Cunningham & Ors v Collett & Farmer (a firm)

Summary assessment on the standard basis requires a two-stage approach. The court must first decide whether the costs as a whole are disproportionate, having regard to the relevant circumstances. It must then assess the reasonableness of the individual items. Where global costs are disproportionate, recovery is limited to the reasonable costs that would have been incurred had the litigation been conducted proportionately. The court must consider conduct, value, importance, complexity, skill, time and circumstances. A comparison with the paying party’s costs may assist as a cross-check, but cannot by itself establish the amount reasonably payable. Costs caused by a party’s own change of legal team or procedural misconduct may be excluded or substantially reduced.

The claimants had agreed that their former solicitors, McFaddens, would pay specified costs arising from an inappropriate adjournment application and related applications to revoke unless orders. The court was required to summarily assess the claimants’ costs against McFaddens and the defendant’s costs of the application to revoke the orders.

The parties agreed that the costs fell to be assessed on the standard basis. The central issues were proportionality, reasonableness, the effect of the parties’ conduct, and whether costs attributable to changing the claimants’ legal team were recoverable.

1. Costs summarily assessed. McFaddens was ordered to pay a further £2,050 to the claimants and £14,250 to the defendant by 17 February 2006.
2. Under CPR 44.4(2) and CPR 44.5, the court must consider all the circumstances, including conduct, value, importance, complexity, skill, time and the circumstances in which the work was done. Doubt about unreasonable or disproportionate costs is resolved in favour of the paying party.
3. Following Lownds v Home Office [2002] EWCA Civ 365, the assessment has two stages. The court first adopts a global approach to determine whether the total costs appear disproportionate. It then adopts an item-by-item approach. If the global figure is disproportionate, only work that was necessary and reasonably priced on the assumption of proportionate conduct is recoverable.
4. The comparison between the parties’ costs was relevant but not determinative. Following Bryen & Langley Ltd v Martin Boston [2005] EWCA Civ 973, it was wrong in principle to assume that costs were reasonable merely because they were similar to the other party’s costs.
5. The claimants’ costs were disproportionate and unreasonable. A substantial element resulted from changing solicitors and was not recoverable under the agreed order. The court also took account of the First Claimant’s repeated non-compliance with court orders. The claimants’ own costs were assessed at £7,800 for the October hearing and £14,250 for the November application.
6. The defendant’s costs were also disproportionate and unreasonable. Excessive use of fee-earners, attendance, document work and other claimed time required substantial reductions. The defendant’s costs were assessed at £14,250.