Claimant loses all costs after assessment misconduct

Donald: Smaller bill was not enough of a sanction

A claimant has lost all of his remaining entitlement to costs because of misconduct during the assessment process.

The costs judge took an even stricter approach than the Court of Appeal did in last year’s landmark ruling in Bamrah v Gempride, which saw a successful claimant lose half of her profit costs for claiming a higher hourly rate than she was entitled to.

By coincidence, the solicitors for the claimant in Farmer v The Chief Constable of Lancashire, McMillan Williams, were recently bought out of administration by Taylor Rose TTKW, which acted for the defendant in Bamrah.

According to a briefing on Farmer by Stephanie Donald, the senior associate at Hill Dickinson who acted for the defendant, the claimant served a bill of costs in June 2018 for £175,000.

The bill indicated that the claim was funded by two retainers – the first conditional fee agreement (CFA1) covered first three parts of the bill, up the solicitor leaving. CFA2 covered the final part.

Among other issues, the points of dispute challenged the retainer, and put the claimant to strict proof that cancellation notices were included, as the agreement had been entered into at the claimant’s home.

The claimant’s response stated that all the retainer docs were in order, but, prior to the first hearing, he conceded that CFA1 had no cancellation notice. However, he relied on CFA2 as having retrospective effect.

At the hearing, the master noted that the hourly rates claimed in the bill were higher than those allowed for in the CFA. The master ordered an adjournment and disclosure of all retainer documents.

CFA2 was disclosed, with an attendance note and a signed cancellation notice from the claimant. “There was nothing within the documents which would cover the first three parts of the bill, but the claimant’s representative advised that ‘there was an undertaking’,” Ms Donald reported.

Ahead of the next hearing, the claimant served a witness statement, apologising for the errors in the bill and provided a revised, albeit unsigned, bill for a third of the costs as originally drawn.

The defendant filed an application was filed to strike out the costs under rule 44.11, arguing that the claimant had provided no credible explanation for the errors, and there had been a failure to assist the court, or provide a correct bill since the original hearing.

At the hearing, the claimant accepted that errors had been made in the case, but attempted to distinguish Bamrah on the basis that his errors were not made with intent, were genuine mistakes and any penalty applied ought to be less than the 50% reduction ordered in Bamrah.

“The court was plainly unimpressed with this argument,” Ms Donald said. “The master found that the claimant had provided no evidence in support of entitlement to costs for the early period of the claim. The second CFA had been cancelled by the claimant and there was no evidence of any alternative retainer.”

The fact the corrected bill was so much lower than the original version was not considered to be a sufficient sanction on its own, she continued.

“It was also noted that the claimant had produced numerous, certified documents which had been signed without any proper regard or fact-check that matters were dealt with properly.”

The master held that, as well as being unreasonable and improper, the conduct of McMillan Williams, up to and including the witness evidence, had been in breach of the CPR.

“That conduct, in the view of the master, warranted disallowance of what was left of the bill. The claimant was also ordered to pay the defendant’s costs of assessment and repay previous interim payments made on account of costs.”

Ms Donald told Litigation Futures that the master was willing to apply a harsher sanction than Bamrah, despite the lack of dishonesty, because there had been repeated failures to assist the court or fact check any of the documentation certified.

“The contractual issues also should have been addressed prior to taking up two days of the court’s time. The claimant had been requested to disclose the retainer documents in the points of dispute, but the replies dismissed the point.”

The claimant in Bamrah – who was herself a solicitor and represented by her own firm – was recently fined £20,000 by a disciplinary tribunal over her misconduct, avoiding a harsher penalty because of her reliance on the costs firm advising her.

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