Bnm v Mgn Ltd
| Jurisdiction | England & Wales |
| Judge | Master Gordon-Saker |
| Judgment Date | 03 June 2016 |
| Neutral Citation | [2016] EWHC B13 (Costs) |
| Docket Number | Case No: AGS/1501540 |
| Court | Senior Court Costs Office |
| Date | 03 June 2016 |
[2016] EWHC B13 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
London, WC2A 2LL
Master Gordon-Saker
Case No: AGS/1501540
Mr Simon Browne QC (instructed by Atkins Thomson) for the Claimant
Mr Jamie Carpenter (instructed by RPC) for the Defendant
Hearing dates: 29th April 2016
JudgmentApproved
At a hearing on 29 th April 2016 I concluded that the reasonable and proportionate costs which should be allowed to the Claimant was the sum of £83,964.80and this judgment sets out my reasons for that decision.
The background
The Claimant is a primary school teacher and has no public or media profile. Between 2008 and 2011 she had a relationship with a successful premiership footballer; which relationship was known only to a small circle of friends and family.
In March 2011 the Claimant lost her mobile phone, which contained private and personal information.
The Defendant publishes a number of newspapers, including the Sunday People. An assistant editor of the Sunday People was approached by a source who was in contact with another person who claimed to have the Claimant's phone and who revealed the relationship between the Claimant and the footballer.
On 23 rd March 2011 Ms Tracey Kandolah, a freelance journalist who undertook work for the Defendant, was sent by the Assistant Editor to the Claimant's home to enquire about the relationship between the Claimant and the footballer.
This led to a complaint to the Defendant by the Claimant's father and, on 3 rd May 2011, to the return of the phone to the Claimant. The Claimant contended that all data had been deleted from the phone before it was returned.
In March 2013 the Claimant instructed Atkins Thomson, a firm of solicitors then based in Covent Garden, in relation to a proposed claim against the Defendant. Atkins Thomson had acted for other claimants with similar claims. On 18 th April 2013 the Claimant entered into a conditional fee agreement with Atkins Thomson which provided for a success fee of 100 per cent of their normal fees but a discounted success fee if the claim concluded before trial. On 7 th May 2013 Atkins Thomson entered into a conditional fee agreement with counsel, Mr David Sherborne, which provided for a success fee of 100 per cent but a discounted success fee if the claim concluded before exchange of witness statements. On 25 th July 2013 the Claimant purchased an after the event insurance policy from Temple Legal Protection Limited. That provided indemnity of up to £165,000 against liability for the Defendant's costs and the Claimant's own disbursements, including the premium payable for the policy. On 30 th July 2013 Atkins Thomson entered into a conditional fee agreement with another counsel, Mr William Bennett, which similarly provided for a success fee of 100 per cent but a discounted success fee if the claim concluded before exchange of witness statements.
The Claimant commenced proceedings against the Defendant on 31 st July 2013, having obtained an anonymity order the day before. She claimed an injunction to restrain the Defendant from using or publishing confidential information taken from her phone, damages and an order for delivery up of any confidential information.
The Defendant made substantial admissions in the Defence and the claim was concluded by a consent order dated 14 th July 2014, under the terms of which the Defendant undertook not to use or disclose the confidential information, agreed to pay damages of £20,000 and agreed to pay the Claimant's costs of the action.
The costs claimed were in the sum of £241,817. That included a success fee in respect of the solicitors' costs of 60 per cent, success fees in respect of the costs of both counsel of 75 per cent and an after the event insurance premium of £58,000 plus insurance premium tax of £3,480.
The detailed assessment
The detailed assessment was listed on 23 rd November 2015 with a time estimate of 2 days. The first morning was taken up with leading counsel's submissions on the Defendant's argument that requiring it to pay additional liabilities would be incompatible with its right to freedom of expression as a publisher under Article 10 of the European Convention on Human Rights. I reserved judgment on that issue and proceeded with the detailed assessment on the footing that additional liabilities would be recoverable. By the end of the second day the only outstanding issue was proportionality, which I had indicated should be dealt with after the line by line assessment, and the detailed assessment was adjourned part heard to 29 th April 2016. In the meantime, on 11 th January 2016, I handed down judgment on the Article 10 issue, concludingthat the recovery by the Claimant of additional liabilities would not be a violation of Article 10.
Subject to the outstanding issue of proportionality, the success fees of both solicitors and counsel were allowed at 33 per cent and the after the event insurance premium was allowed as claimed.
Following the hearing in November 2015 the parties agreed the figures resulting from the line by line assessment as:
| Base profit costs | £46,321 |
| Base Counsel's fees | £14,687.50 |
| Court fees | £1,310 |
| Base costs of drawing the bill | £4,530 |
| Atkins Thomson's success fee | £16,780.83 |
| Counsel's success fee | £4,846.88 |
| ATE premium | £61,480 |
| VAT | £17,433.24 |
| Total base costs | £62,318.50 |
| Total costs | £167,389.45 |
At the hearing in April 2016 the Defendant argued that these sums were disproportionate and should be reduced further. I concluded that the sums which had been allowed as reasonable on the line by line assessment were disproportionate and were about twice the sum which would be proportionate. As I had been given the breakdown set out above I gave separate figures for the sums allowed:
| Base profit costs | £24,000 |
| Base Counsel's fees | £7,300 |
| Court fees | £1,310 |
| Base costs of drawing the bill | £2,250 |
| Atkins Thomson's success fee | £7,920 |
| Counsel's success fee | £2,409 |
| ATE premium | £30,000 |
| VAT | £8,775.80 |
| Total costs | £83,964.80 |
At the hearing the parties calculated the total as £84,855.80, a difference of £891.
Apart from the court fee, each of the items was reduced by about one half. The success fees are 33 per cent of the respective base costs allowed.
The new test of proportionality
The relevant paragraphs of CPR 44.3, in force after 1 st April 2013, are:
(2) Where the amount of costs is to be assessed on the standard basis, the court will –
(a) only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and
(b) resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party.
(5) Costs incurred are proportionate if they bear a reasonable relationship to –
(a) thesums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.
(7) Paragraphs (2)(a) and (5) do not apply in relation to –
(a) cases commenced before 1st April 2013; or
(b) costs incurred in respect of work done before 1st April 2013,
and in relation to such cases or costs, rule 44.4(2)(a) as it was in force immediately before 1st April 2013 will apply instead.
The new test of proportionality was introduced because the old test did not promote access to justice at proportionate cost. In Willis v Nicolson [2007] EWCA Civ 199 Buxton LJ, delivering the judgment of the court, said:
When the Civil Procedure Rules replaced the Rules of the Supreme Court, and encouraged active intervention by the court and the application of public values and not merely those values with which the parties were comfortable, it was hoped that that practice might change; and that hope was reinforced when this court said, in [2] of its judgment in Lownds v Home Office [2002] 1 WLR 2450:
'Proportionality played no part in the taxation of costs under the Rules of the Supreme Court. The only test was that of reasonableness. The problem with that test, standing on its own, was that it institutionalised, as reasonable, the level of costs which were generally charged by the profession at the time when professional services were rendered. If a rate of charges was commonly adopted it was taken to be reasonable and so allowed on taxation even though the result was far from reasonable.'
However, in the event nothing seems to have changed. That is because, as explained in [29] of the same judgment, 'proportionality' is achieved by determining whether it was necessary to incur any particular item of costs. And then 'When an item of costs is necessarily incurred then a reasonable amount for the item should normally be allowed': and the reasonable amount per hour of the professional's time continues to be determined by the market.
At a public seminar held in Cardiff on 19 th June 2009 as part of Sir Rupert Jackson's Review of Civil Litigation Costs, Sir Anthony May, then President of the Queen's Bench Division, said:
In my experience, there is no doubt at all but that costs are assessed with nodding respect only to proportionality. An application of rule 44.5 of the Civil Procedure Rules and section 11 of the Costs Practice Direction can scarcely expect to do better than that.
It is clear that the new test of proportionality was intended to bring...
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