Mr Scott Halborg v Emw Law LLP (Respondent/Claimant)
| Jurisdiction | England & Wales |
| Judge | Sir Terence Etherton, MR,Lord Justice Beatson,Lord Justice Underhill |
| Judgment Date | 23 June 2017 |
| Neutral Citation | [2017] EWCA Civ 793 |
| Docket Number | Case No: A2/2015/1780 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 June 2017 |
[2017] EWCA Civ 793
Sir Terence Etherton, MR
Lord Justice Beatson
and
Lord Justice Underhill
Case No: A2/2015/1780
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
HIS HONOUR JUDGE PURLE QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Robert Marven (instructed by Deals & Disputes Solicitors LLP) for the Appellant
Vikram Sachdeva QC (instructed by EMW Law LLP) for the Respondent
Hearing dates: 13 June 2017
Approved Judgment
This appeal raises a short but important issue, namely whether a Limited Liability Partnership ("LLP") of solicitors, which is a party to litigation and acts as its own legal representative in the proceedings, is a litigant in person within CPR 46 and so can only recover the level of costs allowed to litigants in person under CPR 46.5(2) and PD46 para. 3.4.
The background
The appellant, Mr Scott Halborg, then carrying on practice as a solicitor in sole practice, was the solicitor on the record in proceedings against an architect for professional negligence, breach of contract, misrepresentation and fraud ("the main proceedings").
The respondent, EMW Law LLP ("EMW"), was retained by Mr Halborg to act as his agent in the main proceedings pursuant to a conditional fee agreement.
The main proceedings were compromised by a substantial payment to Mr Halborg's clients. The factual position as to how the costs liability (or part of that liability) in the main proceedings has been dealt with, as between Mr Halborg and the losing party, is not before the Court. Nothing has been paid to EMW in respect of its costs.
On 22 October 2013 EMW issued these proceedings against Mr Halborg (and others) in the Senior Courts Costs Office for, among other things, a detailed assessment of EMW's costs ("the SCCO proceedings").
On 6 February 2014 Mr Halborg (and others) issued an application in the SCCO proceedings for summary judgment against EMW or for the claim to be struck out.
That application came before costs judge Master Campbell. On 24 October 2014 he dismissed the application insofar as it related to the claim by EMW against Mr Halborg. Master Campbell also ordered that Mr Halborg pay EMW's costs of the application, such costs to be summarily assessed.
On 24 November 2014 Master Campbell summarily assessed EMW's costs in the sum of £17,600.
Mr Halborg appealed against Master Campbell's orders of 24 October 2014 and 24 November 2014 on several grounds. The only ground relevant to this appeal is that, in assessing EMW's costs of the summary judgment and strike out application, Master Campbell had wrongly refused to treat EMW as a litigant in person and to limit its recoverable costs accordingly.
The appeal on that ground was dismissed by His Honour Judge Purle QC, sitting as High Court Judge of the Chancery Division, in a judgment handed down on 22 May 2015 and an order of the same date.
Mr Halborg relies on CPR 46.5, the terms of which are as follows, so far as relevant.
"Litigants in person
46.5 – (1) This rule applies where the court orders (whether by summary assessment or detailed assessment) that the costs of a litigant in person are to be paid by any other person.
(2) The costs allowed under this rule will not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.
(3) The litigant in person shall be allowed –
(a) costs for the same categories of –
(i) work; and
(ii) disbursements,
which would have been allowed if the work had been done or the disbursements had been made by a legal representative on the litigant in person's behalf;
(b) the payments reasonably made by the litigant in person for legal services relating to the conduct of the proceedings; and
(c) the costs of obtaining expert assistance in assessing the costs claim.
(4) The amount of costs to be allowed to the litigant in person for any item of work claimed will be –
(a) where the litigant can prove financial loss, the amount that the litigant can prove to have been lost for time reasonably spent on doing the work; or
(b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at the rate set out in Practice Direction 46.
(5) …
(6) For the purposes of this rule, a litigant in person includes –
(a) a company or other corporation which is acting without a legal representative; and
(b) any of the following who acts in person (except where any such person is represented by a firm in which that person is a partner) –
(i) a barrister;
(ii) a solicitor;
(iii) a solicitor's employee;
(iv) a manager of a body recognised under section 9 of the Administration of Justice Act 1985; or
(v) a person who, for the purposes of the 2007 Act, is an authorised person in relation to an activity which constitutes the conduct of litigation (within the meaning of that Act)."
Paragraph 3.4 of PD46 provides that the amount allowed to a self represented litigant under CPR 46.5(4)(b) is £19 per hour.
Discussion
I agree with Judge Purle, for the reasons which he gave and for the additional reasons in EMW's respondent's notice, that EMW was not a litigant in person within CPR 46.5 when opposing Mr Halborg's summary judgment and strike out application.
The historical context
It is necessary to place CPR 46.5 (6) in its historical context.
In The London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 ("the Chorley case") the Court of Appeal held that solicitors who successfully defended proceedings in person were entitled on taxation to the same costs as if they had employed a solicitor and were not restricted to out of pocket expenses or such other costs as would be allowed to non-solicitors. The principle was expressed as follows by Brett MR (at p. 875):
"When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit. When an ordinary litigant appears in person, he is paid only for costs out of pocket … but for loss of time the law will not indemnify him. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. There are things which a solicitor can do for himself, but also he can employ another solicitor to do them for him; and it would be unadvisable to lay down that he shall not be entitled to ordinary costs if he appears in person, because in that case he would always employ another solicitor. If a solicitor does by his clerk that which might be done by another solicitor, it is a loss of money, and not simply a loss of time, because it is work done by a person who is paid for doing it."
Brett MR went on to say, by way of qualification of that rule, that the successful solicitor could not recover for anything which the fact of acting for himself made unnecessary, such as consulting himself or instructing himself or attending upon himself.
Bowen LJ said the following (at p. 877):
"Professional skill and labour are recognised and can be measured by the law; private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual. Professional skill, when it is bestowed, is accordingly allowed for in taxing a bill of costs; and it would be absurd to permit a solicitor to charge for the same work when it is done by another solicitor, and not to permit him to charge for it when it is done by his own clerk. The question before us does not depend on the privileges of a solicitor. My judgment is the same as that of the Master of the Rolls; the costs claimed, subject to the exceptions which have been mentioned, ought to be allowed, because there is an expenditure of professional skill and labour."
Fry LJ, agreeing with those judgments, said as follows (at pp. 878–879):
"This is not a question as to a solicitor's privilege. I think that the conclusion at which we have arrived will be beneficial to the public, because if the rule were otherwise a solicitor who is party to an action would always employ another solicitor, and whenever he is successful he would recover full costs; whereas under the rule of practice laid down by us, a solicitor who sues or defends in person will be entitled, if he is successful, to full costs, subject to certain deductions, of which his unsuccessful opponent will get the benefit."
The common law principle established by the Chorley case ("the Chorley principle") may be summarised as being that: (1) a solicitor who acts for himself as a party to litigation can recover not only his out of pocket expenses but also his profit costs, but he cannot recover for anything which his acting in person has made unnecessary; (2) the reason is not because of some special privilege but on the purely pragmatic grounds that (a) there has actually been an expenditure of professional skill and labour by the solicitor party, (b) that expenditure is measurable, (c) the solicitor party would otherwise employ another solicitor and, if successful, would be entitled to recover the costs of that other solicitor, and (d) since he cannot recover for anything which his acting in person has made unnecessary, the unsuccessful party will have the benefit of that disallowance and so would pay less than if the solicitor party had instructed another solicitor.
That formulation of the principle in the Chorley case explains why the successful solicitor litigant in person was entitled to recover his costs (other than for...
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