John Poyser & Company Ltd v Cynthia Spencer
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morris |
| Judgment Date | 01 July 2022 |
| Neutral Citation | [2022] EWHC 1678 (QB) |
| Docket Number | Appeal Ref: QA-2021-000111 |
| Court | Queen's Bench Division |
[2022] EWHC 1678 (QB)
Mr Justice Morris
SENIOR COSTS JUDGE GORDON-SAKER (ASSESSOR)
Appeal Ref: QA-2021-000111
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM MASTER JAMES, COSTS JUDGE
THE SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mark Friston (instructed by John Poyser & Co Ltd) for the Appellant/Claimant
The Respondent/Defendant appeared in person unrepresented
Hearing date: 15 February 2022
Further written submissions: 17 February 2022
Approved Judgment
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.
Introduction
This is an appeal by John Poyser & Co Limited (“the Claimant”) against a final costs certificate issued by costs judge, Master James, dated 5 May 2021 (“the Certificate”) in Part 8 proceedings brought by the Claimant against Cynthia Spencer (“the Defendant”). By these proceedings the Claimant claimed an order for the detailed assessment of its bills pursuant to a retainer with the Defendant.
The appeal raises an important point of principle, namely whether the provisions of CPR 44.11 concerning misconduct can apply to an assessment of costs between solicitor and client pursuant to section 70 Solicitors Act 1974 (“the 1974 Act”) and CPR Part 46.9 and 46.10 (“Solicitor/Client Assessment”). The Master held that they can apply, and then applied them to reduce by 75% the profit costs recoverable by the Claimant. I have concluded, for the reasons set out below, that CPR 44.11 cannot apply and thus that the Master was wrong to apply that reduction.
On 22 April 2021 the Master handed down her revised judgment (“the Judgment”). She concluded, inter alia, as follows:
(a) The Claimant's profit costs should be reduced in any event, by about two- thirds to a sum of £13,195;
(b) She had power, pursuant to CPR 44.11(1)(b), to reduce further the amount of the Claimant's costs by reason of its misconduct; and
(c) On the facts, the Claimant was guilty of such misconduct, particularly in relation to a “shortfall”, and thus the Claimant's profit costs fell to be reduced by a further 75% to £3,298.75; and
(d) Taking account of recoverable disbursements and netting off of sums already paid by the Defendant, there was a substantial balance due from the Claimant to the Defendant.
By the Certificate, issued pursuant to the terms of the Judgment, the Master assessed the Claimant's total costs as £29,386.08, recorded that £47,650.98 had already been paid by the Defendant and therefore certified that the Claimant should pay to the Defendant the balance of £18,264.90 within 14 days, together with interest thereon in the sum of £2914.37, totalling £21,179.27.
The Grounds of Appeal
The Claimant now appeals, with the leave of Eady J, against the Certificate and seeks to have it set aside, on two grounds only:
(1) The Master made an error of law in that she imposed a penalty pursuant to CPR 44.11 in an assessment under Part III of the Solicitors Act 1974 when no such jurisdiction to impose such a penalty existed.
(2) Alternatively, to the extent that the court had jurisdiction to make findings of misconduct, the Master's decision was “wrong” within the meaning of CPR 52.21(3)(a) because the findings that the Master made were based on findings of fact that were incorrect or were findings of fact that were incapable of justifying a finding of misconduct within the meaning of CPR 44.11.
In her written judgment, Eady J refused permission to appeal on all other grounds. The Claimant's essential purpose of the appeal is to set aside the Master's findings of misconduct made against the Claimant, and against Mr Poyser in particular.
The course of this appeal: the Defendant's vulnerability
The Claimant has been represented, in this appeal and in the later stages before the Master, by counsel, Dr Friston. The Defendant is unrepresented, as she was before the Master. As the Master records and as is accepted by the Claimant, the Defendant is a particularly vulnerable person.
Prior to the hearing on 15 February 2022, the Defendant applied to adjourn the hearing. However, in the event, she was able to appear before me on a video link, albeit without the friend who had previously assisted her before the Master. Throughout the hearing, Dr Friston and the Court took steps to explain the arguments being put forward. The Defendant herself made some, albeit limited, arguments, to the effect that she should not have to repay any of the sums paid to her.
Following the hearing, the Defendant was given an opportunity to put forward any further points she wished to make in writing, and with the benefit of assistance from her friend. To that end, and at the court's direction, Dr Friston was required to provide a written summary, in non-technical language, of the Claimant's arguments in the appeal and explaining how much money the Defendant would be required to repay to the Claimant if the latter's argument was correct. I directed that the Defendant should show that summary to her friend and that she should submit any comments in writing within a further 10 days or such longer time, should she require. No such further written submissions were made by the Defendant within that or any extended time.
Additionally, as explained in paragraphs 96 and 104 below, I raised by way of a Note to the Parties dated 17 February 2022, (“the Note”) a further issue arising from the Claimant's arguments. Dr Friston responded in writing on the same day.
A week later, an email was received from a Mr Kirk-Blythe of Complex Legal Ltd, a firm of “regulatory advisors” (but not lawyers). In that email, Mr Kirk-Blythe accepted that he was not representing the Defendant in the present proceedings, but referred to, and enclosed, a complaint they had made to the Claimant back in June 2020 about its conduct towards the Defendant, in particular in relation to the fees she had paid. He accepted that he did not know how those historic allegations were relevant to the issues now before the Court. The matters raised in his email did not appear to take the evidence already before the Court any further. For this reason, I did not accede to his request to be allowed to speak “as a witness or as a McKenzie friend”.
The Note and Dr Friston's response was sent to the Defendant and to Mr Kirk-Blythe inviting a response within 6 days. Mr Kirk-Blythe responded by return, indicating that he could not respond, as his firm was not authorised to conduct litigation and did not have sufficient expertise in costs law. He added that the disparity of arms continued to be a real worry, but at the same time indicated that the Defendant was very grateful for all of the Court's assistance and that the court was doing its utmost to support the Defendant. Nothing further was received from the Defendant, her friend, or Mr Kirk-Blythe.
The Law
The Solicitors Act 1974: statutory right to assessment of a solicitor's bill
Part III of the 1974 Act deals “Remuneration of Solicitors”. Within Part III, Section 70, in particular, provides as follows:
“Assessment on application of party chargeable or solicitor.
(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in subsection (1), then, on an application being made by the solicitor or, subject to subsections (3) and (4), by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment), order—
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
…
(5) An order for the assessment of a bill made on an application under this section by the party chargeable with the bill shall, if he so requests, be an order for the assessment of the profit costs covered by the bill.
(6) Subject to subsection (5), the court may under this section order the assessment of all the costs, or of the profit costs, or of the costs other than profit costs and, where part of the costs is not to be assessed, may allow an action to be commenced or to be continued for that part of the costs.
(7) Every order for the assessment of a bill shall require the costs officer to assess not only the bill but also the costs of the assessment and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the assessment.
…
(9) Unless—
(a) the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment, or
(b) the order for assessment or an order under subsection (10) otherwise provides,
the costs of an assessment shall be paid according to the event of the assessment that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs.
(10) The costs officer may certify to the court any special circumstances relating to a bill or to the assessment of a bill, and the court may make such order as respects the costs of the assessment as it may think fit.…”
Relevant provisions of the Civil Procedure Rules
CPR Part 44
CPR Part 44 is headed “General Rule about Costs”. CPR 44.1, entitled “Interpretation and application”, provides, inter alia,...
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