evidence as to the proposed limited nature of the instructions. I should say that by 12th March 2004 according to their fee notes MM QC had (already) incurred some £9,950 worth of chargeable time and GW some £2,380. Neither the Appellant nor the Respondents were aware of it.

If a conference took place on 30th March 2004 with MM QC it was clearly an acrimonious affair and Mr Krishnani wrote to express his displeasure the next day on 31st March 2004. In that letter he reiterated his dissatisfaction with MM QC as a suggested Counsel. By that time Counsel’s fees had risen to nearly £60,000. Mr Sibley replied with a long letter of 5th April 2004 continuing to defend the appointment of MM QC. He delivered an interim bill which omitted Counsels’ fees (save those of Linden Ife who had been separately retained on a failed summary judgment application). The Deputy Master found that these fees were far in excess of the fees contemplated by the Respondents and in the absence of any clear indication used his own expertise to substitute fees of £7,500 and £3,750 respectively.

The criticism of the Appellant’s is an initial one of failure of the Judge to set out any real assessment of the impression made by Mr Krishnani and Mr Sibley. It is true that there is no detailed analysis but for the reasons I have set out earlier in this judgment I do not find that that is a justified criticism. It is plain when one reads the judgment as a whole the Deputy Master had a firm grasp of the evidence and how the witnesses had performed and had come to his views. Equally the criticisms of the failure to deal with Mr Krishnani’s alleged earlier stances which were changed do not matter. These go to questions as to credibility and consistency. There is nothing in the judgment to suggest that the Deputy Master was not alive to such possibilities. I do not accept that he has to set out a rebuttal of each and every point in coming to the decision that he did. The correspondence in my view is strongly supportive of the Respondents’ case. Given that it seemed to me that the Deputy Master would then have to give Mr Sibley an opportunity to see whether he could improve his position. However the difficulty Mr Sibley has is that there are no contemporary documents showing any communications or discussion with his client (nor even Counsel for that matter) and he fails on this issue because the Deputy Master simply disbelieved him. I can see no grounds for suggesting this decision was wrong.

Equally I do not accept the criticisms of the level of fees assessed by the Deputy Master. This is in line with the level of fees which Mr Krishnani was expecting and which the Deputy Master found he was expecting and in the absence of any submissions from the parties as a fallback the Deputy Master was entitled to apply his own experience as to what would be a justified level of fees for such a conference given the limited nature of the supposed instructions. I do not see his decision can be said to be wrong.

Here the Deputy Master was extremely critical of Mr Sibley’s involvement and ultimately Cousels’ involvement in the expert evidence. He referred to the role of the legal advisors in preparation of expert reports (paragraphs 7-8) and was extremely critical of what was done although he accepted that Mr Krishnani knew that the expert report was being worked upon. The unusual nature of the relationship is well demonstrated by the email that Mr Symes sent to Mr McLaren dated 11th March 2004. In his first paragraph he said “I understand that Sibley & Co forwarded you a draft of an expert witness statement supposedly written by me. I wish to point out the document you have received is at this moment in time the work of Eddie Sibley with small parts of supporting commentary being unauthorised extracts of my work….” Further the email continued “in your comments I notice you use the word fraud. Unfortunately I have been instructed by Sibleys not to mention the words collusion or fraud although I truly believe any expert witness called by the Defendants or the Insurers will arrive at the same conclusion”. Finally he asks MM QC to keep the email confidential between them. The email was nevertheless passed on to Mr Sibley in any event (see MM QC’s email of 11th March 2004) albeit by accident rather than by a decision to commit it to the client as a matter of principle. This is somewhat surprising conduct to put it mildly.

In his judgment (paragraphs 45-51) the Deputy Master set out his reasoning. He was clearly concerned about the role that Mr Sibley and Counsel appeared to be playing in the preparation of the expert’s report. Counsels’ fees for this head were £24,115 and £12,105 respectively. This reflects a substantial amount of work which he correctly describes as unusual in nature and amount and that there is no evidence to show that the Appellant told the client that as a result they might not recover all of them. In paragraph 51 he correctly in my view identified the limited role that Counsel and solicitors should have in the preparation of an expert report. He therefore concluded that the fees as claimed were unreasonable and in the absence of any evidence as a fallback once again he clearly used his expertise to determine the proper level for Counsel to discharge their functions properly would be £4,000 and £2,000 respectively.

I have already dealt with the suggestion that the Deputy Master substantially fell into error by referring to 14 drafts and that he failed to read (unaided) all of the experts’ reports and come to his conclusion as to the amount of input by Counsel. The criticisms here are that the Deputy Master was mistaken in his conclusion that the work Counsel had carried out was beyond the scope of their instructions. I do not see that that is sustainable. I would have come to the same conclusion. However of course that is not the right test. The test is whether there was material which could have reasonably led the Deputy Master to his conclusion. The material is set out in his judgment and I do not see that there is any basis for challenging them. I can see no basis therefore for challenging the conclusion. There is nothing to suggest that Mr Symes was a truculent expert with erratic views; the Deputy Master appears to have been impressed with Mr Symes and I do not see how an Appellate Court could possibly interfere with that impression given the fact that the Appellate Court had not seen him.

The Deputy Master (paragraphs 21-34) dealt with this issue extensively. The instructions to provide a written advice were dispatched on 19th April 2004 having been prepared on 14th April 2004. Those instructions indicated that the trial was likely to be in June 2004 and the witness statements had been exchanged. The Deputy Master concluded that the purpose of the instructions was to provide the Respondents with a preliminary written view by MM QC. Mr Krishnani was plainly still dissatisfied with MM QC. He wrote to that effect on 17th May 2004. Mr Sibley’s reply dated 24th May 2004 refers to a joint opinion and this is fastened upon by the Appellant to justify fees for both Leading and Junior Counsel. The Deputy Master rejected that submission that that was sufficient to put Mr Krishnani on notice that both Counsel were involved (judgment paragraph 27(c)). I do not see that is a conclusion that it can be said is an unreasonable decision. The reference to Junior Counsel is tucked away in one letter. More in my view is needed to show that Mr Krishnani agreed to joint Counsel. As the Deputy Master found the purpose of the written opinion was for him to be provided with what he was expecting in conference from MM QC namely a short written advice setting out his views of the type that Mr Swainston QC had provided.

Mr Sibley promised the opinion but that was against the background of Mr Krishnani still complaining about the suitability of MM QC (see for example his letter of 25th May 2004). Mr Sibley referred to the opinion as being a “preliminary opinion” in his letter of 25th May 2004 when he promised it to Mr Krishnani by the end of the week. When it arrived it extended to 72 pages or so and Mr Sibley made a unilateral decision to withhold it from Mr Krishnani. I do not see that it can be said that the conclusions that the Deputy Master came to in paragraph 27 of his judgment can be said to be wrong. In fact Mr Sibley commented on the opinion without Mr Krishnani’s knowledge and following a telephone conversation between MM QC the latter declined to change his advice. He sent a lengthy email on 4th June 2004 urging Mr Sibley to produce the advice to the client. This was not done but instead Mr Sibley instructed MM QC to produce a summary which was produced on 9th June 2004 but was still not sent to Mr Krishnani until 17th June 2004. By that time the trial was less than 2 weeks away.

The Deputy Master concluded that Mr Krishnani was expecting a fee of around £5,000 but unknown to him between 30th March 2004 and 15th June 2004 a further £65,235 was expended in Leading and Junior Counsels’ fees. I have already commented on the paucity of the material in respect of Counsels’ fee notes. The Deputy Master accordingly concluded that the appropriate level of fees for the written advice should be £5,000 for Leading Counsel and none for Junior Counsel.

The Appellant’s criticism of the Deputy Master’s judgment start with a general repetition of the argument based on Gray and his alleged failure to properly analyse the evidence which I have rejected. There are criticisms (set out in paragraph 23 of the skeleton) based on the fact that it is suggested that the limited nature of the advice was only put very late in the day when it was put to Mr Sibley in cross examination. That might be correct but I do not see that it can be said that the Deputy Master’s decision was wrong. The correspondence fairly understood in my view between April and May 2004 is explicable only on the basis that Mr Krishnani whilst he was still unhappy with MM QC was willing to go along with him for the purpose of a limited advice only. It makes no sense for him to agree with the continued retainer of MM QC to prepare a full and detailed opinion when he is yet to be persuaded he had any confidence in him. The purpose of the short advice was in effect to enable MM QC to persuade Mr Krishnani to use him. There was no role for GW in that exercise and the Deputy Master was quite right to disallow the entirety of his fees. Although the point again rose late I do not see that it is an issue which was not dealt with fairly and therefore I can see no basis for suggesting that the Deputy Master was wrong. On the contrary I would have come to entirely the same conclusion.

Brief fees for Leading and Junior Counsel for the trial of the preliminary issue were agreed on 28th June 2005 at £50,000 and £29,000 respectively with daily refreshers of £2,750 and £1,250 respectively. It appears that Mr Sibley agreed these after the usual haggling that takes place with Counsel’s clerk. He initially asked for £75,000. He reduced the fees on the basis that all work done before that could be separately charged (see the Clerk’s letter of 28th June 2004). As the letter says the brief fee was deemed incurred at that date so that it was payable in any event. What is quite surprising is that Mr Sibley apparently agreed this “reduction” of Counsel’s fees when he had no idea what the amount of exposure the clients had for Counsel’s fees up to that stage. It is possible that he had the fee notes dated 24th June but the evidence on that was not clear. He certainly never asked what was being claimed pre brief fee. An application for an adjournment had been made on 22nd June but only a limited adjournment was granted against an undertaking that a fresh application to adjourn would not be made.

A fresh application to adjourn was made (by Mr Hill-Smith not MM QC or GW). That was successful. The Deputy Master (paragraph 39) determined that the agreement made for preparation work to be excluded from the brief fee was unusual in nature and amount. That is a conclusion which the Deputy Master could reasonably come to and is a conclusion with which I would have agreed. He sets out in paragraphs 36-38 the pressure that was plainly put upon Mr Sibley by Counsel’s Clerk. It is unlikely (although the Deputy Master made no finding) that Mr Sibley saw the fee notes bearing in mind the conversation that took place on 24th June. In any event he plainly had no time to digest it. He was critical of the fact that Mr Sibley was unable to produce an attendance note of these critical discussions especially as some £80,000 was involved. He was also critical of Mr Sibley for his failure to agree a reduced fee to take into account the eventuality that the trial would be adjourned. When brief fees are negotiated when the trial is close and might not take place a number of possibilities could ensue. The parties could agree a differential fee depending on the outcome of the application for an adjournment. Alternatively the parties can agree that the brief fee stands in full but that it is not to be added to or increased when the new trial comes on unless there are extra costs incurred or time taken by Counsel between the original trial and the adjourned trial. The other possibility is simply to agree an adjournment fee and nothing more. All of these fall within the ambit of normal negotiations that take place between Counsel’s Clerk and the solicitor. In my view it cannot be said that the Deputy Master’s view that a separate adjournment fee should be negotiated is unreasonable. It should be borne in mind that he has determined fees of £40,000 and £20,000 on the basis of an adjournment not on the basis of a trial. Although in the events that have happened neither MM QC nor GW (or Sibley & Co for that matter) had any further role that does not deflect from the fact that on the Deputy Master’s analysis they would be able to negotiate a fresh fee for a resumed trial. The Deputy Master once again came to his own figures based on his own expertise apparently without any assistance from the parties.

I do not accept the criticisms have any basis (paragraph 33 of the Appellant’s skeleton). The decision is well within the parameters of the Deputy Master. I do not accept that his analysis is wrong. The fact that the adjournment application started on 5th July 2004 (the date of the trial commencement) and carried on until it was acceded to on 7th July 2004 does not in my view entitle MM QC and GW to full brief fees because the trial had started (absent the wording of their Clerk’s letter see paragraph 64 above). Their role in the trial would not start in my view until after the adjournment application was rejected and they are called upon to open the case. They did not do that. In my view therefore whilst the suggestion of an adjournment fee appears to be a point which emanated from the Deputy Master’s own thought processes I do not see it can be said to be wrong. It is logically correct and is a conclusion that I too would have come to. It is far more sensible in my view for the solicitors and Counsel’s clerk when an application is made late to adjourn a trial to postulate brief fees on the possibility that the application is successful as well as the possibility that it might fail.

Having concluded that an adjournment fee ought to have been agreed the Deputy Master (paragraph 41) consequently disallowed any fees beyond those figures from 7th June 2004. This reduced MM QC’s from £64,745 to £40,000 and GW’s fees from £36,950 to £20,000. In addition he (generously in my view) awarded them a day refresher and a half day refresher. That latter covers the fact that Lindsay J adjourned giving his judgment from the afternoon of 6th July 2004 so that MM QC was attending in Court for the morning. MM QC however according to his note (paragraph 32 (d)) does not appear to accept that a reduction to half a day is appropriate. In my view I personally would not have awarded any refresher fees because the trial never started. However the Deputy Master came to a conclusion that refresher fees should be awarded and I would not interfere with that. I think the decision for a half day represents reality. Once again my understanding is that a refresher fee assumes that a full day (i.e. 5 hours work) is done so that if on day 1 the time goes short the client is entitled to credit the next day until the full 5 hours is achieved i.e. no refresher on day 2 until 5 hours work has been done. I do not see how the half day is unreasonable. In any event the point was conceded by Mr Woolgar on taking instructions from Counsel’s clerk on 24th May 2007. MM QC and GW might not have known that but such a concession was within the ostensible authority of their clerk.

The Appellant criticises the consequential disallowance from 7th June 2004 (skeleton argument paragraphs 34-36). The date of 7th June 2004 is criticised. The Deputy Master appears to have selected that date because that was the date on which the first discussion took place about proposals for brief fees. It is suggested that he had already assessed some fees up to 15th June 2004 in paragraph 33 of his judgment. Whilst that is correct it is also irrelevant. The fees in that period are covered by the fees preparing for the written advice. I do not accept the suggestion that the reduction in fees absolved the Respondents from any liability to pay for the substantial adjournment application that MM QC and GW prepared for and argued on 22nd June. I can see no reason why that should not be included in the adjournment fee. It must be borne in mind that the Deputy Master is compensating them on the basis that the trial goes off. He is not compensating them for a brief fee for a trial. Given that the fees in my view are generous and I do not see that it can be said that his thought processes are unreasonable.

This arises out of the Deputy Master’s determination that the correct fee for the written advice was £5,000 (paragraph 33 of his judgment). It is said by the Appellant that it is not clear whether or not he was disallowing them because of they were unreasonably incurred or whether there was no authority to incur them. Some of the fees were allowed as paragraph 33 of the judgment contemplates. It seems to me to be clear that the Deputy Master is fixing the fees that are to be paid for work which is authorised and simply disallowing anything else on the basis that the client never agreed to Counsel doing any other work. He plainly disallows the work done for the witness statements on the basis that no instructions were given to do those matters. As regards the balance of the fees he concluded that they were both of an unusual nature and there was no evidence that the solicitor informed the client that they might not be recovered from another party. In other words he is not satisfied that the Respondents agreed to all this work being done by Counsel. That is a finding that he is entitled to come to in my view having looked at the material and the conclusions he has come to elsewhere. Given the limited nature of the instructions that he determined were appropriate anything else that does not fall within those instructions is simply going to be disallowed. I do not see that it can be said that it was an unreasonable decision. I too would agree with it. Although his figure was wrong (i.e. the £65,235) the actual amount being £54,834 the logic of his decision is not affected. This analysis by the Appellant of course is dependant on Mr Woolgar’s table being correct. I have already observed on the difficulties of the exercise he faced because of the paucity of the material to justify the fee notes. I accept as he said in paragraph 30.3.3 of his skeleton the amount of fees in issue appear to be £20,052.50 (a revised figure). But I do not see how the quantum can not lead to a conclusion they are unusual in nature or amount. The reason they are unusual in nature or amount is because the Appellant is unable to identify any retainer for the work which the Respondents had agreed to. It is a matter of proof. Bearing in mind the inadequacy of the Appellant’s records in relation to fees this is hardly surprising. At the end of the day the Appellant retained Counsel without giving them clear instructions as to what they would do, never imposed any limits on their ability to run up chargeable hours and never obtained any figures at all as to the amount that was being incurred until at the earliest 22nd June 2004. That was only 2 weeks before the trial. Despite the dissatisfaction with MM QC this rolling indifference to the Respondents’ complaints effectively trapped them in to using MM QC plainly against their wishes at a time when it was not even known what exposure the clients were being apparently led to in respect of MM QC’s work.

It is plain that the Deputy Master formed the view that Counsel’s enthusiasm to do work on the case had no limits and that arose from the failure on the part of the Appellant to address it. In the context of the difficulty of the client it was hardly surprising that the Respondents disputed these items (although they have paid substantial amounts as appears from the early part of this judgment). When the Deputy Master’s judgment is fully and fairly analysed although the written arguments appear to have substance when the appeal is analysed in the light of the material which the experienced Deputy Master had none of the grounds in my view was made out. The Respondents were entirely justified in challenging the fees.

For all of those reasons I will dismiss the appeal. I will hear submissions when I hand down the judgment (if not agreed) as to any consequential orders that need to be made.