Musa King v Telegraph Group Ltd (Costs)

Reference: 02/12/2005

Court: Supreme Court Costs Office

Judge: Senior Costs Judge Hurst

Date of judgment: 2 Dec 2005

Summary: Costs - Detailed assessment - Defamation - Proportionality - Conditional Fee Agreements - Success fees

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Appearances: Justin Rushbrooke QC (Claimant) 

Instructing Solicitors: Carter-Ruck for the Claimant; Farrer & Co for the Defendant

Facts

This was the detailed assessment of costs in a libel claim settled shortly before trial and 10 days after the Court of Appeal had dismissed the Defendant’s interlocutory appeal seeking a costs-capping order against the Claimant. The Claimant’s claim was funded by a CFA. The Defendant had agreed to pay £60,000 plus costs, as well as giving an undertaking and joining in a Statement in Open Court. There were two bills, one for the appeal, and one for the main action. The latter claimed base costs (excluding VAT) of around £317,500.

Issue

The Defendant raised various preliminary issues for decision before the ‘item by item’ assessment of the bills, namely: (a) the proportionality of the bill for the main action; (b) success fees; (c) backdating of the CFAs; (d) hourly rates.

Held

(1) Success fees should not be included when considering proportionality under the ‘global approach’ basis; s.11.5 and 11.9 of the Costs PD were not wrong in law. (2) The Claimant’s base costs, on the ‘global approach’ basis, appeared disproportionate, in particular bearing in mind the potential maximum level of recovery. It would therefore be necessary to apply the ‘necessity’ test on an item by item basis. (3) The risk assessments of both counsel and solicitors were reasonable and proportionate in accordance with the facts as known to them at the time. Given the risks of libel litigation, a 100% success fee was appropriate for the solicitors’ CFA and 67% for counsel’s (where the prospects of success had been estimated at 60%). (4) Backdating to include work done prior to the CFA was permissible, although a success fee on that work was not recoverable. (5) £325 per hour would be allowed for partner time.

Comment

It remains to be seen how much of an impact the decision will have on the conduct of future CFA-funded litigation. The result on proportionality is perhaps hardly surprising given the critical remarks of the Court of Appeal. In the end the amount allowed on the detailed assessment was about 65% of the bill. More controversial is the Senior Cost’s Judge suggestion that an appropriate test is to ask whether a private individual of adequate means would be prepared pay the level of costs in question to achieve success.