Stone Rowe Brewer Llp v Just Costs Ltd

Under section 70(10) of the Solicitors Act 1974, “special circumstances” must be exceptional grounds making it unfair to apply the statutory costs consequences. The overall result of the assessment is determined by aggregating the reductions under the order for assessment, rather than by examining individual bills separately. Complexity, or success on particular bills, does not itself constitute special circumstances. Conduct that is unreasonable, reprehensible or causes unnecessary costs may justify departure from the usual rule. Procedural rules must be enforced, but they should not support excessively technical objections that prevent a party from explaining non-compliance or pursuing a meritorious appeal.

The claimant sought detailed assessment of 15 bills of costs totalling approximately £33,000. The parties compromised for £23,700, producing an overall reduction exceeding one-fifth. The costs judge nevertheless found special circumstances under section 70(10) of the Solicitors Act 1974 and ordered the claimant to pay 70% of the defendant’s assessment costs.

The claimant appealed. The High Court first considered whether the appeal was out of time and whether the supporting evidence was admissible. It then considered whether the costs judge had been entitled to treat success on individual bills as special circumstances despite the overall reduction exceeding one-fifth.

1. Procedural issues. Any delay in filing the appellant’s notice resulted from confusion caused by administrative changes between the Senior Courts Costs Office and the High Court Appeals Office. The evidence explaining the delay was admissible. Even if there had been technical non-compliance, imposing a sanction would have been disproportionate and would risk denying proper access to justice. If necessary, the court would grant a retrospective extension of time, so the application was treated as in time.
2. One-fifth rule. Section 70 of the Solicitors Act 1974 treats the client as the winner where the assessed bill is reduced by more than one-fifth. Where one order provides for assessment of several bills in one action, the court must aggregate the amounts claimed and allowed. This approach was endorsed in Devereaux v White (1896) 13 TLR 52.
3. Special circumstances. In subsection (10), “special circumstances” means exceptional circumstances making it unfair to apply the ordinary statutory consequence. Relevant examples may include failure to beat a without-prejudice save as to costs offer, unreasonable failure to negotiate, or unnecessarily prolonged and pointless argument. It does not include the fact that the defendant would have succeeded on individual bills, or that some issues were more complex or costly than others.
4. The costs judge erred by examining the outcome of selected bills and treating the defendant as the winner on those bills. That approach undermined the statutory requirement to assess the result by reference to the totality of the bills. The compromise did not establish that the claimant had unnecessarily incurred the assessment costs, particularly as the disputed argument succeeded in relation to one of the five principal bills.
5. Permission to appeal was granted and the appeal allowed. The claimant was awarded the costs of the assessment and the costs of the appeal.

1. High Court (Queen’s Bench Division): The court granted permission to appeal and allowed the appeal against the costs judge’s order. It held that the one-fifth rule had to be applied to the aggregate result and that no special circumstances existed.
2. Senior Courts Costs Office: Master O’Hare ordered the claimant to pay 70% of the defendant’s costs of the assessment, despite an overall reduction exceeding one-fifth.