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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Malpas v Fife Council [1999] ScotCS 23 (15 January 1999) URL: http://www.bailii.org/scot/cases/ScotCS/1999/23.html Cite as: [1999] ScotCS 23

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This optional procedure action arose out of an accident on 1 February 1995 when the pursuer, who was employed by the defenders, sustained injury. In their defences lodged on 24 March 1997 the defenders admitted liability. A proof on quantum was appointed to be heard on 20 and 21 November 1998.

On 21 October, 3 November and 13 November those acting for the pursuer telephoned those acting for the defenders reminding them of the imminence of the proof and expressing concern that no offer in settlement had been made. On 7 November those acting for the defenders asked the pursuer's agents if they had a figure in mind which the pursuer would accept to settle the action, but none was given.

On 14 November 1998 a Minute of Amendment for the defenders was lodged and intimated. The Minute was fairly brief and included a number of calls. On 18 November the Court refused to allow amendment in terms of the calls but allowed amendment in terms of one sentence as follows: "Explained and averred that the pursuer is fit for light work".

On 17 November 1998 those acting for the pursuers intimated by fax to those acting for the defenders that they were instructing senior and junior counsel for the proof, and did so. Later that day the defenders tendered £36,611.09. On 19 November senior and junior counsel consulted with the pursuer. On senior counsel's advice the tender was rejected as inadequate. Senior counsel also advised the pursuer of an appropriate settlement figure. Later that day there were brief negotiations between the parties' agents and between their respective junior counsel and these led to settlement at a figure of £43,500.

Against that background the Auditor has disallowed the charges made by senior counsel for the pursuer for preparation for proof and for the consultation and certain related changes made by agents.

Although paragraph 7 of the Note of Objections submits that the Auditor could not take such action in the absence of judicial determination that the costs of senior counsel were not the responsibility of the defenders, that point was abandoned before me.

The pursuer's position was quite simply that it was at first blush an extreme step for the Auditor to take to disallow senior counsel's charges for preparation for proof in an action for £50,000, which ultimately settled for £43,500, where he was instructed at a point where no offer at all had been made, and one would expect to find in the Auditor's Minute answering the Note of Objections a reason which justified that decision. Mr Bell's submission for the pursuer was that many of the factors taken into account by the Auditor in arriving at his decision were irrelevant or self evidently wrong and could not in any event, when taken together, justify the decision the Auditor reached.

Mr Bowie for the defenders reminded me, and I readily accepted, that I should be slow to interfere with the decision of the Auditor and could do so only if I was satisfied he had proceeded on the basis of irrelevant material or had left relevant material out of account or had misunderstood the material before him or had misdirected himself on that material or on the law or had made an unreasonable decision, that is a decision that no auditor acting reasonably would have made. The last category identifies the test the Court normally applies when faced with deciding whether some decision or act was reasonable. If the decision or act is one, which is within the range that a person might make or do in the exercise of his own judgment or discretion, then it cannot be described as unreasonable.

In this case the adjective "reasonable" arises in another context. The Rule of Court governing the Auditor's work is 42.10.(1) which provides: "Only such expenses as are reasonable for conducting the cause in a proper manner shall be allowed." It follows that, when the Auditor disallows an item, he does so because it was not reasonable for the party to incur that expense. In his initial submission to me Mr Bowie suggested that it was entirely a matter for the Auditor, in the exercise of his discretion based on his own wide experience of practice and taking into account any material he considered relevant, to decide what charges were reasonable. In my opinion that cannot be the test. If it were, agents would have no basis on which to gauge whether expenses incurred might be recoverable in the event of success. It is also inconsistent with the opinion of the Lord President (Cooper) in Macnaughton v Macnaughton 1949 S.C. 42 at 46 setting out how what was then the "proper" fee for counsel should be ascertained:

The introduction of the present test in November 1974 by Act of Sederunt (Rules of Court Amendment No 6) 1974 (S.I. 1974/1686) does not in my opinion affect that guidance. Indeed in my experience the present Auditor's predecessor relied on the dictum quoted above to support his approach to the task. It was accepted by both parties that different charges are made by different counsel for similar work, and that a range of charges for any given work might be reasonable. Similarly it is common experience that different agents might approach preparation for a case in different ways and with differing degrees of diligence, but the additional work done by one would not obviously in these circumstances be described as "unreasonable". So there may be a range of different ways of conducting a case that might all be described as "reasonable". It seems to me to follow that, in deciding whether to allow or disallow any particular item, the Auditor is undertaking a task similar to mine and should only disallow an item if it can truly be said that to incur that expense was not reasonable, in the sense that a competent solicitor acting reasonably would not have incurred it.

My reading of the Auditor's Minute is that he took that approach. In the lower half of page 4 he explains that he disallowed the charges because he "found it wholly unreasonable to allow" them "in the Party and Party Account". At paragraph 8 on page 5 he says in even stronger language that "The instruction of Senior Counsel was not justified". Assuming he is using the word "justified" in the sense of being justified as reasonable under Rule of Court 42.10(1), then that again indicates such an approach.

It follows that the question the Auditor was considering was whether a solicitor acting reasonably would have instructed senior counsel to conduct the proof.

The Auditor does not suggest in his Minute that competent solicitors do not instruct senior counsel in such circumstances for the proof in cases such as the present. What he says in paragraph 6 is that there were certain circumstances in this case which made the instruction of senior counsel for the proof wholly unreasonable. They are five in number:

(a) the admission of liability in the defences;

(b) the instruction of Junior Counsel;

(e) The fact that negotiations following on the tender were conducted by junior counsel is irrelevant to the question whether it was reasonable to instruct senior counsel for the proof and to consult on the tender. Both these steps were taken by agents before any subsequent negotiation took place. Counsel for the defenders relied a little in relation to this point on the opinion of Lord Cullen in Signet Group Plc v C. & J. Clark Retail Properties Limited, 23 June 1995, unreported, (1995 G.W.D. 27-1454). However, that case relates to the situation where agents specifically decided to instruct junior counsel for a hearing and then engaged senior and junior counsel when the hearing did not take place until a later date. In the present case senior counsel was instructed before the tender was received. Senior counsel then consulted and advised against acceptance of the tender and advised on a figure which should be accepted. That advice led to settlement. The fact that the legwork of finally negotiating settlement was undertaken by junior counsel has no bearing on the reasonableness of instructing senior counsel for the proof at the time he was instructed. If it was reasonable to instruct senior counsel when he was instructed, then it follows that it was reasonable to instruct him to consult with and advise the pursuer on the tender, since he would be conducting the proof in the event that the tender was rejected, and indeed had not met her.

(d) When pressed, counsel for the defenders conceded that the figure of £43,500 was not a figure one would ordinarily describe as a "relatively small settlement figure". At paragraph 8 the Auditor also describes it as "not a substantial one". In relation to both descriptions counsel for the defenders submitted that, while the Auditor's choice of language was not entirely felicitous, junior counsel commonly undertook on their own actions involving such a sum. The description of the settlement as "relatively small" is combined with the statement that there was an "absence of any complicating factors in quantification". Counsel submitted that the computation was straightforward and the issue over pension loss was resolved by horse trading. In my opinion the Auditor erred in two respects in making the statement that the settlement figure was relatively small and that there was an absence of any complicating factors in quantification. Obviously the settlement figure might be described as "relatively small" depending upon what its size is being compared to. In its context, however, the expression is not used in comparison to anything specific. The statement is made as a description of the settlement figure in ordinary parlance. There is no indication that a comparison is being made with settlement figures in the Court of Session in general or against any other standard. In these circumstances it is plainly wrong to describe a sum of £43,500 as damages to a caretaker who might never be able to work during the eleven years between the accident and her normal retirement date as "relatively small". It is also plainly wrong to state that there were no complicating factors in quantification. The defenders lodged a Minute of Amendment on 14 November about the fitness of the pursuer for light work and then made an offer on 17 November which was subsequently increased by 20% before the action was settled. The accepted facts demonstrate that the Auditor misdirected himself in relation to the issue of quantification.

(c) The pursuer's agents enrolled a motion for commission and diligence to recover documents and arranged their recovery themselves. They also prepared for the proof without obtaining a note in the line of evidence from counsel. In my opinion they should be commended for undertaking both tasks without involving counsel where they considered that that was quite unnecessary. Agents familiar with personal injury reparation proceedings under the optional procedure are perfectly capable of undertaking these responsibilities without guidance from counsel, especially in the absence of the assertion of any positive defence prior to the Minute of Amendment. Counsel for the defenders submitted that the fact that the pursuer's agents undertook such work on their own indicated that the action was straightforward. What faced the pursuer's agents was a proof in which they sought to recover up to £50,000 for the pursuer, when a Minute of Amendment had been lodged by the defenders but had not been dealt with, and when there was no indication from the defenders of their willingness to settle the action at a reasonable level. I do not consider that the steps taken earlier by agents themselves were in any way relevant to the question whether it was reasonable in these circumstances to instruct senior counsel.

(b) The instruction of experienced junior counsel can only be relevant in connection with other factors relating to the case itself. The point could, therefore, only be relevant if there was substance in Grounds (c), (d) and/or (e).

(a) This is simply a statement of the fact that the proof related to quantum only. That on its own could never be justification for disallowing the fees of senior counsel. Senior counsel's fees could only be disallowed in relation to a proof on quantum for some other reasons relating to the proof itself.

It is accordingly my opinion that the Auditor took account of irrelevant material and misdirected himself in relation to material presented to him.

In addition I can find no clear indication in the Auditor's Minute that he clearly focused in his own mind the crucial question raised principally in paragraph 6 of the Note of Objections. That is whether it was reasonable for the pursuer's agents to instruct senior counsel when three days before the proof no offer in settlement had been received, no indication had been given of the level at which an offer might be made, and there was an outstanding minute of amendment before the Court. However, even if he did, I am satisfied he erred in the way I have described in his approach to it.

The Auditor refers to the opinion of Lord Jauncey in Giles v Fleming Bros. Structural Engineers Ltd 1987 S.L.T. 114 at 115k to the effect that optional procedure is ideally suited to cases where the facts are within a relatively small compass and the medical evidence is straightforward. That opinion was expressed in relation to whether an action should continue as an optional procedure cause rather than as an ordinary cause. It was not expressed in the context of deciding whether the instruction of senior counsel was appropriate in such cases. There is in my opinion no reason in principle why senior counsel should not be instructed in optional procedure cases as long as it is reasonable in the whole circumstances of the case to instruct them. The fact that the case is proceeding under optional procedure is of itself of no particular significance in determining the choice of counsel. Indeed the more relaxed pleading requirements may in certain circumstances justify the engagement of senior or more experienced counsel to ensure that the case at proof is confined to the issues raised. In our largely oral based adversarial system the most important skill is advocacy, which is itself largely the product of experience. It does not follow that, because a particular form of procedure is designed to be less expensive than another form of procedure currently in use, that saving should necessarily by achieved by the exclusion of more experienced advocates from the procedure.

I am satisfied that no sound reason has been stated by the Auditor for finding it wholly unreasonable for the pursuer's agents to instruct senior counsel for the proof and consultation. I accordingly sustain the objection in the Note. There being no issue over the amount of the fees charged but disallowed, I shall ordain the Auditor to amend his report to give effect to the decision of the Court by reinstating the items deleted on pages 3 and 4 of the account, the item deleted on page 5 in relation to November 17, and the items deleted in relation to November 19 and November 20 on page 6, and by making any further necessary consequential revisals to the final calculation.