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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Jemma Trust Company Ltd v Liptrott & Ors [2004] EWHC 1404 (Ch) (17 June 2004) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2004/1404.html Cite as: [2004] EWHC 1404 (Ch) |
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CHANCERY DIVISION
ON APPEAL FROM THE SUPREME COURT COSTS OFFICE
Strand, London, WC2A 2LL |
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B e f o r e :
Sitting with
COSTS JUDGE WRIGHT (sitting as an Assessor)
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JEMMA TRUST COMPANY LTD. |
Claimant/ Appellant |
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- and - |
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(1) PETER D'ARCY LIPTROTT and (2) JOHN FORRESTER (As Executors of Sir Geoffrey Alan Hulton Bt deceased) (3) MESSRS KIPPAX BEAUMONT LEWIS |
Defendants/ Respondents |
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Mr Justin Fenwick QC and Mr Nicholas Bacon (instructed by Messrs. Kippax Beaumont Lewis) for the Defendants.
Hearing dates: 4th May 2004
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Crown Copyright ©
Mr. Justice Hart:
"the importance of looking at the final figure in the round in order to ensure that the appropriate factors are taken into account in every individual case to arrive at no more than a fair and reasonable remuneration overall"
"We have already made clear our view that the judge has assessed too low an hourly rate, if he was right to conclude that a valuation element should not appear separately in the bills. If the value element is addressed separately, the Law Society guidance contemplates an uplift factor of 25% to 33% over the expense rate. By adopting KBL's skeleton argument, the judge gave KBL that rate but no more, at any rate for the years 1994–1996. The last years seem to be assessed at slightly more, but only minimally so. In these circumstances we are not satisfied that the judge has given any sufficient allowance for the value of the estate at all. The parties agreed that, in the event of this conclusion being reached, the matter would have to be remitted to the costs judge. He will be able to consider our judgment, as a whole, and make his final assessment in the light of it. "
i) His decision to allow a value charge of £141,906.71 (which was the effect of his decision to assess the bills in the reduced sum overall of £500,000):ii) His decision to make no reductions for time spent in relation to individual bills, other than to apply a 5% reduction for duplication in the work of Mr Liptrott and Mr Marriott. This decision was said to be the result of procedural unfairness on the part of the Costs Judge; and
iii) His decision to make no reduction on the ground of the inadequacy or absence of attendance notes justifying particular items claimed within the time charge.
The Value Charge Issue
"2. In this Order … "entitled person" means a client or an entitled third party; "entitled third party" means a residuary beneficiary absolutely and immediately (and not contingently) entitled to an inheritance, where a solicitor has charged the estate for his professional costs for acting in the administration of the estate, and either (a) the only personal representatives are solicitors (whether or not acting in a professional capacity); or (b) the only personal representatives are solicitors acting jointly with partners or employees in a professional capacity …
3. A solicitor's costs shall be such sum as may be fair and reasonable to both solicitor and entitled person, having regard to all the circumstances of the case and in particular to:—
(a) the complexity of the matter or the difficulty or novelty of the questions raised;
(b) the skill, labour, specialised knowledge and responsibility involved;
(c) the time spent on the business;
(d) the number and importance of the documents prepared or perused, without regard to length;
(e) the place where and the circumstances in which the business or any part thereof is transacted;
(f) the amount or value of any money or property involved;
(g) whether any land involved is registered land;
(h) the importance of the matter to the client; and
(i) the approval (express or implied) of the entitled person or the express approval of the testator to:—
(i) the solicitor undertaking all or any part of the work giving rise to the costs or
(ii) the amount of the costs."
For ease of exposition I will refer to each of those lettered sub-paragraphs as factors (thus "factor (a)" means the content of that sub-paragraph and so forth).
"I have come to the conclusion after taking into account all the factors laid down by the remuneration order, all the submissions made to me by the advocates, and on my perusal of the documents, consideration of the transcripts and evidence given by the witnesses, that the fair and reasonable charge for these bills, which is both fair and reasonable to the solicitors, as well as to Jemma Trust, is the total sum of £500,000. This of course equates to a value element of £141,906.71, which is considerably in excess of the £30,300 which the application of an updated regressive Maltby v D J Freeman scale would suggest, but I do not think that the application of such a scale would produce the right result in this case."
"13.2 The mark-up is a method of expressing the weight to be attached to the factors in the Order, apart from value and time, and of other relevant circumstances in the general run of work. It is not the only method, nor is it always the most suitable, but it has become widely accepted and it has this merit; it enables you to distinguish degrees of skill etc. between one file and another in work of similar type and thereby establish a reference point to take into account when finally deciding what the charge should be. It does not represent an addition to expense to which you are automatically entitled…"
The booklet then goes on to distinguish the case where there is no ascertainable value factor (paragraph 13.4) and that where there is (paragraph 13.5) concluding that in the latter case the mark-up will commonly be in the region of 25-33%.
"In determining the overall sum to be allowed the learned Costs Judge was wrong to leave wholly out of account the very considerable sums charged by counsel, accountants and the subsequent firm of solicitors in addition to the bills before him. He ought to have taken account of the existence of these further charges whilst reminding himself that they might be reduced on assessment."
"However - and both sides agreed with this view of the matter - in view of the termination of instructions before the solicitors had completed their normal work, the sum under this head falls to be reduced by 50 per cent. It is obviously right that an allowance should be made for the premature termination of the work, and it is, I think, consistently with the heads of the rules, the only suitable head under which to effect such reduction, illogical though it may strictly be to utilise it in this manner. The more logical alternative would, of course, be to apply a suitable percentage reduction to the totality of heads (1), (2), (6) and (7). In view of the agreement of the parties, I do not pursue this alternative further in this case. The precise amount of the reduction must, in every case, be a matter of extreme difficulty, and it is complicated by the freely acknowledged fact that in the present case, by reason of his professional status, the first plaintiff was able to afford the defendant firm a great deal of assistance in relation to values. As I have indicated, both sides agreed that a 50 per cent. reduction was a fair figure to take care of both these factors, and I entirely agree with their judgment."
"In determining the value element the learned Costs Judge was wrong to take account of the interventions of Major Reynolds and Mr Butterfield: these interventions increased the work done, but [KBL] were adequately remunerated for that extra work in the allowance of time spent and no further allowance ought to have been made in the determination of the value element".
Procedural unfairness
"14. Accordingly, it was agreed that I should read the numerous files which had been left with me, during the ensuing seven days, and, at appropriate times, should hear from the three principals concerned: Mr Kippax, Mr Liptrott and Mr Marriott, so that they could be asked questions in light of my reading.
15. In fact Mr Liptrott gave evidence at the beginning of that period, and Mr Kippax and Mr Marriott towards the end. I did have a number of questions for all three witnesses, but obviously I also allowed Mr Kenny, and his costs draftsman Mr Hiesman, to put questions to the witnesses.
16. As I made clear when the closing submissions were made to me on 26 November, I was, and remain, somewhat concerned at the way this particular aspect of the matter was conducted. It seemed to me that all three witnesses, one of whom was sworn, were asked questions which were perfectly legitimate questions, because they arose out of matters which appeared on their respective files, but of which they had little, or no advance notice, and, more importantly, had not previously been given the opportunity to deal with in the form of a witness statement.
17. As I explained, and as I think all parties are well aware, cross examination of witnesses in the course of detailed assessment proceedings, is unusual, though it is by no means unprecedented. It is the practice within the Supreme Court Costs Office to seek to contain such cross examination to the absolute minimum necessary to decide disputed issues. The necessity for such evidence will normally arise in connection with the question of whether there is a retainer, and if so what that retainer is, in disputes between a solicitor and his client. I normally insist that such disputes are put into written form, in the form of a witness statement, and that the witness concerned is tendered for cross examination. In that way both the witness, and the cross examiner, know what to expect.
18. In this case, as already indicated, there were no such witness statements, and some of the questions clearly took the witnesses by surprise, and were, if I may use the expression, somewhat combatative. Most of these questions were put by Mr Hiesman, and were based upon his very careful perusal of the files of Kippax Beaumont Lewis, which he had spent many days going through. My concern was that Mr Hiesman might have selected, from the many examples which were open to him, those which he thought were most damaging to the Defendant and most helpful to the Claimant, and put those to the witness.
19. When I put this to the advocates on 26 November, they both seemed to suggest that it was a matter for me to decide the weight to place on the individual answers given to those questions."
"Objection 1 – Individual bill points
45. I have decided to make no reductions in respect of any of these bills for the following reason. They were taken somewhat at random by Mr Hiesman, and examined as such, but, although I can see the force of the arguments put forward in respect of each of the individual bills, it seems to me that it would be wrong to make deductions for these specific bills when many other bills were not considered at all. Originally, as indicated in paragraph 13 above, the detailed assessment proceeded on the basis that each bill was going to be considered in turn, but that approach was discarded as soon as it became apparent how long this exercise would take. The attempt to persuade me in the skeleton to disallow certain items from individual bills based on points put (without advance warning) to witnesses seems to me wrong, and I therefore do not think it is appropriate so to do."
Lack of attendance notes
"whose records are inadequate are liable to find that doubts are resolved against them because they are unable to fulfil their duty to account for what they have received and to justify their claim to retain part of it for themselves by way of remuneration." (ibid 334 D)