Giving two examples of family cases where Practice Direction (Fam Div. Family Proceedings: Court Bundles) [2006] 1WLR 2843 had not been followed, the court commented on practitioners’ general failure to comply with the practice direction. In one case, the hearing bundle prepared by experienced family solicitors had lacked a reading list and skeleton argument, and the chronology and index were virtually useless. Most of the key documents were scattered through the bundle without chronological or thematic order. In the second case, a bundle had been delivered to the court on the morning of the hearing, leaving no time for pre-reading. The index stated the wrong date and court, and two orders which should have been included in the bundle were not. The hearing had to be re-listed. These were two examples out of many instances of the practice direction not having been followed.

Held: Far too often the requirements of the practice direction were not being observed. That was unacceptable. Paragraph 12 of the practice direction warned of sanctions penalising those who failed to comply with its requirements. Orders for costs could be made against either the party in default or against the defaulting lawyers. Cases could be put to the end of the list or adjourned to a later date. In particularly egregious cases, defaulters could be publicly identified in open court

The court’s comments were to be taken by the professions as fair public warning that the sanction of public exposure was available and could be applied in appropriate cases.

Statement issued in open court.

The draft rule says that an order can be made if it is in the interests of justice to do so and that a ’substantial risk’ that costs will be disproportionately incurred without it.  The committee went on to say that the risk could no be adequaltly controlled by case management powers or through the process of Detailed Assessment.

Costs Assessment Guidance - October 2007 

Please look at Paragraphs 15.8, 15.9, 15.10, 15.12, 15.13 & 15.21.  Our reading of this is that: 

• You can claim for drawing bills on Family matters at the appropriate hourly rate.
• You can make a claim in FPC work as well as County & High Court work
• Clients can still be charged by their Costs Draftsmen on a percentage basis
• Preparation of the bill is part of the fixed fee in Care Proceedings unless it is exceptional, in which, we can make a claim
• The time limit for submitting claims is now 6 months and there is no penalty.

Words of Caution:

The Costs Assessment Guidance specifies in paragraph 1.1 that these provisions only to apply to matters commenced after 1^st October 2007.  The Guidance is not ‘law’ and the current Statutory Instruments still provide scale maximums for “preparing the bill”, and exclude work done in the FPC from this provision.  It may well be that amendments to these will follow.  However, if the LSC are issuing this guidance to all practitioners and to those assessing bills, I think we should go along with it.  Therefore, when we make a claim for drawing the bill, we include wording along the lines of “…in accordance with the LSC Costs Assessment Guidance October 2007, paras 15.8, & 15.10” until we get a clearer picture.

The court had to determine costs arising out of an action by the claimant landowners (C) against the defendant surveyors (S) alleging negligence in connection with leases of land used by Bournemouth International Airport as a car park.

The court found that S had been negligent in respect of a 2002 lease, which superseded a 2000 lease, and in respect of a 2003 lease of further land which followed the terms of the 2002 lease. The court held that S should have negotiated leases in 2002 and 2003 which contained ‘turnover’ rent provisions with a split of net car park income of 10% to C.

The damages in respect of the 2002 lease were £773,479, and in respect of the 2003 lease were £141,660, making a total of £915,139. Those damages were assessed on a loss of capital value basis rather than on a loss of income basis. The sum which was claimed at trial had been up to £87.8 million on the basis that the income split should have been 93.4% to C.

The court further held that the car parks would not in due course have been built over with decking, thus increasing their capacity, and that no claim could be made for loss on that basis.

Claims against the solicitors (W) who acted for the estate in connection with the leases and who were brought into the action by S were dismissed, and W were awarded their costs on an indemnity basis.

C argued that they stood in the position of winners and should accordingly have the costs of the action subject possibly to an order to reflect the fact that they had lost on various discrete issues. S submitted that C were not to be treated as winners because they were awarded damages which we’re but a small proportion of their claim; C had exaggerated their claim, which made mediation impossible; S were entitled to their costs on a number of discrete issues on which C had lost; there should be no order as to costs in relation to the balance of the costs; C had failed to comply with the professional negligence pre-action protocol; S had made offers to C to settle.

Held: (1) The decision to join W was a tactical one, and no proper consideration had been given to whether there was any sufficient basis for making a claim against W: if it had been properly considered, it would have been realised that there was not S should bear the consequences of their conduct and C should not S’s costs payable to W should not be reimbursed by C, and C should not have to pay S’s own costs incurred against W.

(2) Some £240,000 of S’s total unassessed costs of £1.6 million related to issues, including the decking issue, which should be paid by C That was 15%. The £ 1.6 million included costs incurred in advandng the daim against W. Accordingly, C would be ordered to pay S 15% of their costs as determined on detailed assessment if not agreed, and should not recover 15% of their own costs as determined on detailed assessment if not agreed.

(3) The court was satisfied that C intended to comply with the pre-action protocol and rejected the submission that there was conduct which should be reflected in the orders for costs.

(4) Neither side’s stance in negotiations was reasonable.

Where the failure to mediate was due to the attitudes taken on either side, it was not open to one party, in the present case S, to daim that the failure should be taken into account in the order as to costs.

C’s position at the mediation was plainly unrealistic and unreasonable. A party who agreed to mediation but then took an unreasonable position in the mediation was in the same position as a party who unreasonably refused to mediate. That was something which the court could and should take account of in the costs order, Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002 applied. In the circumstances, S’s offers should not be taken into account on costs. C had won on liability and had recovered substantial damages, but S succeeded in cutting down the sum awarded to a fraction of what C were asking for. In the circumstances, C should not have the whole of the balance of their costs. Something should be deducted to reflect the fact that they daimed so much more than they recovered.

C were awarded only 70% of the balance of their liability costs, with the result that they would get 59.5% of their costs incurred against S in connection with liability as assessed or agreed. C were awarded only 80% of the balance of their costs on damages, with the result that they would get 68% of their costs incurred in connection with damages as assessed or agreed.

Judgment accordingly.

Anthony Speaight QC (instructed by Stockier Brunton) for the claimants; Edwin Johnson QC, John Gallagher (instructed by Williams Holden Cooklin Gibbons) for the defendant.

The appellant firm of solicitors (S) appealed against a decision of a costs judge that it was bound by an estimate given to the respondent (R).

A dispute had arisen between R and a building contractor. R consulted S, who informed her that the estimated cost of taking the matter forward and through to trial would be in the region of £10,000 to £18,000 plus VAT. The building contractor subsequently issued proceedings against R, and she instructed S to act for her in conducting her counterclaim.

Throughout the course of the litigation S sent R a number of invoices, and then sent a letter stating that S’s estimate as to the likely overall cost of the case had to be revised to around £30,000 plus VAT. R had already paid S around £15,000 in line with the original estimate, but further bills were sent to her. R did not pay them, and S informed her that, as the sum of £25,000 remained outstanding, it would not act further.

R instructed new solicitors, was ultimately successful on all elements of her counterclaim and was awarded damages. The question of costs payable by R to S was referred to the costs judge. He went through all the points of dispute and concluded that S should be bound by its estimate of £18,000, to which the 15% ‘margin’ available under established case law would be added, thereby limiting R’s liability for costs to £20,700, Wong v Vizards [1997] 2 Costs LR 46 QBD cited.

S contended that the judge had erred in failing to take into account that the whole point of the revised estimate had been to advise R in advance of the costs being incurred that the original liniit of £18,000 was going to be exceeded, and that she had treated the original estimate wrongly as a fixed quotation.

Held: There had been no error of law on the part of the judge of which S could complain. He had been entitled to have held that S should be bound by the estimates. The revised estimate had been an attempt to correct an earlier under-estimate and was not attributable to any change in the facts. There had been no significantly unusual developments before the revised estimate such as to explain the difference between the £18,000 estimate and the £30,000 revised estimate.

Appeal dismissed.

Nicholas Bacon (instructed by the in-house solicitor) for the appellant; Stephen Cottrell (instructed by Bar Pro Bono Unit) for the respondent