Walker & Ors v Burton & Anor

These are cross appeals against the order made on 23 May 2012 by SCCO Deputy Master Hoffman, sitting as a Deputy Adjudicator to HM Land Registry, by which he assessed at a figure of €157,309.97 the costs payable by Mr & Mrs Burton to Mr Walker and others (whom I will refer to as "the villagers", as they have been throughout the proceedings for reasons appearing below). The villagers say that the adjudicator was wrong to apportion their solicitors' total costs for a specified period between those of them who were contractually liable to the solicitors (who acted for them all) and those who were not; the effect of that decision being to cut in half the recoverable amount for base costs. The adjudicator refused permission on that ground, but on the villagers' renewed application I determined at the opening of the appeal that it should be granted. There are cross appeals, both with the permission of the adjudicator, against his decision to allow a success fee of 60% on the villagers' base costs as assessed.

The underlying proceedings were bitterly fought and attracted substantial national publicity. I summarise the background very briefly. The dispute related to the lordship of the manor of Ireby, a village in Lancashire, and whether it continued in existence to this day. In 2000 Mr Burton and his then partner Susan Banford (they have since married and for simplicity I refer to them throughout as Mr & Mrs Burton) purchased Over Hall, a large house in Ireby, They did not at that time take any express assignment of the lordship, but in 2003, on their application, were nevertheless registered at I-WI Land Registry as proprietors of the lordship. The following year they took a confirmatory assignment for a consideration of €1 from the vendors of Over Hall. Immediately to the north of Over Hall lies Ireby Fell, some 300 acres of moorland subject to various rights of common. An enquiry in 1997 had failed to find any owner of the land, but in 2005 Mr & Mrs Burton were registered as first proprietors of the fell, on the basis that it was land of the manor that passed with the lordship title.

Disputes arose with the owners of various properties in the village when Mr Burton purported to exercise rights deriving from the lordship to require them to clear up or cease obstructing (eg by parking vehicles) pieces of land near their properties which, he claimed, were waste land of the manor and thus owned by him as lord of the manor. In 2007 Mr Walker and 5 other residents of the village of Ireby, initially acting in person, applied to the Land Registry to close both the lordship and the fell titles. That application was referred to the Adjudicator and eventually determined by Mr Simon Brilliant, sitting as a Deputy Adjudicator, after a 10 day hearing at which historical evidence going back to the Domesday Book was examined in detail. On 10 December 2010 he handed down a comprehensive written judgment of great clarity (from which I have gratefully derived the above summary) in which he upheld the villagers' principal case that the lordship had ceased to exist by virtue of the break- up of the manorial lands by 1605. He determined that the lordship title should be closed accordingly. However although he found that title to the fell had been registered by mistake (ie that Mr & Mrs Burton owned it as lands of the manor) he declined to order closure of the fell title. Mr & Mrs Burton had acquired that title in good faith and come to be in possession of the fell, and the register should not be rectified against them without their consent (Land Registration Act 2002 Sch 4 para 6(2)). Although not relevant to the hearing before me, I note that an appeal against that latter decision was dismissed by Mr Jeremy Cousins QC, sitting as a Deputy Judge of this court, on 17 April 2012 (Walker and others v Burton and another, [20121 EWHC 978 (Ch)). A second appeal has been heard by the Court of Appeal, upon which judgment is awaited.

Following further submissions Mr Brilliant made a costs order (as amended on 29 June 2011) under which, inter alia, Mr & Mrs Burton were to pay the villagers' costs of a preliminary issue in full and the other costs of the reference as to 80%, in each case on the standard basis subject to detailed assessment. It is common ground that the reference was governed by The Adjudicator to Her Majesty's Land Registry (Practice and Procedure) Rules 2003 (Sl 2003 No 2171; "the 2003 Rules"), which provide by Rule 42 for the Adjudicator to make a costs order and to assess the costs claimed. Thus it was that Deputy Master Hoffman came to assess the villagers' costs, sitting as a Deputy Adjudicator.

Although the 6 villagers initially acted in person, from 16 October 2007 they were represented by the solicitors firm of Blakemores in Birmingham, which had relevant expertise in manorial law. The fee earner initially acting was Mr Geoffrey Barrett, a consultant. From 14 May 2008 the matter was handled by Mr Michael Baxendale, then a partner in the firm. There were issues before Deputy Adjudicator Hoffman as to the basis on which the solicitors initially acted and whom they represented.

It appears from the correspondence in the bundle that Blakemores were initially approached by Ms Scott in 2005, when she was sent a client care letter, but that she and the other villagers must have decided to commence the closure application themselves and did not give any instructions to Blakemores until 2007. On T April 2008 Ms Scott wrote a letter, which appears in the bundle redacted save as to the header which shows that it concerned the lordship and fell titles and the signature which is stated to be on behalf of herself and the other 5 villagers. In subsequent correspondence and attendance notes Ms Scott is treated as the point of contact for "the group" and recorded as saying that she is authorised to agree matters such as fees of counsel on behalf of the group. On 20 June 2008 Blakemores sent an email to Mr Walker saying that they would be sending . . .a client care letter . . .to every member of the group, as they will all be clients" and on 19 August 2008 Mr Baxendale wrote to Ms Scott referring to the level of costs incurred and saying "at least you are assisted by the fact that you are presumably sharing the costs somehow between yourselves although, for the record, you are all jointly and severally liable to my firm for costs". Blakemores clearly regarded all 6 villagers as their clients, having gone on the record for them, but were sending their bills only to Ms Scott and/or Mr Walker and, it appears, leaving it to them to organise the provision of funds to settle those bills.

In a witness statement made for the assessment proceedings, Mr Baxendale described how he had become involved in 2008 and had his instructions to act confirmed at a meeting with all 6 villagers on 17 June 2008, at which they also agreed that he could charge an hourly rate of €300 whereas Mr Barrett had charged €195. Shortly after, he said, he agreed that because of the villagers' financial constraints he would send interim bills at €195 per hour, deferring the balance. The bills were nevertheless substantial because there were active proceedings on a preliminary issue on which Mr & Mrs Burton sought to strike out the application, and so he later proposed a CFA.

The CFA was sent on (and dated) 27 April 2009. Mr Baxendale's witness statement said (bundle p246):

Ms Scott, Mr Walker and Mr Balchin were referred to as "the CFA clients" and the other three as the "non- CFA clients". I observe that the non- CFA clients included Mr Walker's wife and Ms Chamberlain who is referred to in correspondence as Ms Scott's partner (and who has since died, Ms Scott being her representative).

The CFA contained a retrospective element; it provided that fees prior to 27 April 2009 would be charged at €195 up to 31 December 2008 and thereafter €225 "if you lose the case" but "if you win costs in the entirety of the period before 27 April 2009 will be at the rate of $300 per hour plus VAT . . . ". For the future "If you win your claim you pay our basic charges, disbursements and a success fee. Our basic charges means our time at the hourly rate of €300 plus VAT. The success fee is an additional 100% on top of the basic charges to represent the risk factors in this case which include the following: [six factors are listed]. . . If you lose you remain liable for the other side^rs costs as well as Disbursements

The order for costs was in respect of the costs of "the villagers", ie all 6 who were parties to the reference. The bill as submitted for assessment stated that it was the bill of all 6 villagers. References to the CFA did not make clear that only 3 of them were parties to it. A Notice of Funding had been sent to Mr & Mrs Burton (although it is common ground that it was not a prerequisite of recovery of any additional charges to do so) which stated, by way of a box ticked, that "all claims" were being funded by a CFA, without any mention (for which there would have been no provision on the form as printed) that only 3 of the parties represented had entered into that agreement.

In their Additional Points of Dispute on the Bill (p165) Mr Littman on behalf of Mr & Mrs Burton made this objection:

It is relevant to note, in the light of the way matters proceeded before Deputy Adjudicator Hoffman and were argued before me, that it was not contended in the

It was the position of Dr Friston, who appeared before Deputy Adjudicator Hoffman as he did before me, that no apportionment was required; the three CFA clients were liable for the whole amount of the bill and it was illogical to seek to apportion part of the bill away to the non- CFA clients who were not liable to pay it, and then hold that part irrecoverable on the basis that although the non-CFA clients had an order for their costs, they were not liable to the solicitors for any part of the costs and so could not recover any because of the indemnity principle.

When Mr Littman came to open this issue before the adjudicator he put it on a different basis from that stated above, which was that it must be assumed that the nonCFA clients were, or at least might be, liable as between themselves and the solicitors for part of the costs, but because no documents had been disclosed showing what terms of contract existed between them and the solicitors, it could not be determined what they were liable for, and that inferences would have to be drawn. The adjudicator was, it appears, highly receptive to this argument. I have read through the passages in the transcript in which this issue was addressed and revisited at considerable length. It is fair to say that they show a very difficult hearing, particularly between Dr Friston and the adjudicator. As an illustration, at one point both counsel were required to make written submissions as to the evidence of terms of the confract of retainer between the non-CFA clients and Blakemores. Dr Friston, whose position was that there could be no such evidence because no such contract existed, made submissions to that effect which he described to me as blunt'. Mr Littman referred to them as 'insulting to the court'. The adjudicator described them as 'an attack on the court'. Dr Friston maintained before me that the adjudicator had wholly failed to understand the issues involved, made inconsistent and contradictory rulings throughout the hearing and reached a wholly illogical conclusion on the apportionment issue.

The course of argument on this point was somewhat convoluted. In large part this comes from the nature of detailed assessment proceedings, which are very interactive between the judge and advocates. Mr Littman submits that what Dr Friston describes as contradictory decisions of the adjudicator are no more than his testing the pöSition put to him in the course of argument. Even allowing for this, it seems to me that there is force in Dr Friston's complaint that the adjudicator appears to have adopted a fixed position at the start that there must have been a contract of retainer under which the non- CFA clients were liable for part of the costs, and then suddenly reversed that position but still held that part of the costs must be apportioned to them. Because there was considerable difference between counsel as to what findings I should conclude that the adjudicator made I will have to recite a number of extracts from the transcript. I have kept these as brief as possible to illustrate the point and reach my conclusions on the appeal. I should say that it was not part of Dr Friston's grounds of appeal that the Deputy Adjudicator's decision was tainted by serious procedural irregularity.

I begin at page 306 in the bundle. There are certain points in the transcript where the transcriber has marked passages as "inaudible", or inserted words in brackets which could not be entirely made out. In the following extracts, wording in brackets is inserted by me as either the transcriber's suggestion or my own which seems to make sense in the context, or in some cases a précis to link two passages:

Counsel then made their respective submissions as to whether there should be an apportionment in principle. Mr Littman argued that where a solicitor had acted for two or more parties on separate retainers, each was entitled to a separate bill. It was impossible to identify any particular costs that related solely to the case of any one or more of the villagers, and so all the costs would have to be apportioned pro rata amongst them all. He relied in particular on the law as summarised by Chadwick J in Baylis v Kelly [1997] 2 Costs LR 54. He submitted that all six clients must have been jointly liable before the CFA was entered into, and (p328):

The following extracts illustrate Dr Friston's submissions and the adjudicator's reaction to them. I begin at page 328 of the bundle:

Mr Littman then made a response which was again premised on his contention that the CFA clients could not be regarded as liable to their solicitors for the whole of the bill. He said

The adjudicator then made a ruling as follows (p366):

At this point, then, the adjudicator seems to have held that the client relationship, which was not seriously disputed to have existed, between the non-CFA clients and the solicitors must have been on the basis that they were liable for the solicitors costs to some extent, either because he did not accept that there could be such a thing as a client who was not liable to pay his solicitor, or because if such an arrangement were possible he was not satisfied with the evidence of Mr Baxendale that that was the arrangement in this case, and would have expected to see clear documentation in some form to persuade him that such an arrangement had indeed been made.

Dr Friston then asked (p369) for clarification of what terms the adjudicator found applied between Blakemores and the non- CFA clients. The adjudicator referred again to the letter stating that all were jointly liable in 2008 (which was before the CFA) but said that the terms of the retainer after the CFA had not been explained. There was a discussion about the hourly rate for which the non- CFA clients would be liable, the adjudicator indicating that it should be €195 per hour. The adjudicator invited Dr Friston to prepare written submissions over the adjournment on the evidence as to the terms of the retainer, on which he would then rule.

Those were the submissions that Dr Friston described as "blunt". They appear at page 293 of the bundle and include the following:

Mr Littman made written submissions in response. The following morning, the adjudicator said this at the opening of the hearing (p390):

Dr Friston referred to this, in my view justifiably, as a volte face on behalf of the adjudicator. Having previously ruled that there must be a retainer under which the non CFA clients continued to be liable for fees and even that the hourly rate for which they were liable must be inferred to be €195, the adjudicator now held, as Dr Friston had argued all along, that they were not liable to pay any fees. I feel bound to observe that although the adjudicator said that what he had said he did not understand was not the idea that a client might not be liable to pay fees but how such a client could recover costs, I find that difficult to reconcile with the points he took in argument with Dr Friston, some of which I have extracted above. Although he referred to Mr Baxendale as "only acting for three" it is clear from the remarks about any nonfeepaying client being unable "to recover his costs in breach of the indemnity principle", and from the remarks I will quote below, that the adjudicator was not making a finding that the non-CFA clients had ceased to be clients at all after the CFA was executed. Although the adjudicator referred at one point to there being "no retainer" and that another to there being "no contract of retainer" it is clear in the context that what he was referring to was the absence of a contractual obligation on the part of the client to pay any fees to the solicitor. In terms of the distinction that Dr Friston had argued for, there was a "retainer" in the sense of a client relationship with the non-CFA clients but no "contract of retainer" under which those three clients were liable for fees.

Any impression that Dr Friston might have had that the argument had moved in his favour was short lived. The hearing then continued as follows:

There then follows a passage in which Mr Baxendale (who was making submissions at this point because Dr Friston was temporarily indisposed) pursued the argument that any apportionment should be "per retainer" rather than "per client". By this he meant that the liability for costs should only be apportioned between those clients who had entered into a contract of retainer to pay the costs, and not between all the clients irrespective of whether they were liable to pay. The terminology was, as will be apparent, not entirely clear and it may have led to some confusion on the adjudicator's part:

Thus the adjudicator arrived at the 50/50 apportionment of costs, purely on the basis that the costs incurred must be treated as being apportioned equally between the clients who were liable to pay and the three who were not. He did so notwithstanding his earlier indication that the costs would not necessarily be apportioned on such a simple basis, and that he had accepted Dr Friston^ts subnfission that to do so would result in a "huge windfall" reduction in Mr and Mrs Burton's liability. In his written reasons for refusing permission to appeal on this point (p461) the adjudicator recorded that he had found that the non CFA clients were not liable to their solicitor for any costs and so could not recover any in breach of the indemnity principle. He said that he had applied Baylis v Kelly in making an apportionment of costs to them (giving reasons why the amount apportioned was 50%). Dr Friston submits that this was an error of law.

Before turning to Baylis v Kelly itself, I think it should be borne in mind that an assessment of costs payable by one party to the other has to deal with issues that can be broadly grouped into two questions:

In Baylis v Kelly, a solicitor had acted for three defendants to an action. One was legally aided. The defendants lost the case and were ordered to pay the plaintiffs costs (subject to costs protection of the legally aided defendant). There was also an order for legal aid assessment of the assisted defendant's costs, and it was an appeal against items in that assessment that came before Chadwick J; specifically in relation to certain items for attendances and conferences that the taxing master had treated as apportioned equally between all three defendants so that only one-third was recoverable as the assisted party's costs from the Legal Aid Board.

At page 215 of the report, Chadwick J said this:

Baylis v Kelly was, then, a decision on issues relating to the liability of a client to his own solicitor. It was necessary to isolate the costs properly attributable to the case of the legally aided defendant, since the Legal Aid Board was not liable to pay any costs that should properly have been regarded as incurred on behalf of the non- assisted defendants. Insofar as it is relevant to the assessment of costs recoverable from the paying party, the case deals only with the first of the two questions I referred to above. The primary position is that the client's liability is to be determined according to the terms of the retainer, i.e. the contract he has with his solicitor, which must be determined as questions of fact. If there are a number of clients, the solicitor may be

In the present case, the adjudicator had established that the CFA clients were contractually liable (presumably jointly as between themselves) to Blakemores to pay for the work done at the rates set out in the CFA agreement. He had accepted, eventually, the submission that the non-CFA clients were not liable to pay anything to Blakemores because the arrangement made was that the CFA clients would be responsible for paying Blakemores. There was no need to resort to apportionment to determine what the CFA clients were liable for, and it would have been a nonsense to do so.

That is not the end of the matter however, for the second question also needs to be considered. In Ellingsen (which Mr Littman relied on in the Points of Dispute) there were two companies which were defendants to the action, one of which, Harsem & Co, was successful and the other was not. It was found that there were separate retainers in relation to each company, rather than a joint retainer on behalf of both, but that Harsem & Co had agreed to pay the solicitors the costs of both defendants. On taxation of Harsem & Co's bill as between it and the paying party, it was allowed all the costs relating specifically to his own defence, but only half of those relating to both defendants jointly. That decision was upheld by the Court of Appeal, citing the remarks of Amphlett B in Burridge v Bellew (above) that "As the principle of allowance of costs is that the successful party is to be recompensed the liability he has reasonably incurred in defending himself, if he is only liable to his solicitor for half of certain joint items he cannot be allowed the whole of them, even though by some separate agreement he has made himself liable for the other half, primarily the liability of another and unsuccessful defendant" and Beaumont v Senior [1903] 1 K. B. 282, which was also a case in which one defendant out of two was successful but had agreed with the solicitor that he would pay the costs of both.

Atkin LJ said in relation to Beaumont v Senior:

These decisions show that a successful defendant may only recover from an unsuccessful claimant the costs properly attributable to his own defence, which will be determined if necessary by an apportionment of joint items in a bill, even if the successful defendant is contractually liable to the solicitor to pay all costs including those of the unsuccessful defendants. It appears that while Ellingsen may have been a case in which both clients were in principle liable to the solicitors, but there had been a separate agreement that Harsem & Co would pay the costs of both of them, Beaumont v Senior was assumed to be a case in which one of the defendants had no liability for costs at all, the other having agreed from the outset to pay for both of them.

Insofar as an apportionment of costs jointly incurred has to be made, there is a rule of thumb that they will be apportioned equally between the successful and the unsuccessful defendants. It is not an inflexible rule however; in Korner v H Korner & Co [1951] Ch 10 there were eight defendants, six of whom were successful in their defences. The bulk of the costs of the action had been incurred in dealing with an issue involving the unsuccessful defendant, but which did not arise against the successful defendants. Although the decision turned on the wording of the order itself, in relation to the general principle of equal apportionment of joint costs Singleton LJ said this:

No point appears to have been taken that the successful defendants were not liable to the solicitors for any part of the costs relating to the issues that did not involve them. Presumably, therefore, this was a case of a retainer under which each of the defendants was jointly liable for all of the costs, or at least separately liable for an equal part of the whole.

Thus, the paying party who has succeeded against one defendant but failed against another is protected from injustice when the second of the two questions is asked, not only by the application of a principle that he is only required to pay an apportioned part of jointly incurred costs, even if the receiving party is liable for the whole amount of those costs, but also that an equal apportionment will not be applied if that would be unjust because the effect would be to require the paying party to meet costs properly attributable to the case of a defendant against whom he has succeeded. Even if the successful defendant is contractually liable to pay an equal part (or the whole) of such costs, that would not be a liability "reasonably incurred in defending himself".

Although all these cases were ones in which the receiving parties were defendants, no point was taken that similar apportionments would not be made if it were the costs of claimants in issue, as in the present case. If for instance different claimants acting by the same solicitors bring different claims in the same action (as they may if the claims can conveniently be disposed of together, see CPR Part 7) and one succeeds but others do not, I have no doubt that a paying defendant would be entitled to have the costs apportioned between the claimants so that the defendant paid only those properly attributable to the successful claimant's case.

None of these cases involves a paying party who has been ordered to meet the costs of all the defendants, but seeks to escape from paying part on the basis that only some of them were liable to the solicitors for the costs jointly incurred on behalf of all of them. Chadwick J said, relying on remarks made in Re Colquhoun, that the rule would be applied even if it meant that a solicitor was unable to recover some of his costs because for example one of his clients was insolvent. His example presupposes that what is being considered is apportionment as between solicitor and client where the clients are each severally liable for part of the costs. The apportionment cannot be adjusted to make the solvent client pay more than he is liable for, simply because the solicitor would otherwise lose out. It is not a reason for imposing apportionment inter partes so as to deny a party recovery of costs for which he has incurred a liability.

In the present case, save for minor matters not relevant to the issues before me, all of the issues were common to all of the claimants, or at least were issues that affected one or all of the CFA claimants. None of the issues depended, for instance, on the individual titles of any of the claimants, save for one argument based on Ms Scott's title, but she is one of the CFA claimants. None of the non- CFA claimants advanced any arguments that were not relied on by the CFA claimants. It was essentially irrelevant to the conduct and success of the action whether there were one, three, six or 100 named claimants. If the CFA claimants had been the only claimants named the issues would have been no different and their costs would have been no less. There

If for some reason one of the non-CFA clients had been awarded his costs but all of the others, including those who had signed the CFA, were not, then no doubt it would be argued that since he has no liability for any costs, none were recoverable under the indemnity principle. But that is not what has happened here. All of the claimants have been awarded their costs. There is no injustice to the defendants in their being required to pay the whole of the costs without any apportionment; it does not result in their paying costs that have been increased by the unnecessary addition of the nonCFA clients as parties, or in paying any element of costs that can be said to be properly attributable to parties against whom, or issues upon which, the defendants succeeded in the action (the defendants did of course succeed on the issue of the fell title, but that was reflected in the order for payment of a percentage of the claimants' costs and has no bearing on issues as to apportionment).

In contrast, the apportionment made in my judgment results in a considerable injustice to the CFA claimants. The adjudicator's order meant that the CFA clients failed to recover a significant element of the costs that they have incurred (and for which, as Mr Littman informed me, they are being sued by Blakemores at the present time) over and above amounts disallowed for reasons of proportionality and the like, simply because other individuals lent their names to the action on the basis, as the adjudicator accepted, that they did not incur liability for Blakemores ^t costs. The adjudicator seemed to think that there was something wrong or undesirable in this, that the nonCFA clients were getting "a free ride" which the court should in some way not countenance. I agee with Dr Friston's submissions here and below that there is nothing at all wrong with any such arrangement; and there is no reason for the court to go out of its way to impose penal consequences on those parties who, like the CFA clients, are willing to take responsibility for the costs of pursuing what is essentially a community interest. Of course all those who join as parties must be advised about their possible exposure to adverse costs orders, but that is a matter between them and their solicitor and no concern of the opposing party or of the court on assessment between the parties.

In my judgment, the adjudicator was wrong to make any apportionment of the claimants' costs. In so far as he thought he was required to do so pursuant to Baylis v Kelly in order to determine the amount for which the CFA clients were liable to the solicitor, that was wrong because he had already made findings the effect of„which was that they were liable for the whole amount, from which it follows that there is no breach of the indemnity principle in their being able to recover that amount. In so far as he thought it was required to do so to give effect to the principle in Ellingsen, that too was wrong in my judgment since for the reasons given above the apportionment was not necessary to identify the costs properly incurred by the party in whose favour the costs order had been made in pursuit of his successful claim, and resulted in injustice to the CFA clients.

It follows that the costs order must be set aside insofar as it allowed only an apportioned part of the costs incurred. For completeness I refer to a number of subsidiary arguments raised. Mr Littman in his skeleton argument submitted that the adjudicator had not accepted the villagers' case as to the nature of the retainer, but he had had accepted an admission against their interest "that Blakemores had become bound not to recover the costs of the non-CFA clients". In other words, his submission was that the non-CFA clients were in principle liable to pay Blakemores, but Blakemores had agreed to waive recovery of any costs from them. Mr Littman accepted in the course of the hearing that this would only support his case if the adjudicator had also accepted that Blakemores had agreed not to recover from the CFA clients the share of the costs that they had waived the right to recover from the non-CFA clients. It is however in my view clear from the passages I have quoted above that the adjudicator did not proceed on the basis of a waiver of liability incurred, but that the terms on which Blakemores acted for the non-CFA clients were that they were never liable for any costs, and there is nothing to indicate that the adjudicator concluded that Blakemores had agreed to charge the CFA clients less than the amount set out in the CFA agreement. Nor was there any evidential basis that would have supported such a conclusion.

Mr Littman also criticised the lack of clarity of the documentation and evidence as to the terms on which Blakemores acted for the non-CFA clients. He characterised the villagers case as being that "the Deputy Adjudicator was bound to take the uncorroborated word of a solicitor who had already been found unreliable, where the retainers in question were on any showing unusual and where he did not produce any of the expected documents which should exist if his case were correct". These criticisms were made on the premise that the adjudicator had not made a finding that the non-CFA clients were not contractually liable to pay any costs. But, as appears from the passages quoted above, the adjudicator did make that finding and Mr & Mrs Burton have not appealed against it, so that questions of the sufficiency of the evidence to support it do not arise.

Lastly, Mr Littman raised at the end of the hearing that the adjudicator's finding as to non-liability of the CFA clients for costs was only in respect of the period before the CFA was made. This was based on the adjudicator having said, just before the adjournment during which Dr Friston prepared his written submissions as to the terms of a contract of retainer with the non- CFA clients (p383):

However, this must have been a slip of the tongue or a mistranscription. There is nothing earlier to indicate that Dr Friston was being asked to make submissions limited to the pre CFA period, his submissions were not so limited and there is nothing to suggest the adjudicator approached them as if they were. The apportionment was made in respect of costs incurred after the date of the CFA and not before, which would have been inconsistent with the finding Mr Littman argued for.

I move on to issues relating to the success fee. First, Mr Littman argued that nothing should be allowed at all because the costs order made by Deputy Adjudicator Brilliant did not expressly order payment of additional liabilities. Sections 58 and 58A Courts

S58 thus provides for the enforceability of CFAs. Previously any fee agreement in which all or part of the lawyer's remuneration depended on the outcome of litigation would have been unenforceable as constituting maintenance of the proceedings, contrary to public policy. In the case of an agreement such as the CFA entered into in this case, nothing would have been payable by the losing party on assessment, because of the indemnity principle.

The argument was over the meaning and effect of s58A(6) as then in force (it has since been amended by the Legal Aid Sentencing and Punishment of Offenders Act 2012 in enacting the Jackson reforms and now provides that one party may not be ordered to pay success fees incurred by another). Mr Littman's submission was that it made a success fee recoverable if, but only if, the costs order provided for it to be paid. The problems that might arise if such a provision were omitted were mitigated, he says, in proceedings covered by the CPR, because the Costs Practice Direction, para 2.1 provided that:

It is accepted that proceedings before the Adjudicator and in other tribunals are "proceedings" for the purposes of ss 58 and 58A, so that a costs order was permitted to make provision for additional liabilities. Other tribunals, Mr Littman submits, make deeming provisions in their rules similar to costs PD para 2.1, or incorporate that provision by cross reference to the CPR. But proceedings before the Adjudicator are (or were then) governed by the 2003 Rules, r42 of which is the only provision dealing with costs and contains no reference to additional liabilities or the CPR. In the absence of an express order for payment of additional liabilities (or an order which is deemed to include such a provision) it cannot be reasonable to allow payment of more than the rate that the court assesses as the appropriate base rate for the work done.

Mr Littman acknowledged that in Abbott v Keeley, 18 June 2009 REF/2008/0305 Mr Martin Dray sitting as a deputy adjudicator and determining issues of costs following a reference held that a success fee was recoverable. At para 3 of his judgment Mr Dray (having referred to ss 58 and 58A) said:

This decision, Mr Littman argues, is either incorrect or can be explained because Mr Dray was determining both the principle of which party should be entitled to costs and the assessment of the amount of those costs at the same time. He was thus making a costs order within the meaning of s 58A(6) which provided for recovery of additional liabilities. In the present case, the costs order was made by Deputy Adjudicator Brilliant, and Deputy Adjudicator Hoffman performed only the assessment of the amount so ordered. As would be the case with a costs judge assessing costs in proceedings before a court, he had no power to vary the effect of the costs order already made, but only to apply it by determining the amount payable.

The Adjudicator dealt with this point briefly. He said (p457):

In my judgment, Mr Littman's argument is based on a false premise. It assumes that, but for section 58A(6) a success fee could not be recovered between parties and the receiving party would always have been limited to recovering the base costs assessed by the court to have been the reasonable charge by a solicitor to a client who had not entered into a CFA and so was liable to pay such costs irrespective of the outcome of the litigation. But the reason why success fees could not been recovered prior to 1990 was not because an agreement to pay anything over the normal base rate was by definition umeasonable but because the CFA could not be enforced at all, being deemed to be contrary to public policy. If any attempt were made to enter into a CFA it would not have been just the success fee that was irrecoverable; the solicitor would not have been able to uncover any remuneration at all from his client. By virtue of the indemnity principle, the opposing party would not be liable to pay anything at all.

Once the CFA is made enforceable as between solicitor and client, that difficulty falls away, and an order for payment of the costs of that client by another party starts from the position that all the costs for which the client is liable are potentially recoverable inter partes. An order for costs on the standard basis requires the paying party to pay such costs in so far as they are reasonable and proportionate (in this respect the provisions of the 2003 Rules are the same as those of the CPR). The question therefore is whether the totality of the amount for which the client is liable to his solicitor has been reasonably and proportionately incurred. This cannot be answered simply by pointing to the hourly rate that would be reasonable as between a solicitor and client who has not agreed a CFA, because in the circumstances in which the solicitor has entered into a CFA he has incurred the risk of not achieving success in the proceedings, for which he is properly to be compensated by payment of a success fee. It is answered by a combination of the considerations routinely addressed in the course of assessment; what were the alternatives available to the client for funding the litigation, what is the reasonable base costs rate to allow and what is a reasonable success fee to allow to compensate for the risk of failure?

Mr Littman made the point that if this is so, there was no need to enact section 58A(6) at all. In that, he may be correct; it is not necessary for me to decide the point, but it does not seem to me that it is particularly that Parliament would have wished to enact a provision "for the avoidance of doubt" when making provision for a new regime of funding so radically different from that which had previously operated. Similarly, Costs PD para 2.1 is in my judgment declaratory of the position that would obtain in any event, and does not have the deeming effect that Mr Littman contended for.

On this point, then, in my judgment the adjudicator's decision was correct and Mr and Mrs Burton's appeal fails.

Finally, there are cross appeals against the Adjudicator's decision to allow a success fee by way of an uplift of 60% over the base costs allowed, rather than the 100% provided for in the CFA or the 40% which Mr Littman had argued was the maximum reasonable amount. Dr Friston on behalf of the villagers argued that given the cumulative effect of the risk factors identified in the CFA, the only reasonable conclusion was that the prospects of success were never greater than 50%, so that the

The CFA identified six risk factors as follows:

These, Dr Friston argued, were all independent risks. He did not seek to put a particular percentage on the risk of failure because of any one of them, but produced a table showing that even if it were assumed that the separate risk of each one of them occurring was quite low, say 10%, any of them would have caused the failure of the action and applying basic probability theory the overall probability of failure as a result of the occurrence of any one or more of a number of independent events was to be determined by multiplying together the individual probabilities of each of them occurring, which quickly produced a combined probability of failure exceeding 50%. The Adjudicator could not, he said, reasonably have concluded that the risk of failure through each of these causes was less than 10%, and so could not reasonably. have concluded that the overall risk of failure was less than 50%.

Further, he said that the Adjudicator was wrong to take account of the fact that by reason of the definition of "success" in the CFA, the solicitors had not been subject to the risk that the villagers might fail (as that ultimately did) in their application to close the title to the Fell. This the Adjudicator referred to as "the riskiest risk". In his decision on the amount of the success fee to be allowed he said (p458):

Mr Littman submitted that the correct approach was set out in the judgment of Lord Neuberger NIR in Motto and others v Trafigura Ltd and another, [2011] EWCA Civ 1150, encapsulated in the following passages:

In my judgment, the Adjudicator was obviously right to recognise that the way in which "success" was defined in the CFA had to be taken into account. Dr Friston submitted that this was in some way treated as automatically meaning that the percentage success fee should be reduced, but that is clearly not what the Adjudicator did. He said that he would have to "look at the other risks", that is to say he evaluated the risks that the solicitor was running, taking no account of the one that he was not running. That is plainly the correct approach.

Thereafter, he made a broad overall assessment of the total risk borne by the solicitor. That in my judgment is what he was required to do. It is true that he did not indulge in any detailed analysis of the individual risks or how they related to each other. But it is difficult to see how he could have arrived at any meaningful conclusion by seeking to be more precise as to the individual components of the risk. There is force in the submission that although six factors were set out, they cannot be said to be truly independent risks. At least three of them (points 1,2 and 4) boiled down to the same thing, namely that despite extensive research there were gaps in the documentary record and something else might emerge. The risk of a finding of a "Prescriptive Grant" was closely similar to considerations based on the fact that parties had acted as if a Lordship had existed. None of these matters was capable of any objectively ascertainable individual quantification, and nor was the general factor that the relevant law was difficult. Any attempt to attribute individual percentages, or to assess the degree to which any one of the factors was dependent on any of the others, would in my view have only lead to a wholly spurious impression of precision.

It was in my judgment undoubtedly relevant that by the time the CFA came to be signed huge amounts of time had been spent by people with a direct interest on both sides in researching the historical and legal position. That was bound to affect the likelihood that new documents, or new arguments, would come up. The possibility remained, but it was right to regard it as much reduced.

The role of this court on appeal is as set out by Lord Neuberger in the passage cited above. It is not to make and to substitute its own assessment. The Adjudicator did not in my judgment can make any of the legal errors referred to, and the assessment that he made could not be said to be below the range which was available to him.

Somewhat ironically in view of the argument relied on above, Mr and Mrs Burton also appeal against the 60% figure on the basis that it was unreasonably high. Mr Littman argued that in fact the cumulative risks of failure were so low that no success fee should have been allowed over the 40% which had been offered by his clients

This appeal in my judgment must fail for the same reasons. The Adjudicator had seen the correspondence between Mr Baxendale and Mr Mrs Burton, which could not sensibly be considered as anything more than a solicitor talking up the prospects of his own client^ls case in order to put pressure on the opponent. He had not of course seen the material from the later proceedings, and for me to consider it is now it would have to be admitted as new evidence. But it would not be right to do so, in my judgment, because nothing in it would be likely to have affected the result. Plainly, Mr Baxendale and his firm must have considered the prospect of success sufficiently strong to make it financially worth the firm's while accepting the risk and entering into a CFA. Neither the fact that they may have been described as "strong" nor the fact that the firm might have had additional motivations for entry into a CFA could affect the essential task that the Adjudicator had to perform of making a broad assessment of the degree of risk involved, nor in my judgment could they lead to the conclusion that he could not reasonably have arrived at the figure he did.

I anticipate from what was said at the hearing that it is likely that a further hearing will be required to deal with matters arising from this judgment. I invite the parties to agree and submit a time estimate for that hearing.