Milkovics (t/a Milkovics & Co) v Keppel-Palmer

In assessing loss caused by professional negligence in a costs assessment, the court may make a broad-brush assessment where further detailed calculation would be disproportionate. A judge is not bound to accept an expert costs draughtsman’s opinion about the hypothetical outcome of litigation. The judge may assess that evidence using the court’s own experience of litigation. An appellate court should not interfere with such a finding merely because another view is possible; a properly supported finding is not perverse. A party who invited a broad-brush approach will ordinarily be unable to challenge its general application on appeal, particularly where the proposed alternative was not argued below.

Mrs Keppel-Palmer brought proceedings arising from a disastrous holiday and recovered damages against Royal Westmoreland Villas Ltd. A costs judge awarded her some costs relating to that claim, but the assessment produced a substantially lower sum than claimed. She subsequently sued her solicitor, Milkovics, alleging negligence in failing to provide the costs draughtsman with her former solicitor’s retainer and conditional fee agreement, and in failing to advise adequately about the costs position.

HHJ Morgan awarded Milkovics £13,550.70 inclusive of interest and allowed Keppel-Palmer’s counterclaim for £10,918.95 inclusive of interest. She appealed, challenging both the refusal to award the costs of the assessment and the percentage used to quantify the costs lost through the negligence.

Longmore LJ delivered the judgment of the court. Maurice Kay LJ and Sir John Chadwick agreed.

1. Costs of the assessment. The finding that the costs judge would not have awarded the costs of the assessment, even if the retainer and conditional fee agreement had been supplied, was a finding of fact. The court was not bound to accept Mr Watson’s evidence. His evidence represented his own opinion about what would have happened in litigation in which he had participated. HHJ Morgan was entitled to rely on his own experience and intuition as to what had concerned Deputy Master Haworth, namely the inclusion of substantial unnecessary work described as time dumping. The fact that some profit costs had been allowed showed that the missing documents were not treated as the complete reason for the costs outcome.
2. Quantification of loss. HHJ Morgan was clearly entitled to adopt a broad-brush approach because a further assessment of the hypothetical costs recovery would have generated disproportionate additional costs. The proposed division of the assessment into separate percentages for different parts of the costs claim was not advanced in the closing submissions and emerged only on appeal. A party who had invited a broad-brush exercise could not ordinarily complain that the judge had adopted the wrong broad brush after disliking the result.
3. The overall figure of 40 per cent fell within the reasonable bounds of the order available to the judge. There was no basis for appellate interference with the counterclaim of £7,768.68 plus interest. The appeal was dismissed.

1. Court of Appeal (Civil Division) — In [2009] EWCA Civ 969, the court dismissed Keppel-Palmer’s appeal.
2. Kingston-upon-Thames — HHJ Morgan’s decision dated 16 April 2007 awarded Milkovics £13,550.70 inclusive of interest and allowed Keppel-Palmer’s counterclaim in the sum of £10,918.95 inclusive of interest.