Angel Airlines v Dean and Dean

A clear, timely and properly formulated without-prejudice offer may constitute a special circumstance capable of altering the statutory presumption on the costs of a solicitor-client taxation under section 70 of the Solicitors Act 1974. A late or unclear offer, particularly one failing to address costs and acceptance consequences, may carry no weight. Interest under article 14 of the Solicitors (Non-Contentious) Remuneration Order 1994 is discretionary, not an entitlement as of right. An appellate court should interfere with a costs judge’s discretionary decision only for error of principle or a decision outside the reasonable ambit of discretion.

Dean and Dean appealed from decisions of Master Seager Berry, Costs Judge, arising from the detailed assessment of their bill for non-contentious solicitor’s work for Angel Airlines. The bill had been substantially reduced, and the Costs Judge ordered Dean and Dean to pay the assessment costs, declined to award interest for various periods, and ordered them to pay half the costs of a hearing at which their application for a stay failed.

The appeal concerned the effect of a without-prejudice offer, entitlement to interest, and the order for the costs of the December hearing.

1. Appeal dismissed. The Costs Judge had approached each issue correctly and had exercised his discretion on a proper basis.
2. Under section 70(9) and (10) of the Solicitors Act 1974, where more than one-fifth of a solicitor’s bill is taxed off, the solicitor ordinarily pays the costs of taxation. A clear offer made in proper time and form may be a special circumstance under section 70(10), but the offer made shortly before the anticipated end of the assessment was 18 months late, failed to address costs, gave no acceptance period, and left the consequences of acceptance uncertain. It therefore had no material weight and did not displace the statutory presumption.
3. The same conclusion followed, alternatively, under CPR 47.19. The considerations relevant to the offer included its lateness, form, lack of clarity, acceptance period, consequences and amount. The fact that the offer was not beaten was an additional, though less significant, factor. The appellant’s own conduct had also caused the later assessment costs.
4. The Solicitors (Non-Contentious) Remuneration Order 1994 did not provide an entitlement to interest as of right. Article 14 used permissive language and was conditional on the required information having been given under articles 6, 7 and 8. No sufficient notice had been proved. Even if the Order applied, an award remained discretionary.
5. The Costs Judge was entitled to withhold interest for periods in which the appellant’s conduct caused delay. This was not double jeopardy because no corresponding reduction in the bill had been shown to arise from the same conduct. Lost interest caused by failure to place money into an interest-bearing account could properly be set off against interest otherwise due.
6. The order for half the costs of the December hearing was justified because the appellant’s application for a stay had failed. The remaining costs were appropriately left in the assessment.

• High Court (Queen’s Bench Division): Mr Justice Coulson dismissed the appeal from decisions of Master Seager Berry, Costs Judge, dated 18 August 2006 and 12 September 2006.