Cole v British Telecommunications Plc

For an in-house solicitor’s costs, the conventional A + B method used for private practitioners remains appropriate unless it is reasonably plain that it infringes the indemnity principle. A special case requires material identifying a different sum that adequately covers the actual cost of all the work. That sum may arise by concession or from the taxing tribunal’s factual assessment, but a detailed accounting exercise is not justified in every case. The existence of an hourly-rate table does not necessarily establish the actual employment cost or require departure from the conventional method. The assessment remains a matter for the expert judgment of the taxing tribunal.

Richard John Cole appealed against a decision of Alliott J, sitting with assessors, reviewing a contested taxation by Deputy Master Badcock. Cole had been ordered to pay the costs of unsuccessful proceedings against British Telecommunications Plc. BT’s legal work was performed by an employed solicitor, and the bill included an hourly rate of £105 plus a 60 per cent uplift.

Cole argued that applying the conventional method produced a figure exceeding BT’s actual employment cost and therefore breached the indemnity principle. He relied on an hourly-rate table produced by BT. The central issue was whether that material made this an exceptional case requiring departure from the approach established in In Re Eastwood [1975] Ch 112.

1. Appeal dismissed. The Court of Appeal held that the conventional method for taxing a private solicitor’s bill also applies to an in-house solicitor’s bill, except where it is reasonably plain that the method will infringe the indemnity principle.
2. A special case arises where a different sum can be identified which adequately covers the actual cost of all the work done. The sum may be identified by concession or by the factual assessment of the taxing tribunal. The possibility of such a calculation does not justify a detailed investigation in every case.
3. The hourly-rate table did not amount to a concession that it stated BT’s full cost. It omitted matters including cost allocation and was capable of being treated as no more than the A figure. Its figures were therefore insufficient to demonstrate an infringement of the indemnity principle.
4. Whether the evidence establishes a special case is a matter for the expert judgment of the taxing tribunal. The Deputy Master and Alliott J were entitled to conclude that it did not. The conventional approach involves an assumption that, outside a special case, the indemnity principle is not infringed. That assumption promotes simplicity and avoids disproportionate accounting enquiries.
5. The reliance on Bailey v IBC Vehicles [1998] 3 All ER was misplaced. The professional breach discussed there concerned a private solicitor seeking more than had been charged to the client. It did not apply to an in-house solicitor whose standard-basis bill had been approved by the taxing master, assessors and High Court judge.
6. The appeal was dismissed with costs.

• Court of Appeal (Civil Division): Appeal from Alliott J’s review of the contested taxation by Deputy Master Badcock. Appeal dismissed with costs.