Bloomsbury Law Solicitor v Macpherson, Court of Appeal - Queen's Bench Division, November 03, 2017, [2017] EWHC 2708 (QB)

Issuing Organization:Queen's Bench Division
Actores:Bloomsbury Law Solicitor v Macpherson
Resolution Date:November 03, 2017
 
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Neutral Citation Number: [2017] EWHC 2708 (QB)

Case No: HQ12X01404, SCCO Ref: JMS1203442

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 03/11/2017

Before :

MR JUSTICE WARBY

Sitting with MASTER LEONARD as an Assessor

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Between :

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Robert Marven (instructed by Bloomsbury Law Solicitors) for the Appellant

Roger Mallalieu (instructed by T M Costings Ltd) for the Respondent

Hearing date: 27 October 2017

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Mr Justice Warby :

  1. This is an appeal from Orders made by Master Simons on 23 August 2016. It is brought by permission of Sir Alastair Macduff, granted on 23 May 2017. It is the third appeal from decisions made by Master Simons when resolving hard fought costs disputes between the Appellant solicitors and a former client.

    Background

  2. It was as long ago as April 2012 that the Appellant (``Bloomsbury'') brought proceedings under Part 7 of the CPR (``The Part 7 Claim'') against the Respondent (``Mr Macpherson'') for billed and outstanding costs and disbursements of around £270,000. This was the net unpaid sum allegedly due under a large number of invoices rendered by Bloomsbury to Mr Macpherson over a period of time in respect of work done in various pieces of litigation. The total sum due under these invoices was some £416,000.

  3. After some interlocutory complexities, the detail of which it is unnecessary to recite, Master Leslie entered default judgment on The Part 7 Claim for £6,600 and damages to be assessed. He also awarded Bloomsbury the costs of the claim, to be assessed. Pending the assessment Mr Macpherson was ordered to make an interim payment on account in the sum of £176,250.

  4. By the same order, at the request of Mr Macpherson, and to avoid the need to issue formal Part 8 proceedings, Master Leslie transferred the assessment to the Senior Courts Costs Office (``SCCO''), to proceed by way of a non-statutory assessment of costs. For ease of reference, albeit inaccurately, the assessment process has been referred to as ``the Part 8 Claim'', and I will adopt that label. It was later directed that the assessment should cover all the 81 bills that had rendered by Bloomsbury, including bills that had previously been paid and were not the subject of the claim.

  5. The assessment was then undertaken by Master Simons, in June 2014. By day 7 of a hearing originally listed for 9 days he had assessed 41 of the bills at a total of £276,899.36 including VAT. At that point, the parties compromised the dispute over the remaining bills, and on 16 June 2014 an order was made for the assessment of Bloomsbury's bills in the total sum of £323,000, with interest of £7,000.

  6. Argument on costs followed. On 20 June 2014, Master Simons ordered that Bloomsbury should pay all the costs of the Part 8 Claim. He had reduced the total billed costs by some 23%. Having done so, he thought it appropriate to have regard to the statutory rule that where a solicitor recovers less than 80% of his billed costs he must pay the costs of the assessment (s 70 of the Solicitors Act 1974). The upshot was that on 16 June 2014 the Master ordered Bloomsbury to pay all the costs of the assessment.

  7. Bloomsbury sought to appeal that decision. Pending the appeal, Patterson J DBE granted a stay of the Master's order of 16 June 2014. On 4 August 2014, the Master ordered Bloomsbury to pay £85,000 into court ``by way of interim payment in respect of the sums owing to [Mr Macpherson] as overpayment of fees.'' The appeal (``the First Appeal'') was heard by Males J sitting with an assessor the following year.

  8. On 29 June 2015 Males J allowed the First Appeal. The Judge held that the Master had been wrong to adopt the Solicitors' Act approach. He substituted an order that Bloomsbury should recover 75% of its costs of the assessment process: Ahmud & Co v Macpherson [2015] EWHC 2240 (QB) [2016] 3 Costs L R 443 (the decision was made before a name change). As a result, on 28 October 2015, the Master directed that the £85,000 paid in the previous August should be paid out to Bloomsbury, with interest.

  9. On 18 December 2015 Master Simons ruled that two of Bloomsbury's bills were non-compliant with the Solicitors Act 1974, as they did not adequately identify what it was that the client was being charged for.

    Bloomsbury's second appeal was a challenge to that decision. It was dismissed by Lewis J: Bloomsbury Law Solicitors v Macpherson [2016] EWHC 3394 (QB) [2016] 6 Costs L R 1227.

  10. In August 2016, the Master conducted the assessment of Bloomsbury's costs of the Part 7 and Part 8 Claims against which the present appeal is brought.

    Issues

  11. On this third appeal Bloomsbury raises six issues about the Master's decisions and orders of 23 August 2016.

    (1) Proportionality. Bloomsbury challenges the Master's finding that, as a starting point, its bills for the Part 7 Claim and the Part 8 Claim were both disproportionate.

    (2) Hourly Rates. Bloomsbury complains that the hourly rates adopted by the Master for the assessment of its senior ``Grade A'' fee-earner's costs were too low.

    (3) Costs associated with the Master's Order of June 2014. Bloomsbury contends that the Master was wrong to disallow its claim for various heads of costs related to this Order.

    (4) Stay costs. Bloomsbury argues that the Master was wrong to disallow the costs of an application it made to Master Simons for a stay pending the conclusion of the First Appeal.

    (5) Costs of procuring repayment. The Master disallowed a claim by Bloomsbury for costs incurred in carrying into effect his order for the payment out of the £85,000 it had paid into court. Bloomsbury contends that the Master was wrong to do so.

    (6) Interest on costs. Bloomsbury complains that the Master was wrong to order that interest on its costs should run at 2% above base rate to a date in October 2015, thus depriving it of interest at the higher, Judgment Act rate for many months.

    Applicable principles

  12. The applicable principles are well-established and uncontroversial. An appeal such as this is a review, not a rehearing: CPR 52.21(1). To succeed, the appellant must persuade the appeal court either that the decision of the lower court was wrong, or that it was unjust because of some procedural or other irregularity: CPR 52.21(3). Only the first of these criteria is relevant here.

  13. An appeal court will not upset a discretionary decision unless it is shown that the lower Court has either erred in principle in its approach, or ignored a relevant factor or taken account of an irrelevance, or reached a decision that was so wholly wrong that the Court is driven to conclude that it has failed to carry out a fair and proper balancing exercise: see, for instance, AEI Rediffusion Music Limited v Phonographic Performance Ltd [1999] 1 WLR 1507, 1523 (Lord Woolf MR).

  14. A somewhat similar approach is to be taken to decisions which require the court to take into account, weigh, and balance multiple factors in order to arrive at an overall evaluative decision. Such a decision is not a discretionary one, but the nature of the exercise means it is one with which an appeal court will be reluctant to interfere; though it will do so if there are circumstances which would invalidate the exercise of discretion: Aldi Stores Ltd v WSP Group plc [2007] EWCA Civ 1260 [2008] 1 WLR 748 [16].

  15. The appeal court will accord due weight to any advantages possessed by the lower court. Factors that are often given weight in this context include the experience of the Judge involved and the benefit of having examined detailed material before, during, and sometimes after a lengthy hearing over a period of several days. Both those factors are relevant here. Master Simons was a very experienced costs Judge. Unusually the proceedings, the costs of which he was assessing, had been conducted before him over a period of seven days.

  16. Finally, when considering whether a decision of the lower court was ``wrong'' the appeal court must have regard to the way the parties argued their cases before the lower court: King v Telegraph Group Ltd [2004] EWCA Civ 613 [2005] 1 WLR 2282 [54].

    Conclusions

  17. Applying these principles, my conclusions on the issues raised by this appeal are, for the reasons that follow, these:

    (1) Master Simons did not err in his conclusions on proportionality. He made no error of principle, or of approach. In any event I would uphold his conclusion.

    (2) The Master's decision as to the appropriate hourly rate for the Grade A fee-earner's work involved no error of principle and was well within reasonable bounds. I uphold it.

    (3) The Master was wrong to reject Bloomsbury's claims for costs associated with his Order of June 2014. The appeal on that issue is allowed.

    (4) Master Simons was right to disallow Bloomsbury's claim for the costs of its stay application to him.

    (5) The Master was right to disallow Bloomsbury's claim for the costs of obtaining repayment of funds from the Court Funds Office.

    (6) The Master was entitled to reach the decision which he did, so far as interest on costs is concerned. He made no error of principle in doing so.

  18. In the result, the appeal succeeds to a limited extent (the total sum involved in ground (3) is £5,262). Otherwise, the appeal is dismissed.

    Reasons

    Proportionality

  19. The bill in respect of the Part 7 Claim (``the Part 7 Bill'') was £48,557. The Bill in respect of the Part 8 claim (``the Part 8 Bill'') was £183,996.43. The Master was unequivocal in his description of these figures. At [22] he described the Part 7 costs as ``grossly disproportionate''. At [23] he said the Part 8 bill involved costs ``at a level that ... is something outside of my experience'' given the nature of the claim. The time spent was ``vastly disproportionate'', he said: [24].

  20. The test of proportionality which the Master rightly applied was the test that applied to cases commenced before 1 April 2013 (it...

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