Walker & Ors v Burton & Anor

In assessing inter partes costs, the court must distinguish the receiving party’s liability to its solicitor from the amount the paying party must pay. Where several parties advance one common case and some parties are contractually liable for the whole solicitor’s bill, costs need not be apportioned merely because other represented parties have no liability to pay. Apportionment is required only where it identifies costs properly attributable to the successful party’s case or prevents injustice. Equal apportionment is a rule of thumb, not an inflexible rule. A success fee under an enforceable conditional fee agreement may be recoverable under a standard costs order if reasonably and proportionately incurred. Its assessment requires an overall judgment about litigation risk.

These were cross appeals from an assessment by a Deputy Adjudicator to HM Land Registry of costs payable by Mr and Mrs Burton to six villagers. The underlying proceedings concerned the existence of the lordship of the manor of Ireby and registration of Ireby Fell. The villagers obtained an order for costs, but only three had signed a conditional fee agreement with their solicitors. The Deputy Adjudicator apportioned the solicitors’ costs equally between the CFA and non-CFA clients and allowed a 60 per cent success fee. The issues were whether apportionment was required and whether the success fee was recoverable and reasonably quantified.

The appeals were allowed in part. The costs order was set aside insofar as it apportioned the villagers’ base costs. The 60 per cent success fee was upheld.

1. Apportionment. The court distinguished between the costs incurred by the receiving parties and the proportion payable by the paying party. The first question is governed principally by the retainer. The Deputy Adjudicator had found that the three CFA clients were liable to the solicitors for the whole bill and that the other three were not liable for fees. It was therefore erroneous to apportion the bill under Baylis v Kelly when determining the CFA clients’ liability.
2. The second question may require apportionment of jointly incurred costs, particularly where the paying party succeeded against one party or on distinct issues. Equal division under Ellingsen v Det Scandinaviske Compani is only a rule of thumb and must yield where it causes injustice. Here the issues and costs were common to all six villagers, the additional parties had not increased the costs, and all had obtained costs orders. No apportionment was required.
3. Success fee. Sections 58 and 58A of the Courts and Legal Services Act 1990 made conditional fee agreements enforceable and permitted a costs order to include fees payable under an agreement containing a success fee. An express reference to the success fee in the costs order was unnecessary. The total liability had to be reasonably and proportionately incurred. The reasoning in Abbott v Keeley was adopted.
4. Quantification. The adjudicator was entitled to exclude risks not undertaken under the CFA and to make a broad assessment of the remaining risks. They were not properly treated as wholly independent probabilities. The appellate court’s role, following Motto v Trafigura Ltd, was supervisory. The 60 per cent figure fell within the available range.

• High Court (Chancery Division): on cross appeals from the Deputy Adjudicator’s assessment order of 23 May 2012, the court set aside the apportionment of costs and upheld the 60 per cent success fee.
• High Court (Chancery Division): an earlier appeal concerning rectification of the Ireby Fell title was dismissed: [2012] EWHC 978 (Ch).