Cost News

Matthew Waring

Litigant in Person Costs: Michael Earl Wilson v John Forster Emmott [2023] EWHC 816 (KB)

The thorny issue of whether a Solicitor should be restricted to Litigant in Person costs was considered. There have been a number of cases over the years which deal with this, however much of the issue turns on the facts; as this case did. This case was an appeal from the Senior Courts Costs Office, the issue was should the Appellant be limited to Litigant in Person rates of £19.00 per hour, or should he recover a commercial hourly rate; the Master in the SCCO had allowed Litigant in Person hourly rates.

The Appellant, Michael Earl Wilson was an employee and managing director of Michael Wilson & Partners Limited, a BVI registered company which provided legal advice. Under CPR 46.5, there is an exception at 46.5 (6)(b) to the Litigant in Person rule. The Appellant relied upon this provision to confirm that his role of employee and managing director of the firm was analogous to a “Partner”.

On this occasion the Court found that the Appellant had not offered any evidence to back up his assertion that he may have been “financially better off as a result of fees and cash-flows generated by other employees of the Firm”. In the sense that a Partner of a firm has an interest in the fees generated by employees, given the Partner or Partners share the profit of the firm and the employees’ wages are paid out of the profit of the firm. Accordingly, the Appellant’s appeal was dismissed.

With Mr Justice Sani concluding “The position of Mr Wilson seems to me to be the equivalent of a person who has no ownership interest in a business enterprise but may or may not be able to ask the true owners for a bonus at the end of the year if things have gone well.”

Comment – This case is a reminder that the issue of whether Litigant in Person costs can be recovered should be considered on a case by case basis.

Unjustified Allegations in the Letter of Claim: Stubbins Marketing Ltd & Ors v Rayner Essex LLP & Anor [2023] EWHC 515 (Ch).

This case concerned a Professional Negligence case by the Claimants against the Defendants; the Claimants had sent a pre-action letter of Claim, then when a Claim Form was issued, and subsequently amended the Claimants had abandoned certain elements of their claim against the Defendants. The abandoned claims were the Claimants’ claims in deceit, dishonest assistance in breach of fiduciary duty and unlawful means conspiracy.

The Court found that the amendment of the unserved Claim Form should be treated as a formal Discontinuance under CPR 38, even though it was not a formal Notice of Discontinuance. The Court also confirmed there was no good reason to depart from the usual provision under CPR 36.8 in that a discontinuing Claimant is liable for costs.

With regards to the basis of assessment, the Court considered the abandoned allegations, which were allegations of fraud and concluded that the appropriate basis of assessment was the Indemnity Basis per Clutterbuck v HSBC Plc.

Comment – This is a timely reminder not to present baseless allegations in the Letter of Claim and also a reminder that the Court may treat an amended Claim Form as a Notice of Discontinuance.

Costs of Claimants instructing two firms of Solicitors: Patley Wood Farm LLP & Ors v Kristine Kicks & Anor [2022] EWHC 3118 (Ch).

In short this was a claim of Possession Proceedings, with the successful Applicant’s being the Receiving Parties, however the Receiving Parties instructed separate Solicitors. With the First and Second Applicants instructing one firm and the Third Applicant instructing a second firm.

When the costs were being summarily assessed, the Respondent’s took issue with this. The Court considered this point and concluded that it was suitable for the Applicants to be represented by separate firms of Solicitors, confirming “All the applicants have an interest in obtaining the relief sought. There is no conflict between them as to that, and they have jointly instructed the same counsel. But their interests are different, proceeding from their different positions, and they should be separately advised as to those”. However the Court did confirm that there would be no allowance where there had been duplication of work.

Comment – An interesting case, which gives some guidance on the point which is very much a case by case topic.