Woolley v Haden Building Services Ltd (No.2), Court of Appeal - Supreme Court Cost Office, August 11, 2008, [2008] EWHC 90111 (Costs)

Resolution Date:August 11, 2008
Issuing Organization:Supreme Court Cost Office
Actores:Woolley v Haden Building Services Ltd (No.2)

Case No: HQ05X00623

SCCO Ref: 0705738

BAILII Citation Number: [2008] EWHC 90111 (Costs)



Clifford's Inn, Fetter Lane

London, EC4A 1DQ

Date: 11 August 2008

Before :


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Between :

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Mr Steven Green (instructed by Messrs Irwin Mitchell) for the Claimant

Mr Simon J Brown (instructed by Berrymans Lace Mawer) for the Defendant

Hearing dates: 22-23 July 2008

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Master Rogers:


  1. The comprehensive points of dispute to this, between the parties, bill claiming £244,220.52 (including additional liabilities), raised eight preliminary issues which were considered appropriate for decision prior to the actual detailed assessment which might, and hopefully still may, result in the full detailed assessment not having to be conducted.

  2. The first of these preliminary issues concerned whether or not the two CFAs entered into, firstly by the deceased prior to his death, with his local solicitors, Messrs Boys and Maughan, and secondly, entered into by his widow with his new solicitors, Messrs Irwin Mitchell, were unenforceable by virtue of non-compliance with the provisions of Regulation 4(2)(c) of the 2000 Regulations.

  3. Since, if successful, that application would dispose of the bill totally in favour of the Defendant, it was argued before me as a separate and discrete preliminary issue on 22 January 2008.

  4. I handed down a reserved judgment in the matter on 15 February 2008 in favour of the Claimant. That judgment is now reported at [2008] EWHC 90097 (Costs).

  5. Since it is obvious that if any matters dealt with in this judgment go further, that judgment will be referred to. I do not intend to repeat the background to this case or any material which is contained in that previous judgment.

  6. Following the hearing the matter was re-listed before me on 22 and 23 July to dispose of the remaining preliminary issues and hopefully also to deal with the actual detailed assessment.

  7. It seemed to me that it was appropriate simply to deal with those preliminary issues, since they cumulatively will have a substantial effect on the outcome of the assessment and, as I have already indicated, may well obviate the necessity for a full item by item detailed assessment.

  8. The remaining preliminary issues were as follows:

    i) reliance on estimates and proportionality;

    ii) hourly rates;

    iii) recoverability of success fees on the two CFAs;

    iv) level of solicitors' CFA success fee;

    v) level of counsel's CFA success fee;

    vi) recovery by claimant of costs of funding.

  9. As indicated in paragraph 14 of my first judgment, no claim for costs is being maintained in this bill by or on behalf of the Claimant's first solicitors, Messrs Boys & Maughan and therefore any issues arising out of the validity or otherwise of their CFA fall away.

  10. In addition, the third preliminary point, which was a technical point turning on the wrong date being inserted on the N251 by the Claimant's solicitors, was resolved during the course of the hearing before me by the Claimant making an application for relief from sanction under CPR 3.9 which, after hearing both advocates, I duly granted.


  11. Strictly, these are separate issues but they were argued together because it was contended on behalf of the defendant, that if it was successful, the level of the Claimant's base costs would be such that the issue of proportionality would no longer arise.

  12. Nevertheless, I will deal with them separately in this judgment:

    Reliance on estimates

    Mr Brown on behalf of the Defendant argued strongly and at length that the Claimant's solicitors' figures for costs contained in the allocation questionnaire and which were relied upon by his client, or to be more strictly accurate, his client's insurer, were so much lower than the actual costs now claimed that the Claimant's solicitors should be limited to the amount of the estimate together with a margin which in this case amounted to some 31 per cent over and above the estimate.

    The written estimate

    This was contained at section G of the allocation questionnaire filed on 24 May 2005:

    ``What is your estimate of your costs incurred to date? £30,330

    What do you estimate your overall costs are likely to be? £38,000''

  13. However, the base costs claimed in the bill of costs total £106,453.88, of which £92,326 represents base profit costs and £14,127.88 base disbursements.

  14. Obviously the starting point in considering this matter must be the relevant Practice Direction which is CPD Section 6, which reads as follows:

    ``6.1 This section sets out certain steps which parties and their legal representatives must take in order to keep the parties informed about their potential liability in respect of costs and in order to assist the court to decide what, if any, order to make about costs and about case management.

    6.2 (1) In this section an `estimate of costs' means -

    (a) an estimate of base costs (including disbursements) already incurred' and

    (b) an estimate of base costs (including disbursements) to be incurred,

    which a party intends to seek to recover from any other party under an order for costs if he is successful in the case. (`Base costs' are defined in paragraph 2.2 of this Practice Direction.

    (2) A party who intends to recover an additional liability (defined in rule 43.2) need not reveal the amount of that liability in the estimate.

    6.3 The court may at any stage in a case order any party to file an estimate of costs and to serve copies of the estimate on all other parties. The court may direct that the estimate be prepared in such way as to demonstrate the likely effects of giving or not giving a particular case management direction which the court is considering, for example a direction for a split trial or for the trial of a preliminary issue. The court may specify a time limit for filing and serving the estimate. However, if no time limit is specified the estimate should be filed and served within 28 days of the date of the order.

    6.4 (1) When -

    (a) a party to a claim which is outside the financial scope of the small claims track files an allocation questionnaire; or

    (b) a party to a claim which is being dealt with on the fast track or the multi track, or under Part 8, files a pre-trial check list (listing questionnaire),

    he must also file n estimate of costs and serve a copy of it on every other party, unless the court otherwise directs. Where a party is represented, the legal representative must in addition serve an estimate on the party he represents.

    (2) Where a party is required to file and serve a new estimate of costs in accordance with Rule 44.15(3), if that party is represented the legal representative must in addition serve the new estimate on the party he represents.

    (3) This paragraph does not apply to litigants in person.

    6.5 An estimate of costs should be substantially in the form illustrated in Precedent H in the Schedule of Costs Precedents annexed to the Practice Direction.

    6.5A (1) If there is a difference of 20% or more between the base costs claimed by a receiving party on detailed assessment and the costs shown in an estimate of costs filed by that party, the receiving party must provide a statement of the reasons for the difference with his bill of costs.

    (2) If a paying party -

    (a)claims that he reasonably relied on an estimate of costs filed by a receiving party; or

    (b)wishes to rely upon the costs shown in the estimate in order to dispute the reasonableness or proportionality of the costs claimed,

    the paying party must serve a statement setting out his case in this regard in his points of dispute.

    (`Relevant person' is defined in paragraph 32.10(1) of the Costs Practice Direction)

    6.6 (1) On an assessment of the costs of a party, the court may have regard to any estimate previously filed by that party, or by any other party in the same proceedings. Such an estimate may be taken into account as a factor among others, when assessing the reasonableness and proportionality of any costs claimed.

    (2) In particular, where -

    (a)there is a difference of 20% or more between the base costs claimed by a receiving party and the costs shown in an estimate of costs filed by that party; and

    (b)it appears to the court that -

    (i)the receiving party has not provided a satisfactory explanation for that difference; or

    (ii)the paying party reasonable relied on the estimate of costs;

    the court may regard the difference between the costs claimed and the costs shown in the estimate as evidence that the costs claimed are unreasonable or disproportionate.''

  15. During the course of the submissions to me there was a dispute between the advocates as to whether 6.5A applied to this case or not. That sub-paragraph was introduced into the Rules in September 2005, whereas of course the allocation questionnaire in this case was filed in May 2005.

  16. Accordingly, Mr Green submitted that the mandatory provisions of 6.5A did not apply in his case.

  17. Mr Brown on the other hand, submitted that 6.5A did apply to all assessments conducted after September 2005 irrespective of when the original estimate in question was filed.

  18. I do not think it is strictly necessary for me to decide that issue, though I am inclined to think that Mr Brown's submissions are to be preferred. However, it seems to me that an explanation was supplied for the discrepancy by the Claimant's solicitors, albeit not with the bill as such, but in their points of reply.

  19. This is perhaps unsurprising, because the point was not raised by the Defendant until their points of dispute were served in April 2007.


  20. It was agreed between the advocates that the effect of 6.5A was to ``put...

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