The issue raised by this appeal is neatly put in paragraph 1 of Mr Justice Lightman’s judgment:
‘This appeal raises questions as to the application and effect of Section 11 of the Access to Justice Act 1999 and the Community Legal Services (Costs) Regulations 2000 made thereunder. These statutory provisions apply where a party is awarded costs against an assisted person or a Legal Services Commission funded client. They protect the assisted person or funded client from having to pay an amount exceeding ‘the sum which is a reasonable one for him to pay having regard to all the circumstances . . ‘ The principal question before me is whether they also prevent a party awarded costs from setting off those costs against costs and other sums awarded in favour of an assisted person or funded client.’
The costs order arose out of a solicitors’ partnership dispute, during part of which the claimant was a legally assisted person, who obtained an order for an account which Master Dyson took and fixed on 13 November 1996 at the sum of pounds 36,740 plus interest to be paid by the defendant. He ordered the defendant to pay the claimant’s costs up to the date on which an account had been directed (16 March 1993) and the claimant to pay to the defendant two thirds of his costs from that date (but not before that date). He directed the taxing officer to set off those costs orders’ one against the other and certify the balance due.
Following unsuccessful appeals by both plaintiff and defendant against that order and finding, the claimant proceeded to have his costs taxed, both as between the parties and as between himself and the Legal Aid Board, but the defendant did not lodge his bills for taxation, though he did attend the first of the hearings of the claimant’s bills, which were ultimately taxed at pounds 40,598.86, with interest this sum had increased to pounds 77,000 by 13 November 1996.
The claimant took no steps to enforce that costs order until January 2003, when he caused a statutory demand to be served on the defendant requiring payment of the amount found due on the taking of the account and the assessed costs. An application by the defendant to set aside the statutory demand was dismissed, as was an appeal to a Circuit Judge.
Meanwhile the defendant applied to the SCCO to have a detailed assessment of his costs which Master Dyson had ordered. On 1 May 2003 the Costs Judge confirmed his previous provisional order, that, on the proper interpretation of Section 11 of the 1999 Act and of the 2000 Regulations the defendant could not proceed under the ordinary detailed assessment rules. An additional ground given by the Costs Judge on 1 May for refusing the defendant to proceed further was that it was time barred.
The defendant appealed, and the Judge, having had his attention drawn to an unreported decision (Hicks v Russell Jones and Walker: 27 October 2000) and on his interpretation of the 1999 Act and 2000 Regulations held that the principle enunciated in Lockley v National Blood Transfusion Service [1992] 1 WLR 492 applied and entitled the defendant to use his costs order as a shield to defend the claim brought on the basis of the claimant’s costs orders.
In remitting the matter to the Costs Judge for a detailed assessment the Judge commented that, because this was a pre April 1999 case, the full 7.5% taxing fee would be payable, and further the Costs Judge should consider the fact (as contemplated by Master Dyson) that there would have been a saving in costs if both bills had been assessed at the same time, and, if he were to find that any costs were wasted because that had not happened, those costs should be borne by the defendant. He also strongly urged the parties to try to settle the dispute.
Citations:
[2003] EWHC 9047 (Costs)
Links:
Jurisdiction:
England and Wales
Costs
Updated: 06 April 2022; Ref: scu.235574
