NAP Anglia Ltd v Sun -Land Development Co Ltd (No. 2)

Costs incurred by claims consultants or other third parties may be recoverable where they are incurred solely to advance or defend a claim, provided the third party performs no act reserved to solicitors and does not purport to act as a solicitor. The work remains recoverable even if it is commonly performed by solicitors. The court may assess those costs, but they must be reasonably incurred, reasonable in amount, directly attributable to the relevant proceedings and no greater than the equivalent solicitors’ cost. A proportionate costs order should reflect both the degree of success and the time spent on issues on which the receiving party failed. Indemnity costs are inappropriate where the paying party, despite criticised conduct, successfully resisted a significant part of the application.

NAP applied to enforce an adjudicator’s decision against Sun-Land. Summary judgment was granted for the adjudicated sum, but relief concerning the adjudicator’s fees was refused, and execution was stayed above £65,000 because of NAP’s financial position and the pending county court proceedings concerning the parties’ final account.

The judgment concerned the costs of that application. NAP sought its costs on the indemnity basis and claimed sums incurred by its solicitors, counsel and claims consultants. Sun-Land disputed the indemnity basis, argued for a percentage reduction based on the amount recovered, and contended that claims-consultant costs were irrecoverable in principle.

1. NAP was awarded 85% of its costs. The appropriate proportion had to reflect both the degree of success and the time spent on the issues on which NAP lost or partly lost. A simple percentage based on the proportion of the monetary claim recovered was inappropriate.

2. Although Sun-Land’s conduct was arguably close to the type that might attract indemnity costs, it had successfully resisted a significant part of the application. Costs on the indemnity basis were therefore inappropriate.

3. Following Piper Double Glazing v DC Contracts [1994] 1 All ER 177, and the approval of that decision in R (Factortame) v Secretary of State for Transport [2003] BLR 1, sums paid to a third party solely to advance or assist with the prosecution or defence of a claim may in principle be recoverable. The third party must not perform an act that only a solicitor can perform or act whilst purporting to be a solicitor.

4. It is immaterial that the third party performs work commonly done by solicitors, including work performed by non-practising barristers or solicitors. The court may assess the third party’s costs, which must have been reasonably incurred and be reasonable in amount.

5. The assessment had to proceed item by item. Costs were recoverable only where directly attributable to the summary-judgment application and no greater than the costs that solicitors would have incurred for the same work. The use of claims consultants who already knew the adjudication documents did not inevitably involve duplicative work.

6. The recoverable costs were assessed at £16,803.60 for Prettys and counsel, together with £2,144.90 for HCC’s allowed costs and travel, subject to correction of any arithmetic errors. Payment was ordered within 14 days.

First-instance costs judgment following the court’s earlier summary judgment dated 3 November 2011. No separate appellate decision is stated in the judgment.