It is so important that you can rely on and trust your costs professionals.
Here we look at estimated time and misconduct on detailed assessment, and a case in which the receiving party’s solicitor’s bills of costs were reduced by 40% due to misleading bills.
Ikin & Ors v Shawbrook Bank Ltd & Ors [2023] EWHC 1075 (SCCO) is a decision of the Senior Costs Judge in which he explains his reasons for applying penalties to the costs claimed, with regard to misconduct and CPR 44.11.
The substantive proceedings related to claims for damages for misrepresentation and the rescission of finance agreements entered into with the defendant finance companies for the installation of solar panel systems. The Claimants had the benefit of costs awards in their favour, and all were represented by the same solicitors. The Defendant had sought and obtained the transfer of the cases to the Senior Courts Costs Office, citing concerns about Counsel’s fees, expert fees and the profit costs claimed.
In the assessment proceedings the Defendant produced a schedule of further examples of identical entries between the Claimants’ 8 bills, to which the Claimant responded:
“… that these are nothing more than estimates of time spent. The Claimant’s Solicitor has used the same costs draftsman throughout. They have estimated time in accordance with their opinion as to how long tasks consistently take. There is nothing more sinister than the same draftsman estimating the same (or similar) work at the same or similar times.”
A Part 18 request followed, and the Claimants confirmed that time had been estimated in the bill, but that such appeared in every bill before the court. The Claimant was asked to identify the time that was estimated, but failed to do so before the assessment hearing.
When the Senior Costs Judge came to assess the first bill there were serious problems identified there were no time records were produced and no time was recorded in the Claimants’ solicitors’ file, save for one attendance note. The Claimant conceded that, with one exception, all of the time in the bill had been estimated. It also became apparent that the work was ”completely unsupported” by the file.
The Senior Costs Judge accepted that “If there is a letter in the file drafted by the receiving party’s solicitor and no record of how long it took to draft, the bill draftsman has little option other than to estimate how long it would probably have taken. However, the convention is to mark estimated time in a bill with an (e)”, with regard to such times being approached with circumspection with reference to the well-known case of Brush v Bower Cotton & Bower [1993] 4 All ER 741. He also stated that:
“Where there is no record or evidence that work had been done and no reason to infer that work had been done, then, clearly, no work should be claimed.” In the case being considered he found that there was imaginary work claimed, “or, as I apparently described it in the hearing, “just fiction”.”
Such were the court’s concerns that the Claimants’ solicitor was ordered to file and serve a witness statement explaining why the bill in this case contained misdescriptions of the work done and why the Claimant’s solicitor had certified the bill as accurate. Then the Claimant’s solicitor was ordered to attend for cross-examination. The solicitor explained that they had instructed KE Costs to prepare the bills, and accepted that she had not checked each item in the bill on a line by line basis, but had relied upon “the expertise of the costs draftsman and my experience of dealing with claims of this nature”.
The bills were assessed or agreed, and the court then considered whether to apply a reduction for misconduct with reference to CPR 44.11. Senior Costs Judge Gordon-Saker was forthright in his view that the Claimants’ solicitor’s conduct was unreasonable or improper, stating:
“Claiming the cost of work where there was no evidence in the file that the work had been done and nothing to allow a reasonable inference that the work had been done is, in my judgment, both unreasonable and improper for the purposes of r.44.11. It permits of no reasonable explanation (so is unreasonable) and has the hallmark of conduct which the consensus of professional opinion would regard as improper.”
He specifically held that the costs draftsman would have known that some of the work claimed had not been done, and the draftsman and fee earners who did the work would have known virtually all of the time was estimated. The bills were found to be: “intentionally misleading in that time was claimed for work which was not done (and for which there was nothing that could lead to a reasonable inference that it had been done) and in that the impression was given that only part of the time had been estimated.”
As a result of the Claimants’ misconduct the costs otherwise payable were reduced by a further 40% of the assessed or agreed sum, and added to that the court deviated from the usual position that the Claimants’ would recover their costs of assessment. Instead, the Claimants’ solicitor was ordered to pay 75% of the Defendant’s costs of the assessment proceedings on the indemnity basis.
The case shows the importance of instructing a trusted costs expert to assist you in maximising costs recoveries and dealing with costs arguments, and I would highly recommend PIC. We truly will be your Partners In Costs, with many specialist qualified and regulated costs professionals within our team.
Please drop Adrian Hawley a line at Adrian.Hawley@pic.legal to discuss any new instruction matters. We can also discuss training matters, such as relating to time recording, with you to ensure that you do not face the issues seen here.
Caroline Engledow, Costs Lawyer
12.10.2023