STONE ROWE BREWER LLP v JUST COSTS LTD 2014 EWHC 219 (QB)

An important High Court decision on the application of the one fifth rule (s.70(9)) on assessment under the Solicitors Act 1974 and the nature of any "special circumstances" justifying departure from that rule under s.70(10).

For the full Judgment, click here



A brief summary of the case at first instance - 

• SRB had entered into a retainer with JCL, a specialist firm of costs solicitors, to draft bills and undertake negotiations in a number of personal injury and clinical negligence matters.
• SRB became dissatisfied with JCL, particularly over charging issues, and  the retainer was terminated
• SRB asserted that JCL's overcharging was such that, in specific cases, it amounted to a repudiatory breach
• SRB further asserted that, in a number of cases, JCL had applied a charging rate higher than the rate agreed in writing
• SRB sought assessment under the Solicitors Act 1974 of 15 bills totalling £33,543
• There were no offers from JCL to accept a reduced amount in respect of any of the bills
• On the day of the hearing before Master O'Hare, and before the matter went before the Court, JCL agreed to accept a reduction to £23,760 (a reduction of 29.2% - or an overcharge of 41%) and the matter was compromised on that basis, with the Master to determine the appropriate costs order
• Master O'Hare found that, in not pursuing the repudiatory breach point (which put at risk the totality of JCL's fees in some cases), JCL were the overall winners, and should be entitled to 70% of their costs

On Appeal before Mrs.Justice Andrews the Court allowed the Appeal, holding -

1. That on an ordinary reading of s.70(10) there had to be exceptional grounds making it unfair for the normal rule to apply. In deciding whether s.70(10) applied, a costs judge had to ask himself whether something had happened which made it unfair for the claimant to get his costs. Existing case law showed that claimants had generally only been deprived of the normal costs order where they were guilty of some sort of reprehensible or unreasonable behaviour, including where they had failed to beat an offer to settle by their opponent, they had unreasonably refused to negotiate, or they had racked up the costs by arguing pointless matters of law
2. "Special circumstances" did not necessarily exclusively refer to a claimant's behaviour, but a finding of special circumstances could not extend to a situation in which, on an examination of the individual bills making up the total, it transpired that the defendant would have been victorious if the bills had been assessed separately and the one-fifth rule had been applied to each of them. 
3. The master had erred in assessing who had been the winner on each of the bills separately, and his approach drove a coach and horses through the scheme under s.70. The proper approach was one of totality, looking at the overall amount billed and applying the one-fifth rule to that. 
4. No special circumstances existed in the instant case. It followed that, once the one-fifth rule was applied to the total bill, S was entitled to the costs of the assessment.