Erison Balaj & Ors. Secretary of State for the Home Department

Conduct justifying costs sanctions under Civil Procedure Rules 1998, rule 44.11, requires more than an error of judgment, a hypothetical conflict, or conduct capable of a reasonable explanation. The conduct must be unreasonable or improper in the relevant sense and must be supported by evidence. A representative’s professional status and relationships may be relevant, but they do not establish misconduct without a demonstrated breach affecting the court or the client. The indemnity principle is not breached merely because a receiving party has not paid the contractual costs and may be liable for a shortfall. Costs incurred in pursuing a conduct issue may nevertheless be disallowed or reflected in the costs order where they are excessive, unnecessary or irrecoverable.

Eight immigration judicial review costs bills of Ashton Ross Solicitors had been provisionally assessed and reviewed by a Costs Judge because recurring challenges concerned hourly rates and conduct. The Defendant alleged that the firm’s principal fee earner, while a pupil barrister at Imperium Chambers, should not have instructed counsel from those chambers or agreed their fees. It also alleged breaches of professional conduct standards, the indemnity principle and the requirements of rule 44.11 of the Civil Procedure Rules 1998.

The court had to decide whether the alleged arrangement amounted to improper or unreasonable conduct warranting disallowance or reduction of the main action costs, whether the indemnity principle was breached, and how the costs of the conduct issue should be dealt with.

1. Conduct in the main bills. The alleged arrangement between Ashton Ross Solicitors, the fee earner and counsel did not engage the court’s powers under rule 44.11 of the Civil Procedure Rules 1998. The asserted conflict, possible circumvention of pupillage-payment rules and concern about future negligent work were hypothetical. There was no evidence that independence had been compromised or that the feared events had occurred.
2. Meaning of unreasonable and improper conduct. Applying the guidance in Gempride Limited v Bamrah and Lawlords of London Limited [2018] EWCA Civ 1367, unreasonable conduct is conduct permitting no reasonable explanation, while improper conduct bears the hallmark of conduct regarded as improper by the consensus of professional opinion. The fee earner’s decision to complete vocational training at a familiar chambers had a reasonable explanation and was not conduct falling below professional propriety.
3. Indemnity principle. The fact that vulnerable clients might not have paid the assessed costs, or might not ultimately be pursued for the contractual shortfall, did not establish a breach. A bill may certify that the receiving party is liable to pay the contractual amount; actual payment is not required. Any informed-consent issue concerning recovery of a shortfall was outside the Defendant’s proper role in the between-the-parties assessment.
4. Costs of the conduct issue. The very substantial costs claimed for the conduct exercise were not treated as misconduct warranting reduction of the main bills. However, much of the work was unnecessary, irrecoverable or excessive, including voluntary evidence, legal research and disproportionate preparation of the N260. The court therefore exercised its discretion to make no order as to the costs of the conduct issue. The main action costs remained as previously assessed.

The judgment arose from provisional assessments of eight costs bills. The court’s earlier decisions on the non-conduct issues had been given orally and reduced to writing after the October 2020 hearing. No appeal stage is stated.