Guest Supplies International Ltd v Ince Gordon Dadds LLP
| Jurisdiction | England & Wales |
| Judge | Leonard |
| Judgment Date | 10 October 2022 |
| Neutral Citation | [2022] EWHC 2562 (SCCO) |
| Docket Number | Case No: SC-2020-BTP-000047 |
| Court | Senior Courts |
[2022] EWHC 2562 (SCCO)
COSTS JUDGE Leonard
Case No: SC-2020-BTP-000047
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building
Royal Courts of Justice
Strand, London WC2A 2LL
Lois Aldred (instructed by Knapp Richardson Ltd) for the Claimant
John Churchill (instructed by Ince Gordon Dadds LLP) for the Defendant
Hearing date: 8 July 2022
Judgment Approved
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
COSTS JUDGE Leonard
This is the detailed assessment of a series of 12 bills delivered by the Defendant solicitors to the Claimant between February and October 2020, when the Defendant represented the Claimant in pursuing a claim for breach of contract against South Place Hotels Limited. It would seem that South Place Hotels Limited's holding company, D & D London Limited, was also a party to litigation but it is unclear to me what the Claimant's case against D & D London Ltd might have been. For simplicity's sake I shall refer to the defendant or defendants to the Claimant's breach of contract claim as “SPH”. The bills are as follows:
| Bill No. | Date | Total |
| 161983 | 14/01/2020 | £2,730.00 |
| 162506 | 31/01/2020 | £10,962.00 |
| 162591 | 31/01/2020 | £23,656.80 |
| 163783 | 29/02/2020 | £27,015.00 |
| 165153 | 31/03/2020 | £34,712.20 |
| 166143 | 30/04/2020 | £43,834.20 |
| 167158 | 29/05/2020 | £31,801.20 |
| 168284 | 30/06/2020 | £30,160.80 |
| 169396 | 31/07/2020 | £43,883.20 |
| 170470 | 29/08/2020 | £40,128.60 |
| 171789 | 30/09/2020 | £40,534.20 |
| 174146 | 31/10/2020 | £2,868.00 |
| Total | £332,286.20 |
The amount of the unpaid balance of the bills is not formally agreed, but the Defendant's calculation (excluding any claim to interest) of £227,356.20 is slightly lower than the Claimant's as incorporated in its Part 8 claim form, so the Defendant's figure seems unlikely to be in issue.
The purpose of this judgment is to address preliminary points 1 and 2 in the Points of Dispute served by the Claimant upon the Defendant in response to the Claimant's detailed breakdown of its bills. Evidence and submissions on preliminary points 1 and 2 were heard on 8 July 2022.
The Points of Dispute and Replies: Preliminary Point 1
At preliminary point 1 the Claimant asserts that the costs recoverable by the Defendant should be limited, inclusive of counsel's fees and disbursements, to £40–£50,000 plus VAT. That is the amount of an estimate allegedly given by the Defendant to the Claimant, at an initial meeting on 22 November 2019, to take the litigation to a Costs and Case Management Conference (“CCMC”). Alternatively, by reference to Wong v Vizards [1997] 2 Costs LR 46, the Claimant says that the Defendant's fee should be limited to a margin of 15% over that figure because the Claimant was not provided by the Defendant (in accordance with its professional duties and the terms of retainer) with the best information in order to make an informed decision on the costs that have been billed by the Defendant.
The Claimant also refers at preliminary point 1 to a costs budget in Precedent H format prepared by the Defendant for a CCMC initially listed for May 2020 (but subsequently adjourned). The Claimant says that the budget shows costs to 30 May 2020 of £125,354 (just over £150,000 with VAT) whereas bills rendered to the end of May 2020 totalled £174,711.40. Projected profit costs to the end of the trial, according to the budget, were £118,650 whereas billed post-budget profit costs were £113,311.50. The relevant phases of work had not been completed when the retainer between the Claimant and the Defendant was terminated; witness statements had not been exchanged; there were no settlement discussions, nor the 6-day trial provided for in the budget. Nonetheless, billed profit costs and disbursements claimed exceeded the budget by some margin. The budget should have been increased, but no application was made.
The Claimant's Points of Dispute do not say that this comparison between budgeted and billed figures justifies any alternative limit, beyond the £50,000 plus VAT proposed by the Claimant, upon the amount of costs and disbursements recoverable by the Defendant from the Claimant.
In the Defendant's Replies to the Claimant's Points of Dispute, this is said about estimates. The first meeting between the Claimant and the Defendant on 22 November 2019 was a “beauty parade”. At that stage the Defendant had been provided with very limited documentation by the Claimant's Accountant, who was at the meeting to brief the Defendant. With no knowledge of the specific facts the Defendant was asked if a fee of about £45,000 to get a case to the first CCMC was reasonable and the Defendant said that it sounded about right.
Subsequently the Defendant had to amend Particulars as the Claimant had pleaded the case incorrectly. The matter subsequently developed far beyond what the “Claimant” (I take this as an intended reference to the Defendant) had been told before the Defendant was instructed.
The Claimant (says the Defendant) was kept regularly informed of the costs by way of interim bills delivered on a monthly basis. As matters developed and the Claimant fell behind with payments for bills delivered, the Defendant made clear the costs going forward and the Claimant was aware of the budget approved at the CCMC.
“The Claimant”, say the Replies, is an experienced businessman and worked closely with both of the main fee earners throughout the matter, often attending conferences with counsel and communicating on a regular basis. (This would appear to be a reference not to the Claimant but to Mr Aristos Aristodemou, the managing director of the Claimant company who in that capacity managed the litigation on the Claimant's behalf and who would appear, on the evidence, to have been in effective control of both the Claimant and of the litigation.)
With regard to the budget, the Defendant says that the total of £125,354 to which the Claimant refers was not the total to the end of May 2020. The CCMC was originally listed for 5 May 2020 and the budget was served and filed in accordance with the relevant rules in April 2020.
With VAT, says the Defendant, the total incurred costs in the budget amount to £150,424.80. Bills to the end of April 2020 amount to £142,910.20 including VAT. Further, as the Claimant was advised at the time the budget was drafted, the costs of amending the Particulars of Claim were not included. The budget figures offer a fair and accurate reflection of the actual costs incurred.
As for anticipated costs, the Defendant had made the Claimant aware that the budget would require updating, not least in respect of disclosure, and had the Claimant not changed Solicitors an appropriate application would have been made. Further, SPH had proposed that its budget should be increased by consent but the Claimant would not agree to that.
The Points of Dispute and Replies: Preliminary Point 2
At preliminary point 1 the Claimant raises arguments in relation to counsel's fees (and, to some extent, to costs more generally) which to my mind are best considered in the context of preliminary point 2. At preliminary point 2 the Claimant maintains that throughout the period of the retainer, the Defendant did not provide the Claimant with details of the disbursements likely to be incurred before they were incurred, which were in consequence not agreed or approved, expressly or impliedly, by the Claimant and that no invoices or fee notes of disbursements had been provided.
With regard to counsel's fees, the claimant refers to the judgement of Lavender J in Belsner v Cam Legal Services Ltd [2020] EWHC 2755 (QB) which, says the Claimant, establishes a need not only for a written agreement between the Claimant and the Defendant but also for the Claimant as client to have given informed consent to that agreement. In this case there is, as the Point of Dispute put it, “nothing to suggest” that the Claimant gave informed consent to the Defendant's costs or the level of counsel's fees. The Claimant has not approved the fees and disbursements set out in the disputed bills and in consequence they are unreasonable in amount and unreasonably incurred. As a fiduciary, a solicitor may not receive a profit from his client without his client's fully informed consent.
The Acknowledgement of Debt
I need to address one more point raised at preliminary point 1 of the Points of Dispute. Reference is made to a document signed by Mr Aristodemou on 19 June 2020 (“the Acknowledgement of Debt”), acknowledging the Claimant's liability to pay the Defendant's billed costs and disbursements to 31 May 2020. What the Points of Dispute have to say about the Acknowledgement of Debt, for present purposes, is not entirely clear although it is evident that it is not considered by the Claimant to be an obstacle to limiting the Defendant's costs by reference to the alleged estimate of 22 November 2019.
By way of reply the Defendant says that it was made clear to the Claimant that if the document was not signed the Defendant would no longer continue to act for the Claimant. Further, the Claimant was required to pay certain monies on account to cover counsel's fees so that a formal brief could be delivered. The document took into consideration both billed and unbilled costs up to 18 June 2020 and following the signing of the agreement the Defendant continued to act for the Claimant for a further 3 months.
Documentary Evidence
The Defendant has produced an attendance note of the meeting of November 2019. The attendance note is dated 21 November...
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Yvia Pulford v Hughes Fowler Carruthers Ltd
...case I should refer to the principles by reference to which I must address the issues I have summarised above. 38 In Guest Supplies International Ltd v Ince Gordon Dadds LLP [2022] EWHC 2562 (SCCO), I had to consider similar arguments relating to cost estimates and informed consent, and in......