I commented, last week, on a talk by Erica Bedford at the #ACL Regional Meeting, in which she highlighted some changes to costs rules and procedure discussed at the #CJC costs review.

The changes could impact all of us, but in my view, most of the proposals make sense.

Here is a link to the ACL article on that review, in which further details of the proposed changes are set out.

Last night I went to a regional meeting of the Association of Costs Lawyers in Liverpool. It was the first event of this kind I had attended for some time, and it was well worth the effort.

There were two speakers:  Erica Bedford and Kevin Latham, both of Kings Chambers and both specialising in costs. I have heard Erica speak on numerous occasions and have even been against her on one occasion many moons ago. I have not heard Kevin speak before. Both, however, provided very useful and enlightening information which we could and should all learn from.

I will come to Kevin’s topic first. He talked to us about the “Dos and don’ts” of detailed assessment. Now, I have been doing this job for the best part for fifteen years and I like to think I know my stuff. But it never hurts to get some insight as to how an advocate thinks you should run your case to maximise the benefits to your client, whether receiving or paying party. We all draft bills of costs, points of dispute and replies regularly during the course of our work. But do we become complacent? Do we think about why we are drafting them? Perhaps, at least to some degree.

Kevin gave plenty of tips, many of which should be obvious but some of which we sometimes might forget along the way. They included:

• Draft points of dispute and replies for the judge, not for your opponent
• When drafting, think about what you want the judge to do
• In the points of dispute, tell the judge which filters you want him/her to apply in an electronic bill
• Remember, at the end of points of dispute, to return to the issue of proportionality and include a figure over which you submit that costs are disproportionate and should be reduced
• Make concessions in replies to show you are taking the process seriously
• Give proper explanations, for example if costs have been incurred which look unreasonable and/or disproportionate but for which there is actually a good reason
• Make sure the bundle at the detailed assessment hearing complies with the rules
• If you are using an electronic bundle, paginate the index
• Make sure the bundle follows the points of dispute
• If you are attending the hearing as an advocate, READ EVERYTHING
• Have details of offers and payments on account of costs ready at the hearing
• Check and double check the final order

Erica talked about the seismic changes in costs, some of which have just happened, and others of which come into force in October.

The changes to the QOCs rules came into force on 6 April this year and mean that costs orders against a claimant can now be set off not just against damages awarded but also against any orders, costs and interest made in favour of the claimant. We all know that, but have any of us really thought about the impact of that change?

Erica highlighted the fact that the wording of solicitors’ retainers (and, in particular, CFAs) MUST change in light of the changes to the QOCs rules because the client could potentially be personally liable for their solicitor’s costs in situations where an early offer was not accepted and any liability of the defendant to pay the claimant’s costs is wiped out by an order for costs in the defendant’s favour.  There has been a win, but the only option for the solicitor is to go to the client for payment.

Clearly, in the circumstances outlined above, a client is going to be less than happy. Not only have they lost all their damages because they have been set off against the defendant’s costs, but they also had to find money to pay their solicitor. So, whilst the claim succeeded, because an early defendant offer was not beaten, they will end up out of pocket, probably by many thousands of pounds.

What does this mean for claimants and their solicitors? Well, it is likely to lead to more solicitor and client assessments when claimant clients seek to challenge their solicitors’ fees. It will probably also have to lead to a significant change to the ATE (after-the-event) insurance market to allow for such eventualities. But who will pay for that? The client, of course.

Ignore the implications of the changes at your peril. Start thinking about them now so that your retainers are set up to deal with adverse costs in QOCs cases.

Erica then went onto talk about the changes, amongst other things, to fixed recoverable costs which come into force on 1 October this year. For us as costs lawyers, her comments provided some comfort because, rather than fixed recoverable costs leading to the end of our industry, Erica suggested that there are likely to be significant arguments about where a claim falls. For example:

• If there are factors other than value to take into account, should the claim be allocated to the Fast Track, Intermediate Track or Multi Track?
• If it falls into the Fast or Intermediate Track, which complexity band does it fall into?
• What constitutes a complete admission of breach of duty and causation in a clinical negligence case?
• Has a claimant pleaded a point in a clinical negligence case which should not have been pleaded and was clearly only intended simply to force the case out of fixed costs and into the Multi Track by virtue of the fact that causation would not be admitted in full?
• When should you issue proceedings in a case which might or might not fall into fixed recoverable costs?
• If cases are issued early so as to minimise work being done outside the scope of fixed costs, will that result in defendants arguing that proceedings have been issued prematurely?

Many of the above questions, and probably others, are likely to be decided in court, and costs professionals will no doubt be involved in the process.

Erica also talked about conversations being had about changes to the budgeting rules where QOCs apply, changes to the Guideline Hourly Rates (particularly in heavy commercial cases outside of London) and an amendment to CPR 46.14 which, when it comes into force, is going to allow a court to determine not just the quantum of pre-issue costs, but also the incidence of them, which could potentially have dire consequences for some.

So, costs lawyers, keep smiling. There will be plenty of work out there to keep us busy. And solicitor clients, do not be complacent. Look at the new rules and think about their impact, not just in respect of how much you will be paid, but also how you can make sure that you do get paid.

Lastly, thank you, Erica, and Kevin, for two excellent talks. They certainly made me sit up and think.

An interesting article today from the Law Society Gazette, on the application of the fixed costs extension which will come into force on 1 October 2023.

The main point is that fixed costs will apply to most money claims (excluding clinical negligence claimed) valued at up to £100,000.

The full article can be found on the Law Society Gazette website.

Legal disputes can be complicated and costly, but instructing a costs lawyer can be the secret weapon in achieving a favourable outcome in costs disputes. Costs lawyers, in the same way that solicitors are specialists in their own fields, are specialists in dealing with legal costs.  They can help clients save money, navigate complex costs rules, and ensure that costs claimed are accurate, reasonable and proportionate. In this article, we will explore why instructing a costs lawyer rather than trying to deal with costs issues yourself is a smart choice and how a costs lawyer can be your secret weapon in legal disputes.

What Is a Costs Lawyer?

A costs lawyer is a qualified legal professional who specialises in dealing with all matters relating to legal costs.  This includes drafting costs budgets, dealing with budget discussions, drafting bills of costs, points of dispute and replies to points of dispute, undertaking costs negotiations and attending costs-related hearings.  Costs lawyers can also provide advice and assistance in relation to costs management and budgeting. In the UK, costs lawyers are regulated by the Costs Lawyer Standards Board (CLSB) and must adhere to strict professional standards.

Why Are Costs Lawyers Important?

Costs are a significant factor in legal disputes, and it is important to be accurate when claiming costs from another party to litigation.  A costs lawyer can both assist in making sure that a solicitor is claiming everything which their client is entitled to recover from their opponent in litigation, but (and this is equally important) can prevent a solicitor client from inadvertently trying to claim costs which are not recoverable between the parties.  Serious and significant sanctions can be handed out to solicitors who claim costs which are not recoverable, including - in cases where inaccurate budgets or bills of costs have been signed as accurate - disallowing all costs claimed whether normally recoverable from an opponent or not.

Assessing Costs

Because costs lawyers have an expert understanding of what is and is not recoverable between the parties as well as what is reasonable and proportionate, they can help, when negotiating settlement in costs disputes, in assessing what it is fair and reasonable for the paying party to pay.  Their expertise allows them to recover the maximum for their clients, or, in cases where they are acting for the paying party, to prevent their client from paying costs which are either not recoverable, unreasonable or disproportionate.

Navigating Complex Costs Rules

Legal costs can be complex and subject to a variety of rules and regulations. Costs law, over recent years, has begun to evolve quickly and therefore it is vital that the person dealing with costs disputes is fully appraised of the current law in relation to costs.  Costs lawyers are trained to navigate these rules and changes to the law and ensure that clients are in compliance with them.

Why You Should Instruct a Costs Lawyer

Hiring a costs lawyer can provide a number of benefits, including:

Saving Time and Money

Costs lawyers can help clients save money by undertaking costs work at a lower hourly rate than their solicitor clients would charge, enabling those clients to spend more time working on their cases their own higher hourly rate.  Because of their expertise, they will also recover more costs than their clients would be able to do.

Expertise

Costs lawyers have extensive knowledge of legal costs and the rules and regulations that govern them. They can provide expert advice on cost budgeting, costs management and costs assessment, ensuring that clients are in compliance with these rules and maximising their chances of a favourable outcome.

Peace of Mind

Knowing that legal costs are being managed by a professional can provide clients with peace of mind. Costs lawyers can ensure that costs claimed are accurate, reasonable and proportionate, thereby minimising the risk of unexpected costs being claimed, and providing clients with a greater sense of control over their budgeted costs.

Conclusion

Legal disputes can be stressful and expensive, but hiring a costs lawyer can provide a secret weapon in achieving a favourable outcome in costs disputes.

Judgment in Karatysz v SGI Legal LLP [2022] EWCA Civ 1388 was delivered at the same time as the Judgment in Belsner v Cam Legal Services Ltd [2022] EWCA Civ 1387.  The appeals in both cases were dismissed, with stark warnings from the Master of the Rolls, Sir Geoffrey Vos.

In this case, at the start of the judgment, Sir Geoffrey Vos said that the following three points should be noted from Belsner:

1. Solicitors undertaking claims for their clients within the pre-action protocol for low value personal injury claims via the RTA Portal are undertaking non-contentious business within the meaning of the Solicitors Act 1974 (the 1974 Act) until legal proceedings are formally issued.
2. Consequentially, section 74(3) of the 1974 Act (which limits the remuneration of a solicitor to that which can be recovered between the parties to an assessment) does not apply to limit the costs that solicitors can recover from their clients in respect of claims pursued through the RTA Portal, because that section applies only to contentious business in the county courts.
3. CPR part 46.9(2), which requires a written agreement between solicitor and client expressly allowing the solicitor to charge the client more than can be recovered inter partes, does not extend the ambit of section 74(3) of the 1974 Act to make it apply to costs incurred in non-contentious business.

In Karatysz, the issue in question was largely based around the amount of the solicitor’s statute bill.  There was confusion as to the amount of the bill, and therefore how the £455.50 retained out of the client’s damages was calculated.  It was argued, therefore, that the bill was not complete. Sir Geoffrey Vos held that:

1. “36.The only sensible interpretation of the Bill as a whole was that it was demanding whatever had already been paid, namely £1,116 by Aviva plus £455.50 by the client, totalling £1571.50…”

He then went onto say:

45. The Client allowed checkmylegalfees.com to bring this costly case on her behalf, when she had almost nothing to gain. As Lavender J demonstrated at [42], she recovered £177.50 before DJ Bellamy, which was all that was really at issue except massive sums by way of costs. The process whereby small bills of costs are taxed in the High Court is to be discouraged. It is far more economic to use the Legal Ombudsman scheme which is a cheaper and more effective method of querying solicitors’ bills in these circumstances. Moreover, whilst it has not been necessary to decide whether there were “special circumstances” in this case under section 70(10), because the Client has not succeeded on her appeal, there remains a lesson to be learned from this case. Firms such as checkmylegalfees.com and their clients should be in no doubt that the courts will have no hesitation in depriving them of their costs under section 70(10) if they continue to bring trivial claims for the assessment of small bills to the High Court, even if those bills are reduced on the facts of the specific case by more than one fifth under section 70(9). The critical issue is and always will be whether it is proportionate to bring this kind of case to the High Court. In this case, it was not.
46. The Client argues that certainty is needed. I agree. Properly drawn bills ought in future to state the agreed charges and/or the amounts that the solicitors are intending by the bill to charge, together with their disbursements. They should make clear what parts of those charges are claimed by way of base costs, success fee (if any), and disbursements. The bill ought also to state clearly (i) what sums have been paid, by whom, when and in what way (i.e. by direct payment or by deduction), (ii) what sum the solicitor claims to be outstanding, and (iii) what sum the solicitor is demanding that the client (or a third party) is required to pay.
47. The practice of imposing conditions on the face of a statutory bill is confusing and unhelpful. If conditions are to be imposed, they should be transparent. If, for example, the bill is for £5,000, but the solicitors wish to say that they will accept £4,000 in full and final settlement if payment is made within 14 days, that should be clearly stated. The amount of such a bill would be held to be £5,000, just as it was in Carthew.
48. There was discussion about whether anything about this case changes because the Bill was, in the event, for non-contentious, rather than contentious, costs. I do not think so. But points made about gross sum bills and the legal (as opposed to good practice) requirements for the content of bills were not in the grounds of appeal and we have not, therefore, decided them.

49. I have, however, decided that the proper question for the court to ask in determining “the amount of the bill” under section 70(9) is, in respect of the category or categories of costs being assessed, “what is the total sum that the bill is demanding be paid to the Solicitors, whether or not all or part of that total sum has actually been paid”.
50. I would dismiss this appeal with costs.”

The Court of Appeal has allowed the Defendant’s appeal in the case of Belsner v CAM Legal Services, ruling that the assessment of costs at this stage of a Portal claim was a non-contentious matter and that the solicitor’s bill to the client was fair and reasonable in all the circumstances.  This is an extremely important costs case which, had the appeal been disallowed, would have and significant ramifications for solicitors.

The claim was a low-value RTA in which the Defendant solicitors acted for the Claimant. The RTA claim was settled for £1916.98 damages, following which the Defendant deducted the sum of £321.25 (not including VAT) from the Claimant’s damages.  This was by way of payment of a capped success fee in addition to the fixed costs of £500 plus disbursements which were recovered from the insurer of the Defendant in the RTA claim.

On first appeal the Claimant’s appeal had been allowed, and the success fee was reduced to £75, being 15% of the fixed costs recovered.  Mr Justice Lavender had been of the view that the Defendant solicitors owed their client (the Claimant) a fiduciary duty when negotiating the retainer, and that that retainer could only be valid and enforceable if the client had informed consent when entering into it.  No proceedings were issued in the RTA claim.

The main question to be answered in the second appeal was whether the judge was right to assume that CPR 46.9(2) and s.74(3) Solicitors Act 1974 applied in RTA cases started in the Portal and where no county court proceedings were issued. In order to decide that point, the Court of Appeal had to decide whether the claims started in the Portal were contentious business or non-contentious business.

The Court of Appeal found that the term in the solicitor’s retainer with the client to charge the client more than could be recovered from the Defendant to the RTA claim was not unfair under the Consumer Rights Act 2015 and that the business was non-contentious business, in which case the court could decide what was fair and reasonable to pay.  Master of the Rolls, Sir Geoffrey Vos, cited Mastercigars v. Withers [2009] 1 WLR 881 at [102] in which it was held:

“Even if the solicitor has spent a reasonable time on reasonable items of work and the charging rate is reasonable, the resulting figure may exceed what it is reasonable in all the circumstances to expect the client to pay and, to the extent that the figure does exceed what is reasonable to expect the client to pay, the excess is not recoverable.”

At paragraphs 97 to 101 of his judgment, Sir Geoffrey Vos said:

97. “I agree with the Client that, in all the circumstances, she ought as a matter of good professional practice to have been told the level of fixed costs that she would recover if the case settled within the RTA portal. But that does not necessarily mean that the Solicitors’ Bill was unfair. The question is only whether it was fair and reasonable in all the circumstances, having regard to the factors in the 2009 Order for the Client to pay an additional £385.50 on top of what was recovered from the third party. I see no reason why she should not be required to do so. She has filed no evidence suggesting that she is not a reasonably sophisticated client. She accepted in her points of dispute that she expected that she might have to pay some of her base costs. DJ Bellamy assessed the Solicitors’ reasonable base costs at some £1,392 plus VAT, which exceeded the £500 plus VAT recovered from the third party. She has never suggested that she did not understand that she would have to pay a success fee on top of some of her base costs. The success fee charged fee was capped by statute at 25% of recovered damages. Lavender J admittedly applied the success fee (of 15% of base costs) assessed by DJ Bellamy to the base costs of £500 recovered from the third party, but he thought the Solicitors had a legal duty to obtain the Client’s fully informed consent to charging more by way of base costs than was recovered from the third party. He was wrong about that.
98. The Client in this case has never had any real or economic interest in the pursuit of this costly litigation. Only checkmylegalfees.com have such an interest. The Solicitors capped their fees voluntarily at a fair and reasonable level after the event, even if they ought to have told the Client what she would recover by way of fixed costs in the RTA portal, and even if they ought to have agreed in advance when they entered into the CFA to the cap they later applied voluntarily. Mr Ben Williams KC, counsel for the Solicitors, told us in argument that the Solicitors would not have “dreamed” of doing anything other than making a proportionate deduction from the damages as opposed to charging the Client their full base costs and the maximum possible success fee. In future, I hope that solicitors will not suggest CFA or other fee arrangements to their clients that allow for fees that they would not dream of actually charging.
99. The Client, in effect, argued that the full ramifications of the fully informed consent requirement found by the judge (but not upheld by me) should be read back in to the assessment through the requirement of fairness in the 2009 Order. I do not agree. I think the overall Bill was fair and reasonable. I would, therefore, re-assess the total base costs and success fee payable as being £821.25 plus VAT (£500 + £321.25, the latter figure being £385.50 less VAT). I am conscious that, on one analysis, this assessment could be construed as allowing base costs in excess of £500, since a success fee of 15% of base costs was fixed by DJ Bellamy and not appealed thereafter. In the extremely unusual circumstances of this case, I am reassessing the Bill from scratch because the costs are non-contentious ones which were assessed as contentious ones. For the reasons I have given, I have not found it helpful to do so in the traditional way of assessing base costs and then the success fee. Nothing I have done in that regard will be relevant to future cases. I have simply applied Morgan J’s dictum and an overall approach to fairness and reasonableness in the convoluted circumstances of the three stages of this case.
100. For the reasons that I have given in Karatysz v SGI Legal [2022] EWCA Civ 1388, which was heard immediately following this case, the question to ask in order to determine “the amount of the bill” under section 70(9) of the 1974 Act is “what is the total sum that the bill is demanding be paid to the Solicitors, whether or not all or part of that total sum has actually been paid”. Accordingly, in this case, the amount of the Bill was £821.25 plus VAT, and the Client achieved no reduction from that Bill as a result of seeking an assessment for the purposes of section 70(9) either before DJ Bellamy or in this court. The prima facie position would, therefore, be that the Client should pay all the costs unless there are special circumstances under section 70(10) of the 1974 Act. I am conscious that there may be other arguments as to costs in the complex circumstances of this case, so will leave the parties to agree the costs here and below, and we can determine them on paper if necessary.

101. Conclusion
102. For the reasons I have given, I would allow this appeal, and order that the base costs and the success fee payable by the Client in this case should be assessed in the total sum of £821.25 plus VAT. The sum of £295.50 must be repaid by the Client to the Solicitors.”

Whilst solicitors will be pleased with the result of this appeal, they should note Vos’s comments at paragraph 15 of the Judgment:

“…it is unsatisfactory that, in RTA claims pursued through the RTA portal…, solicitors seem to be signing up their clients to a costs regime that allows them to charge significantly more than the claim is known in advance to be likely to be worth.  The unsatisfactory nature of these arrangements is not appropriately alleviated by solicitors deciding, at their own discretion, to charge their clients whatever lesser (and more reasonable) sum they may choose…”

And those challenging solicitors’ bills should also beware:

“…it is also unsatisfactory that solicitors like checkmylegalfees.com can adopt a business model that allows them to bring expensive High Court litigation to assess modest solicitors’ bills in cases of this kind.  The Legal Ombudsman scheme would be a cheaper and more effective method of querying solicitors’ bills in these circumstances, but the whole court process of assessment of solicitors’ bills in contentious and non-contentious business requires careful review and significant reform.”

It will be interesting to see how, in due course, the long-awaited outcome of this case impacts on those affected by it.

In Elias v Wallace LLP [2022] EWHC 2574 (SCCO), the Claimant had made an application under s.68 Solicitors Act 1974 (“the 1974 Act”) for delivery of a final statute bill from the Defendant, his former solicitor who had acted on his behalf in proceedings in the Business and Property Courts.  The Claimant was of the opinion that the invoices were not statute bills because they were not signed or delivered in accordance with s.69 of the1974 Act.

The Defendant disagreed, its case being that the six invoices issued between 19 August 2020 and 15 October 2020, and which came to a total of £80,168 including VAT, formed a series of Chamberlain bills and were both signed and delivered in accordance with the 1974 Act.

Senior Costs Judge Gordon-Saker referred to s.69 which provides that:

(2A) “A bill is signed in accordance with this subsection if it is –

1. Signed by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign, or
2. Enclosed in, or accompanied by, a letter which is signed as mentioned in paragraph (a) and refers to the bill.

(2B) For the purposes of subsection (2A) the signature may be an electronic signature.

(2C) A bill is delivered in accordance with this subsection if—

1. it is delivered to the party to be charged with the bill personally,
2. it is delivered to that party by being sent to him by post to, or left for him at, his place of business, dwelling-house or last known place of abode, or
3. it is delivered to that party -
   1. by means of an electronic communications network, or
   2. by other means but in a form that nevertheless requires the use of apparatus by the recipient to render it intelligible, and that party has indicated to the person making the delivery his willingness to accept delivery of a bill sent in the form and manner used.”

The Costs Judge, in reaching his decision, referred to the following:

• S 7(2) Electronic Communications Act 2000 (“the 2000 Act”)
• Chamberlain v Boodle & King [1982] 1 WLR 1443
• Bari v Rosen [2012] 5 Costs LR 851
• Vlamaki v Sookias & Sookias [2015] 6 Costs LO 827
• Ralph Hume Garry v Gwillim [2003] 1WLR 510
• Cook v Gillard 1 E & B
• Eversheds v Osman [2000] 1 Costs LR 54
• Neocleous v Rees [2019] EWHC 2462 (Ch)
• 2 Law of Property (Miscellaneous Provisions) Act 1989
• Bennion, Bailey and Norbury on Statutory Interpretation (8^th ed)
• Attorney General v Edison Telephone Co of London Ltd (1880) 6 QBD 244
• The Telegraph Act 1869

He came to the following conclusions:

1. The series of invoices formed a Chamberlain bill.
2. The Claimant had been provided with sufficient information to form a view as to whether or not the charges were reasonable.
3. Whilst the invoices themselves were not signed, the typed name “Alex” at the foot of the emails to which the invoices were attached was a signature falling within the definition at s.7(2) of the 2000 Act.
4. That the emails were letters for the purposes of s.69(2A)(b) of the 1974 Act.
5. That, by virtue of the Claimant’s agreement to clause 24.3 (that the client agreed that formal notices and documents could be served in him by email), the invoices had been delivered to the Claimant for the purposes of s.69(2C) of the 1974 Act.
6. That the Claimant would now need to show special circumstances for an Order that there be a detailed assessment.

Gordon Exall's blog on the recent case of Optimares SpA v Qatar Airways Group QCSC [2022] EWHC 2507 (Comm) is a helpful reminder that weak claims and inappropriate conduct can result in an award for indemnity costs against the losing party.

In this case, it was the Claimant who lost, and of whom it was stated that "Optimares pursued the claim on all issues despite the weakness of its construction arguments" and that it "conducted its claim with an insufficient regard to proportionality or reasonableness, which gave rise to the incurring of substantial costs on both sides".

In deciding to award costs on the indemnity basis, Mr Justice Calver referred to the case of Excalibur Ventures LLC v Texas Keystone Inc [2013] EWHC 4278 (Comm) in which Christopher Clarke LJ referred to the case of Balmoral v Borealis UK Limited [2006] EWHC 2531 and his own judgment in that case. Christopher Clarke LJ held, in those cases, that, in order for indemnity costs to apply, there had to be a departure from the norm, either in the conduct of the Claimant or in the circumstances of the case.

In Balmoral, LJ Clarke cited the case of Three Rivers District Council v The Governor & Company of the Bank of England [2006] EWHC 816 in which Tomlinson J gave examples of circumstances which took the case out of the norm. They were when a claimant:

"(a) advances and agreessively pursues serious and wide-ranging allegations of dishonesty or impropriety over an extended period of time.

(b) advances and aggressively pursues such allegations despite the lack of any foundation in the documentary evidence for those allegations and maintains the allegations without apology to the bitter end.

(c) actively seeks to court publicity for its serious allegations both before and during the trial.

(d) turns a case into an unprecedented factual inquiry by the pursuit of an unjustified case.

(e) pursues a claim which is to put it most charitably thin, and in some respects far-fetched.

(f) pursues a claim which is irreconcilable with the contemporaneous documents.

(g) commences and pursues large scale and expensive litigation in circumstances calculated to exert commercial pressure on a defendant and during the course of the trial of the action the claimant resorts to advancing a constantly changing case in order to justify the allegations which it had made, only then to suffer a resounding defeat.”

Gordon Exall's blog and links to the relevant case law can be found here: Optimares SpA v Qatar Airways Group QCSC [2022] EWHC 2507 (Comm)

The appeal in the case of Belsner v CAM Legal Services was finally heard in the Court of Appeal during the week commencing 3 October with judgment being reserved.

According to reports in the Law Society Gazette that week, the Court heard that:

• it was "rediculous" for the case to have reached the High Court and the Court of Appeal (CAM's Counsel)
• CAM Legal Services charged its client £385.50, including VAT, on top of the £500 fixed costs recovered from the Defendant in a low-value RTA claim (CAM's Counsel)
• There was a "complete lack of evidence" that the client had been aggrieved by the reduction (Counsel for the Law Society)
• Belsner "had absolutely nothing to complain about the services she received" (CAM's Counsel)
• The client was entitled to bring a High Court claim - "just saying it's rediculous doesn't get you very far" (Master of the Rolls)
• "It seems most unreasonable at first" that a client might not know what solicitors might deduct from them (Sir Geoffrey Vos - Master of the Rolls)
• "Solicitors have regulatory responsibilities and contractual obligations to give their clients the best possible advice and to conduct a costs benefit analysis" (CAM's Counsel)
• "It does seem odd that it is OK to send a raft of impenetrable documents to someone who has a small claim..." (Master of the Rolls)
• "We have to decide whether it is appropriate or not..." if solicitors' practices have to change "then so be it" (Lord Justice Flaux)
• "the Society would say that if you sat down and read [the Law Society's model] CFA, it is comprehensible, because it is meant to be read by lay people." (Counsel for the Law Society)
• "We have to be quite careful, particiularly when there are hundreds of thousands of such cases, not to make solicitors' lives impossible, or indeed to make clients' lives impossible." (Master of the Rolls)
• CAM Legal Services did not have its client's informed consent to deduct around £321.50 that was not recovered from the Defendant in the personal injury claim (Belsner's Counsel)
• There was an inequality within the relationship between solicitor and client (Belsner's Counsel)
• When agreeing a retainer without setting out exactly how deductions would be made, the firm "at that stage put themselves in conflict with the client" and "they do not tell [Belsner] what amount may be recovered under the fixed costs" (Belsner's Counsel)
• "The client was not told about the recoverability of costs and that they are supposed to be reasonable. The client was not told that the actual costs estimate was five times what was recovered and she was at risk of paying a disproportionate amount of costs." (Belsner's Counsel)
• There had been a "regrettable disconnect..." but the deduction was "modest and fully in-keeping with [Belsner's] expectations" (CAM's Counsel)
• The Bill prepared for Belsner was "incredibly unclear" and "doesn't seem to clarify anything" (Master of the Rolls)

It is likely that, in making its judgment (which has been reserved) the Court of Appeal will include guidance on when legal business can be counted as contentious and non-contentioius and what costs can be incurred for each; a ruling as to whether or not CAM Legal Services was entitled to claim back unrecovered costs form Belsner's damages; a review of the Law Society's model CFA; and a ruling as to whether or not the costs incurred were reasonable.

The first of the Law Society's articles on this case can be found here: Belsner: Lawyers await ‘costs case of the decade’ ruling

Following on from my post in July about the application of the recently updated SCCO Guideline Hourly Rates, there has now been a case in which the case of Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466 has been considered, but in which rates in excess of the Guideline rates have nevertheless been awarded.

In the case of Lappet Manufacturing Company Ltd & Anor v Rassam & Ors [2022] EWHC 2158 (Ch) in which Nottingham solicitors had been instructed, Mr Justice Adam allowed a grade A rate of £350 and a grade C rate of £230 per hour, whereas the band 1 Guideline rates for Nottingham are £261 for a grade A and £178 for a grade C.

In allowing the enhanced hourly rates, Mr Justice Adam cited the cases of Harry Cohen v Marion Fine & Ors and ABS Company Ltd v Pantaenius UK Ltd & Ors and said:

“In this case, I am satisfied that there is justification for an increase on the Nottingham Guideline rates. That arises from the complexity of the issues which arose on the two applications I disposed of. Both required specialist knowledge of the procedure applicable to intellectual property claims, and trademark claims in particular … In my opinion, the Claimants were thus fully justified in engaging solicitors with the appropriate specialist knowledge, appropriate to advising on the issues in question and managing the conduct of the Defendants’ applications … as I see it, a departure from the Guideline Rates is justified on the basis of the long-established principle that specialist solicitors in specialist areas of activity should recover an uplift to reflect that specialism, where that is justified in the circumstances”

It still remains, however, that a “clear and compelling justification must be provided” as held by Males J in Samsung v L G Display.