SUMMARY ASSESSMENT OF COSTS: AN IMPORTANT EXAMPLE

This blog has looked at examples of  the summary assessment of costs before. These do not give rise to any great principles or points of law. Summary assessments are rarely (if ever) reported. Virtually every litigator is going to be involved in one at some stage. It is helpful to have some idea of the approach that judges take “on the ground”.

An example can be seen in the judgment of Mr Justice Edwards-Stuart in Imtech Inviron Ltd -v- Loppingdale Plant Limited [2014] EWHC 4109 (TCC).  There are some interesting observations in relation to assessments generally.

KEY POINT

The judge allowed, in full, the claimant’s bill of costs for an application to enforce adjudicator’s award in the sum of £16,251.

THE JUDGMENT

“Introduction

  1. This judgment deals with the costs of an application for summary judgment to enforce an adjudicator’s award following the judgment that I handed down on 19 November 2014 ([2014] EWHC 4006 (TCC)). For the reasons given in that judgment I concluded that the Claimant was entitled to summary judgment.
  2. The application was resisted on two grounds. First, the adjudicator was not properly appointed with the result that he had no jurisdiction. Second, the adjudicator purported to decide different disputes arising under different contracts without the consent of the parties. This second ground really fell away during the course of the argument, but nevertheless it was vigorously pursued up to that point.

Some observations about costs in this type of application

  1. By way of background, it is my experience that the costs incurred by a claimant in applications to enforce adjudicators’ awards range, typically, from about £15,000 to about £25,000, or perhaps a little more, excluding court fees. The Claimant’s costs in the present case are a little below the bottom of this range. However, this was a fairly straightforward application and so the Claimant’s overall costs cannot be regarded as being at a level that was in any way unusual.
  2. Furthermore, as the Claimant points out, its solicitors were not involved in the adjudication and so came to the application without any prior knowledge of the facts of the case or the issues. This is not always the case. Sometimes the solicitors acting for a claimant in an application to enforce an award will also have represented the claimant at the adjudication. Accordingly, when instructed to prepare an application to enforce an award they will already be familiar with the facts giving rise to the dispute and the issues and the arguments that have been raised.
  3. It is also a matter of common observation that the costs of a claimant in an application such as this, will, all other things being equal, be higher than those incurred on behalf of a defendant. The difference is usually between about 20% and 30%, depending on the circumstances. This is because the claimant’s solicitors have additional tasks, such as that of preparing the application and the bundles of documents that are required to support it, liaising with the court about possible hearing dates, preparing the bundles of documents for the hearing and so on.

The points raised the Defendant

  1. In relation to the “work done on documents”, in this case the parties spent 7.1 and 12.8 hours, respectively, by way of such work. However, about five hours or more of the work done by the Claimant’s solicitors was spent on preparing the documents for the issue of proceedings and the bundles for the hearing of the application. Once this time is stripped out, the time spent by the Claimant’s solicitors amounts to about eight hours – only a little more than the 7.1 hours spent by the Defendant’s solicitors.
  2. Many of the criticisms made by the Defendant of the Claimant’s schedule of work done on the documents are in my view nit-picking, misconceived or arbitrary. An example of the first is the challenge to 0.6 hours for reviewing the draft application notice and witness statement. It is said that this should only have taken 0.4 hours – a difference twelve of minutes. In my view the court is in no position to doubt the Claimant’s contention that 36 minutes was spent, that it was reasonable and that it was proportionate. Another submission in a similar vein relates to the costs schedule: it is said that because it is only five pages long it should not have taken more than six minutes to review it. In my view this is far from self-evident: it is the content of the material, not its quantity, that matters.
  3. An example of the second category is the Defendant’s complaint that the partner in the Claimant’s solicitors spent 0.6 hours amending the draft proceedings prepared by the assistant solicitor. In fact, the work described as being done by the partner is “Review draft proceedings and amend”. In my view, this is exactly what partners are there for: to consider documents prepared by junior solicitors and make any alterations or amendments that they think fit. That does not imply that the assistant solicitor has made mistakes, rather that the partner can suggest modifications or improvements that a partner’s experience can bring.
  4. In my view, for the reasons that I have given I consider that the claim for the work done on documents is both reasonable and proportionate. In relation to the latter aspect, I would make the general observation that the Claimant’s costs of this application represent about 2½% of the amount at stake. On its face, that can hardly be described as disproportionate.
  5. In relation to the rest of the work done by the Claimant’s solicitors, they spent 7.3 hours on other activities against four hours spent by the Defendant’s solicitors (I exclude travelling time). A substantial part of this was time spent on the telephone (3.1 hours in all). I do not see how those figures can be challenged on the grounds of either reasonableness or proportionality. The alternative figures suggested by the Defendant seem to me to be completely arbitrary and I can see no basis for doubting that the time claimed was spent and that it was reasonable. There is, in my view, no available argument about proportionality for the reason that I have already given.
  6. As to counsel’s fees, it is true that the Claimant’s costs are much higher than those of the Defendant. However, they are in line (and, if anything, perhaps a little below) typical levels of fees claimed for counsel in this type of application. Whilst this was not a complicated application on the facts, it raised points of law that were not straightforward and which justified the use of specialist junior counsel of seven to ten years’ experience. In my view, there is no reason to doubt that the fees charged in this case are reasonable, were necessary and are proportionate.
  7. I therefore see nothing in the criticisms of the Claimant’s costs and so I will assess them on the standard basis in the sum claimed, namely £16,251.

SEE ALSO

 

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