JOHN POYSER & CO LTD v CYNTHIA SPENCER

On a renewed application for permission to appeal from a solicitor-and-client costs assessment, the court held that there was an arguable issue whether CPR 44.11 applied to a detailed assessment under section 70 of the Solicitors Act 1974. Permission was therefore granted on that issue.

Permission was also granted on a limited challenge to serious findings of misconduct, because ambiguity in the documentary evidence arguably made the Master’s conclusions unsustainable. Permission was refused on procedural-fairness grounds where the claimant had received written notice of the relevant issues and had not requested an oral hearing. Challenges to proportionality, double counting and the use of conduct in the assessment were not reasonably arguable.

The claimant solicitor firm sought permission to appeal against a Master’s revised judgment following a detailed assessment of fees payable by its former client. The Master had made findings concerning mishandling of client money, overcharging, mis-certification and misconduct, reduced the claimant’s profit costs by 75 per cent under CPR 44.11, and concluded that no sum was due.

Permission had been refused on the papers by Mrs Justice Collins Rice on 7 September 2021. The claimant renewed its application before the High Court. The central questions were whether CPR 44.11 could apply in a solicitor-and-client assessment under section 70 of the Solicitors Act 1974, whether the Master’s findings were wrong or procedurally unjust, and whether the sanction and assessment involved disproportionality or double counting.

1. Disposition. Limited permission to appeal was granted on ground 1 and on ground 2 insofar as it challenged the findings of misconduct. Permission was refused on the alleged procedural unfairness, and on grounds 3 and 4.
2. Application of the costs rules. The court considered that CPR 44.11 applies to detailed assessments under CPR 47. The costs governed by Parts 44 to 47 include costs payable by a client to a legal representative under CPR 44.1(2)(a)(iii). A detailed assessment under section 70 of the Solicitors Act 1974 is subject to the Part 47 procedure through CPR 46.10, unless expressly disapplied. The point nevertheless raised an arguable issue of law of wider assistance and permission was granted.
3. Procedural fairness. The claimant had been given a reasonable opportunity to make written submissions and could have requested an oral hearing under paragraph 11.1 of Practice Direction 44. Its evidence and submissions had addressed the potential misconduct findings. No arguable procedural irregularity was established.
4. Findings of misconduct. The documentary evidence concerning cash payments was ambiguous. Because the Master made serious findings on documents and witness statements without tested oral evidence, it was reasonably arguable that the findings adverse to the claimant were wrong. The same applied to the issues concerning hourly rates, charging for complaint-related work and consequential mis-certification, but only as questions of substance and not fairness.
5. Sanction and assessment. The Master had invited submissions on sanction and had regard to proportionality. In light of the more serious misconduct found than in Gempride v Bamrah [2018] EWCA Civ 1367, the 75 per cent reduction disclosed no reasonably arguable error. The alternative calculation was not double jeopardy. The challenge under CPR 44.4 was likewise not reasonably arguable.
6. The claimant was ordered to bear its own costs of the permission application under CPR 52.18(1)(c). It was also directed to provide the appeal court with the relevant directions, orders and any note or transcript concerning the misconduct issue.

• Master James: Revised judgment dated 22 April 2021 following a detailed assessment under section 70 of the Solicitors Act 1974; findings of misconduct were made and the claimant’s costs were reduced.
• High Court: Permission to appeal was refused on the papers by Mrs Justice Collins Rice on 7 September 2021.
• High Court (Queen’s Bench Division): On the renewed application, limited permission was granted on ground 1 and part of ground 2. Permission was refused on the remaining issues.