Sullivan v Co-Operative Insurance Society Ltd

On a standard-basis taxation, the reasonableness of instructing solicitors in a particular location is judged objectively by reference to the litigant’s reasonable interests. Relevant factors include the importance and complexity of the case, the location of the parties and court, the availability of competent local practitioners, accessibility, recommendations and likely comparative fees.

A habitual relationship between a union or other organisation and a particular firm is relevant but carries limited weight. If the choice of solicitor is objectively reasonable, costs are assessed by reference to the broad market rates for that solicitor’s area. If it is not, assessment proceeds on the notional basis of the solicitor who ought to have been instructed.

The claimant brought an asbestos-related personal injury claim in the Central London County Court against his Manchester-based employer. The claim settled for provisional damages, with costs payable on County Court scale 2 on the standard basis.

On taxation, the claimant’s London solicitors’ hourly rates and witness expenses were allowed. A review by a judge sitting with assessors dismissed the defendant’s challenge. The defendant appealed, arguing that the case should have been conducted by Manchester solicitors and that lower Manchester rates should have been used. The central issue was whether it was objectively reasonable to instruct London solicitors in a case with no material London connection.

1. Appeal. The appeal was allowed as to charging rates but dismissed as to witness expenses. The appellant received its costs of the appeal, assessed at £4,500, with no order for costs on the taxation and the respondent ordered to pay the appellant’s costs below.
2. Applicable principles. Under former Order 62 rule 12(1) of the Rules of the Supreme Court, taxation on the standard basis required reasonable costs reasonably incurred, with doubts resolved in favour of the paying party. The decision whether particular solicitors were reasonably instructed formed part of the question whether the costs were reasonably incurred.
3. Objective assessment. The question was whether the claimant had acted reasonably, judged objectively. The court had to balance the importance and complexity of the litigation, its geographical connections, the availability of competent practitioners elsewhere, accessibility, recommendations and the likely fees. A union’s established practice of using particular solicitors was relevant but of limited weight.
4. Rates. If the choice of solicitor was objectively reasonable, the appropriate broad average rates for that solicitor’s area could be allowed. If the choice was unreasonable, the assessment had to proceed on the notional basis of the solicitor or type of solicitor who should have been retained.
5. Application. This was an ordinary asbestos case arising in Manchester, with no relevant London connection and no need for expertise found only in London. Competent Manchester practitioners were readily available. The seriousness of the claim, possible future cases, the union’s preference and the general availability of medical experts in London did not outweigh those considerations. Manchester rates therefore formed the proper basis of assessment.

• Court of Appeal (Civil Division): allowed the appeal as to charging rates, but not witness expenses.
• Central London County Court: a review of taxation dismissed the application to review the deputy district judge’s decision.
• Deputy district judge: allowed the claimant’s London solicitors’ hourly rates and witness expenses on taxation.