Bloomsbury Law Solicitor v Macpherson

An appeal from a costs assessment is a review, not a rehearing. The appellate court should respect the lower court’s experience and detailed involvement unless there is an error of principle, consideration of an irrelevant matter, failure to consider a relevant matter, or a conclusion outside the reasonable range.

Under the former proportionality regime, the costs judge should first form a global view and then, if costs appear disproportionate, apply a more rigorous necessity test to individual items. Conduct must be considered, but the first-stage assessment need not resolve every dispute about responsibility for increased costs. Costs incurred in dealing with consequential matters may remain costs incidental to the parent proceedings. The court has a broad discretion over the commencement date and rate of interest on costs.

Bloomsbury Law Solicitors appealed orders made by Master Simons on 23 August 2016 concerning the assessment of its costs in litigation against a former client, Howard Macpherson. The appeal raised six issues: proportionality, hourly rates, costs associated with a prior costs order, stay costs, costs of obtaining repayment of money paid into court, and interest on costs.

The appeal followed earlier decisions concerning the parties’ costs disputes, including a successful appeal by Bloomsbury on the costs of the assessment and an unsuccessful appeal concerning non-compliant bills. The central questions were whether the Master had erred in principle or acted outside the proper range of evaluative and discretionary judgment.

1. Disposition. The appeal succeeded only in relation to approximately £5,262 of costs associated with the order made in June 2014. The remaining grounds were dismissed.
2. Appellate review. An appeal is a review, not a rehearing. The appellate court should not interfere with discretionary or evaluative decisions unless there is an error of principle, failure to consider a relevant matter, reliance on an irrelevant matter, procedural unfairness, or a conclusion wholly outside the proper range. Appropriate weight must be given to the lower court’s experience and detailed knowledge of the case.
3. Proportionality. The former two-stage approach in Lownds v Home Office [2002] EWCA Civ 365 applied. The costs judge first forms a global view, having regard to the statutory and procedural factors. If the costs appear disproportionate, individual items are then tested for necessity and reasonableness. Conduct is relevant at both stages, but there is no hard and fast requirement to determine fault for increased costs before forming the initial global view. The Master was entitled to find both bills disproportionate.
4. Hourly rates. The rates allowed for the Grade A fee-earner were within the range reasonably open to the Master. The litigation was not sufficiently complex, difficult or unusual to justify the enhanced rates claimed.
5. Incidental costs. Costs of dealing with an opponent’s costs schedule, consequences of an overpayment on account, and carrying out an order to pay money into court may be costs incidental to the parent proceedings, even though incurred after the substantive hearing. The Master’s categorical disallowance of those items was therefore wrong in principle. Costs of obtaining repayment of the £85,000 were different because the relevant costs order had reserved costs after the substantive proceedings had ended, and no specific costs order had been made.
6. Interest. The court has discretion under CPR 40.8 and CPR 44.2(6)(g) to determine when interest on costs begins and the rate applicable before judgment-rate interest. The Master was entitled to award commercial-rate interest before delivery of the bills and judgment-rate interest thereafter.

• High Court (Queen's Bench Division): appeal from orders made by Master Simons on 23 August 2016. The appeal was allowed only on the issue of costs associated with the June 2014 order and dismissed otherwise.
• Earlier appeals: the judgment records an earlier appeal allowed by Males J and a further appeal dismissed by Lewis J, but gives no neutral citation for the former decision and identifies the latter as [2016] EWHC 3394 (QB).