Accentuate Ltd v Asigra Inc

An appeal from a detailed costs assessment is by way of review, not rehearing. The appellant must show an error of principle or that the decision was plainly wrong.

Assessment of proportionality requires a two-stage approach. The costs judge must first make a global assessment of the costs as a whole, having regard to the relevant factors. The judge must then assess individual items by applying the appropriate test identified by the global assessment. An appellate court should not interfere where the decision falls within the range reasonably open to the costs judge.

The claimant appealed against a Master’s assessment of the parties’ costs following discontinuance of commercial agency proceedings. The appeal challenged the finding that the defendant’s costs were proportionate, the hourly rates allowed for the defendant’s solicitors, and the disallowance of costs incurred before the defendant’s February 2009 jurisdiction application.

The Master had assessed the claimant’s bill at £34,503.69 and the defendant’s bill at £74,199, and ordered the claimant to pay £20,700 for the costs of assessing both bills. The central issues were whether the Master had erred in principle, reached a plainly wrong conclusion, or wrongly categorised pre-application work.

1. Appeal by way of review. The court reviewed the Master’s decision rather than rehearing the assessment. The claimant therefore had to establish an error of principle or a conclusion that was plainly wrong.

2. Proportionality. The approach in Home Office v Lownds [2002] EWCA Civ 365 required two stages. First, the costs judge must make a global assessment of whether the costs as a whole appear disproportionate, having regard to the matters identified in CPR Part 44.5(3). Secondly, the judge must assess individual items using the test appropriate to the global conclusion. Where the costs as a whole are not disproportionate, the usual question is whether each item was reasonably incurred and reasonable in amount. Where they appear disproportionate, the court must consider whether the work was necessary and whether the costs would have been incurred in proportionate conduct of the litigation.

3. The Master was entitled to conclude that the defendant’s costs were not disproportionate. The claim involved a substantial sum, technical factual and legal issues, and a large volume of documents. Continuing trial preparation after the security-for-costs order, until discontinuance, was not unreasonable.

4. The hourly-rate decision was within the range open to the Master. The Master was entitled to allow rates reflecting the nature of the commercial litigation practice, while making reductions to the senior partner’s rate and to the junior fee earners’ rates.

5. The claimant’s pre-February 2009 costs were properly treated as costs of the claim rather than costs of the later jurisdiction application and appeal. Work undertaken to obtain permission to serve out, including valuation work, was not occasioned by the defendant’s later application.

6. The appeal was dismissed.

• High Court (Queen’s Bench Division): On 18 April 2013, Tugendhat J dismissed the claimant’s appeal from the detailed assessment order of Master Leonard dated 13 April 2012.