Detailed Assessment in Action!
If they have the time, those with an interest in how the fine minutiae of a bill of costs may be assessed on detailed assessment should read the decision of Costs Judge Rowley in Lyle & Anor – v – Bedborough & Anor  EWHC 1628 (SCCO). For those that don’t have the time, read on.
The Applicant trustees in bankruptcy brought proceedings to establish that the Respondents had been involved in a transaction at an undervalue within the meaning of section 339 of the Insolvency Act 1986, and obtained judgment to that effect together with costs of the application.
The Applicant’s bill of costs totalled £169,532.16, and was in part assessed over a day and a half before Costs Judge Rowley later concluded the assessment by reviewing the work done on documents on the basis of the papers and the arguments made to him during the hearing.
The paying party was highly critical of the extent of time claimed for work on documents at a total of approximately 392 hours in the context of what it said was a straightforward application with limited procedural steps, where counsel had drafted all of the documents, and sought reduction to approximately 72 hours. The Applicant maintained the proceedings were complex, reaching a three-day hearing before a High Court judge leading to a 32-page judgment.
Conduct was taken by a grade C junior solicitor, assisted by grade D fee earners and supervised by a grade A partner.
It had become apparent that there were no attendance notes before the court to support the time spent on documents, with the relevant details having been taken from the Applicants’ solicitors’ time recording systems, and the paying party argued that would prove problematical in determining whether any of the costs claimed were wholly or partly in relation to an unsuccessful application for specific disclosure made by the Applicant.
Cost Judge Rowley agreed with the Respondents’ submissions that there was little in the case save for preparation of witness statements prior to a hearing of the evidence, and the number of hours claimed was, in context, surprising. A sample of time spent in preparation of significant individual documents (an advice note, the letter of claim, instructions to counsel) was considered, together with those documents. Cost Judge Rowley formed the view that there had been a rigour imposed by all fee earners to make sure that time on the file was amply recorded whenever it was opened, though that had not been matched in an equally rigorous consideration of whether all of the time ought to have been claimed in the bill of costs.
In the absence of attendance notes there would be cause for some conjecture in considering the time claimed for individual tasks, with Costs Judge Rowley commenting that in the absence of such notes, doubt would inevitably be resolved in favour of the paying party. However, it was possible that not a great deal may turn on that given that time spent on documents was undoubtedly unreasonable.
Previously a view had been taken that the routine communications claimed were very largely recoverable, and whilst it would be by no means unique, it was unusual for the approach to time spent on documents to be completely different from the time spent on timed and routine communications. This however appeared to be a matter in which there would be a divergence in approach to the assessment of those different aspects of the bill.
Where ‘considerable time’ had been claimed in a bill which appeared to be out of step with the actual work done, it was tempting to assess costs from the ground up and hypothetically consider what needed to be done and put times against those steps. However, this approach would tend to underestimate the vagaries of running a case and Costs Judge Rowley therefore favoured the alternative approach of taking something of an impressionistic broad brush to the times claimed bearing in mind the arguments and his review of the documents. In explaining the allowances made, Cost Judge Rowley confirmed his view that the involvement of counsel did not negate the need for supervision by a partner in the firm, and the fact that counsel had drafted documents did not obviate the need for the solicitors to review those documents or alternatively to provide drafts on which counsel was to work. An allowance of 229 hours was made overall, so sustaining around 70% of the conducting grade C fee earner’s time, with greater reduction in grade A and D time, in respect of the latter noting that it was often the fate of the most junior fee earner to do work that is not always recoverable inter partes.
Having deferred dealing with the claim for time spent checking the bill until after conclusion of the assessment of the documents items, Cost judge Rowley would not have expected more than an hour to be claimed for checking and signing a bill of the order of that presented.
Ultimately, an unselective approach to inclusion of every aspect of time spent in a matter can serve to undermine the overall claims made, and also likely misses the opportunity for firms to address underlying time recording or resource allocation issues. At Partners in Costs, we’ll always have one eye on both.
Dominic Woodhouse, Advocate & National Training Manager