JXA v Kettering General Hospital NHS Foundation Trust

Assessment of incurred costs involves two questions. First, whether it was objectively reasonable to instruct the solicitors chosen, having regard to all relevant circumstances. Secondly, whether the rates charged were reasonable by comparison with the broad average charged by comparable firms in the same area. The availability of cheaper solicitors elsewhere may inform the first question, but does not determine the second. A costs judge must address both questions clearly. An error in failing to do so does not require different rates where the rates allowed remain within the reasonable range available on the evidence and the judge’s experience.

The claimant appealed from the decision of Master Nagalingam on 16 November 2017 concerning the costs of a settled clinical-negligence claim. Liability had been agreed at 90%, but the damages claim remained unresolved. The Master allowed hourly rates of £350 for a Grade A partner, £200 for a Grade C solicitor and £150 for a Grade D fee-earner, rather than the higher rates claimed.

The claimant argued that the Master had failed to decide whether it was reasonable to instruct the chosen London solicitors and had placed excessive weight on the availability of firms elsewhere. The central issue was whether the Master’s approach required the rates to be reconsidered.

1. The appeal technically succeeded on the first ground, but was dismissed in its practical result. The Master had not directly addressed the first question in the required two-stage assessment of reasonableness. His reference to a theoretical Outer London locality also lacked clarity.
2. The first question was whether the claimant acted reasonably in instructing the solicitors chosen, assessed objectively in the circumstances. Relevant matters included the importance, complexity and value of the litigation, the claimant’s location, the reasons for choosing the solicitors, their accessibility, and what the claimant might reasonably have known about comparative fees.
3. The second question was whether the hourly rates were reasonable compared with the broad average charged by comparable firms undertaking comparable work in the same area. The availability of cheaper solicitors elsewhere was relevant to the first question but not the second. Under CPR 44.3, any doubt about reasonableness was resolved in favour of the paying party.
4. Despite the procedural error, the Master had recognised the exceptional importance and complexity of the claim and had allowed rates materially above summary-assessment guideline rates. On the evidence and with the assistance of the Costs Judge’s experience, the rates fell within the reasonable band of decisions open to him. No alteration was therefore required.
5. The court made no order as to the costs of the appeal, subject to written submissions seeking a different order within the specified time.

• High Court (Queen’s Bench Division): appeal from Master Nagalingam’s costs decision dated 16 November 2017. The appeal was dismissed in its practical result and the rates allowed by the Master were upheld.