Costs: Entirety Of Costs Bill Disallowed After Solicitors' Improper Conduct

• Published date: 29 June 2020
• Subject Matter: Insurance, Insurance Laws and Products
• Law Firm: Clyde & Co
• Author: Mr Jonathan Shaw

The Senior Courts Costs Office has held that the unreasonable and improper conduct of a firm of solicitors during the assessment process can result in the entirety of a claimant's entitlement to costs being disallowed.

Master James concluded the firm's conduct had also been in breach of the CPR "especially of the provisions of CPR 1.3 whereby the parties are required to help the court to further the overriding objective".

The Claimant had initially served a bill of costs totalling '174,565.79 in June 2018. However, it was subsequently conceded that a success fee of '28,088.41 was pursued under an unenforceable CFA, and '20,556 had been claimed at incorrect hourly rates. A replacement bill was lodged in the sum of '116,192.50.

The Defendant successfully applied to disallow the entirety of the bill pursuant to CPR 44.11, which allows a court to reject all or part of the costs being assessed where "it appears to the court that the conduct of a party or that party's legal representative, before or during the proceedings or in the assessment of proceedings, was unreasonable or improper".

Background

The claim had been funded by two Conditional Fee Agreements ("CFA"), one of which was signed pre-LAPSO and the second post-LASPO. The first CFA covered the first three parts of the bill and the final part of the bill was covered by the second CFA.

Points of Dispute were filed. On reviewing the documents, Master James stated that it was clear that the Claimant clearly believed the first CFA was valid and enforceable.

However, prior to the hearing, the Claimant's solicitors submitted the second CFA was retrospective and covered all of the work done in parts one, two and three, as well as four of the bill; all in the absence of a cancellation notice for the first CFA.

Master James found that this was clearly incorrect; upon examination of the Claimant's solicitors' file there was nothing to suggest the Claimant had been advised that the second CFA was intended to have retrospective effect covering the entirety of the bill.

Indeed, Master James stated that such a move would have been a "colossally bad bargain" on the part of the Claimant, and in the absence of independent advice, would have created a conflict of...