Hurst & Anor v Denton-Cox

I have before me an appeal against Master Rowley sitting as a costs judge, who was conducting a detailed assessment ordered by Proudman J on 23 February 2011 when she made an order on the application of the defendant, Mr Denton-Cox, striking out the claim of the claimant, Mrs Hurst, which was a claim brought in professional negligence against Mr Denton-Cox, he being the barrister who had previously represented her. Proudman J made an order in paragraph 3 that, save for the costs of the bundle to be assessed on the standard basis, the claimant pay the defendant's costs of the action on the indemnity basis, to be subject to a detailed assessment if not agreed and that within 21 days the claimant should make an interim payment of £8,000 in relation to the costs of the action.

That detailed assessment initially came before a costs officer in October 2012 and then before Master Howarth on 21 January 2013. He, in the event, was not satisfied, either with the form of the bill of costs which had been lodged by Mr Denton-Cox's solicitors, Browne Jacobson, nor with one of the matters which was in contention at that stage, and he adjourned the hearing to come back before him on 2 September 2013. That hearing was not in itself effective for reasons that I will come to no doubt later today and was relisted before Master Rowley who heard the matter on 18 December 2013.

One of the points taken by Mr Hurst, the claimant's husband, who is a solicitor and who acted for her in these proceedings and has appeared before me, was that for the hearing on 21 January 2013, a schedule of costs was provided by Browne Jacobson. That costs schedule was a short, two page cost schedule and contains at the bottom a statement that "The costs stated above do not exceed the costs which the defendant is liable to pay in respect of the work which is stated", and is signed in the name of Browne Jacobson LLP without identifying the individual partner who signed it on behalf of the firm.

That sets out, among other costs that are claimed under the statement, under "Estimated future costs - travel and waiting", five hours for LH, who is Laura Hackney, who is a costs draftsman employed by Browne Jacobson, charged at £550 and, under disbursements, a return train fare of £183.25. In the event, because Master Howarth adjourned the hearing and ordered the defendants to pay the costs of the abortive hearing on 21 January, no use was made of that costs schedule before Master Howarth and Mrs Hurst has not been asked at any stage to pay for the costs which are detailed in it.

Nevertheless, Mr Hurst now takes a point that he took before Master Rowley and that is in this form. He says that the claim for five hours for travel and waiting and the return train fare is something that is in breach of the indemnity principle and therefore the signature of Browne Jacobson to the statement that the costs did not exceed the costs which the defendant is liable to pay, is false. He then refers me to the then form of CPR 44.14, which gives the courts powers in relation to misconduct and says that it engages 44.14(1)(a), which provides that:

The particular Practice Direction that he relies upon is Practice Direction 44 and the particular paragraph he relies on is 9.5.3 which requires the statement of costs to follow as closely as possible form N260 and to be signed by the party or parties' legal representative.

Form N260 (which I do not have in front of me) contains the requirement that there be a signature to the statement (to which I have already referred twice), that the costs do not exceed the costs which a defendant is liable to pay. Mr Hurst says that the court should conclude that that statement is not true. Therefore the schedule of costs is not in the required form and there was a breach of 44.14(1)(a) and that that therefore brings in 44.14(2), which says:

The reason why Mr Hurst says that the statement in the schedule of costs is untrue is because he happened to discover after the hearing (there had been nothing to alert him to this beforehand) that in fact Miss Hackney was staying down in London, having come down from Nottingham for the purposes of the hearing before Master Howarth, to attend a two day action proceeding in the Clerkenwell County Court. That became apparent to him as a result of an email from Mr Radford of Browne Jacobson, who appears for the defendant before me, dated 23 January, that is two days after the hearing, in which he says:

Mr Hurst says that, as a matter of practice, cannot be right. Mr Denton-Cox was charged the entirety of the travel there and the time of travelling, in circumstances where Miss Hackney was having to come down from Nottingham to London for two clients, one being Mr Denton-Cox and the other being the Clerkenwell client.

When he took this up with Browne Jacobson, he received a letter dated 1 October 2013 from Mr Bambury, the senior partner of Browne Jacobson, which says this:

What Master Rowley said on this point - he did not give a fully reasoned judgment but he dealt with the points as they arose and he gave reasons in the course of the discussion with Mr Hurst - and what he said at page 37 of the transcript was as follows:

He points out that there is a difference between what Mrs Hurst as the paying party might have to pay:

Then he says at page 38 of the transcript:

Then having said he had thought about the point quite hard, at page 40 he says:

Before me, Mr Hurst invites me to conclude that there was either a breach of the indemnity principle and that it is untrue that Mr Denton-Cox and his insurers were liable to pay and paid the entirety of the travel costs and the entirety of the travel time, or that they must have been misled: as he put it, insurers are not known for their acts of charity and it is inconceivable, he suggested, that the insurers would have agreed to pay 100 per cent of those costs had they been made aware that Miss Hackney was also coming down for another matter.

It seems to me that it is impossible for me to go behind the combination of two things. One is the signature of Browne Jacobson on the bill of costs. As to this, Henry LJ said in Bailey v IBC Vehicles Ltd, 27 March 1998:

The second is the explanation given by Mr Bambury in his letter that there were two clients, but that the arrangement that was reached was that Mr Denton-Cox should be charged for travel and Browne Jacobson's other client, the Clerkenwell client, should be charged for the hotel costs. Whether that was a sensible or fair arrangement to make is not, it seems to me, the question. The question is whether there is evidence, which is what Henry LJ's dictum requires, which enables me to reject the signature on the bill as being untrue. It is a very serious allegation to suggest that solicitors have put before the court a schedule of costs which is inaccurate, and it does not seem to me that Master Rowley was at fault in refusing to find that there was any breach of the indemnity principle.

I do think that there were questions which could have been asked and there were questions which could have been answered as to whether it was appropriate for Mr Denton-Cox and his insurers to effectively pay the entirety of the travelling time and, in circumstances in which it was known that Miss Hackney was not going back to Nottingham that day but was staying for another hearing, it does raise a doubt as to whether it was appropriate to require Mr Denton-Cox to pay for a return ticket and for the whole of the travelling time in circumstances where, had that been the only matter on which Miss Hackney was engaged, she would have gone back to Nottingham that day and not stayed for any of the remaining time in a hotel at all. But that is not the question for me; it is whether I can be satisfied, or rather more accurately whether Master Rowley should have been satisfied, that there had been a breach of 44.14(1)(a), that is that the party's legal representative had failed to comply with the Practice Direction, the breach being suggested being that the certificate given was false and misleading.

I am not prepared to reach that conclusion on the basis of the material before me, and I do not think that Master Rowley's decision can be faulted. In any event, Master Rowley went on to say that, given that the schedule of costs was not in fact deployed before him, given that Mrs Hurst was not in fact asked to pay any of those costs, he did not regard it as appropriate, even if there had been a breach of a certificate, as serious enough to take any account of, because, as he said, "I am not going to spend all morning talking about a schedule of costs that was never presented to the court and therefore the seriousness of the breach of certificate or any of those issues seem to me to be too hypothetical for it to be of any value, because you were never asked to pay those costs."

That, on analysis, is a discretionary decision under 44.14(2) which clearly contains a discretion under which the court may, where paragraph (1) applies, disallow all or part of the costs which are being assessed.

Given that the costs which were being assessed were the costs of the action before Proudman J and that even if the schedule put forward in January 2013 was misleading, which, as I say, I am not prepared to conclude on the material before me, that is something that would have had no effect on the quantum of costs that were claimed in relation to the costs which Master Howarth was being asked to assess, it seems to me that that is a decision which was open to him in the exercise of his discretion, so that in any event an appeal against that is not something that I can allow.

I will therefore dismiss the appeal on that ground.

The second point that is taken by Mr Hurst on behalf of his wife arises in this way. The application that came before Proudman J in February 2011 was an application to strike out the claim on the grounds, I believe, that it did not disclose any reasonable cause of action, or something along those lines. I have not seen the application, but that application was acceded to by Proudman J, who struck out the claimant's claim and, for good measure, declared that the claimant's claim against the defendant was wholly without merit.

In preparation for that hearing, Mr Radford had sent Mr Hurst an email the day before, 22 February, at 12.37. I am not going to read it all out because it is quite long, but that did two things. Firstly, it enclosed a form in the then form of N260 giving the defendant’s statement of costs for the hearing of 23 February 2011, signed by Mr Radford on behalf of Browne Jacobson and coming to a grand total of £9,255. In paragraph 1 of the email Mr Radford says:

I regard that by itself as giving rise to an inference that those were the costs incurred on the application rather than the costs of the whole action. That, however, is made perfectly clear beyond any peradventure, by paragraph 2 of Mr Radford's email which says:

Then he sets out various details of the costs and comes to a total figure of £13,080.

That seems to me to make it perfectly plain that £9,255 was not being said by Mr Radford to be the entirety of the costs of the action, but only the costs of the application and that, were the claim struck out and were the defendant awarded the costs of the action, there would be further costs which he would invite to be made the subject of detailed assessment, with an interim order on account.

The next thing that happened was that a draft order was prepared for that hearing, no doubt by counsel. Paragraph 3 of the draft order contained two alternatives. One was that "the claimant do pay the defendant's costs of the action on an indemnity basis, summarily assessed at [ ]", and the second alternative was "alternatively the claimant do pay the defendant's costs of the action on an indemnity basis to be subject to a detailed assessment if not agreed. Within 21 days the claimant shall make an interim payment of [ ]".

One of the points that Mr Hurst took before Master Howarth when he came before him in January 2013, was that there being no costs schedule before Proudman J other than the costs schedule to which I have referred in the figure of £9,255, it follows that had the judge been asked summarily to assess the costs, the only figure in which she could have been asked summarily to assess them was £9,255. Master Howarth took the view that that was something which should be the subject of a further explanation and he adjourned the hearing some time during the morning to be resumed at 2 o'clock, by when Mr Radford had made and faxed down to London a witness statement in which he explained what, to the best of his recollection, the position was at the hearing before Proudman J on 23 February 2011, which was then some 23 months previously.

He says at paragraph 4:

I interpose to say that I have already said that that seems to me to be entirely clear. At paragraph 5 he continues:

Some considerable time later, when serving replies, rather out of time as Mr Hurst has pointed out, to the paying party's points of dispute in August of last year, Browne Jacobson, and I assume it is Mr Radford, said this:

The point that Mr Hurst seeks to urge under this head of appeal, is that it is apparent that Proudman J was asked by counsel then appearing for Mr Denton-Cox to make a summary assessment, not only of the costs of the application but of the action as a whole, and he invites the inference, which Master Howarth said he would otherwise have inferred, that the sum that was asked for on summary assessment was limited to the £9,255.

Fortunately, it is not necessary to rely on any inference because Mr Radford, who appears before me and whom Mr Hurst accepts to be a man of integrity, has explained that to the best of his recollection, that was precisely what happened. He has explained further that the decision was taken that, if an order could be obtained for summary assessment of the action, the sum claimed would be £9,255, as he said to avoid the costs of satellite litigation, which costs can so easily become, and indeed have become in this case. However, as he said in his replies, the learned judge declined that opportunity and instead, as I have already referred to, ordered in paragraph 3 of her order that, apart from the cost of the bundles, the claimant pay the defendant's costs of the action on an indemnity basis, subject to a detailed assessment, with an interim payment of £8,000.

The point Mr Hurst seeks to urge upon me is that I should infer, and Master Rowley should have inferred, that Browne Jacobson had agreed with their clients, that is Mr Denton-Cox and his insurers, that the costs of the action should be limited to £9,255 and to claim more than that in the detailed assessment is therefore a breach of the indemnity principle. I simply do not see that there is any reason for inferring that at all. I see no reason not to accept what Mr Radford said to me, which is that, to avoid the cost of satellite litigation, he and his firm and his firm's clients would be content with an order for summary assessment in the sum of £9.255, thereby effectively waiving the right to recover any further sums but that, if the matter went off to detailed assessment as it did, then they would claim whatever they could claim at a detailed assessment.

I simply see no reason not to accept that that is the case. If that is the case, there is no breach of the indemnity principle, and the fact that Browne Jacobson and their clients were willing, for what seem to me to be rather good reasons, to accept £9,255 in February 2011 rather than pursue a detailed assessment, if the judge had been willing to do that, does not seem to me to give rise to any inference that, when Proudman J did order a detailed assessment, they had agreed that in all the circumstances costs would be limited to the £9,255. I simply do not understand the basis upon which I could or should make such an inference.

I have no basis for concluding on this ground that the bill is in breach of the indemnity principle, and dismiss this ground of appeal.

I now have to deal with the third point taken by Mr Hurst on behalf of his wife and that point is this. Proudman J made an order, to which I have already referred, requiring the claimant to pay the defendant's "costs of the action". The action, although issued on 29 June 2010, was not served on the defendant until some time in November 2010. Mr Hurst says that the result of that is that, as far as the defendant is concerned, the costs of the action are only the costs which are incurred after he has been served with the proceedings. The proceedings, he says, were only served on Mr Denton-Cox on 2 November 2010 and he said the Master had no jurisdiction to assess costs incurred prior to that date and that what the Master has effectively done is treat the order as if it said "Costs of and incidental to the action" and he accepts that, in those circumstances, it would have been different because, if it had said “costs of and incidental to the action”, he accepts that that would have been capable of including the costs incurred in complying with the pre-action protocol.

As I understand it, Browne Jacobson did incur costs between June 2010 and their client being served in November 2010 in compliance or attempted compliance with the pre-action protocol.

What Master Rowley said about that was this (page 42 of the transcript):

Then when Mr Hurst says it does not say that, Master Rowley says:

I was referred in this connection by Mr Hurst to a number of authorities which I will take in chronological order. The earliest is re Gibson's Settlement Trusts [1981] Ch 179 in which the then Vice-Chancellor, Sir Robert Megarry, sitting with assessors, was dealing with an order which provided, as one sees from 183D for the taxation of the costs of and incidental to the application of the plaintiffs, the trustees, and also on the common fund basis “the costs of and incidental to the said application of the defendants.” He set out at 184E a number of principles. The first of which is as follows:

At paragraph 2 he says:

Then after dealing with another case he says:

Then he deals at 186B with the Pécheries and Frankenburg cases saying this:

Then he deals with the Frankenburg case which is a reference to Frankenburg v Famous Lasky Film Service Ltd [1931] 1 Ch 428 and said:

At 187F he says:

Just pausing there, it seems to me quite plain that, although the Vice-Chancellor was dealing with an order which in that case did include the costs “of and incidental to” the action, and although in that case he said the words do extend rather than reduce the ambit of the order, in the passages which I have referred to he is dealing with costs orders which do not include the words "of and incidental to" but are ordinary costs orders which refer to the payment in the Pécheries case of taxed costs, and in Frankenburg's case, solicitor and client costs. There is nothing to suggest that in either of those cases the words "and incidental to" were included in the order and those cases are cited by the Vice-Chancellor as authority for the proposition that even without the words "and incidental to", certain costs incurred before the writ has been issued, in both those cases it being the plaintiff's costs which were in issue, could be included within the ambit of an order for costs as being a matter for the taxing master as to whether they would have been sufficiently connected with the proceedings as ultimately constituted, and reasonably incurred.

I do not regard, therefore, that judgment as any authority for the proposition that, without the addition of the words "and incidental to", an order for the costs of an action is strictly limited to costs incurred prior to the writ being issued, indeed, it seems to me plainly inconsistent with any such proposition.

The next case I was referred to was the decision of Judge Peter Coulson QC in McGlinn v Waltham Contractors Ltd [2005] EWHC 1419 (TCC). In that case, what the judge was being asked to do was to make an interim payment in respect of costs which a defendant had said had been thrown away in the pre-action protocol stage in considering and responding to certain claims which, in the event, were no longer being pursued against him in the Particulars of Claim in the action as issued. That required him to construe section 51 of the Supreme Court Act 1981, which provides that the costs of and incidental to proceedings should be in the discretion of the court. He was not construing a previous order of the court; he was being asked to make an order of the court and the question was whether section 51 entitled him to do so.

It was in those circumstances that he said at [9] that:

“both as a matter of construction of section 51 and by reference to Re Gibson's Settlement and to Callery v Gray, [a case which I will come to,] I am of the view that as a matter of principle the costs incurred in complying with a Pre-Action Protocol may be recoverable as costs ‘incidental to’ any subsequent proceedings. Whether or not a particular item of Pre-Action Protocol costs can properly be described as having been incurred ‘incidental to’ the proceedings will, of course, be a matter of fact and assessment on each occasion.”

He was not dealing with the question, which was not before him, as to whether, if there were an order limited to the costs of an action, that by itself could include any costs incurred in complying with a pre-action protocol, that being, as I say, not a question which was argued before him. He does, however, refer to the case of Callery v Gray [2001] 1 WLR 2112 which I have not been shown but there is a brief extract from it in his judgment. It appears that the Court of Appeal were there concerned with the costs recoverable in circumstances where claims had settled without the need for substantive proceedings.

At paragraph 54 of his judgment, Lord Woolf CJ said:

It is noticeable that the Lord Chief Justice did not there say that “the costs awarded will, if they are expressed to include costs not only of the action but incidental to the action, include costs reasonably incurred before the action started,” but proceeds on the basis that an award of costs by itself will include costs reasonably incurred before the action started. In the absence of reference to a full report, I cannot be satisfied that this particular point was in the Lord Chief Justice's mind, but there is certainly nothing in Callery v Gray which is inconsistent with what the Vice-Chancellor said in Re Gibson's Settlement.

The next case is a decision of Tugendhat J in Citation Plc v Ellis Whittam Ltd [2012] EWHC 764 (QB) in which Tugendhat J cited from the judgment of Judge Peter Coulson QC in McGlinn and at paragraph 16 said:

Again he was not there construing an order of the court which had been previously made, but was being asked to make an order and the order that he made was that the claimants be ordered to pay to the defendant the defendant's costs of and incidental to the action as from the point at which the claim form was served. That was obviously in the circumstances of that particular case. I do not regard this as taking the matter any further. He was again considering the scope of the jurisdiction conferred by section 51 and not the meaning of a normal order for the costs of the action to be paid.

Finally I was referred to the decision of Morgan J in Neuman's LLP v Andronikou [2012] EWHC 3088 (Ch). He was there dealing (again I have only seen a short extract from what is obviously a very extensive judgment), as appears from paragraph [132], with the jurisdiction under the Insolvency Rules, Rule 4.218(3)(h) of which refers to "the costs of any person appearing on the petition whose costs are allowed by the court". At paragraph [133] he says this:

So far as that is concerned, it is true that he refers to Re Gibson as dealing with the approach that should be adopted in relation to orders where a party is awarded the costs of and incidental to proceedings. But it is noticeable that the actual decision is the meaning of the words of the insolvency rule, which does not refer to "costs of and incidental to" but simply “the costs of any person appearing on the petition”, and he takes the view that those words are sufficient to include, in appropriate cases, costs incurred before the petition was presented.

It seems to me that on those authorities, the law is as follows. If one is being asked to make an order which includes costs incurred before an action is commenced, section 51 of the Supreme Court Act entitles one to do it in appropriate cases, as does the relevant insolvency rule which does not refer to "costs of and incidental to", but simply refers to the costs of any person appearing on the petition.

That, however, is not the question before me. The question before me is not what costs order I should make in the exercise of a discretion under section 51. The question before me is what the effect is of the order which Proudman J made which was limited to the costs of the action. It does seem to me that the analysis adopted by Sir Robert Megarry in Re Gibson and the two Court of Appeal cases which he refers to, the Pécheries case and the Frankenburg case, establish that it is not necessary to use the words "and incidental to" in order for the court, when assessing the costs that are payable under an order for costs, to be able to include costs incurred before the action is brought. This can be done under an order for the “costs of the action” to be paid.

I am pleased to see that that accords with Master Rowley's experience where he says that it almost never does say "of and incidental to" at the end of a case or an order that has been granted by consent, and for what it is worth, my experience, which is probably much less extensive than Master Rowley's, is to the same effect. It does not follow from the authorities I have been referred to that the failure to add the words "and incidental to" in a costs order means that the court is strictly precluded from awarding any costs which had been incurred before the proceedings are commenced.

Whether these particular costs in this case incurred by the defendant prior to being served with the claim form which had been issued were properly to be regarded as encompassed within the costs of the action, was a matter not of principle but of assessment by the Master, and I have no reason to overturn his assessment. It seems to me, on the contrary, not at all surprising that costs incurred before the claim form has been issued in pre-action protocol and similar matters, are costs which the Master would normally regard as falling within the costs of the action if the action is subsequently brought and, as happened in this case, dismissed.

I would dismiss this ground of appeal.

I come now to the fourth point. The fourth point arises in this way. Master Howarth, as I have already indicated, had a hearing in January 2013 which he adjourned and his order made on 21 January 2013 provided at paragraph 4 that it be relisted before him on 2 September 2013 at 11 o'clock, with a time estimate of two days. So there was no doubt from that date that it was due to be heard by Master Howarth himself.

When Mr Hurst turned up ready to argue the matters on 2 September 2013, Master Howarth revealed, for the first time so far as Mr Hurst was concerned, and maybe so far as Mr Radford is concerned, that he, along with a large number of other judges, some 3,000 I am told, had instructed Browne Jacobson, the defendant's firm, to act in relation to what is known as the O'Brien litigation in which Mr O'Brien, a part-time judge, was taking proceedings against the Ministry of Justice in relation to the terms of his service. Those proceedings, as we know, have ultimately gone to the Supreme Court.

I am told, and there is no dispute I think as to the facts as to what happened, that Master Howarth was apologetic for not having drawn it to the attention of the parties beforehand. Then he indicated that he would be happy himself as far as he was concerned to continue to hear the matter if the parties were happy for him to do so. After a short adjournment Mr Hurst indicated that he would prefer it to be heard by another judge, at which point Master Howarth adjourned the matter. In due course it came before Master Rowley.

Master Howarth was not asked to and did not make any specific order as to costs on that occasion and when Master Rowley was dealing with the costs of the assessment, which he assessed at £15,000, he considered whether the costs should include the costs of both the September hearing and the hearing before him. The costs schedule which had been filed for those purposes by Browne Jacobson, put forward back on 2 September 2013, came to a grand total of £14,271.80 and that for the hearing before Master Howarth on 18 December 2013 came to £6,034.20. Master Howarth allowed those two schedules of costs in the sums of £10,000 and £5,000.

Mr Hurst now says that it is not fair that he should have to pay the costs which were thrown away by reason of the adjournment. It was not his responsibility that Master Howarth had instructed Browne Jacobson between the January hearing and the September hearing, and he says that Browne Jacobson could and should have had some system in place to alert the lawyers in the firm to the potential for them appearing in front of judges who were clients of the firm to do something about it, and he suggested various ways in which that could have been done.

I am told, - I have no transcript of this part of the ruling, but again there is no dispute about this, - that Master Rowley made three points when rejecting that application. Firstly that there is always a risk for a litigant going to court and finding that the judge has a conflict and that is part and parcel of the practice before the courts. Secondly, that Master Howarth was himself happy to proceed and would have proceeded if the parties were happy. It was Mr Hurst himself who chose to cause the adjournment by declining the offer by Master Howarth to proceed with the hearing, and it was a logical consequence of that that extra costs would be incurred by Browne Jacobson or their client. Thirdly that in any event, it was not the whole costs which were thrown away, but only the costs of having the extra day. In effect, Mr Radford repeats those points before me.

The position, it seems to me, is this. It is true that there is always a risk in litigating that one may come to court and find that for some reason, which was wholly unforeseeable, the judge is unable to hear the case, or rather, to be more accurate, the judge has some connection with one of the witnesses or the like, which is one of those circumstances which he ought to draw to the attention of the parties so as to give them the opportunity to invite him to recuse himself.

This case, however, is a slightly different position, because here this was not a wholly unpredictable and unforeseeable consequence. Browne Jacobson as a firm, though I accept entirely that Mr Radford did not personally know this, had within its corporate knowledge the knowledge that Master Howarth, along with a large number of other judges, was a client of the firm. Mr Hurst has suggested ways in which the firm could have evolved procedures to ensure that conflicts of this type did not happen, and, in effect, do a conflict search every time a case was listed in front of a judge.

Mr Radford says that one should not under-estimate the practical difficulties in doing that, and I appreciate that that may not have been an entirely easy or straightforward thing to do. Nonetheless, it does seem to me that one of the consequences of taking on a judge as a client is that the firm is putting itself in a position where the judge does, almost automatically, have a potential conflict of interest in hearing any matter in which that firm is involved. Where only one judge is a client of a firm, the procedure is not difficult to do something about.

I can see that in practical terms it is more difficult when there are 3,000 judges who are clients of a firm, but it does not seem to me that that can affect the principle. The principle is that Browne Jacobson were responsible for agreeing to act for Master Howarth, along with the other judges; that that does, on the authorities, give rise to a potential for a conflict of interest, which is something which should be drawn to the attention of the opponent party, to give the opponent party the opportunity to consider whether to ask for a hearing to be heard by another judge, and that whether the client judge is alone or one of 3,000, it would be better for the firm to evolve procedures which enable that to be something which is resolved before the hearing takes place, rather than for it to be sprung on the opponent party who has had no reason at all to appreciate that that was going to be the position at the hearing.

I do take the view that it was not appropriate to make Mr Hurst and his wife pay for the costs of the adjournment when Mr Hurst could have had no prior knowledge without Browne Jacobson alerting him. This was a potential problem that was foreseeable. So I do not regard this as on all fours with the case where, unbeknownst to either side, the judge had a potential conflict of interest. This seems to me a case where, unbeknownst to Mr Hurst, the judge had a potential conflict but it was known, in the sense in which I have referred to, to the firm of Browne Jacobson, even though, as I say, it may not have been, and I accept it was not known, to Mr Radford himself.

So far as Mr Radford's second point is concerned that it was Mr Hurst's own decision to ask for an adjournment and ask Master Howarth to recuse himself and that it was illogical to foist the consequences of that on the firm, again, although I understand the sentiment behind that, it does seem to me that that cannot be right. If the law is, as it is, that a litigant is not obliged to have a case heard by a judge who has a potential conflict of interest, and given the circumstances which are reasonably well-established by authority in which a judge ought to draw matters to the attention of the parties, it seems to me that it cannot be right that if litigants choose to avail themselves of the opportunity which the law gives them to request the matter to be heard by another judge who is unconflicted, that should be something which can attract disincentives in the form of cost risks, because that would tend to put pressure on litigants, even though they were entitled not to have a conflicted judge hear their case, to proceed with the hearing because otherwise they would face the risk as to costs.

It does seem to me that in this case it was inappropriate to require Mr and Mrs Hurst to pay for the costs which were thrown away as a result of the adjournment, the adjournment being caused by the fact that Browne Jacobson had agreed to take Master Howarth on as a client and that had not been drawn to the attention of Mr Hurst before he turned up for the hearing.

I therefore do propose to allow the appeal to the extent of reducing the amount of the assessed costs which were assessed by Master Rowley at £15,000, to strip out such element as is referable to the necessity for there being two hearings rather than one. Mr Hurst suggests that the simplest way of doing that is to take £5,000 as being the extra costs which were incurred on the renewed hearing, and that seems to me to be an appropriate way to do it.

I will therefore reduce the £15,000 assessed as the costs of the detailed assessment to a sum of £10,000.

Mr Hurst has a further application which is that Browne Jacobson (he does not suggest Mr Denton-Cox himself) should pay for his, Mr Hurst's, own costs of the hearing. That again seems to me to be well-founded and to follow from the decision I have made on the first part, and without any dissent from Mr Radford, would accept that the amount of Mr Hurst's time that was wasted in turning up for that hearing, was four hours. The quantum that that gives rise to, will depend on the answer to one of the later points of appeal.

I will now deal with point five. This point arises in this way. In January 2013, Master Howarth having taken a dim view of the way in which the matter was then presented to him on behalf of the defendant, ordered, as I have already referred to more than once, an adjournment of the proceedings until September 2013 and in paragraph 5 ordered that the defendant should pay the claimant's costs thrown away to date in this assessment, both here and below, such costs to be summarily assessed at the conclusion of the appeal.

Among other things, Mr Hurst asked Master Rowley to assess those costs and Master Rowley accepted, which may have been somewhat generous to Mr Hurst, but is not challenged, that the claimants are entitled to the entirety of the time claimed, some 52 hours, rather than as contended for by the defendant, a proportion of them. On this point I have the advantage of an approved judgment from Master Rowley, which sets out the matters in some detail.

When it comes to the recoverable hourly rate, Master Rowley ordered that to be assessed at the litigant in person's rate of £18, which, multiplied by the 52 hours which he had allowed, resulted in the sum of £936. What Mr Hurst had initially been seeking was that he should be paid, that is his wife should be paid, the hourly rate which he could charge as a solicitor and he claimed £300 an hour which comes to £15,600.

The basis on which he did so was that, as he frankly accepted, he had reached an oral arrangement with his wife, which was on all fours with the arrangement considered by the Court of Appeal in Thai Trading v Taylor [1998] 3 AER 65, which was described by the trial judge in that case, His Honour Judge Nigel Hague QC, as follows:

That, Mr Hurst believed, was an arrangement he was entitled to come to with his wife and that it would be enforceable in accordance with the decision of the Court of Appeal in that case.

However, there were two difficulties with that. Firstly, under rule 10 of what I assume to be the SRA Practising Regulations, Mr Hurst was not entitled to act as a sole practitioner, save in accordance with 10.1(a), (b) or (c). (a) requires the SRA to authorise him as a recognised sole practitioner by endorsing his Practising Certificate or Certificate of Registration to that effect, and that does not apply in Mr Hurst's case. He does have a Practising Certificate as a solicitor, but it has been explained to me that he has no authorisation under 10.1(a) because he does not have insurance. The practical effect of that is that, whereas there is no problem in him being employed by another firm as a practising solicitor, he cannot practice as a partner or on his own as a sole practitioner.

10.1(b) refers to the practice falling within 10.2 below and him therefore being exempt from the requirement to be recognised as a sole practitioner (that is something I will come back to) and 10.1(c) refers to authorisation by some other approved regulator, and that has no application.

10.1(b) which cross-refers to 10.2 below, is relied on by Mr Hurst under 10.2(c)(i), which enables a sole practitioner to be exempt from the obligation to be recognised if his practice consists entirely of (i) providing professional services without remuneration for friends, relatives, companies wholly owned by his family or registered charities. One can see immediately that that does not provide him with any authorisation which would entitle him to act as a sole practitioner for his wife for money, as it is limited to providing professional services without remuneration.

Mr Hurst suggested to me that the Thai Trading arrangement that he came to with his wife would not put him in breach of the requirement in 10.2(c)(i), that of providing professional services without remuneration, because at the time that he provided those services, he was not remunerated and he would only become remunerated in the event of a successful costs order at the end of the day. That seems to me to be an impossible contention. A person who acts on terms that in certain circumstances they will not be paid and in other circumstances they will be paid, cannot be said to be acting without remuneration. They can be said to be acting without the certainty of receiving remuneration, but they cannot be said to be acting without any remuneration at all.

It does seem to me, therefore, that that by itself would have caused difficulty for Mr Hurst's suggestion that he was acting as a person entitled to act under the oral Thai Trading agreement.

However, there was another difficulty which he accepted was insuperable which was that section 58 of the Courts and Legal Services Act 1990 provides that:

One of the conditions which is applicable to every conditional fee agreement is, under section 58(3)(a), that it must be in writing.

Since Mr Hurst's Thai Trading arrangement with his wife was not in writing, he accepts that it was unenforceable under section 58. Mr Hurst, therefore, no longer pursues any suggestion that he should be paid costs at £300 an hour.

But on this application he reiterates a submission which he made to Master Rowley, which is that even if the Thai Trading agreement was unenforceable, instead the Master should have exercised the powers given to him under section 194 of the Legal Services Act 2007 and CPR 36.7:

There are then various other provisions which I do not need to read, but in s.194(10) there is a definition of "free of charge" which means "otherwise than for or in expectation of fee, gain or reward". The prescribed charity is, I am told, a charity which is known as the Access to Justice Foundation, which presumably does what its name suggests.

Mr Hurst's argument is that, since the Thai Trading agreement was unenforceable, it turns out that he was in fact acting for his wife free of charge. In those circumstances that engages section 194 and Master Rowley should have made an order requiring Mr Denton-Cox to pay the costs to the Access to Justice Foundation.

That requires deciding whether section 194 applies to the situation in which Mr Hurst was in January 2013 at all. Master Rowley made two comments about this. Firstly, he said (this is at paragraph 32 of his judgment):

As I read that, therefore, there are effectively two points taken by Master Rowley for rejecting this claim. One is a timing point that all he was doing was assessing costs; he was not (and at this stage in the proceedings should not) have been making a new costs order. That seems to me to be well-founded. Master Rowley is clearly right that the costs order which was being assessed was the costs order made by Master Howarth on 21 January. The only costs order that Master Howarth made was in favour of the claimants. It was not a costs order made under section 194 and what Master Rowley was doing was assessing the costs under that costs order, and it was not for him to make any costs order under section 194 on the assessment. I do not see any answer to that analysis of Master Rowley's.

Secondly, Master Rowley took the view that in any event the arrangements between Mr Hurst and his wife were not such as to attract section 194, and it is not entirely clear whether he regarded that as going to the jurisdiction to make an order, or the discretion to make an order. But again, I agree with the result. The requirement for section 194 to come into play is that R's representation of P was provided free of charge. Free of charge means "otherwise than for or in expectation of fee, gain or reward". That seems to me to make it clear that one does not judge retrospectively whether someone has acted for free, because what one is looking at is the time at which the representation is provided.

At the time that Mr Hurst appeared on 21 January 2013 for his wife, he was not, in my judgment, acting free of charge within the meaning of section 194(10). He was not acting otherwise than for or in expectation of fee, gain or reward. On the contrary, he was acting for or at least in expectation of fee, gain or reward. It was no doubt a contingent fee, gain or reward. The arrangement which he had made with his wife, albeit that it turned out to be unenforceable unbeknownst to him at the time, was that, provided that she succeeded and obtained a costs order in her favour, she would pay the normal profit costs. I do not think that can be regarded as acting free of charge or as pro bono representation within the meaning of section 194.

I endorse the decision of Master Rowley that a pro bono retainer requires a conscious agreement between the party and the solicitor during the proceedings, namely that the representation is to be provided without charge and without any expectation of fee, payment or reward and does not encompass an arrangement which at the time was thought to be enforceable and to be one which could lead to monies being recovered under it, but which subsequently, due to non-compliance with statutory requirements, has been held to be unenforceable. That makes it unnecessary to consider how, if there were a discretion, it ought to be exercised because, in my judgment, Master Rowley came to the correct conclusion and section 194 was not engaged.

I will dismiss this ground of appeal.