Hill v Bailey

Costs protection for an assisted person or funded client restricts enforceable liability to pay costs. It does not prevent the opposing party from obtaining an assessment of costs and using those costs by way of set-off. Where assessment is sought only for that purpose, section 11 of the Access to Justice Act 1999 and its associated time limit do not apply. A late request for detailed assessment is not thereby barred. The applicable limitation period concerns enforcement of the costs order and begins only when costs have been assessed and certified.

The parties had formerly practised as solicitors in partnership. In earlier partnership proceedings, the claimant obtained monetary relief and an order for his costs up to a specified date, while the defendant was awarded two thirds of his costs thereafter. The order directed that the costs be assessed and set off.

The claimant’s costs were assessed, but the defendant did not initially lodge his own bills. Years later, he sought detailed assessment so that his costs could be set off against sums due to the claimant. Master Wright held that the statutory costs-protection regime applied and that the application was time barred. The central issue on appeal was whether the regime prevented assessment for set-off and whether the delay independently defeated the application.

1. Appeal allowed. The orders of Master Wright dated 11 March and 1 May 2003 were set aside, and the matter was remitted for detailed assessment.
2. The statutory protection concerns the amount which an assisted person or funded client may be required to pay. Set-off does not impose a payment obligation on that person. It reduces or extinguishes the amount payable by the other party. The principle stated in Lockley v National Blood Transfusion Service [1992] 1 WLR 492 therefore remained applicable.
3. The same construction applied under section 11 of the Access to Justice Act 1999. The judgment of Robert Walker LJ in Hicks v Russell Jones & Walker, given on 27 October 2000, confirmed that the statutory restriction concerns costs which the assisted litigant may be ordered to pay and does not prevent set-off.
4. Because the defendant sought assessment only to obtain set-off, section 11 and the six-year deadline in regulation 12(5) of the Community Legal Service (Costs) Regulations 2000 did not apply.
5. The defendant’s delay did not bar assessment. Under section 24 of the Limitation Act 1980, the relevant period concerns an action on an enforceable judgment. Following Lowsley v Forbes [1999] 1 AC 329 and Times Newspapers Ltd v Chohan [2001] EWCA Civ 964, enforcement of costs cannot begin until the costs have been assessed and certified. Limited sanctions for delay did not deprive the defendant of the right to assessment.
6. Any costs of the assessment should take account of the defendant’s delay. Any waste caused by the delay should be borne by him.

The judgment records earlier orders in the partnership proceedings, including an order by Master Dyson dated 13 November 1996 and dismissal of appeals by His Honour Judge Levy QC on 28 February 1997.

• High Court (Chancery Division): Master Wright’s orders dated 11 March and 1 May 2003 held that the statutory costs-protection procedure applied and that the application was time barred.
• High Court (Chancery Division): The appeal was allowed, Master Wright’s orders were set aside, and the matter was remitted for detailed assessment.