Keith Smeaton v Equifax Plc
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE EADY,Mr Justice Eady |
| Judgment Date | 23 July 2012 |
| Neutral Citation | [2012] EWHC 2088 (QB) |
| Date | 23 July 2012 |
| Docket Number | Case No: HQ09X01737 |
| Court | Queen's Bench Division |
[2012] EWHC 2088 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM MASTER SIMONS
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Eady
(Sitting with Senior Costs Judge Hurst and Mr Peter Todd as Assessors)
Case No: HQ09X01737
Katie Scott (instructed by Irwin Mitchell) for the Claimants/Respondents
Mark Friston (instructed by Berrymans Lace Mawer LLP) for the Defendant/Appellant
Hearing date: 3 July 2012
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.
Kent County Council ("the Council") appeals against decisions made by Costs Judge Simons following a detailed assessment which took place on 16 June 2011. There are three grounds of appeal, in respect of which Globe J gave permission on 14 March 2012.
It is necessary to have well in mind the test for an appellate court in these circumstances: see CPR 52.11(3). Since the appeal is by way of review, rather than a rehearing, I have to consider whether the Costs Judge was "wrong". Did he misdirect himself or make an error of law? Did he take into account any irrelevant factors or vice versa? Did any of his decisions fall outside the range of reasonably possible solutions? See e.g. Tanfern Ltd v MacDonald [2000] 1 WLR 1311 and Solutia v Griffiths [2001] EWCA Civ 736.
The first ground concerns the hourly rates allowed. It is said that the Costs Judge applied a wrong legal test (i.e. subjective rather than objective) and that this led him to allow an inappropriately high rate. The Respondents' contention is that no error of law was made.
The second ground is that he was wrong to allow an uplift once he had determined that his starting point should be Central London guideline hourly rates (not least because for some years an uplift of 50% has been built in to those rates). The Respondents, on the other hand, submit that the decision to allow an uplift was within the band of reasonable decisions he was entitled to make, having regard to CPR 44.5 (and the so-called seven pillars of wisdom).
The third ground relates specifically to the time allowed in respect of the documents section in Part 2 of the bill. The submission is that he must have made an arithmetical error (i.e. of fact) in carrying out his "broad brush" approach. In this instance, the Respondents argue that the Council has misinterpreted the Costs Judge's conclusions and that there is no reason to suppose that an error of fact was made.
Irwin Mitchell was instructed in 2003, through the Official Solicitor, on behalf of four young sisters who wished to bring a claim against the Council for having failed to protect them, by removal from the family home, against sexual, physical and emotional abuse. It is not in dispute that the case was complex in a number of respects. There is no need at this stage for me to go into the detail, although it is conveniently set out in a full note by Ms Gumbel QC prepared for the costs assessment. In particular, there were difficulties over causation, since three of the sisters had been exposed to an element of abuse for which the Council could not be liable. At a case management conference in August 2009, it was directed that issues of liability should be determined first, leaving causation and quantification of loss for later.
It is also true that, at the stage when the potential claims were originally referred to the Official Solicitor, the law in relation to liability on the part of local authorities in such circumstances was unclear. Later, in the case of JD v East Berkshire Community Health NHS Trust (2005) 83 BMLR 66, the Court of Appeal recognised that there was a common law duty of care to children who were the victims of abuse. It could no longer be said, as had previously been thought to be the position, that there was simply no common law duty of care owed to a child in respect of the investigation of suspected child abuse and/or in the initiation and pursuit of care proceedings. That is not to say, of course, that thereafter the law or its application had been rendered simple. This was one of the first cases to be pursued in the light of the newly established principles, and it was by no means clear in what circumstances such a duty of care would be imposed or how the applicable standards would be defined.
Until a relatively late stage, it appeared that the Council was contesting liability in reliance upon an expert report suggesting that, judged by the standards of the relevant time, no breach of duty had taken place.
The matter was set down for a trial on liability, to take place on 26 April 2010, but in due course a settlement was achieved at a round table meeting on 4 March of that year, whereby the four sisters accepted £60,000, £35,000, £35,000 and £25,000 respectively.
The main challenge under the first ground of appeal is that the Costs Judge applied the wrong legal test in assessing the hourly rates; in that he confined himself to asking whether the Official Solicitor had, judged subjectively, acted reasonably in instructing Irwin Mitchell when he should have asked the question what it was reasonable to require the paying party to pay. It is necessary to have regard to CPR 44.5 and to consider whether the costs were proportionately and reasonably incurred and/or proportionate and reasonable in amount.
My attention was also drawn to the decision of the Court of Appeal in Wraith v Sheffield Forgemasters Ltd [1998] 1 WLR 132. It was there determined that the appropriate question was whether the client had acted reasonably in instructing his particular solicitors, having regard to all the circumstances. Those would include the importance of the matter to the client, any legal and factual complexities, the location of his home in relation to the relevant court, how the solicitors came to be instructed and whether they had relevant experience in relation to the type of work. Reference was made by Kennedy LJ, at pp 141–142, to the test applied by Potter J at first instance, which he approved: see [1996] 1 WLR 617, 624–625:
" … In relation to the first question 'Were the costs reasonably incurred?' it is in principle open to the paying party, on a taxation of costs on the standard basis, to contend that the successful party's costs have not been 'reasonably incurred' to the extent that they had been augmented by employment of a solicitor who, by reason of...
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