Jemma Trust Company Ltd v Liptrott & Ors

A solicitor administering an estate may charge by reference both to time and to value where the resulting remuneration is fair and reasonable overall. In assessing a separate value charge, the costs judge may consider all relevant factors, including factors already reflected in hourly rates, provided that the risk of double counting is kept in view. A regressive value scale indicated by an appellate court is ordinarily guidance rather than a mandatory formula. The assessment remains a broad evaluative judgment for the specialist costs judge. There is no absolute obligation to keep attendance notes. Their absence creates an evidential risk because the solicitor must prove both that time was spent and that it was reasonably spent.

Jemma Trust, as assignee of the residuary beneficiary’s interest, appealed three decisions made by Costs Judge Rogers during the detailed assessment of 79 bills rendered by Kippax Beaumont Lewis for administering an estate. The assessment followed remittal by the Court of Appeal after its decision in Jemma Trust Company Ltd v Liptrott, [2003] EWCA Civ 1476.

The appeal challenged the value charge, the absence of reductions on individual bills, and the refusal to disallow time unsupported by attendance notes. The central issues were the proper method of assessing dual time-and-value charges, the extent of appellate intervention in a detailed assessment, and the evidential consequences of inadequate records.

1. Appeal dismissed. The Costs Judge was entitled to assess the overall remuneration as fair and reasonable and to allow a separate value element.
2. The hourly rates had been fixed on an A plus B basis, with the mark-up reflecting factors other than time and value. That did not prevent the Costs Judge from considering those factors again when assessing the value element. The factors overlapped, and the assessment concerned the fairness of the total remuneration rather than merely the arithmetic method used in the bills. The judge had, however, to remain conscious of the extent to which particular factors were already reflected in the time charge.
3. The regressive scale indicated by the Court of Appeal was not mandatory. A costs judge could assess the appropriate value charge by considering all relevant factors and the overall result. The assessment was a value judgment based on discretion, experience and the detailed material before the Costs Judge. Although the reasons for the final figure were relatively sparse, the judgment demonstrated that the relevant factors had been considered, and the figure was one which was open to him on the evidence.
4. The fact that the estate administration was incomplete and that other professional charges had been incurred did not establish an error of principle. The Costs Judge was concerned with fair remuneration for the work actually performed and had not been shown to have ignored relevant matters. He was also entitled to consider circumstances that increased the complexity of the work.
5. The sampling procedure used during the assessment did not require specific deductions on individual bills. The Costs Judge was entitled to treat the exercise as informing his overall assessment rather than as a complete adjudication of every item.
6. There was no legal obligation whose breach automatically required disallowance of time unsupported by attendance notes. The solicitor bore the burden of showing both that the time was spent and that it was reasonable to spend it. Attendance notes were one means of proof, but their absence exposed the solicitor to the risk that doubts would be resolved against him.

1. High Court (Chancery Division): appeal from decisions made during the detailed assessment of costs dismissed.
2. Court of Appeal: the earlier preliminary-issue decision was reversed and the matter remitted for detailed assessment: [2003] EWCA Civ 1476, reported at [2004] 1 All ER 510.