Edinburgh v Fieldfisher LLP

This is a renewed application for permission to appeal against the decision of Master James sitting in the Senior Courts Costs Office on 2 December 2019. Permission to appeal was refused on the papers by Freedman J.

The proceedings before her arose from a dispute about the level of fees charged by Fieldfisher LLP ("Fieldfisher"), the Respondent, to its client Mr Jason Edinburgh, the Appellant. The Solicitors Act 1974 makes provision for the resolution of such disputes by a cost judge.

The background is as follows. In 2007, Mr Edinburgh was advised along with a number of others to invest in a tax savings scheme. This ultimately resulted in him being investigated by HMRC, dismissed from a lucrative and high-profile role with Royal Bank of Scotland and being arrested and tried for tax evasion. He was acquitted, but lost many hundreds of thousands of pounds in legal fees. In 2017, he instructed Fieldfisher with a view to a possible claim against Greystone Financial Services Ltd

On 30 October 2018, Mr Edinburgh terminated the retainer with Fieldfisher and continued the claim against Greystone as a litigant in person. Fieldfisher rendered four invoices in respect of the work done on Mr Edinburgh’s behalf, for a total of

Mr Edinburgh made the payment on account. Fieldfisher sent the bill of costs to Mr Edinburgh’s new solicitors, Crofts, by email timed at 11.23 on 12 July 2019. It therefore fell to Mr Edinburgh, in accordance with the Masters directions, to serve the points of dispute by 8 August 2019. On 7 August 2019, Crofts wrote to Fieldfisher indicating that they considered service of the bill of costs to be defective because the bill had been served by email and they had not indicated that service by that method was acceptable. Crofts served points of dispute containing two general points only. The first related to the alleged defective service. The second was not really a point of dispute at all: it was simply a reservation of Mr Edinburgh’s right to dispute each and every item claimed in the bill and to serve supplemental points of dispute if service was determined to be effective.

Fieldfisher applied for a confirmatory order. That was granted by Master James on 5 September 2019. She decided that the service of the defendant’s bill of costs by email

Mr Blackburn, who appeared for Mr Edinburgh before Master James as he does before me today, argued that permission should be given to serve supplementary points of dispute. He pointed out that Mr Edinburgh’s brother had died in the summer at a young age. Mr Edinburgh had been close to his brother and was understandably affected by his death. Furthermore, Mr Edinburgh had been preoccupied by the claim against Greystone, which had settled “within the last few months”. Mr Blackburn submitted that the Master should have regard to the fact that Mr Edinburgh was a private individual whereas Fieldfisher was a global law firm with a turnover in excess of £240 million. The bill as drawn amounted to £73,999.41, of which only £18,053.41 remained outstanding. This was a modest sum to a firm of Fieldfisher’s size and standing but a sizeable amount to a private individual such as Mr Edinburgh. If Mr Edinburgh was ultimately unsuccessful in the assessment proceedings, Fieldfisher would be compensated by an award of interest for being kept out of their money.

Having heard the parties, the Master gave an ex tempore judgement. She said that she did not think relief from sanctions was required having regard to CPR 46PD, para. 6.15 to which she had been directed by Mr Blackburn. The Master said that it was very sad that Mr Edinburgh’s brother had passed away in the summer but she did not understand why that had not been put to the court in August 2019. Instead, she said, what had been put to the court was an “unmeritorious technical point” (by which she meant Mr Edinburgh’s challenge to the validity of service of the bill of costs). She noted that Mr Blackburn had said that the Greystone litigation had settled “within the last few months”, which suggested that he had “had it off his plate for at least a while now”. The Master pointed out that, if the application to serve supplemental points of dispute had been made when Fieldfisher applied for detailed assessment on 11October 2019, it would have been possible for her to deal with the detailed assessment “today”. Instead of that, it was made less than 3 working days before the hearing and, even then, did not have the supplemental points of dispute annexed to it. Those had been provided 90 minutes before the hearing. The “one point” which went against this, in the Master’s view, was that Fieldfisher’s bill of costs for the assessment proceedings (£49,000) was “an extraordinarily high sum and a sum that is likely to come down significantly”. Nonetheless, she decided not to allow any amendments to the points of dispute.

Given that the assessment of own client costs takes place on the indemnity basis, disallowing the supplemental points of dispute was, as the Master accepted, bound to mean that the assessment allowed almost all of Fieldfisher’s costs. So it proved. Costs were assessed in the sum of £71,103.35.

For Mr Edinburgh, Mr Blackburn explained the background to the dispute. I have drawn on this explanation in what I have already said. It was common ground that the Master had been correct to regard service of the bill of costs by email as valid. The sole question was whether this court should interfere with her decision not to allow Mr Edinburgh to amend his points of dispute in terms of the supplemental points provided just before the start of the hearing on 2 December 2019. As to that, Mr Blackburn drew attention to the provisions of CPR 46PD, para. 6.15:

“If a party wishes to vary that party’s breakdown of costs, points of dispute or reply, an amended or supplementary document must be filed with the court and copies of it must be served on all other relevant parties. Permission is not required to vary a breakdown of costs, points of dispute or a reply but the court may disallow the variation or permit it only upon conditions, including conditions as to the payment of any costs caused or wasted by the variation.”

Because permission is not required to vary points of dispute, the Master held that this was not a case where it was necessary for Mr Edinburgh to apply for relief from sanctions. It was not, therefore, necessary to apply the structured approach set out in Denton v T.H. White Ltd [2014] 1 WLR 3296. Mr Blackburn accepted, however, that para. 6.15 gave the Master a general discretion to disallow the variation, or permit it only upon conditions. He submitted that the question for me was whether his case, that she erred in the exercise of that discretion, had a real, as distinct from a fanciful, prospect of success: Swain v Hillman [2001] 1 All ER 91.

In considering whether the Master erred in the exercise of her discretion, Mr Blackburn properly accepted that a judge of this court would be asking not whether he or she would have exercised the discretion differently, but whether there was an error of approach, which could include taking account of any irrelevant consideration or failing to take account of a relevant one. It followed that, at this permission stage, I should ask myself whether it is arguable that there was such an error. Mr Blackburn identified two.

Furthermore, Mr Blackburn submitted, the Master fell into error by taking in account irrelevant matters. In particular, he submitted there was no cause to criticise Mr Edinburgh for delay, given the death of his brother and the fact that he had had to attend to the Greystone litigation by himself. It was also wrong to say that, had the supplemental points of dispute being served earlier, Fieldfisher would have consented to their being considered. This was unrealistic given their attitude to the costs litigation, which was to dispute every possible point. Mr Blackburn submitted that it was also wrong to suggest that the late filing of the supplementary points of dispute made it impossible for the hearing to be completed on the day allotted for it, given that only one hour had been set aside for it anyway.

It was also relevant, in considering whether to grant permission to appeal, to note that the effect of the Master’s decision was to deprive Mr Edinburgh of the opportunity to dispute a potentially substantial proportion of Fieldfisher’s bill of costs. This could be demonstrated by looking at Fieldfisher’s bill for the assessment proceedings which had been reduced from about £49,000 to about £12,000.

Finally, Mr Blackburn submitted that permission to appeal should be granted not only because the appeal had a real prospect of success but also because it raised an important point about the exercise of discretion under CPR 46PD para. 6.15, a topic which had not been considered in any decided case to date.

For Fieldfisher, Mr Nethercott submitted as follows. Fieldfisher had notified Mr

As to the disputed invoices, Mr Nethercott notes that part of these related to counsels’ fees and disbursements. Only £48,835 plus VAT was in dispute.

I start, as Mr Blackburn did, with the terms of CPR 46PD para. 6.15. I accept, as Mr Blackburn submitted, that the default position under that paragraph is that parties may vary points of dispute if they so wish. That default position is, however, subject to a general discretion to disallow the variation or to allow it upon conditions. This is an important discretion, without which it would be possible for parties to ambush their opponents by waiting to the last minute to file supplemental points of dispute raising points not previously heralded. This would be productive of unfairness. Paragraph 6.15 does not prescribe how the discretion to disallow supplemental points of dispute should be exercised, but the overriding objective (enabling the court to deal with disputes of this kind) “justly and at proportionate cost” should be borne in mind.

Despite Mr Blackburn’s persuasive submissions, I am unable to find any arguable error in the approach of the Master to the exercise of the discretion conferred on her by CPR

Moreover, as Mr Nethercott submitted, even after Fieldfisher had applied for detailed assessment of the 3 invoices on 11 October 2019, Mr Edinburgh had more than 3 weeks in which to file supplementary points of dispute. Had he done so, Fieldfisher might have consented to those points being considered. More importantly, though, even if they had not, the hearing might have been listed with a time estimate that permitted the resolution of those points. As it was, had the Master agreed to consider the supplementary points of dispute, fairness would have required her to adjourn the assessment hearing, which would have given rise to yet more cost. The Master was therefore fully entitled to conclude that the delay gave rise to “grave concern”. The contrary is not arguable.

The complaint about the Master’s failure expressly to refer to the matters set out in CPR r.1.2 is in my judgment not arguably justified. The list of matters set out in CPR r. 1.2 is not intended to be a rigid checklist. It is not necessary to refer to each and every one of the factors there set out in every case. The extent to which it is necessary to refer to any or all of these factors will depend on the facts of the case. What matters is whether the decision maker has referred to the key factors relevant in the particular case. In this case, the master properly concentrated on the question whether it would be fair to consider substantive objections to the amounts claimed in invoices when no such objections had been received until 90 minutes before the hearing.

I accept that it is possible that, had the supplementary points of dispute not been disallowed, Mr Edinburgh might have secured a substantial reduction in the bill. The Master, however, had this fully in mind when she referred to the likelihood that Fieldfisher’s bill of costs for the assessment would be substantially reduced, as it in fact was. This was, as the Master said, a point in Mr Edinburgh’s favour. But the fact that the bill for the costs of assessment fell to be reduced on assessment was not a strong indicator of the likelihood that the bill she was then assessing would also be reduced. (The work done on the assessment related to work done by some of the same fee earners as had worked on the original case, but the Master took the view that this was not appropriate.) In any event, the Master was perfectly entitled to take the view that this point was not enough to outweigh Mr Edinburgh’s failure to indicate any substantive points of dispute until 90 minutes before the assessment hearing. The decision she made was, in my judgment, well within the “generous ambit within which reasonable disagreement is possible”: see G v G (Minors: Custody Appeal) [1985] 1 WLR 647, 652, cited in Tanfern Ltd v Cameron-Macdonald [2000] 1 WLR 1311, [32] (Brooke LJ). Again, the contrary is not arguable in the sense explained in Swain v Hillman.

Finally, as to Mr Blackburn’s submission that the appeal raises a point of wider significance, the language of CPR 46PD para. 6.15 is clear. The factors that may be relevant to the exercise of the discretion to disallow supplementary points of dispute depend on the circumstances of each case. This case raises no point of wider significance that justifies the grant of permission where, as I have found, the appeal has no real prospect of success.