Mr. George Loizou v Mr. Nathan Gordon and Another
| Jurisdiction | England & Wales |
| Judge | Master Leonard |
| Judgment Date | 21 August 2012 |
| Neutral Citation | [2012] EWHC 90221 (Costs) |
| Docket Number | Case No: 9SF00451 |
| Court | Senior Court Costs Office |
| Date | 21 August 2012 |
[2012] EWHC 90221 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
FROM BARNET COUNTY COURT
Thomas Moore Building
Royal Courts of Justice
LondonWC2A 2LL
Master Leonard
Case No: 9SF00451
SCCO Reference CL1201221
Mr Mark Sweeney ( Horwich Farrelly) for the First Defendant
Mr Ian Simpson (instructed by Pollard Bowers) for the Second Defendant
Hearing date: 2 July 2012
This is the assessment of Second Defendant's costs, payable by the First Defendant. The case arose from a road traffic accident on 30th October 2008. The Second Defendant was driving the Claimant's motor vehicle which collided with the First Defendant's vehicle. Liability for the collision was disputed between the First Defendant and the Second Defendant, as was the Second Defendant's claim for damages. After a certain amount of confusion and delay, including the issuing of claims in different courts, directions were given for allocation of a consolidated action to the Fast Track and for split trial of liability and quantum. A liability-only trial was listed for 21 July 2011.
The First Defendant and his witness did not attend the hearing and the trial judge, Mr Recorder Hochhauser QC, refused Counsel for the First Defendant's application to adjourn to another date. After a short adjournment for counsel to take instructions, liability was conceded on behalf of the First Defendant. The learned Recorder gave judgment for the Claimant against the First Defendant, dismissed the claim against the Second Defendant and ordered the First Defendant to pay the costs of both the Claimant and the Second Defendant following quantification or agreement of damages. The Second Defendant's claim for damages was settled on 22nd November 2011 and a quantum hearing (listed for 1 December) vacated.
The Issue
The Second Defendant's solicitors (first Dunne and Gray, then Pollard Bower) acted under conditional fee agreements. They claim a fixed success fee of 100% by reference to the provisions of CPR Part 45 part III, which sets success fees for Road Traffic Accident claims. The First Defendant argues that they are entitled to a success fee of 12.5%.
The Material Provisions of CPR 45
CPR 45.16 provides that: '… the percentage increase which is to be allowed in relation to solicitors' fees is:
(a) 100% where the claim concludes at trial; or
(b) 12.5% where:
(i) the claim concludes before a trial has commenced; or
(ii) the dispute is settled before a claim is issued.'
CPR 45.15 (6) provides that:
'…(b) a reference to 'trial' is a reference to the final contested hearing or to the contested hearing of any issue ordered to be tried separately;
(c) a reference to a claim concluding at trial is a reference to a claim concluding by settlement after the trial has commenced or by judgment…'
In short the rules provide for a 100% success fee where a claim concludes, whether by settlement or judgment, at or after a contested hearing, whether that hearing is final or of any issue ordered to be tried separately. It is common ground that the provisions of CPR 45.16 do not allow any discretion to be exercised by a court as to which percentage increase is to apply; Lamont v Burton [2007] EWCA Civ 429.
The Transcript
I have been provided with a transcript of the proceedings on 21 July 2011. Based on that transcript I will set out events in a little more detail than I have above.
The case was called on for trial. Counsel for all the parties appeared before Mr Recorder Hochhauser Q.C. Counsel for the Claimant started the opening of the Fast Track trial by briefly introducing the parties' representatives before giving way to Counsel for the First Defendant's application for adjournment. The learned Recorder expressed his dissatisfaction with the First Defendant's purported reasons for non-attendance before giving a short judgment refusing the application.
Counsel for the First Defendant then sought a short adjournment to take instructions as to the First Defendant's position. The learned Recorder noted the non-attendance of the first Defendant's supporting witness before stating 'I will adjourn for 5 minutes. I will start this case at quarter to.' After that short adjournment, Counsel for the First Defendant confirmed her instructions to consent to judgment being entered against the First Defendant on liability only.
Mr Recorder Hochhauser summarised: 'So, by consent, judgment as to liability against the First Defendant. Claim dismissed against the Second Defendant.'
Decided Cases
Both parties have of necessity departed from the strict requirements of the Practice Direction (Citation of Authorities) [2001] 1 WLR CA in order to assist me in considering the proper approach to whether a trial has commenced for the purposes of CPR 45. These are the decisions to which I have been referred.
In Dahele v Thomas Bates & Son Ltd. [2007] EWHC 90072 (Costs), Master Haworth, considering the provisions of part V of CPR 45, governing employer's liability disease claims, found (at paragraph 24) that a case settling on the day and after the time fixed for trial did conclude at trial. Given that he was addressing the particular facts of Dahele, the findings of the learned Master are of limited assistance in this case.
In any case, in ( Sitapuria v Khan unreported, 10th December 2007), a Road Traffic Accident claim to which Part III of CPR 45 applied, HHJ. Stewart Q.C. took a different view. In that case an order settling the claim and costs was presented to the court and approved by the Circuit Judge prior to the case being opened. Summary assessment of costs was deferred to another date. The learned Circuit Judge (considering the success fees of both solicitors under CPR 45.16 and Counsel under CPR 45.17) rejected the submission that settlement on the day of (but before the opening of) the trial was such as to give rise to 100% fee increase, stating (at paragraph 10):
'…the definition section, under 45.15(6)(b) clearly refers to the words "contested hearing". Of course, if the trial commences — by which, in any normal sense of the word, it means that the case has been called on and has at least begun to be opened as a contested hearing — and the parties then settle the matter, then the trial has commenced and either that settlement which takes place after the case has been called on, and therefore has commenced, or judgment of the court in those circumstances entitles both solicitors and counsel to 100 percent. However, it seems to me that the trial has not commenced in the sense that there is no contested hearing which has commenced, if the parties conclude a settlement prior to the case being called on as a contested hearing and the opening has commenced of such a contested hearing.'
In Thenga v Quinn [2009] EWCA Civ 151, the county court hearing originally fixed to determine the quantum of damages in a Road Traffic Accident claim was instead (liability and damages having been agreed) used for the summary assessment of the claimant's costs. On the claimant's unsuccessful application for permission to further appeal from the circuit judge, who had awarded a success fee of 12.5%, Wilson LJ declined the claimant's invitation to address the 'mischief' (failure to settle all matters) that the regulations were designed to obviate. He stated (at paragraph 17) that:
'I fear that, particularly where the differential increase is as wide as the rule-makers have provided in Rule 45.16, there is bound to be the most unfortunate jockeying for position in order to be on one or other side of the line which they have drawn. So, tempted as I am to … rise above the words and look at mischief, I feel that in the end the court is required to see where the rule-makers have drawn this important line and … to see whether there can be any real argument about it…My view is that it is plain beyond serious argument that, in drafting rule 45.15 (6)(b), the rule-makers have not thrown the conventional notion of a 'trial' to the winds and that the 'final contested hearing' relates to the substantive claim…'
Permission to appeal was refused.
In Gandy v King [2010] EWHC 90177 (Costs), a case not governed by CPR 45, trial having been adjourned until 2pm on 3 November, the date fixed, the trial judge was then told that the claim had been compromised. He approved a settlement order on 7 November. Solicitors' and counsels' success fees depended upon whether the case had concluded at trial.
Sitapuria and Dahele were both cited to Master Haworth, who distinguished them because they had concerned 'the question of what constitutes a 'trial' for the purpose of CPR Part 45. At paragraph 28 he stated:
'The first question to be determined is whether on the basis of the solicitors' CFA, this claim had concluded at trial. To my mind the word 'trial' denotes an examination and determination of issues between the parties by a Judge, or some other tribunal. I accept that the date fixed for a quantum trial had been reached…however it is clear from the transcript…that the trial did not start. Mr Martin was not ready to start and sought an adjournment until 2.00 pm on the day fixed for trial. At that time Mr Martin…told the court that the parties had compromised the claim. In my judgment, the trial did not commence on that day. On 7th November 2008, Mr Justice Blake approved the compromise agreement reached by the parties several days before … An approval settlement in my judgment does not meet the criteria of a trial and in those circumstances I find that the … claim did not conclude at trial.'
In Amin & Anr. v Mullings & Anr. [2011] EWHC 278, another case governed by Part III of CPR 45, quantum of the Claimant's claim had been...
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...(c) Even if rightly decided on its particular facts, (which is not accepted), the Loizou decision [ Loizou v Gordon & Patsias [2012] EWHC 90221 (Costs)]is rightly distinguished: — (i) Significance was attached to the fact that the 1 st Defendant was not going to attend, which was used to di......