GSD Law Ltd v Wardman & Ors

CPR 44.11 provides a distinct jurisdiction to disallow costs being assessed for unreasonable or improper conduct connected with the assessment. The court is not confined by the restrictive guidance governing free-standing wasted-costs applications, although it must observe the overriding objective and proportionality.

Serious and sufficiently particularised allegations may be investigated within assessment proceedings, especially where they overlap with matters that would otherwise be examined. Fairness requires adequate notice and a proper opportunity to respond. A multi-day hearing may be proportionate where the allegations and sums at stake justify it.

The appeal arose from detailed assessment proceedings concerning costs in 14 successful personal injury claims. The paying parties alleged that GSD Law Limited had made dishonest and excessive costs claims, including claims based on a forged conditional fee agreement.

District Judge Neaves disallowed all costs in two sample cases and ordered payment of the assessment costs on the indemnity basis. His Honour Judge Gosnell dismissed GSD’s appeal. The issues before the Court of Appeal were whether CPR 44.11 was a summary jurisdiction akin to wasted costs, and whether the procedure adopted had been unfair.

The Court of Appeal, in a judgment given by Newey LJ with which Hamblen and Longmore LJJ agreed, unanimously dismissed the appeal.

1. Nature of the jurisdiction. CPR 44.11 is distinct from the wasted-costs jurisdiction under section 51 of the Senior Courts Act 1981. Where costs are being assessed, the court may disallow them for unreasonable or improper conduct connected with the assessment. The restrictive guidance in Ridehalgh v Horsefield [1994] Ch 205 and Medcalf v Mardell [2002] UKHL 27, concerning free-standing wasted-costs applications, was therefore less directly relevant.
2. Scope and proportionality. It was proper to investigate the allegations within the pending assessment proceedings. They concerned costs being assessed, overlapped with issues that would in any event arise on detailed assessment, involved no inquiry into the merits of the underlying claims, and raised no difficulty concerning legal professional privilege. The overriding objective and proportionality remained relevant. In view of the seriousness of the allegations and the sums at stake, a three-day hearing was proportionate. A separate claim for fraudulent misrepresentation would have been an unsatisfactory alternative. Lahey v Pirelli Tyres Ltd [2007] EWCA Civ 91 explained the analogy with wasted costs, but did not require the same procedural approach.
3. Fairness. A dishonesty allegation must be adequately formulated and particularised, consistent with Salha v General Medical Council [2003] UKPC 80. The original particulars gave sufficient notice, and the later indictment-style document added little substance. The forged document arose from GSD’s own evidence and had not previously featured in the case. GSD did not seek an adjournment, so the procedure was fair.
4. The lower courts were entitled to exercise the CPR 44.11 jurisdiction and to disallow all costs in the sample files. The appeal was dismissed.

1. Court of Appeal (Civil Division): Appeal dismissed unanimously on 15 December 2017.
2. County Court at Leeds: District Judge Neaves disallowed all costs in the two sample cases and ordered payment of the assessment costs on the indemnity basis. His Honour Judge Gosnell dismissed GSD’s appeal on 8 July 2015.