JOHN POYSER & CO LTD v CYNTHIA SPENCER

CPR 44.11 does not apply to a solicitor-and-client assessment under section 70 of the Solicitors Act 1974 and CPR 46.9 and 46.10. Such an assessment is governed principally by the retainer and the statutory regime, rather than the rules governing party-and-party costs. CPR Part 47 may assist where the CPR 46 procedure contains a gap, but it does not apply wholesale. CPR 44.4 likewise cannot be used to impose a further reduction on the fees being assessed. A reduction for misconduct cannot therefore be added to the ordinary assessment of reasonableness. The appeal was allowed because the further 75 per cent reduction lacked jurisdiction and, in any event, the central factual finding relied upon by the costs judge was wrong.

The claimant solicitor firm appealed against a final costs certificate issued by Master James following a solicitor-and-client assessment of its bills under section 70 of the Solicitors Act 1974. The Master had substantially reduced the profit costs and imposed a further 75 per cent reduction under CPR 44.11 for alleged misconduct, including an alleged shortfall in credits given for payments made by the defendant.

The claimant challenged the jurisdiction to apply CPR 44.11 and, alternatively, the factual findings of misconduct. The central issues were whether CPR 44.11 and CPR 44.4 applied to the costs being assessed, and whether the further reduction could stand.

1. Appeal allowed. The final costs certificate was set aside and was to be replaced by a revised certificate. There was no order as to costs.
2. A solicitor-and-client assessment under section 70 of the Solicitors Act 1974 and CPR 46.9 and 46.10 is distinct from a party-and-party costs assessment. It determines the reasonable amount payable under the retainer within the statutory regime.
3. CPR 44.11(1)(a) did not apply. A solicitor-and-client assessment was not a “summary assessment” or “detailed assessment” within the meaning of CPR 44.1(1), because it was not a procedure conducted in accordance with CPR Part 47.
4. CPR 44.11(1)(b) also did not apply to conduct before or during the solicitor-and-client assessment. The references to “the proceedings” and “the assessment proceedings” concerned party-and-party proceedings and their associated costs assessments. The structure of CPR 44.11, including its references to a party, legal representative and other party, supported that construction.
5. CPR Part 47 could be consulted to fill a procedural gap in CPR 46.10, as explained in Ainsworth v Stewarts Law [2020] EWCA Civ 178, but it did not apply wholesale. CPR 44.1(2) identified categories of costs to which some provisions might apply; it did not make every provision in Parts 44 to 47 applicable to every category.
6. The factual challenge also succeeded in substance. There was no missing £6,090. The claimant had credited £6,390 in total, including counsel’s fees, and had substantially made good the relevant shortfall through the discount. The finding that the claimant had refused to accept the defendant’s account was therefore wrong.
7. The principles concerning unreasonable or improper conduct in Bamrah v Gempride Ltd [2018] EWCA Civ 1367 and [2019] 1 WLR 1545 did not justify the further reduction. Charging an agreed contractual hourly rate, even if the rate was disallowed on assessment, did not without more amount to misconduct. Mistake, error of judgment or negligence was insufficient.
8. CPR 44.4 also did not apply to reduce the fees being assessed. It concerned the factors relevant to party-and-party costs under CPR 44.2 and 44.3. The claimant’s fees had already been reduced substantially to a reasonable amount, and no further reduction was justified.

• High Court (Queen’s Bench Division): The appeal from the final costs certificate issued by Master James was allowed. The certificate was set aside and remitted for recalculation and substitution by a revised certificate.