Cohen v Fine & Ors

On a summary assessment of costs, the court may adopt a broad-brush approach, but it must still consider the individual elements of the receiving party’s statement of costs. It must not substitute an unsupported global figure or its own tariff.

Where costs are assessed on the indemnity basis, proportionality is not an issue. Doubt about whether costs were reasonably incurred or are reasonable in amount is resolved in favour of the receiving party. If there is insufficient time for a proper assessment, the court should obtain express consent to a global approach, re-list the assessment, determine it on written submissions, or order detailed assessment.

The claimant, acting as executor, brought proceedings concerning the sale of estate property. The District Judge ordered the sale and directed that the claimant’s costs be paid from the estate. Those costs were to be assessed on the indemnity basis, but the District Judge summarily assessed them at £27,000 inclusive.

The claimant appealed, arguing that the assessment was inconsistent with the indemnity basis, failed to analyse the statement of costs, and was procedurally rushed. The central issues were the proper method of summary assessment and the appropriate course where the court lacks sufficient time to examine the costs.

1. Appeal allowed. The District Judge’s summary assessment of £27,000 was set aside. The claimant’s costs before the District Judge were summarily assessed at £35,703, and the claimant’s appeal costs at £8,298.12.
2. Under Civil Procedure Rules 1998, a summary assessment may be broad-brush, but it must remain recognisably an assessment. The court must address each individual element of the statement of costs and each specific objection. It may use its experience and review the total figure, but it must not impose an unsupported judicial tariff. This was required by the approach in 1-800 Flowers Inc v Phonenames Ltd, [2001] EWCA Civ 721, McLinden v Redbond, [2006] EWHC 234 (Ch), and Morgan v The Spirit Group Ltd, [2011] EWCA Civ 68.
3. For indemnity costs, proportionality does not arise. The court still allows only costs reasonably incurred and reasonable in amount, but any doubt on those questions is resolved in favour of the receiving party. All relevant circumstances must be considered, including conduct, value, importance, complexity, skill, effort, time and specialist responsibility.
4. The District Judge correctly identified the indemnity basis but failed to apply the required method. Her unsupported global reduction was therefore wrong and produced an unjust result. The appeal court was entitled to conduct its own summary assessment rather than remit the matter for detailed assessment. That course furthered the overriding objective, avoided additional expense, and was suitable given that the defendants were litigants in person.
5. For future cases, the court should identify the disputed items. If there is insufficient time, it should obtain express consent to a global approach, determine the costs on written submissions, re-list the summary assessment, or direct detailed assessment. Where detailed assessment is ordered, the court should consider ordering a reasonable payment on account under CPR 44.2(8).
6. Pending review of the Guideline Hourly Rates, an inflation-linked increase of about 35 per cent to the Manchester and Liverpool Band One rates was justified in this case. The revised rates were £295, £260, £220 and £160 for grades A to D respectively.

• High Court (Chancery Division): Allowed the appeal from the District Judge’s summary assessment, set aside the assessment of £27,000, and substituted assessments of £35,703 and £8,298.12.