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Bill struck out for miscertification

16/10/2019

Regional Costs Judge Baldwin – County Court in Liverpool (Reserved judgment - 16/10/19)

In a scathing judgment, the court struck out the claimant’s bill of costs on the basis it was miscertified as completeness to such an extent that it had a material impact upon the ability of the paying party and the court to accept its accuracy.

The circumstances

Keoghs dealt with a number of claims for costs where Bond Turner (formerly Armstrong Solicitors) acted for the claimant. In each case the bill of costs stated that;

Costs notes: Work was conducted by X (solicitor) and Y (solicitor)”   

Rates applied”

  • Fee Earner                                        Hourly Rate: £xxx
  • Costs Draftsman                           Hourly Rate: £yyy

During the course of the substantive claim there had been a number of telephone calls with and emails from fee earners other than those named in the bill of costs.

Furthermore, during the course of the claim Bond Turner served a number of documents which were signed and certified by fee earners other than those named in the bill.

When comparing the defendant’s file of papers with the bill of costs it was clear that the identities of the fee earners who had done the work was different from the identities of “X” and “Y” stated in the bill of costs.

This raised genuine concerns as to whether the work claimed in the bill breached the indemnity principle and  whether the bill of costs was miscertified as to accuracy and completeness.

The application

Keoghs requested clarification in correspondence and in points of dispute. Bond Turner refused to provide the clarification and relied upon the signature on the bill of costs certifying the bill as accurate and complete.

Keoghs served Part 18 questions requesting the basic information as to the identity, status and contractual hourly rate for each person for whom work had been claimed within the bill of costs.

Bond Turner refused to reply to the Part 18 request on the basis it was ill-conceived stating;

“The bill of costs details the fee earners and we have advised you of this on many occasions.”

The defendant issued an application for an order for the claimant in this lead case to respond to the Part 18 questions and to disclose the claimant’s retainer.

Judgment

The court satisfied itself that the hourly rates claimed in the bill did not exceed the hourly rates the claimant was liable to pay contained within the retainer.

Regional Costs Judge Baldwin then considered whether the bill of costs had been miscertified. He held;

“… the bills of costs has been shown to my satisfaction and on the balance of probabilities to have been mis-certified as to completeness, with a material impact upon the ability of the paying party and the Court to accept its accuracy as otherwise self-proving, for the purposes of the detailed assessment proceedings as a whole.”

Practice Direction 47 paragraph 5.11(2) specifies that;

The background information included in the bill of costs should set out

(2)          a statement of the status of the legal representatives’ employee in respect of whom costs are claimed and (if those costs are calculated on the basis of hourly rates) the hourly rates claimed for each such person.”

The court stated that;

“The bill “should” set out the specified information and the receiving party should anticipate an appropriate sanction being imposed if it does not do so. “ 

There were three issues with the bill that attracted specific criticism:

(i)            The phrase “Work was conducted by” is manifestly insufficient for the purposes of PD47 para. 5.11(2)

(ii)           The appending of signatures to statements of truth and other similar certification when time is not claimed for that fee earner creates a mischief

  • Firstly, it suggests that the status of such signatures is devalued when, in fact, it is of the utmost importance.
  • Secondly it creates a suspicion and is a practice which is not in the spirit of the CPR and directly undermines the status of the signature to the bill.

(iii)          The failure to specify the status of the fee earner at all material times in the bill does not comply with PD 47 para. 5.11(2).

The court struck out the bill of costs for non-compliance with PD 47 para. 5.11(2).

Keoghs Comment

This was the lead case of over 80 cases where the identity, legal qualification and post qualification experience of the fee earners who had actually done the work was deliberately omitted from the bill of costs.

The court has found that, where this practice has a material effect upon the ability of the paying party and the court to accept the accuracy of a bill of costs, it should be struck out.

Receiving parties deliberately use this practice to avoid challenges to the high hourly rates claimed for lower grade fee earners.

Keoghs will continue to challenge this practice to ensure that the bills of costs provide transparency as to who has done the work, their legal qualifications and experience.

 

Howard Dean
Author

Howard Dean
Partner
Head of Costs

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