Detailed Assessment Misconduct – Don’t Lose all your Costs!
If you are a Solicitor specialising in Civil Litigation, conducting your work under a CFA and looking to recover your costs, you MUST read this article.
In Farmer v The Chief Constable of Lancashire  EWHC B18 Costs, Master James in the Senior Cost Court Office disallowed £174,565.79 of the Claimant’s costs in full as the underlying retainer wasn’t enforceable and the bill was incorrectly drafted.
Background of the Case
A detailed assessment of a Bill of Costs for McMillian Williams in front of Master James at the SCCO.
- The original bill of £174,565.79 as per the Notice of Commencement dated 21 June 2018, which included a success fee on Parts Two and Three in the sum of £28,088.41.
- It was conceded that the first CFA is unenforceable and therefore the success fee was no longer pursued. The bill also included costs calculated at incorrect hourly rates in Part Four, worth £20,556. This was also conceded.
- Those two figures, plus VAT, total £58,373.29, and the Receiving Party lodged a replacement bill.
A third of the bill, as originally drawn, had been conceded, but the Paying Party applied pursuant to the Civil Procedure Rules at 44.11, or pursuant to contract in relation to the second CFA, to disallow the entirety of the bill.
According to the Replies to the Points of Dispute served on 14 August 2018, the Success Fee claimed at item 27 was recoverable inter partes, as per the terms of the CFA dated 20 October 2012. Therefore the bill, and that reply, indicate that the Receiving Party believed (as late as August of 2018 and indeed up to day one of the Detailed Assessment on 18 March 2019) that the first CFA was valid and enforceable.
The Receiving Party claimed the second CFA was retrospective to day one and would cover all the work done in Parts One, Two and Three as well as Part Four.
Master James disagreed and ruled that ALL the costs be disallowed.
Master James said;
“ I have looked without success for anything on McMillan Williams’ file to suggest that Mr. Farmer was advised that the second CFA was intended to go right back to the very beginning (in October of 2012) rather than just going back the few days between Mr. Farmer reconnecting with McMillan Williams on or around 14 May 2015 – in the bill on page 24 the documents item starts on that date – and the second CFA being signed on 29 May 2015.”
“Accordingly, I find – as Mr Smith invited me to do – that the only proper interpretation of CFA 2 is that it is retrospective only to around 14 May 2015, and not to around 20 October 2012.”
“That being the case, there is no retainer under which parts two and three of the bill can be recovered, so they would need to be deducted as well.”
“Now, at this point I tried to do arithmetic on the new bill, and the new bill is still wrong. The bill total is £116,192.50 – I agree that – but looking on page 20 of the new bill there is £106,037.98 – that is costs – plus £22,026.25 VAT, plus £6,977.25 disbursements.”
“As well as being unreasonable or improper – the conduct of McMillan Williams up to and including the witness statement of the costs lawyer has been in breach of the Civil Procedure Rules, and especially of the provisions of CPR 1.3 whereby the parties are required to help the Court to further the overriding objective.”
“In my view, on the facts of this case, the conduct of McMillan Williams (as set out above) warrants disallowance of what is left of the bill.”
“McMillan Williams have conceded the hourly rates and the success fee points already, and my decision on CFA 2 as against CFA 1 was not a decision taken in order to penalise McMillan Williams but to put matters back on the correct footing as regards their contract with Mr Farmer.”
PIC’s View (so long as your client is happy to co-operate):
We believe that until a case settles you can just about solve all costs issues on a file.
We strongly advise that you contact a Costs Lawyer once you are ready to begin settlement negotiations on your substantive case. We often save our clients £000’s by identifying and rectifying problems prior to settlement. That is why we are “Partners in Costs”.
If you want to work in partnership with a true Costs Law Specialist get in touch.
Reuben Glynn – Managing Director – Partners in Costs Ltd
Email Reuben here