Halborg v EMW Law LLP

A solicitors’ LLP that is a party to litigation and acts as its own legal representative is not a litigant in person for CPR 46.5 costs purposes. The rule must be read purposively with the common-law Chorley principle: measurable professional skill and labour deployed by a solicitor’s practice may attract ordinary profit costs, subject to disallowance of work made unnecessary by self-representation. The principle applies equally to solicitors’ LLPs and traditional partnerships. An LLP is treated as acting with a legal representative under CPR 46.5(6)(a), while CPR 46.5(6)(b) is directed to individuals. The corporate form, separate personality and limited liability of an LLP do not justify a different result. The two-thirds cap and hourly rate applicable to litigants in person therefore do not govern the LLP’s recoverable costs.

Mr Halborg retained EMW, a solicitors’ LLP, as his agent in professional negligence proceedings. After those proceedings settled, EMW brought proceedings in the Senior Courts Costs Office for, among other matters, assessment of its costs. Master Campbell dismissed an application for summary judgment or strike-out against EMW and summarily assessed EMW’s costs at £17,600.

The High Court, Chancery Division, dismissed Mr Halborg’s appeal on the issue whether EMW was a litigant in person. The central question before the Court of Appeal was whether an LLP acting as its own legal representative fell within CPR 46.5 and was subject to the restrictions governing litigants in person.

The appeal was dismissed unanimously. EMW was not a litigant in person for the purposes of CPR 46.5 and was not subject to the two-thirds ceiling or the fixed hourly rate applicable to litigants in person.

1. The common-law principle in The London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 permits a solicitor party to recover profit costs for measurable professional skill and labour used in the litigation. It does not permit recovery for work made unnecessary by acting for oneself. The principle is pragmatic rather than a professional privilege and is intended to reflect the indemnity principle and the measurable use of professional resources.
2. The introduction of the Civil Procedure Rules 1998 did not attenuate that principle. CPR 46.5(6)(b) was to be given a purposive interpretation. The words referring to representation by a firm include a solicitor in sole practice, and partner includes the sole principal of that practice. A sole-practice solicitor is therefore not subject to the litigant-in-person restrictions merely because the solicitor acts in the firm’s name.
3. There was no coherent policy reason to distinguish a solicitors’ LLP from a traditional solicitors’ partnership. The differences in legal personality and liability under the Limited Liability Partnerships Act 2000 do not affect the rationale of the Chorley principle.
4. EMW fell outside CPR 46.5(6)(a) because it was a corporation treated as acting with a legal representative when it conducted the litigation through its members or employees. CPR 46.5(6)(b) was, on its proper construction, directed only to individuals. Its reference to an authorised person therefore did not recast a corporate LLP as a litigant in person.
5. Alternatively, even if CPR 46.5(6)(b) could apply to corporations, its parenthetical wording would cover both a solicitor member represented by the LLP and an LLP acting as litigant and as its own legal representative. The contrary interpretation would produce an illogical distinction. The court also considered that the drafting-error jurisdiction described in Inco Europe Ltd v First Choice Distribution [2001] 1 WLR 586 would produce the same result if resort to it were necessary, although it was unnecessary.

Lord Justice Beatson and Lord Justice Underhill agreed with the judgment of the Master of the Rolls.

• Court of Appeal (Civil Division) — In [2017] EWCA Civ 793, the appeal was dismissed.
• High Court of Justice, Chancery Division — His Honour Judge Purle QC dismissed Mr Halborg’s appeal from Master Campbell’s orders in a judgment and order dated 22 May 2015.
• Senior Courts Costs Office — Master Campbell dismissed the application for summary judgment or strike-out insofar as it concerned EMW and summarily assessed EMW’s costs at £17,600.