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Summary assessment has always been, in the writer’s opinion, somewhat of a “rough and ready” affair and whilst it is generally accepted by all parties to such assessments that the court will adopt a broad-brush approach to the same, it is not often that a receiving party is so aggrieved as to the outcome as to warrant an appeal. Such appeals can also have unintended consequences for the (in this case possibly quite pleased at first instance) paying party, and so it is in the latest judgement handed down by His Honour Judge Hodge QC whilst sitting as a High Court Judge in Manchester.
The matter arose out of the costs of a claimant professional executor who had been obliged to bring part 8 proceedings to force the sale of the estates main asset, a property, which had been subject to a dispute between the 3 beneficiaries, and the matter at first instance was heard by District Judge Matharu who ordered the sale and then turned her attentions to summarily assessing the costs. In so doing, she noted that she was “appalled” by the costs claimed, amounting to £48,000 inclusive of VAT and then, whilst addressing some items of concern as being unreasonable, further noted that she was “considering matters in the round”, and proceeded to award the alternative sum of £27,000.
The receiving party was, perhaps unsurprisingly, dissatisfied with the outcome of the summary assessment, considering that the District Judge had adopted to much of a broadbrush approach and had failed to consider the N260 Statement of Costs in any reasonable detail, and accordingly appealed.
The matter came before His Honour Judge Hodge QC upon that appeal, whereupon the issue of appropriate hourly charging rates (amongst other matters) were considered. Dissatisfaction within the profession to the imposition of Guideline Hourly Charging Rates (“GHCR”) that are now over 10 years old has been growing for some time, and it is only more recently that we have seen such dissatisfaction being expressed by the judiciary as to the inadequacies of the same. Initial attempts to revise the rates began in 2014, when the (then) Master of the Rolls, Dyson MR, concluded that there was insufficient evidence to support any increase, and their matters rested until O’Farrell J opined in the matter of Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2504 (TCC) that the GHCR were “significantly lower” than rates being used by solicitors and that “updated guidelines would be very welcome”.
More recently, Master Whalan (whilst recognising that he did not have the authority to update the GHCR officially) expressed his dissatisfaction with the GHCR in the matter of PLK & Others [2020] EWHC B28 (Costs), opining that the accepted rates for professional Deputies ought to be increased by 20%. Furthermore, GHCR are now the focus of a Civil Justice Council committee headed by Mr Justice Stewart, which is due to provide an interim report in the near future, with the final report to be presented to the Master of the Rolls next summer.
In addressing his mind to the appeal in Cohen v Fine & Others [2020] EWHC 3278 (Ch), His Honour Judge Hodge QC (whilst expressing some sympathy due to the fact that there had only been 5 minutes after an hour long telephone hearing to address the issue of the costs) concluded that District Judge Matharu had nonetheless “erred” in failing to consider the individual items within the N260, noting that “While summary assessment can be ‘broad brush’, a judge still has to consider the individual elements of the bill item by item”, citing both Flowers, McLinden v Redbond, and Morgan v Spirit Group in support of such view, and thereafter undertook a 2 hour, item by item assessment of the costs claimed within the 13 page N260, concluding that a more proper figure of £35,703 ought to be awarded, as opposed to the “only some 75.6% of the figure that I have arrived at by using the approach mandated by binding authority” which the District Judge had originally awarded.
As part and parcel of that reassessment, His Honour Judge Hodge QC noted his view that the GHCR were “considerably below” rates actually being charged by solicitors and “should be the subject of, at least, any increase that takes due account of inflation” and applying the Bank of England inflation calculator noted “it seems to me that an increase in the (band one) figures for Manchester and Liverpool broadly in the order of 35% would be justified as a starting point (appropriately rounded up for ease of calculation)” which, in turn, gave rise to increases as follows:
Grade GHCR HHJ Hodge
A £217.00 £295.00
B £192.00 £260.00
C £161.00 £220.00
D £118.00 £160.00
which were applied within the summary assessment. He also applied the same rates within the assessment of the costs of the appeal, assessing the same at £8,298 as against the £9,972.
It is refreshing to finally see that the issue of GHCR is becoming more “front and centre”, with the courts being more willing to depart from the same where the indemnity principle permits. It only now remains to be seen what further judgements and, especially both the interim and final reports of Stuart J’s Civil Justice Council committee, ultimately conclude.
However, and in the interim, there is at least a growing catalogue of case law to support a departure from GHCR (subject to the indemnity principle not being offended) and practitioners would be well advised to ensure that their retainers are such that rates above and beyond current GHCR can be recovered.